Judgement-Summary Pairs
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<s>[INST] Summarize the following judgement: minal Appeal No. 123 of 1985.
From the Judgment and Order dated 12.11.84 of the Delhi High Court in State Criminal Appeal No. 71 of 1978.
R.K. Garg and Rajendra Prasad Singh for the Appellant.
233 N.N. Goswamy and Ashok Bhan for the Respondent.
ANAND, J.
This appeal by special leave, is directed against the judgment of the High Court of Delhi dated 12th of November 1984, setting aside an order of the Additional Sessions Judge New Delhi, acquitting the appellant of an offence under Section 302/203 IPC.
The prosecution case is that on the fateful night of 25th/26th July, 1976, the appellant and his wife, Usha Jain, went to sleep in the back verandah of their house situated at P 5, Green Park Extension, New Delhi while his brother M.P. Jain alongwith his wife Sharda and children went to sleep separately in their bed room in the same house.
Police Control Room was informed over the telephone by Sulekh Chand Jain at 4.55 A.M. that an incident had taken place at P 5, Green Park Extension and on receiving the telephone message, S.I. Mauji Ram made a record of it in the daily diary and passed on the information to the duty officer at police station Hauz Khas.
ASI Maha Singh was deputed to proceed to the spot for investigation of the case.
After reaching the spot, the said ASI Maha Singh informed the police station on telephone that a murder had taken place.
The information so provided was recorded by ASI Mangal Sen in the daily diary Whereupon SHO Harmit Singh immediately left for the spot alongwith SI Dalip Singh, SI Moti Singh, Constable Bhawani Dutt and Constable Randhir Singh.
The police party arrived at the spot at about 5.35 a.m. and took charge of the investigation.
The appellant was present near the dead body which had been covered by a Dhoti and on interrogation, the appellant informed the police party that his brother and family had retired for the night in their bed room at about 10.00 p.m. and he alongwith his wife had slept in the back verandah.
Before going to sleep, he had locked the collapsable door of the back verandah.
The wife of the appellant was wearing a gold chain on her neck, eartops in her ears and golden bangles on her wrists besides glass bangles.
At about 1.30 a.m., the appellant felt thirsty and asked his wife to give him water and after some time when he felt chilly, he went inside the room.
He slept in the room while his wife kept sleeping outside.
At about 3.45 a.m., the appellant got up to urinate and when he went outside the room, he found that his wife was lying on the cot with her face upwards but her clothes were in a loose condition and he was almost naked upto the thighs.
On going closer to 234 the cot, he found her tongue protruding and on touching her, he found her dead.
He noticed some scratches on her face and neck and also discovered that the golden chain which was on her neck and golden bangles were missing from her body.
According to the appellant, his wife had been murdered by somebody by strangulation while committing the theft of the golden chain and the bangles.
He started screaming and his brother, the brother 's wife as well as some neighbours came there.
Since, his telephone was found to be out of order, police was informed at his request by Sulekh Chand, another neighbour, from his telephone.
The parents of the deceased, living in Sonepat were also conveyed the tragic news on telephone through their neighbours.
The statement of the appellant which revealed a case of lurking house trespass, with a view to commit offence of theft and murder, was recorded as exhibit P5 and a case under Section 460 IPC was registered.
The statement of the appellant exhibit P5, was despatched by SHO Harmit Singh to the police station with his endorsement for registration of a case under Section 460 IPC.
Formal FIR was registered by ASI Mangal Sen at the police station and the same was received back by the SHO at the house of the appellant at about 6.45 a.m.
The crime team as also the dog squad were summoned.
Both the dogs of the dog squad were first let loose to pick up the smell and according to the ASI Ranbir Singh, in charge of the dog squad, the dogs after picking up the smell from the lock lying in the corner of the back courtyard and from the spot, went to the room where the appellant was sitting and each of the dogs pointed towards him by turn.
That raised a suspicion against the appellant.
According to the SHO, he then asked the appellant to remove his shirt and found that the appellant had injuries in the nature of bruises etc.
on the front part of his body, on the chest, as well as on his back.
Since the appellant had told the police that the bangles of his wife were identical to the bangles of Sharda, the wife of his brother M.P. Jain, who also is the sister of the deceased, the SHO took into possession four bangles from Sharda also for comparing the same in case the stolen property was recovered.
The appellant was thereafter taken for further interrogation to the police station.
Before proceeding to the police station., the SHO had effected recoveries of various articles including some hair, lying near the dead body on the cot.
The appellant had produced the key at the asking of the SHO, which purported to be the key of the lock which had been found lying in the back court yard and the same was taken into possession.
The lock was also taken into possession but it did not appear to have been 235 broken or tampered with.
The recovery of the key was witnessed amongst others by Kuldip Kaul PWl who was present in the crowd outside the home of the appellant.
The inquest proceedings were conducted by SI Moti Singh and the body was thereafter sent for postmortem examination.
At the police station, during interrogation the appellants was placed under arrest and in the presence of SI Dalip Singh PW6, Kuldip Kaul PWl and Harnaik Singh PW2, he made a disclosure statement, exhibit PC, to the effect that he had concealed the golden chain and the bangles in his bathroom and in pursuance of the disclosure statement, the appellant led the police party to the bathroom of his house and after removing the cover from the drain hole, took out the golden chain and the bangles and handed the same over to SHO Harmit Singh in presence of the witnesses.
Recovery memo, EX.PF was prepared and the golden chain and the bangles after being duly weighed were sealed separately and the seal was handed over to Kuldip Kaul PW1.
The appellant was sent for medical examination, after memo of his personal search EX.PE was prepared.
Dr. Dharam Pal PW15 found as many 18 injuries on the person of the appellant consisting of bruises and abrasions on the nose, chest, arm shoulder and on the umbilical region.
The injuries were stated to have been caused by blunt weapon.
The postmortem on the dead body of Usha Jain was conducted on 27.7.1976 at 9.00 a.m. by Dr. Bharat Singh PW 4 and according to the postmortem report EX.PL, all the injuries found on the person of the deceased were ante mortem and the same were possible by throttling the deceased and that the death of Usha Jain was caused by asphyxia resulting from throttling.
The deceased was carrying 7th month pregnancy at the time of her death.
After the disclosure statement was made by the appellant leading to the recovery of the ornaments and after noticing injuries on his person, the case which was originally registered under Section 460 IPC was converted, into one under Section 302/203 IPC.
The SHO during the course of investigation also took sample hair of the appellant and sent the same alongwith the hair recovered from the cot of the deceased to the Central Forensic Science Laboratory.
The nail clippings of the deceased were also sent for analysis to CFSL.
Site plan, EX.PO, was also prepared during the investigation.
After completion of the investigation, challan was filed against the appellant and he was sent up for trial for offences under Section 302/203 IPC in the court of Additional Sessions Judge, New Delhi.
236 There being no eye witness of the occurrence, the prosecution sought to establish the case against the appellant on the basis of circumstantial evidence.
The circumstances set up by the prosecution against the appel lant during the trial were (i) information to the police at 4.55 AM given by a neighbour and not the appellant; (ii) that information not specifically giving out that a murder had taken place and simply intimating happening of an incident; (iii) The accused having slept alone at night in the verandah with the deceased after having locked the collapsable door of that verandah from inside and that lock having been found in the corner of the back courtyard in the morning without being tampered with; (iv) The deceased and accused were last seen together, (v) The dogs of the Dog Squad having pointed out the accused after picking up scent from that lock; (vi) The ornaments which were stated to be on the person of the deceased while she was sleeping, and which were found missing when she was discovered dead having been recovered from the drain hole of the bath room attached to the bed room of the accused in consequence of and in pursuance of a disclousre statement made by the accused; (vii) injuries found on the person of the accused in the nature of abrasions, contusions and lastly; (viii) the accused having given false information to the police by means of hi s statement Ext.
P5" The learned Sessions Judge carefully analysed each of the circumstance and finally observed "On a resume of the analysis of prosecution evidence, and 237 on a very careful appraisal of all the facts and circumstances set up by the prosecution, I am of my earnestly considered view that the prosecution in this case has entirely failed to prove any of the circumstances set up against the accused, much less to establish the chain of circumstances, so as to bring out a nexus between the crime and the accused.
" The appellant was, therefore, acquitted of the offences under Section 302/203 IPC.
On an appeal by the State, a division bench of the High Court reversed the order of acquittal of the appellant.
The High Court held that the circumstances formed a chain and sequences so complete by themselves that one was left in no manner of doubt that the appellant and the appellant alone had committed the crime.
The appeal was accepted and the order of acquittal was set aside.
The appellant was sentenced to undergo rigorous imprisonment for life under Section 302 IPC and also to undergo rigorous imprisonment for a period of one year under Section 203 IPC.
Both the sentences were directed to run concurrently.
Appearing for the appellant, Mr. R.K. Garg, the learned senior counsel submitted that the approach of the High Court was totally erroneous and that a well considered and well reasoned judgment of the Trial Court was upset by the High Court by drawing inferences which were not available from the record and by ignoring material discrepancies and infirmities in the prosecution evidence which not only did not establish various circumstances but which also showed that the chain of circumstantial evidence was wholly incomplete.
Learned counsel for the appellant submitted that the appellant had been roped in on the basis of misguided suspicion and that the circumstances relied upon by the prosecution were not of any conclusive nature and they did not exclude the hypothesis, other than that of the guilt of the appellant.
It was emphasised that the inves tigating officer had created false clues and suppressed material which went against the prosecuting version and supported the defence version.
He argued that the High Court should have drawn adverse inference against the prosecution for not producing the first informant and withholding the evidence of the father of the deceased.
Mr. N.N. Goswami, learned senior counsel assisted by Mr. Ashok 238 Bhan, advocate, on the other hand submitted that some of the circumstances like the pointing out of the appellant by the dogs of the Dog Squad, after picking up the scent from the place of occurence; the disclosure statement and the recovery of ornaments as a consequence thereof at the instance of appellant and the presence of injuries on the person of appellant, were of such a conclusive and clinching nature that they left no doubt that the appellant had committed the crime.
It was submitted that the appellant had made attempt to mislead the investigating officer by giving a false version with a view to screen himself.
According to the learned counsel the established circumstance could only lead to the hypothesis consistent with the guilt of the appellant and not with his innocence.
We shall now consider various circumstances with a view to determine whether the circumstances alleged against the appellant have been established and the chain of evidence is so complete as to lead to no other hypothesis except the one consistent with the guilt of the accused.
There is no motive established in this case by the prosecution for the appellant to commit murder of his wife and the evidence of Tara Chand father of the deceased as welt as the sister of the deceased and the tenants living in, the same house disclosed that the relations between the husband and wife were cordial.
In a case based on circumstantial evidence, motive assumes pertinent significance as existence of the motive is an enlightening factor in a process of presumptive reasoning in such a case.
The absence of motive, however, puts the court on its guard to scrutinise the circumstances more carefully to ensure that suspicion and conjecture do not take place of legal proof Since, the disclosure statement and the consequent recovery pursuant thereto of the ornaments belonging to the deceased has been considered to be one of the most important piece of circumstantial evidence in the case not only by the High Court but has also before us by the learned counsel appearing for the State, we shall first consider that circumstance.
This circumstance is indeed of such an incriminating nature that if found to have been established by reliable and trustworthy evidence, it would go a long way to furnish proof of the guilt of the appellant and connect him with the crime and on the other hand, if the evidence in support of that circumstance is found to be not reliable, the entire chain of circumstantial evidence will snap so badly as to affect the credibility of the prosecution case as a whole.
239 According to the prosecution after the appellant had been taken to the police station by the investigating officer he was interrogated interrogated after being placed under arrest.
He voluntarily made a disclosure statement EX.PC.
The disclosure statement was recorded by the SHO and has been attested by Kuldip Kaul PW 1, SI Dalip Singh PW 6 and Harnaik Singh PW2.
Pursuant to the disclosure statement, the appellant is alleged to have led the police party to the recovery of the ornaments from a drain hole in his bathroom.
The recovery memo EX.PF was prepared at the spot and was attested by SI Dalip Singh PW 6, Kuldip Kaul PW 1 and Hirnaik Singh PW 2 besides the Investigating Officer.
We shall, therefore, first analyse the evidence of the witnesses of the disclosure statement and the recovery memo.
Inspector Harmit Singh, PW 19, SHO, while deposing about the disclosure statement and the consequent recovery of the ornaments at the pointing out by the appellant, stated that he interrogated the appellant in presence of Dalip Singh, Kuldip Kaul and Harnaik Singh PWs at the police station at about 1.45 p.m. and in their presence the appellant made the disclosure statement exhibit PC and then led the party to his house and pointing out the drain hole in the bath room, the appellant took out from that drain hole, three golden bangles and one golden chain, which were weighed separately and while golden bangles were put in one packet the golden chain was put in another packet and the seal used to seal both the packets was handed over to Kuldip Kaul PWI.
The recovery memo EX.PF was prepared at the spot which was signed by the witnesses then and there at about 2 or 2.30 p.m.
In his cross examination, the Investigating Officer denied the suggestion that the bangles and the chain were recovered from underneath a slab in the service lane in the presence of the appellant and Jagminder Dass Jain and a memo had been prepared which was signed by them.
He also stated that he did not call any goldsmith to weigh the ornaments because he had taken with him the measure and the scale.
He then asserted that "Kuldip Kaul did not come back with me to the police station when I came back in the evening after recoveries of the ornaments etc.
had been effected at the spot.
I recorded statement of Kuldip Kaul at the spot after recoveries.
That was a complete statement of his and I recorded only one statement of his on that day.
Kuldip Kaul left from the spot and we were still there when he left." Regarding Harnaik Singh PW2, the I.O. stated "I had gone out to 240 look for another witness and I found at that time Harnaik Singh reversing his taxi in the compound of the police station and then I summoned him.
He had told me that he had dropped a passenger and was taking out his taxi.
I did not see passenger going inside.
There are 60/70 quarters at the back of the police station and that passengers might have gone to any of those quarters.
The disclosure statement was made by the accused in his presence.
I had read out the papers to Harnaik Singh before getting his signature.
In fact, it was written in his presence and whatever were dictated by the accused was within his healing.
It is incorrect to suggest that disclosure statement was already written and I got signatures of Harnaik Singh without explaining to him the document and assuring him to sign on my trust.
" The witness also asserted that he had seen Harnaik Singh for the first time only at about 2 or 2.30 p.m. outside the police station while reversing the taxi and did not know him from before.
Let us now examine as to what the other witnesses have to say in this regard.
Kuldip Kaul PW1, while admitting that he was present outside the house of the appellant in the morning at about 6.30 a.m. when the police party had reached there and had offered himself to join the investigation, went on to say that after the SHO had lifted the shirt of the appellant and found 15 20 marks of scratches on the chest of the appellant, they all came to the police station along with the appellant.
He added that while they were sitting at the police station, Harnaik Singh PW2 also came there along with SHO Harmit Singh and after some initial hesitation, the appellant disclosed that he had kept one golden chain and three bangles which his wife was wearing, in the drain hole of the bath room of his house and he could show the same to the police and get them recovered.
He deposed that disclosure statement EX.PC was prepared at the police station and was signed by him as well as by the other witnesses present there.
Thereafter, the appellant was arrested and he led the police party to his house where he pointed out the drain hole in the bath room and after removing the cover of the drain hole, the appellant took out from inside the drain hole, a golden chain and three golden bangles and handed over the same to SHO Harmit Singh.
Memo of recovery EX.PF was prepared and was signed by the witnesses.
With a view to assert his independence and that he had no earlier connection with the I.O., he stated "I came to know SHO Harmit Singh since March, 1976, when I organised a function of Youth Congress and had contacted the SHO for arrangements for the said function.
I have, never gone to the police station in any other connection or regarding public 241 grievances.
I have not organised any other function in the area except the one stated above.
Regarding the signing of the recovery memo at the house of the appellant and his leaving for his house from there as was deposed to by the Investigating Officer, Kuldip Kaul PWl stated "I had come back with the police to P.S. after the recovery of the ornaments and there at about 3.30 p.m. my, statement was recorded by the police and I came back home at about 4 p.m. " Harnaik Singh PW2 giving his version regarding the disclosure statement and the consequent recovery stated "About 4 1/2 or 5 months back at about 2/2.30 p.m.
I had taken a passenger in my taxi to the quarters of P.S. Hauz Khas.
When I was coming back after dropping the passenger one police officer, Sardarji, who was standing at the gate of the P.S. called me, and took me inside the P.S.
There is one room, besides the police were one Mr. Kaul PWl and Surinder Pal Jain, accused present in court.
Then in the room that Sardarji police officer took up one paper which had been prepared already and asked me to sign, saying that they have to conduct some inquiry in the case.
Then that Sardarji told me to accompany the police party to Green Park.
Then we went there besides the police party and myself PWl and the accused were also there.
On reaching the house in Green Park the accused led the police party to the bath room and I also followed them in to the both room.
Then the Sardarji took out there bangles and one gold chain from the gutter of the bath room.
The Sardarji took those three bangles from the gutter on being told by the accused." He asserted that he did not at all know the Sardarji police officer prior to that date and that.
he had gone to the police station for the first time on that day.
During the cross examination he admitted that "The contents of memos EX.PC and EX.PF were not read out to me but I was told by the police that the weight of things recovered and the recovery was being written in those papers." ASI Maha Singh, PW5, who had arrived at the spot at the earliest and had sent information to his senior officers including SHO Harmit Singh and had kept a guard at the spot.
During the cross examination admitted that "Kuldip Kaul and Harnaik Singh witnesses had come there before 7 a.m." ST Dalip Singh PW6, who had also accompanied the SHO to the house of the appellant at about 6.30 a.m. stated "when we reached Kuldip Kaul and Hamaik Singh witnesses were present.
ASI Maha Singh was already 242 there.
" The witness also deposed about the interrogation of the appellant and the recording of the disclosure statement at the police station in his presence and the subsequent recovery of the ornaments and the preparation of the recovery memo PF in the presence of Kuldip Kaul and Harnaik Singh PWs.
Contrary to what Harnaik Singh PW said, this witness deposed "the accused himself took out three bangles and one golden chain front the main hole and handed them over to the SHO.
" The witness during the cross examination stated "The ornaments were weighed by some goldsmith who was called there by the SHO.
I do not know whether that goldsmith also signed the possession memo or not. ' The above is the entire prosecution evidence relating to the making of the alleged disclsoure statement by the appellant and the consequent recovery under Section 27 of the Evidence Act at his instance.
According to the appellant, however, he had made no disclosure statement nor led the police party to the recovery of the ornaments as alleged.
According to the defence version, the missing ornaments had in fact been recovered by the police party around 11 a.m. during search from the service lane, from underneath a slab, near the boundary wall and at that time the appellant and Jagminder Dass Jain were also present.
This defence version is supported by the evidence of DW2, Tara Chand, father of the deceased.
The presence of this witness is admitted at the spot by the Investigating team, as was natural being the father of the deceased.
His testimony assumes significance as in the normal course of events, he would be the last person to screen the real offender who murdered his daughter.
Tara Chand DW2 stated that the police had interrogated him and he had told the I.O. that the appellant and the deceased had good relations with each other and that he had never received any complaint of any dispute or difference between them from his daughter.
That he had also married of his other daughter with the brother of the appellant, M.P. Jain and that both the sisters alongwith their husbands were living together in the same house.
Deposing about the sequence of events at the house of the appellant, the witness stated "Then at about 10.30 a.m. the police took into possession four golden bangles from Sharda but I cannot say as to from where she had produced them, whether she was wearing them or she had brought them from the house.
I had seen her just producing them.
She had handed over those bangles to the same Sardarji police officer who had talked to me and at that time we were in the drawing room.
The police 243 had been told that the bangles which Usha was wearing and which were missing were of the same type which were with Sharda and there upon they conducted search for the articles in and around the house, with the bangles in hand They went out towards the back side.
Persons who were inside the house and also S.P. Jain accused (had joined the search party).
I came to know that three missing bangles and one chain had been found out from underneath a slab at the back of the house.
I came to know at about 11.30 a.m. that these things had been recovered and after about 1/2 hour of that the police took in jeep M.P. Jain, S.P. Jain and Sharda Jain to the police station.
Police told me that they were taking all the three for interrogation." During the cross examination he asserted, 'After the police had taken Sharda 's four bangles in hand and they went around looking for the stolen bangles I was in the varandah by the side of the dead body and kept on observing the scene and I saw that after sometime the same sub inspector who had the four bangles in hand was coming from outside from the back side and had three bangles and one chain in the other hand.
Some 5/7 persons from the public who were already inside the house had gone outside with the police and they also came back with the police after recovery of the ornaments.
I learnt from them that those ornaments had been found front underneath a slab and sometime after myself went out and saw that spot.
The three bangles and chain were loose and were not found in any cloth." He categorically denied the suggestion that the appellant had led the police party to the bath room on that day and had got recovered form the drain hole of the bath room, the three bangles and the golden chain.
Shri Jagminder Dass Jain appeared as DW12.
He leves in the same locality as the appellant and had gone to the house of the appellant soon after 6 a.m. on learning that some murder had taken place.
Deposing about the recovery of ornaments, he stated that the SHO after taking into possession the bangles from Sharda went outside towards the back lane and the witness accompanied the SHO and the crime team along with some others.
He stated that during the course of the search of the back lane and from underneath a slab, one gold chain and three golden bangles were recovered.
The recovered bangles were compared with the other which had been earlier produced by Sharda and a memo of the recovery was prepared by the police and was signed by the witness as well as the appellant.
The learned Sessions Judge carefully considered the evidence led by the prosecution with regard to the disclosure statement and the recovery 244 of ornaments.
She found the evidence of Harnaik Singh PW2, who according to DW11 Sunder Lal constable of police station Defence Colonly, had been earlier also cited as a witness for the prosecution in a case investigated by Harmit Singh the then Sub inspector of police and the present Investigating Officer was not reliable and that the Investigating Officer had not told the truth when he had deposed that he did not know Harnaik Singh earlier.
That Harnaik Singh had on his own showing signed the disclosure statement after it had already been written and that the appellant bad not made any disclosure statement in the presence of Harnaik Singh PW2, who had been introduced being a convenient witness.
The learned Sessions Judge also found the evidence of PWl Kuldip Kaul as not reliable or trustworthy and disbelieved his testimony by giving cogent reasons after properly appreciating the evidence led by the prosecution.
She found the defence version with regard to the recovery as more probable and opined that the investigating officer had created false clues and fabricated false evidence.
The learned Sessions Judge observed "I, therefore, cannot bring myself at all to accept the prosecution case about any disclosure having been made by the accused or having led to recovery of missing ornaments in pursuance to this disclosure, and I am con strained to say that the I.O. has made unabashed attempt to fabricate false evidence to bring on record incriminating evidence against the accused whom he had tied down for the offence u/s 302 IPC and went to the extent of introducing false witnesses, preparing fabricated recoveries, replacing them by original recoveries." The High Court on the other hand did not deal with the various discrepancies and contradictions appearing in the prosecution evidence relating to the making of the disclosure statement and the recovery of the ornaments.
The High Court placed reliance on the testimony of Kuldip Kaul PWl and Harnaik Singh PW2 to hold that the disclosure statement and the recovery had been made in the manner suggested by the prosecution.
In our opinion, the High Court did not properly appreciate the prosection evidence while reversing the well considered judgment of the learned Sessions Judge.
245 On our independent appraisal of the evidence we find that the prosecution evidence relating to the disclosure statement and the recovery of ornaments is not only discrepent and contradictory but also suffers from glaring infirmities and improbabilities rendering it unsafe to rely upon the same.
There is contradiction between the evidence of Kuldip Kaul PW1` and the I.O. as to the place where Kuldip Kaul signed the recovery memo.
According to the 1.0.
it was signed at the spot while according to Kuldip Kaul PW1, he had returned to the police station and there signed the recovery memo.
Again, while Kuldip Kaul attempted to show that he had met the I.O. just once and did not know him earlier, the I.O. has given a direct lie to it.
After carefully analysing the evidence, we find Kuldip Kaul PWl was a convenient witness and his evidence does not appear to be trustworthy.
Same is our opinion about Harnaik Singh PW2.
Whereas both Harnaik Singh PW2 and the I.O. want the Court to believe that they did not know each other earlier and that I.O. had seen Harnaik Singh for the first time on that day only at the police station, there is abundant material on the record to show only that Harnaik Singh had earlier been cited as witness by the same I.O. while posted as Sub Inspector at another police station, Harnaik Singh PW2 was also present outside the house of the appellant alongwith Kuldip Kaul PWl as early as on 6.30 AM on that day.
Harnaik Singh PW2 also exposed his unreliability when he admitted during the cross examination that the disclosure statement had not been made by the appellant in his presence at the police station but that he had signed a statement which had already been prepared, thus, giving a lie not only to Kuldip Kaul PWI but also to the I.O. who have deposed to the contrary.
As regards the recovery of ornaments also, there is a very serious infirmity which emerges from the testimony of Harnaik Singh PW2.
Contrary to what the I.O. and the other witnesses stated, Harnaik Singh PW2 deposed that the ornaments were taken out by, the Sardarji I. O. from the drain hole and not by the appellant.
This probabilises the defence version that the ornaments had been recovered during the search and were with the I.O. when the ritual of the recovery under Section 27 of the Evidence Act was performed.
The contradictions in the evidence of the I.O. and S.I. Dalip Singh PW6 as to who had weighed the ornaments after their alleged recovery also casts doubt on the correctness of the prosecution story and the bonafides of the investigation.
246 The learned Judges of the High Court noticed the evidence of Harnaik Singh as regards the manner of his signing the disclosure statement and the alleged recovery of ornaments and observed : "Harnaik Singh PW2 even though cited as a witness of the disclosure statement, does not subscribe to it and obviously, as stated by Harmit Singh, he was only brought to the police station after the first interrogation was conducted.
In any event we think that a person like Harnaik Singh PW2 who is not prepared to subscribe to a part of the prosecution case to which he was not a witness could not but be a truthful witness and there is absolutely no reason not to believe his version that these ornaments were recovered at the pointing out of the accused and were drawn from the drain hole by the accused himself.
" We are unable to appreciate this approach of the High Court.
The Court seems to have made a virtue out of a vice.
While deposing about the recovery of the ornaments from the drain hole of the bath room Harnaik Singh PW2 belied the entire prosecution case when he stated that after the appellant had led the police party to the bath room "the Sardarji took out three bangles and one golden chain from the gutter of the bath room".
The High Court did not advert to this aspect of the evidence at all.
Kuldip Kaul PWl who was also disbelieved by the learned Sessions Judge and in our opinion rightly, had also exposed the extent of falsehood indulged into by the investigating officer with regard to the time and place where the witness attested the memo of recovery of the ornaments but the High Court did not deal with the said circumstance also in its proper perspective and on the other hand unjustifiably criticised the Sessions Judge for her adverse comments on the veracity of the prosecution case.
Obviously, the investigating officer had associated Kuldip Kaul PWI not only because he was known to the SHO but also because he was a convenient witness who was prepared to sign the recovery memo at the police station at 3.30 PM, after the police party had returned from the house of the 'appellant.
The glaring discrepancies and contradictions noticed above have rendered the evidence of Kuldip Kaul PW1, Harnaik Singh PW2 and the Investigation Officer Harmit Singh PW19 untrustworthy and unreliable.
On the other hand, we find that the defence version regarding the recovery of ornaments is more probable and is supported by independent witnesses including Tara Chand 247 DW2 father of the deceased whom the I.O. did not produce as a prosecution witness.
Despite searching cross examination nothing was elicited to created any doubt on the veracity of Tara Chand DW2, the father of the deceased, who, as already stated, would be the last person to screen the real murderer of his daughter.
The evidence of Tara Chand DW2 has impressed us and we find that the version given by him, in the facts and circumstances of the case, was more probable.
In view of the serious discrepancies contradictions and the attempt of the Investigating Officer Harmit Singh to create false clues and fabricate evidence, we are of the opinion that the learned Sessions Judge was perfectly justified in rejecting the prosecution evidence relating to the disclosure statement exhibit PC and the consequent recovery of the ornaments.
The prosecution has failed to establish that the appellant did make the disclosure statement as alleged by the prosecution or led to the recovery of the ornaments belonging to the deceased in the manner suggested by the prosecution.
This piece of circumstantial evidence, therefore, has not at all been established, much less conclusively.
In a case based on circumstantial evidence, the settled law is that the circumstances from which the conclusion of guilt is drawn should be fully proved and those circumstances must be conclusive in nature.
Moreover, the established facts should be consistent only with the hypothesis of the guilt of the accused alone and totally inconsistent with his innocence.
Though with the ruling out of the recovery of the ornaments as circumstances relating to the been established conclusively, the chain of the circumstantial evidence snaps badly, we find that there are some other circumstances also in the prosecution case which militate against its correctness.
Admittedly, the nail clippings of the nails of the deceased had been taken by the police.
There was also recovery of the hair from near the cot where the dead body was lying and the romoval of the hair from the scalp of the appellant by the I.O. for the purpose of their comparison.
The report of the chemical examiner has not connected the hair recovered from the cot with those of the appellant.
There is no material on the record either to show that the nail clipping had any blood, which could have tallied with the blood group of the appellant.
Thus, both the/ nail clippings and the hair have failed to connect the appellant with the crime.
248 The information about the incident was given by Sulekh Chand Jain DW13 an immediate neighbour, of the decased who informed the police at 4.55 AM on the request of the appellant about the occurrence.
Sulekh Chand Jain was not examined by the prosecution and was instead examined by the defence and has appeared as DW13.
He deposed that he had conveyed the information, as given to him by the appellant and other inmates of that house, regarding the murder of the deceased to Moti Ram PW11 at police station Hauz Khas on telephone.
The record of the information conveyed by him at the police station was, however, cryptic and no explanation has been furnished as to why the recorded report was so cryptic.
In answer to a question in the cross examination, the witness naturally expressed his ignorance as to why the report had been recorded in the manner in which it was recorded.
That was natural.
This explanation was required to be furnished by the police witnesses rather than DW13.
Though he was subjected to incisive cross examination, nothing emerged from the evidence of DW13 which may show that he had not conveyed the information of murder having been committed to the police.
Under these circumstances, the argument of Mr. Garg that the report was designedly left vague to enable the investigating agency to fill in the blanks latter cannot be dismissed as wholly unplausible particularly when we have noticed the conduct of the Investigating Officer during the investigation.
The possiblility that the entire case was built up after the dogs of the dog squad pointed towards the appellant cannot be ruled out.
Since, the appellant had slept in the verandah near the cot where the dead body of his wife was found; had locked the collapsable door with the recovered lock before going to sleep and had himself been close to the dead body before the police came, the picking up of the smell by the dogs and pointing towards the accused could not be said to be a circumstance which could exclude the possibility of guilt of any person other than that of the appellant or be compatible only with hypothesis of guilt of the appellant.
The pointing out by the dogs could as well lead to a misguided suspicion that the appellant had committed the crime.
The explanation of the appellant regarding the injuries on his person as having been caused by the police is also quite plausible because according to the father of the deceased, the sister of the deceased, the tenants of the house and other neighbours who had reached the spot, the appellant was wearing only a vest and the pyjama and no shirt and there were no marks of injuries on his body before he was 249 taken to the police.
station.
The prosecution case regarding the presence of injuries on the person of the deceased also, therefore, is quite doubtful.
On an independent appraisal of the evidence on the record, we have therefore unhesitatingly come to the conclusion that the learned Sessions Judge was perfectly justified in acquitting the appellant of all the charges and the reasoning given and the findings recorded by her are sound, cogent and reasonable.
The High Court was not justified to set aside those findings on surmises and conjectures.
The finding of guilt recorded against the appellant by the High Court is not sustainable in law and we, agree with the learned Sessions Judge that the prosecution has not established the case against the appellant beyond a reasonable doubt.
We, accordingly, set aside the judgment of the High Court convicting the appellant for the offence under Section 302/203 IPC.
The appeal is allowed and the appellant acquitted of both the charges.
The appellant is on bail, his bail bonds shall stand discharged.
N.V.K. Appeal allowed. [/INST] The appellant and his wife went to sleep in the back varandah of their house on the fateful night of 25th/26th July, 1976 while the appellant 's brother alongwith his wife and children went to sleep separately in their bed room in the same house.
The Police Control Room was informed over the telephone by a neighbour Sulekh Chand Jain at 4.55 A.M. that an incident had taken place in the house and on receiving the telephone message, the S.I. made a record of it in the daily diary and passed on the information to the duty officer at the police station, who deputed an A.S.I. to proceed to the spot for investigation.
After reaching the spot, the A.S.I. informed the police station on telephone that a murder had taken place.
The information was recorded and the SHO immediately left for the spot alongwith S.I.
The police party arrived at the spot at about 5.35 a.m. and took charge of the investigation.
The appellant was present near the dead body and on interrogation, the appellant informed the police party that his brother and family had retired for the night in their bed room at about 10.00 P.M. and he alongwith his wife had slept in the back verandah, and that when he got up at 3.45 A.M. he noticed that his wife had been murdered by somebody by strangulation while committing the theft of the gold chain, eartops and golden bangles that she was wearing.
The crime team as well as the dog squad were summoned.
Both the 227 dogs of the dog squad were first let loose and after picking up the smell from the lock lying in the corner of the back courtyard and from the spot, went to the room where the appellant was sitting and each of the dogs pointed towards him by turn.
That raised a suspicion against the appellant.
The SHO then asked the appellant to remove his shirt and found that the appellant had injuries in the nature of bruises etc.
on the front part of his, body, on the chest, as well as on his back, The appellant was thereafter taken for further interrogation to the police station, and in the presence of the Sub Inspector, PWI and PW2 he made a disclosure statement to the effect that he had concealed the golden chain and the bangles in his bathroom and in pursuance of the disclosure statement, the appellant led the police party to the bathroom of his house and after removing the cover from the drain hole, took out the golden chain and the bangles and handed them over to SHO.
The appellant was placed under arrest.
After the disclosure statement was made the case which was originally registered under Section 460 IPC was converted into one under Section 302 read with section 203 IPC.
After completion of the investigation, the challan was filed against the appellant and he was tried for offences under Section 302/203 IPC in the Court of the Additional Sessions Judge.
The prosecution sought to establish the case against the appellant on the basis of circumstantial evidence, there being no eye witness of the occurrence.
The circumstances set up by the prosecution were : (i) information to the police at 4.55 A.M given by a neighbour and not the appellant; (ii) that information that a murder had taken place was not given but intimating the happening of an incident; (iii) The accused having slept at night in the verandah with tile deceased after having locked the collapsable door of the verandah from inside; (iv) The deceased and accused were last seen together; (v) The dogs of the dog squad having pointed out to the accused after picking up scent from the lock; (vi) The ornaments which were on the person of the deceased while she was sleeping, and found missing when she was discovered dead, were recovered from the drain hole of the bath room attached to the bed room of the accused in consequence of and in pur suance to the disclosure statement made by the accused; (vii) injuries found on the person of the accused in the nature of abrasions, contusions, and (viii) the accused having given false information to the police by means of his statement Ext.
228 The Sessions Judge after carefully analysing the aforesaid circumstances held that the prosecution has entirely failed to prove any of the circumstances set up against the accused, much less to establish the chain of circumstances, so as to bring out a nexus between the crime and the accused, and acquitted the appellant for the offences under Section 302/203 IPC.
The State appealed to the High Court and a Division Bench reveresed the order of acquittal of the appellant.
The High Court held that the circumstances formed a chain and the sequences were so complete by themselves that one was left in no manner of doubt that the appellant alone had committed the crime.
The appeal was allowed, the order of acquittal was set aside, and the appellant was sentenced to undergo rigorous imprisonment for life under Section 302 IPC, and also to undergo rigorous imprisonment for a period of one year under Section 203 IPC.
In the appeal to this Court it was contended on behalf of the appellant that the approach of the High Court was totally erroneous and that a well considered and well reasoned judgment of the Trial Court was upset by the High Court by drawing inferences which were not available from the record and by ignoring material discrepancies and infirmities in the prosecution evidence, which not only did not establish various circumstances but which also showed that the chain of circumstantial evidence was wholly incomplete.
It was further contended that the appellant had been roped in on the basis of misguided suspicion and that the circumstances relied upon by the prosecution were not exclude the hypothesis, other than that of the guilt of the appellant.
The appeal was contested by the State submitting that some of the circumstances like the pointing out of the appellant by the dogs of the Dog Squad, the disclosure statement and the recovery of ornaments as a consequence thereof.
and the presence of injuries on the person of appellant, were of such a conclusive and clinching nature that they left no doubt that the appellant had committed the crime, and this was fortified when the appellant had made the attempt to mislead the investigating officer by giving a false version with a view to screen himself.
Allowing the appeal, and setting aside the judgment of the High Court convicting the appellant, this Court, HELD : 1.
The High Court did not properly appreciate the prosecu 229 tion evidence while reversing the well considered judgment of the Sessions Judge.
On independent appraisal of the evidence, the prosecution evidence relating to the disclosure statement and the recovery of ornaments is not only discrepent and contradictory but also suffers from glaring infirmities and improbabilities rendering it unsafe to rely upon the same.
[244H, 245B] 2.
The Sessions Judge was perfectly justified in acquitting the appellant of all the charges and the reasoning given and the findings recorded are sound, cogent and reasonable.
The High Court was not justified to set aside those findings on surmises and conjectures.
The finding of guilt recorded against the appellant by the High Court is not sustainable in law and the prosecution has not established the case against the appellant beyond a reasonable doubt.
[249B] 3(a).
In a case based on circumstantial evidence, motive assumes pertinent significance as existence of the motive is an enlightening factor in a process of presumptive reasoning in such a case.
The absence of motive, however, puts the court on its guard to scrutinise the circumstances more carefully to ensure that suspicion and conjecture do not take place of legal proof.
In a case based on circumstantial evidence, the settled law is that the circumstances from which the conclusion of guilt is drawn should be fully proved and those circumstances must be conclusive in nature.
Moreover, the established facts should be consistent only with the hypothesis of the guilt of the accused alone and totally inconsistent with his innocence.
[238E F] 4.
No motive has been established by the prosecution for the appellant to commit the murder of his wife and the evidence of Tara Chand father of the deceased as well as the sister of the deceased and the tenants living in the same house disclose that the relations between the husband and wife were cordial.
[238E] 5.
The circumstance (of the disclosure statement and the consequent recovery pursuant thereto of the ornaments belonging to the deceased is of such an incriminating nature that if found established by reliable and trustworthy evidence, it would go a long way to furnish proof of the guilt of the appellant and connect him with the crime and if the evidence in 230 support of that circumstance is found to be not reliable, the entire chain of circumstantial evidence will snap so badly as to affect the credibility of the prosecution case as a whole.
[238G H) 6.
According to the prosecution after the appellant had been taken to the police station by the investigating officer he was interrogated after being placed under arrest.
He voluntarily made a disclosure statement exhibit
The disclosure statement was recorded by the SHO and has been attested by Kuldip Kaul PWI, SI Dalip singh PW6 and Harnaik Singh PW2.
Pursuant to the disclosure statement, the appellant is alleged to have led the police party to the recovery of the ornaments from a drain hole in his bathroom.
The recovery memo EX.PF was prepared at the spot and was attested by PW6.
PWl and PW2 besides the Investigating Officer.
[239A B] 7.
According to the appellant, however, he had made no disclosure statement nor led the police party to the recovery of the ornaments as alleged, and according to the defence version, the missing ornaments had in fact been recovered by the police party around 11 A.M. during search from the service lane, from underneath a slab, near the boundary wall and at that time the appellant and Jagminder Dass Jain were also present.
This defence version is supported by the evidence of DW2, Tara Chand, father of the deceased.
[242D E] 8.
The Sessions Judge carefully considered the evidence led by the prosecution with regard to the disclosure statement and the recovery of ornaments.
It was found that the evidence of Harnaik Singh PW2, who according to DW11 Sunder Lal constable of police station Defence Colony, had been earlier also cited as a witness for the prosecution in a case investigated by Harmit Singh the then Sub Inspector of police and the present Investigation Officer was not reliable and that the Investigating Officer had not told the truth when he had deposed that he did not know Harnaik Singh earlier.
The Sessions Judge also found the evidence of PW1 Kuldip Kaul as not reliable or trustworthy and disbelieved his testimony by giving cogent reasons after properly appreciating the evidence led by the prosecution.
The defence version with regard to the recovery found as more probable and it was opined that the investigating officer had created false cluses and fabricated false evidence.
[243H, 244A B D] 9.
The High Court on the other hand did not deal with the various discrepancies and contradictions appearing in the prosecution evidence 231 relating to the making of the disclosure statement and the recovery of the ornaments, but place reliance on the testimony of Kuldip Kaul PWl and Harnaik Singh PW2 to hold that the disclosure statement and the recovery had been made in the manner suggested by the prosecution.
[244G] 10.
There is contradiction between the evidence of Kuldip Kaul PWl and the I.O. as to the place where Kuldip Kaul signed the recovery memo.
According to the I.O. it was signed at the spot while according to Kuldip Kaul PW1, he had returned to the police station and there signed the recovery memo.
After carefully analysing the evidence, it is found that Kuldip Kaul PWl was a convenient witness and his evidence does not appear to be trustworthy.
[245B C] 11.
As regards the recovery of ornaments also, there is a very serious infirmity which emerges from the testimony of Harnaik Singh PW2.
Contrary to what the I.O. and the other witnesses stated, Harnaik Singh PW2 deposed that the ornaments were taken out by the Sardarji I.O. from the drain hole and not by the appellant.
This probabilises the defence version that the ornaments had been recovered during the search and were with the I.O. when the ritual of the recovery under Section 27 of the Evidence Act was performed.
The contradictions in the evidence of the I.O. and S.I. Dalip Singh PW6 as to who had weight the ornaments after their alleged recovery also casts doubt on the correctness of the prosecution story and the bonafides of the investigation.
[245G H] 12.
Having regard to the serious discrepancies, contradictions and the attempt of the Investigating Officer to create false clues and fabricate false evidence, the Sessions Judge was perfectly justified in rejecting the prosecution evidence relating to the disclosure statement exhibit PC and the consequent recovery of the ornaments.
[247C] 13.
The prosecution has failed to establish that the appellant did make the disclosure statement as alleged by the prosecution or led to the recovery of the ornaments belonging to the deceased in the manner suggested by the prosecution.
This piece of circumstantial evidence, therefore, has not at all been established, much less conclusively.
[247D] 14.
Though with the ruling out of the circumstance relating to the recovery of the ornaments as not having been established conclusively, the chain of the circumstantial evidence snaps badly, there are some other 232 circumstances also in the prosecution case which militate against its correctness.
Admittedly, the nail clippings of the nails of the deceased had been taken by the police.
Were was also recovery of the hair from near the cot where the dead body was lying and the removal of the hair from the scalp of the appellant by the I.O. for the purpose of their comparison.
The report of the chemical examiner has not connected the hair recovered from the cot with those of the appellant.
There is no material on the record either to show that the nail clipping had any blood, which could have tallied with the blood group of the appellant.
Thus, both the nail clippings and the hair have failed to connect the appellant with the crime.
[247F H] 15.
The possibility that the entire case was built up on suspicion after the dogs of the dog squad pointed towards the appellant connot be ruled out.
Since, the appellant had slept in the verandah near the cot where the dead body of his wife was found; had locked the collapsable door with the recovered lock before going to sleep and had himself been close to the dead body before the police came, the picking up of the smell by the dogs and pointing towards the accused could not be said to be a circumstance which could exclude the possibility of guilt of any person other than that of the appellant or be compatible only with hypothesis of guilt of the appellant.
The pointing out by the dogs could as well lead to a misguided suspicion that the appellant had committed the crime.
[248E F] 16.
The explanation of the appellant regarding the injuries on his person as having been caused by the police is also quite plausible because according to the father of the deceased, the sister of the deceased, the tenants of the house and other neighbours who had reached the spot, the appellant was wearing only a vest and the pyjama and no shirt and there were no marks of injuries on his body before he was taken to the police station.
The prosecution case regarding the presence of injuries on the person of the deceased also therefore, is quite doubtful.
[248G H] </s> |
<s>[INST] Summarize the following judgement: Appeal No. 1749 of 1980.
From the Judgment and Order dated 26.3.
1980 of the Gujarat High Court in Special Civil Application No. 1606 of 1975.
D.A. Dave, Vimal Dave, R. Karanjawala, Mrs. Manik Karanjawala, Jitender Singh and P.K Mullick for the Appellant.
R.R. Goswami, S.K Dholakia, P.H. Parekh, Fazal, H.K Rathod and S.C. Patel for the Respondents.
The following Order of the Court was delivered: The State of Gujarat, the appellant herein, is aggrieved against a mandamus issued by the High Court of Gujarat on March 26, 1980 'in Special Civil Application No. 1606/75 whereby its decision to impose a ratio while working out a, Quota rule was upset.
The minimum facts are these: In the State Public Works Department there was an Electrical Engineering Branch.
By Resolution dated July 10, 1972, the services in the said branch w.e.f May 1, 1972 were trifurcated on the same pattern as was 386 done in other branches.
The result was that the trifurcation ended into three cadres (1) Junior Engineers, (2) Supervisors and (3) Over seers.
The compartment of Over seers is a surplus age.
There was only one Overseer at the relevant time and he stood retired.
In substance it was a bifurcation between Junior Engineers and Supervisors, the former being graduates and the latter being diploma holders.
This exercise of the State Government was challenged in a writ petition before the High Court in Special Civil Application No. 1855/73, which was negatived by the High Court by an order dated 2nd April, 1975.
The High Court directed that in working out the trifurcation the Government must provide criterion for promotion from the three independent cadres.
In compliance thereof, the State Government adopted a Resolution dated 26.9.1975 introducing a quota rule effective from May 1, 1972 at the ratio of 2:1 for Junior Engineers and, Supervisors respectively for promotion to the posts of Deputy Engineers.
The nine contesting respondents herein preferred a writ petition being Special Civil Application No. 1606/75 before the High Court challenging the trifurcation as also the quota rule.
The High Court repelled the challenge in so far as it related to the trifurcation and the adoption of quota rule but struck down the ratio of 2:1 holding it to be unjustified as also the disparity in qualifying service from both the channels.
The High Court concluded as follows: "We are, therefore, of the opinion that though it was within the power of the State Government to bifurcate the unified cadre into two distinct cadres of Junior Engineers and Supervisors and though it was within the power of the State Government to prescribe a quota for both of them for the purpose of promotion to the higher posts of a Deputy Engineer there was no justification for prescribing the quota of 2:1 and a longer qualifying service for the Supervisors.
Therefore, the promotional rule which prescribes unequal quota and an unequal length of qualifying service for Supervisors for promotion to the posts of a Deputy Engineer is liable to be struck down.
" And accordingly it did by issuing a mandamus.
The State Government of Gujarat when appealing to this Court was unsuccessful in obtaining a stay of operation of the impugned judgment.
387 As a consequence it had to obey the mandate of the High Court which was to the effect that the ratio of 2:1 could not be enforced.
As a result the quota rule went out of gear.
It was left open all the same to the State Government to make any other rational rule in that behalf.
Even this Court on 18.12.1980, at that juncture, ordered, "Let the Government frame a fresh quota rule consistent with the High Court judgment under appeal for the purpose of making promotions during the pendency of the appeal. ' Pursuant thereto, it appears that the State Government was constrained to introducing of a Rule under Article 309 of the Constitution.
But before we advert to that Rule it would be relevant to mention that earlier in point of time, by Notification dated July 4, 1978, Rules known as Deputy Engineer (Electrical) Recruitment Rules, 1978, were framed under Article 309 of the Constitution giving a statutory clothing to the Resolutions dated 10.7.72 and 26.9.75.
Unfortunately, these statutory provisions were not brought to the notice of the High Court nor were they put to challenge.
The matter in the High Court proceeded on the assumption that an executive action of the State was under challenge.
The necessary assumptions and presumptions, well known to law and the placement of onuses went unnoticed.
In this background and facing the situation so arising the State Government issued a Notification on April 12, 1982 by causing a substitution in the earlier Rules of 1978 aforementioned by fixing t he promotional ratio from both sources at 1:1, but subjected them to the result of the instant litigation emerging from this Court.
We stand deprived of the pleadings of the parties before the High Court.
The pleadings now introduced do not help us.
Significantly, the High Court judgment is silent as to the basis on which it was persuaded to strike down the ratio of 2:1 for Junior Engineers and Supervisors respectively.
The tenor of the judgment of the High Court does however suggest that the executive flexibility, with which the Government works could not justify the fixation of the ratio of 2:1.
The High Court could not and did not substitute what was the right ratio in the circumstances and left it to the Government to devise another ratio.
Had the, factum of the legislation on the subject the Rules dated 4.7.1978, been brought to its notice, perhaps the High Court 's angle of vision would have been different.
The State has no doubt compulsively carried out the mandate but has done so with reservation so as to meet the eventuality.
No such measure can ever be permanent that would hold good for all times, to meet not only the present needs but also future exigencies as well.
Hands of the State cannot to so 388 tied down.
That would be a step retrograde to the growth and working of a democracy.
The State is now left to devise a ratio other than the ratio of 2:1 and cause a variation.
It cannot come to that ratio again.
This appears to us an undesirable situation.
It must be left to the State to get at, it again.
Though obeying the mandamus of the High Court the State must be free to arrive at the original ratio of 2:1.
On some basis the Governor of the State appears to have legislated on the subject.
It was on the writ petitioner 's (now respondents) to lay data before the High Court and bear the onus to show that the legislative measure was unfair and arbitrary, violative of Article 14 of the Constitution.
As said before no such data appears to have been placed before the High Court.
On these circumstances, we are left with no option but to upset the judgment of the High Court and remand the matter back to it for reconsideration.
In doing so we may set at rest the controversy regarding difference of length of qualifying service, from both sources.
The controversy does not survive in view of Roop Chand Adlakha & Ors.
vs Delhi Development Authority & Ors., [1989] Supp.
I SCC 116.
The High Court need not advert now to the disparity in length of qualifying service from the channels of promotion.
In the meantime, however, status quo needs to be preserved.
The substituted Service Rules of 1982 shall continue to operate till the decision of the High Court and the promotions, as before, shall continue, subject to the result of the judgment of the High Court.
In these terms we allow the appeal and set aside the judgment.
The High Court may pass appropriate orders afresh, after permitting the parties to amend their pleadings, if necessary, and putting the onus on the writ petitioners to prove unfairness in the 1978 Rules, or violation of Article 14 of the Constitution.
Since it is an old matter, we request the High Court to dispose it of as quickly as possible, preferably within six months.
No Costs.
V.P.R. Appeal allowed. [/INST] The appellant State by resolution dated 10.7.1972, trifurcated the services, in the Electrical Engineering Branch of the Public Works Department into three cadres, namely, (1) Junior Engineers, (2) Supervisors and (3) Over seers, w.e.f. 1.5.1972.
At the relevant time there was only one Overseer and he stood retired.
Therefore, In substance it was a bifurcation between Junior Engineers and Supervisors the former being graduates and the latter being diploma holders.
In a writ petition before the High Court exercise of the State was challenged.
The High Court directed the State to provide for a criterion for promotion from the three independent cadres, for working out the trifurcation.
In compliance of the order of the High Court, the appellant adopted a Resolution dated 26.9.1975 introducing a quota rule effective from May 1, 1972 at the ratio of 2:1 for Junior Engineers and Supervisors respectively for promotion to the posts of Deputy Engineers.
The respondents challenged the trifurcation and also the quota rule in a writ petition before the High Court.
384 The High Court struck down the ratio of 2:1 holding it to be unjustified as also the disparity in qualifying service from both the channels.
Hence this appeal by special leave by the State, being aggrieved against a mandamus issued by the High Court not to impose the ratio of 2:1 while working out the quota rule.
As the appellant was unsuccessful in obtaining a stay of operation of the High Court 's judgment, it had to obey the mandate of the High Court and the ratio of 2:1 could not be enforced.
This Court on 18.12.1980 ordered the Government to frame a fresh quota rule consistent with the High Court judgment for the purpose of making promotions during the pendency of the appeal and under Article 309 of the Constitution, a Rule was framed.
Earlier the appellant had framed the Deputy Engineer (Electrical) Recruitment Rules, 1978 under Article 309 of the Constitution, which were not brought to the notice of the High Court nor the Rules, 1978 were challenged.
Allowing this appeal, this Court, HELD:1.01.
The matter in the High Court proceeded on the as sumption that an executive action of the State was under challenge.
The necessary assumptions and presumptions, well known to law and the placement of onuses went unnoticed.
In this background and facing the situation so arising the State Government issued a Notification on April 12, 1982 by causing a substitution in the earlier Rules of 1978 by fixing the promotional ratio from both sources at 1:1, but subjected them to the result of the instant litigation emerging from this Court.
[387D E] 1.02.
The High Court judgment is silent as to the basis on which it was persuaded to strike down the ratio of 2:1 for Junior Engineers and Supervisors respectively.
The tenor of the judgment of the High Court does however suggest that the executive flexibility, with which the Government works could not justify the fixation of the ratio of 2:1.
The High Court could not and did not substitute what was the right ratio in the circumstances and left it to the Government to devise another ratio.
Had the factum of the legislation on the subject i.e. the Rules dated 4.7.1978, been brought to its notice, perhaps the High Court 's angle of vision would have been different [387F G] 385 1.03.
The State has no doubt compulsively carried out the mandate but has done so with reservation so as to meet the eventuality.
No such measure can ever be permanent that would hold good for all times, to meet not only the present needs but also future exigencies as well.
Hands of the State cannot be so tied down. 'Mat would be a step retrograde to the growth and working of a democracy.
[387H, 388A] 1.04.
It was on the Writ petitioner 's (now respondents) to lay data before the High Court and bear the onus to show that the legislative measure was unfair and arbitrary, violative of Article 14 of the Constitution.
No such data appears to have been placed before the High Court.
[388B] 1.05.
On these circumstances the case is remanded to the High Court for reconsideration.
[388C] Roop Chand Adlakha & Om vs Delhi Development Authority & Ors., [1989] Supp I SCC 116, referred to.
[388D] </s> |
<s>[INST] Summarize the following judgement: Appeal Nos.3465 69 of 1988.
From the Judgment and Order dated 26.10.1987 of the Punjab and Haryana High Court in C.W.P. Nos. 755, 5141 & 3659/87 & 3138/88.
357 Shanti Bhushan and Prem Malhotra for the Appellants.
Ms. Nisha Bagchi for Ms. Indu Malhotra, U.S. Chowdhary and Ravindra Bana for the Respondents.
Bhal Singh Malik and S.M. Hooda for the Intervenor.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
This batch of appeals is preferred against a common judgment of Punjab an Haryana High Court dismissing a batch of six writ petitions.
There are three wings/branches in the Public Works Department of the Government of Haryana, viz., Irrigation, Roads and Buildings and Public Health.
We are concerned herein with the Irrigation branch.
The Engineering service in the Irrigation branch comprises both class I, and class II services.
Recruitment to and conditions of service of class I are governed by the Haryana Service of Engineers Class I P.W.D., Irrigation Branch Rules, 1964 whereas recruitment to and conditions of service of class 11 is governed by Haryana Service of Engineers Class 11 P.W.D. (Irrigation Branch) Rules, 1970.
The lowest category in class I is that of Assistant Executive Engineers.
Above it is the category of Executive Engineers and above it Superintending Engineers.
Recruitment to the category of Assistant Executive Engineers is only by direct recruitment.
Recruitment to the category of Executive Engineers is (a) by direct recruitment, (b) by transfer of an officer already in class I service of the Government of India or of a State Government and (c) by promotion from class 11 service.
Sub rule (2) of Rule 5 of the class I Rules says, "recruitment to the service shall be so regulated that the number of posts filled by promotion from class 11 service shall not exceed 75% of the number of posts in the service excluding the posts of Assistant Executive Engineers for the first 10 years from the date of commencement of these Rules and thereafter shall not exceed 50% of the number of posts in the service excluding the post of Assistant Executive Engineers.
" The proviso to this sub rule, however, says that "in case an adequate number of Assistant Executive Engineers who are eligible and considered fit for promotion are not available the actual percentage of officers promoted from class 11 service may be larger than 75% or 50%, as the case may be." In other words, after the year 1974, the share of class 11 officers in the promotion quota to the category 358 of Executive Engineers categroy, shall not exceed 50%, the balance being allocated to the Assistant Executive Engineers who are also entitled to be promoted to the categroy of Executive Engineers.
But in case adequate number of Executive Engineers are not available, the said ceiling can be exceeded.
Though the Assistant Executive Engineers are in class I and Assistant Engineers are in Class II, both these categories discharge similar functions, duties and responsibilities.
Members of both these categories are posted as Sub Divisional Officers/Sub Divisional Engieers.
Both are eligible for promotion to the category of Executive Engineers as stated above, but while the cadre strength of Assistant Engineers is very large, the cadre strength of Assistant Executive Engineers is quite small, with the consequence that in the matter of promotion to the category of Executive Engineers, the Assistant Executive Engineers enjoy a marked advantage in view of the inter se quota prescribed by sub rule (2) of Rule 5.
The Assistant Executive Engineers get promoted far sooner than the Assistant Engineers.
The cadre strength of Assistant Executive Engineers is stated to be 49.
While the cadre strength of Assistant Engineers is not stated before us, it is admittedly far larger.
In the year 1985, the Haryana Public Service Commission issued a notification stating that "a combined competitive examination for recruitment to the post of Assistant Executive Engineers (C) in the P.W.D. will be held by the Haryana Public Service Commission in August/September, 1985 in accordance with the rules of Haryana P.W.D. Irrigation, B&R and Public Health Branches, as amended from time to time." Then followed the table of particulars, which must be noticed: Reserved Reserved Reserved Name Of Post No.
Of For S.c.of For B.c.
Post For exhibit Haryana Haryana Service 1 2 3 4 5 (i) Haryana Service of Engineers 15 4 2 1 Class I (Junior Sca les) in P.W.D. Public Health Branch.
359 (ii) Haryana Service of 8 2 1 enginners Class I Enginee rs Class I (Junior Scales) in P.W.D. B & R. Br.
(iii)Haryana Service of Engineers Class I (Junior Scale) posts in the P.W.D. Irrigation Branch are also likely to be filled from the suitable candidates from this very advertisement after the receipt of demand from the Government.
The number of posts given against each category is liable to variation.
Three posts (two for S.C.of Haryana and One B.C. of Haryana) in P.W.D. B & R Branch are reserved failing with other shall be considered.
Seven posts (four for S.C. of Haryana, two for B.C. of Haryana and one for Ex Servicemen) in P.W.D. Public Health Branch are reserved failing whom others will be considered".
It is significant to notice the wording of item (iii) in the table.
It is clear therefrom that the Public Service Commission had notified the vacancies in the category of Assistant Executive Engineers (referred in the Rules and in the notification as Engineers class I (Junior Scale)) even without a requisition from the Government.
The Commission by stating that posts in the said category "are also likely to be filled from the suitable candidates from this very advertisement after the receipt of demand from the Govern ment", had made it known to the candidates of the absence of authority.
Admittedly, no such demand or requisition was ever received by the Government at any time after the issuance of the said notification.
It is equally relevant to point out that under the notification, applications for selection to the category of Assistant Executive Engineers in all the three wings of the P.W.D. were called for.
The eligibility criteria and the qualifications required for appointment to the said category is stated to be indentical in all the three wings though they are governed by different sets of rules.
It is also stated before us that no separate applications were necessary and that one could apply for appointment in all or any of the three wings indicating his choice and subject to his fulfilling the prescribed qualifications.
In response to the notification aforesaid, several Engineers including 360 the appellants herein applied.
A written test was.
conducted followed by an oral interview.
On the basis of the marks obtained in the written test and the oral interview, certain persons were selected for Public Health and Buildings & Roads wings.
No selections were made for the Irrigation wing evidently for the reason that even by the date of finalisation of selections, no requisition or demand had come from the Government.
It is only then that the appellants approached the Punjab and Haryana High Court with a batch of writ petitions praying for the issuance of an appropriate writ, order or direction to the respondents (Government of Haryana and the Haryana Public Service Com mission) "to fill up 44 vacancies of Assistant Executive Engineers and others falling to the quota of direct recruits from amongst the applicants who had applied in pursuance of the advertisement. .
They asked for a further direction to the State of Haryana "to send requisition to the Respondent Commission to fill up all the vacancies in the Class I service which are meant for direct recruits forthwith and to make appointment to the class I service by the method of direct recruits as required by the Rules.
" The appellants challenged the method of selection followed by the Commission as also the refusal/failure of the Government to fill up the vacancies in the category of Assistant Executive Engineers.
The writ petitions were opposed by the Public Service Commission as also by the State Government.
The High Court dismissed the writ petitions rejecting the several contentions urged by the appellants.
In this appeal, Sri Shanti Bhushan, the learned counsel for the appellants urged the following contentions: (1) The cadre strength of Assistant Executive Engineers in the Irrigation wing is 49.
As against the said strength, there were only 5 persons holding the posts, which means the vacancies are 44 in number.
There has been no recruitment to this category since 1979.
In that year, the Government had sent a requisition for 22 posts but only 8 were selected by the Commission.
From out of these eight, only five were appointed to the category.
In the year 1983, the Government sent a requisition to the Commission for 23 posts but none were selected or appointed.
It is in this situation that the notification issued by the Commission in the year 1985 envisaged a selection to the category of Assistant Executive Engineers in the Irrigation Branch as well.
The Commission expected that in view of the vacancies earlier notified, the Government would be sending a requisition and with 361 a view to save time and effort, it included the vacancies in Irrigation wing as well in the Notification, which pertained to the vacancies in the very same category in the other two wings of the P.W.D., for which requisition was received.
The Government acted arbitrarily and unreasonably in no sending the requisition, inspite of the fact that 44 vacancies have been existing in this category in Irrigation Branch since a long number of years.
This refusal to fill up the said vacancies is mala fide and is designed to help and promote the interest of class II officers.
Though, according to the Rules, the number of promotees from class 11 in the category of Executive Engineers should not exceed 50%, the fact is that practically all the promotion posts in the category of Executive Engineers are held by erstwhile class II officers for the reason that the category of Assistant Executive Engineers in this branch is being kept practically empty.
When the statutory rules have created a particular category and a cadre strength is also fixed therefor and more particularly when a quota is reserved for them in the channel of promotion to the category of Executivie Engineers, it is not open to the Government to nullify the spirit and object behind the Rules by refusing to make appointment to the said category.
If these 44 posts are filled up, many of the appellants, if not all, are likely to be selected and appointed.
(2) The procedure adopted by the Haryana Public Service Commission is contrary to statutory Rules.
Whereas the Rules say that a candidate obtaining 50% marks in the written test is entitled to be called for viva voce, the Commission has arbitrarily prescribed a threshold of 65% which it had no jurisdiction to do.
As a result of the said arbitrary stipultion several of the appellants have been denied the opportunity of selection.
The Commission must now be directed to make selection afresh for all the three wings/branches in the Public Works Department.
With a view to clear the ground, it would be appropriate to deal with the second contention first.
It is based upon the proviso to sub rule (2) of Rule 7 of the 1964 Rules.
Rule 7 deals with direct appointment.
For the sake of convenience, we may set out sub rules (1) and (2) of Rule 7: "DIRECT APPOINTMENT: (1) A Candidate for direct appointment shall not be less than 20 years and more than 25 years on age of or before the first day of August next precedin g the last date of submission of applications to the commission; 362 Provided that: (a) in the case of candidates who are displaced persons and in whose case the age limit for admission to Engineering College had been relaxed, and in the case of candidates belonging to the Scheduled Castes, Scheduled Tribes and other backward classes the upper age limit shall be such as may be fixed by the Government from time to time.
(b) in the case of candidates possessing the requisite qualifications who are already in the service of the State Government, the upper age limit shall be 30 years; (2) The selection of candidates, including those belonging to Scheduled Castes, Scheduled Tribes or Backward Classes, shall be made by the Commission, after holding a competitive examination, the syllabus for which shall be such as may be prescribed by the Government from time to time.
The Commission shall recommend the required number of candidates after arranging their names in the order of merit and indicating which out of them belong to Scheduled Castes, Scheduled Tribes or Backward Classes: Provided that a candidate shall not be considered qualified for appointment, unless he obtains not less than forty per cent marks in each subject and also not less than fifty per cent marks in the aggregate, and no candidate who does not obtain the qualifying marks shall be called for interview by the commission.
Provided further that where a vacancy has been reserved for a person belonging to Scheduled Castes, Scheduled Tribes or Backward Classes, who secures the highest marks in the aggregate and has qualified for an appointment shall be selected irrespective of his position with respect to the other candidates.
" 363 A reading of the first proviso to Sub Rule (2) of Rule 7 shows that it prescribes a minimum percentage of marks in the written test hoth for appointment as well as for being called for interview (viva voce).
It does not create a right in the candidate, who has obtained the prescribed percentage of marks, to be called for interview.
This is how a similar Rule has been understood by a Constitution Bench of this Court in Ashok Kumer Yadav vs State of Haryana, A.I.R. 1987 S.C. 454.
Regulation 3 in the Appendix to the Haryana Civil Service (Executive) and other allied services read as follows: "3.
No candidate shall be eligible to appear in the viva voce test unless he obtains 45 per cent marks.
in the aggregate of all subjects including at least 33 per cent marks in each of the language papers in Hindi (in Devanagri Script) and Hindi Essay provided that if at any examination a sufficient number of candidates do no obtain 45 per cent marks in the aggregate the Commission may at their discretion lower this percentage to not below 40 per cent for the language papers remaining unchanged.
" Construing the said Regulation, the Court held: "it is clear on a plain natural construction of Regulation 3 that what is prescribes is merely a minimum qualification for eligibility to appear at the viva voce test.
Every can didate to be eligible for appearing at the viva voce test must obtain at least 45 per cent marks in the aggregate in the written examination.
But obtaining of minimum 45 per cent marks does not by itself entitle a candidate to insist that he should be called for the viva voce test all candidates who satisfy the minimum eligibility requirement.
It is open to the Harvana Public Service Commission to say that out of the candidates who satisfy the eligibility criterion of minimum 45 per cent marks in the written examination, only a limited number of candidates at the top of the list shall be called for interview.
And this has necessarily to be done because otherwise the viva voce test would be reduced to a farce.
It is indeed difficult to see how a viva voce test for properly and satisfactorily measuring the personality of a candidate can be carried out, if 364 over 1300 candidates are to be interviewed for recruitment to a service.
If a viva voce test is to be carried out in a thorough and scientific manner as it must be in order arrive at a fair and satisfactory evaluation of the personality of a candidate, the interview must take anything between 10 to 30 minutes.
" In view of this decision, we do not think it necessary to deal wit the decisions cited by Sri Shanti Bhushan, namely, Umesh Chandra vs Union of India, ; ; Nilima Shangla vs State of Haryana, ; and P.K Ramachandra Iyer & Ors.
vs Union of India & Ors.
, ; Suffice it to say that neither of them lays down any principle contrary to the one quoted above from Ashok Kumar Yadav.
Coming to the first submission of Sri Shanti Bhushan, the defence of the Government is to the following effect: "It is also admitted.
that cadre strength of Assistant Executive Engineer was fixed on 22.1.82 and is 49 out of which 5 persons are in position.
However, at present, there is no vacant post of Assistant Executive Engineer in the Department.
The true facts are that during the year 197980 some major projects viz. Drainage Projects, Jawahar Lal Nehru Project and Linning etc.
under the World Bank Schemes were taken into hand and there was immediate requirements of technical staff.
For this purpose and to take up the time bound works, 212 Assistant Engineers were recruited on adhoc basis and 178 Sub Divisional Officers were promoted from Junior Engineers/Draftsmen etc.
on adhoc basis to meet the immediate requirement during the aforesaid period till their replacement by the joining of regular Assistant Engineers through Haryana Public Service Commission.
The Haryana Public Service Commission recommended 176 number of Assistant Engineers in December, 1981 for regular appointment against the posts of those, who were appointed/ promoted as Assistant Engineer/Sub Divisional Officers on adhoc basis.
They were given offer of appointment on 29.1.1982.On joining of regular Assistant Engineers, the 365 services of about 45 adhoc Assistant Engineers were terminated by the Government.
The adhoc Assistant Engineers whose services were terminated by the Government filed Civil Writ Petition No. 1529/89 Amarjeet Singh and others vs State of Haryana and other, writs involving the same cause of action challenging their termination orders.
Upon regular hearing the above Civil Writ Petition, the Punjab and Haryana High Court (Hon 'ble Justice Mr. I.S. Tiwana) in its orders dated 3.9.84 decided the matter in favour of the adhoc Assistant Engineers recruited during the year 1980.
Thus the services of adhoc Assistant Engineers could not be terminated and they continued to hold the posts of Assistant Engineers, till date.
However, Government have filed Letter Patent Appeal No.186 90 of 1985 and 374 381 of 1985.Amarjeet Singh etc.
vs State and the same is pending for decision in the Hon 'ble Punjab and Haryana High Court.
Similarly, the Sub Divisional Officers, who are promoted on adhoc basis in the year 1979 80 in excess of their quota could not be reverted by the Government for want of finalisation of Ranking List for the purpose of promotion to the post of Sub Divional Officers in pursuance of the directio n given by the Hon 'ble Punjab and Haryana High Court in Civil Writ Petition No. 5630 5631 of 1981.
J.P. Gupta and Shri Krishan vs State, 1524/76 M.L. Verma vs State and 4489/82 Shri R.K Jain vs State.
" The learned counsel appearing for the Government of Haryana explains that 176 Assistant Engineers selected by the Commission in December, 1981 for regular appointment are 'in addition to 390 Officers (212 Assistant Engineers recruited on adhoc basis and 178 Sub Divisional Officers promoted from the category of Junior Engineers/Draftsment etc.
on adhoc basis).
This statement is, however, disputed by learned counsel for the appellants.
Be that as it may, the submission of the learned counsel for the Government of Haryana is this: both the Assistant Engineers and Assistant Executive Engineers are posted as Sub Divisional Officers/Sub Divisional Engineers.
There is no other posting available for them.
In the circumstances explained in the counter affidavit, a large number of Assistant Engineers are in surplus over and above the cadre strength.
They have to be posted some 366 where and they can be posted only as Sub Divisional Officers/ Sub.
Divisional Engineers.
If Assistant Executive Engineers are also appointed as demanded by the appellants, they will be in further surplus inasmuch as they too can be posted only as Sub Divisional Officers/Sub Divisional Engineers and there are no posts available to post them.
The Government is finding it difficult to give postings to the already existing Assistant Engineers, who have been recruited/promoted on adhoc basis as stated above and who could not be ousted because of the orders from courts.
It is for this reason that the Government did not send requisition for filling up the 44 posts of Assistant Executive Engineers in Irrigation" Branch.
The said decision is a bona fide decision actuated by relevant considerations.
There are absolutely no mala fides on the part of the Government in not filling up the said posts of Assistant Executive Engineers.
It is also brought to our notice that though a requisition was sent to the Commission in the year 1983 for 23 posts of Assistant Executive Engineers in the Irrigation Branch, the Government had withdrawn the said requisition on May 20, 1983 itself i.e., even before any selection could be made.
It was for this reason that no one was selected or appointed to the said category in that year.
Counsel submitted, supported by the counsel for the Commission, that in these circumstances, the Commission was justified in not selecting anyone against the post of Assistant Executive Engineers in the Irrigation wing, more particularly when the expectation of the Commission that the Government may send a requisition therefor did not materialise even by the date of finalisation of selections.
The question that arises in the above circumstances is whether the Government can be compelled to send a requisition to the Commission for the selecting Assistant Executive Engineers in respect of 44 vacant posts? and if it, can be so compelled, would it be appropriate to direct that those posts shall be filled by the candidates who applied for and appeared at the selection held in the year 1985? The first thing to notice is that the Public Service Commission had no authority to include the vacancies in the Irrigation branch in the notification issued by it when the Government had not asked for it.
The requisition from the Government was to select Assistant Executive Engineers only for the other two wings viz., Buildings and Roads and Public Health.
May be the Commission did so bona fide.
Even so, the fact remains that none were selected against the vacancies in the Irrigation branch, evidently because no demand/requisition ever arrived from the Government.
Merely because the 367 appellants appeared at such selection they did not get any right to compe either the commission or the Government to select and appoint them.
In deed, it is not as if the appellants appeared only for the vacancies in Irrigation Branch.
It was a composite notification for all the three wings.
The appellant do not say that they confined their applications to Irrigation wing alone Those selected for the other two wings had admittedly scored more marks at the selection.
Because, the appellants could not get selected against the vacancies in the other wings, they have turned their attention to Irrigation wing.
The relevance of their attack upon the selection procedure adopted by the Commission becomes clearer in this context.
Be that as it may, the mere appearance at the selection does not clothe them with the right to selection and/or appointment.
This is the principle affirmed by this court in State of Haryana vs Subhash Chandra Marwaha, ; and I.J. Divakar vs Government of Andhra Pradesh A.I.R. 1982 S.C. 1555.
At the same time, we are constrained to observe that where the Rules have created a particular category, fixed its cadre strength and have also prescribed a quota for such category in the matter of promotion to the higher category, the Government would not be justified in not making appointments to such category for over a decade unless there are very strong and good reasons therefor.
The Government would not be justified in nullifying though not in word, but in spirit the Rules in this manner.
We are also not persuaded that the defence put forward by the Government in this case is acceptable.
There is no reason why the Government did not think it fit to make some adhoc appointments to the category of Assistant Executive Engineers when it was recruiting such a large number, on adhoc basis, to the category of Assistant Engineers.
The situation in which the Government finds itself today is really of its own making.
The problem is no doubt real.
The courts have to think twice before adding the numbers to the already over loaded service.
It is not so much a question of 'punishing ' the errant but one of what to do with the surplus personnel and the consequent unwarranted burden upon the public exchequer.
On balancing the contending rights and equities, we are of the opinion that at least part of the cadre strength of Assistant Executive Engineers in the Irrigation branch should be filled up in the near future.
The question then arises whether the selection held in 1985 86 at which the appellants had appeard, should be directed to be finalised.
We do not think so.
The situation is not similar to the one considered by this court in Divakar.
That was a case where the commission called for.
applica tions pursuant to the requisition from the Government, held the interviews 368 and was about to finalise the select list that the Government withdrew the requisition.
In those circumstances, this Court, while holding that the candidates who appeared for the selection had no right to compel the commission or the Government to select and appoint them, yet gave a direction, in the interest of justice, to finalise the selection process and forward the select Kg to the Government.
The situation in this case, as already explained hereinbefore is totally different.
The only direction that can properly be made herein is to direct the Government to take steps for filling up the vacancies existing in the category of Assistant Executive Engineers in the Irrigation branch as early as possible, Atleast half the vacancies therein should be filled within a period of one year from today.
Before concluding, we must refer to certian letters relied upon by Sri Shanti Bhushan to justify the notification issued by the Commission.
He relied upon the letters of the Engineer in Chief dated 16.8.1985, 16/ 20.5.1986 and another letter written in between (the date of this letter is not given) addressed to the Government of Haryana outing that while at the moment there was no vacancy of Assistant Executive Engineer, there was a possibility of some vacancies arising on amount of retirement etc.
He, there fore, requested the Government to take.
steps to select persons therefor, Firstly, it may be noticed that the appointing authority for this category being the Government, only the Government could send the requirsition/demand to the commission and not the Engineer in Chief.
The aforesaid letters are merely in the nature of recommendation to the Government.
Secondly, all the three letters are subsequent to the notification issued by the commission calling for applications.
These letters, therefore, do not justify the commission calling for applications in respect of vacancies in the Irrigation branch.
For the above reasons the appeals are allowed partly, A direction shall issue to the, Government of Haryana to take steps for filling up the vacancies, in the category of Assistant Executive Engineers in Irrigation branch of P.W.D. as early &A possible.
in accordance with law, Atleast half the vacancies shall be filled up within am year from today.
It is further directed that if any of the candidates who had applied in pursuance of the 1985 Notification apply again, and if they are found to have become age barred, relaxation in the matter of age shall be granted to them so as to make them eligible for consideration.
No other relief co be granted In these appeals.
There shall be no order as to costs.
T.N.A. Appeals allowed. [/INST] The Public Works Department of Government of Haryana consists of three wings viz., Irrigation, Roads and Buildings and The Engineering Service in the Irrigation Branch comprises both Class I service consisting of Assistant Executive Engineers, Executive Engineers and Superintending Engineers and Class II service including Assistant Engineers.
While the Assistant Executive Engineers are recruited by direct recruitment only, the Executive Engineers are recruited by (i) direct recruitment; (ii) by transfer; (iii) by promotion from Class II service.
, The cadre strength of Assistant Engineers, fixed under tie Rules is very large 354 as compared to the cadre strength of Assistant Executive Engineers.
For the purposes of promotion to Executive Engineers both Assistant Executive Engineers and Assistant Engineers are eligible for which inter se quota is fixed under the Rules.
The Haryana Public Service Commission issued a notification in 1985 inviting applications for selection to the posts of Assistant Executive Engineers for all the three wings of the P.W.D.
Although the requisition from the Government was to select Assistant Executive Engineers only for two wings viz. Public Health and Buildings and Roads yet the Commission notified the vacancies with respect to Irrigation Branch also stating that posts in the said category are also likely to be filled from the suitable candidates from this very advertisement after the receipt of demand from the Government.
On the basis of written test and interview selections were made for Public Health and Buildings and Roads wings but no selections were made for the Irrigation wing because even by the date of finalisation of selections, no requisition or demand had come from the Government.
The appellants, who were not selected, filed writ petitions in the Punjab and Haryana High Court for a direction to respondents to fill up vacancies of Assistant Executive Engineers and others falling to the quota of direct recruits from amongst the applicants who had applied in pursuance to the advertisement and for a further direction to the State of Haryana to send requisition to the Commission to fill up all vacancies which are meant for direct recruits.
The High Court dimissed all the petitions.
In appeals to this Court it was contended on behalf of the appellants that (1) the Government acted arbitrarily in not sending the requisition, inspite of the fact that vacancies in Irrigation Branch existed for a number of years; (2) when the rules created a particular category and the cadre strength was also fixed therefor and more particularly when a quota was reserved for them in the channel of promotion to the category of Executive Engineers, it was not open to the Government to nullify the spirit and object behind the Rules by refusing to make appointment to the said category , (3) the procedure adopted by the Haryana Public Service Com mission was contrary to Rules because under the Rules a candidate obtaining 50 per cent marks in the written test is entitled to be called for viva voce, but the Commission arbitrarily prescribed a threshold of 65 per 355 cent which resulted in denial of opportunity of selection to the appellants.
The stand taken by the Government of Haryana was that the decision not to send requisition for filling up the vacant posts of Assistant Executive Engineers in Irrigation Branch was bona fide and actuated by relevant considerations because a large number of Assistant Engineers, who can be posted only as Sub Divisional Officers/Sub Divisional En gineers, are in surplus over and above the cadre strength and if the Assistant Executive Engineers are also appointed as demanded by the appellants, they will be in further surplus inasmuch as they too can be posted only as Sub Divisional Officers/Sub Divisional Engineers.
Allowing the appeals in part, this Court, HELD:1.
The Public service commission had no authority to include the vacancies in the Irrigation Branch in the notification issued by it when the Government had not asked for it.
May be the Commission did so bona fide.
Even so,, the fact remains that none were selected against the vacancies in the Irrigation Branch, evidently because no demand/requisition ever arrived from the Government.
Indeed, it is not as if the appellants appeared only for the vacancies in Irrigation Branch.
It was a composite notification for all the three wings.
The appellants do not say that they confined their applications to Irrigation wing alone.
nose selected for the other two wings had admittedly scored more marks at the selection.
Therefore, the mere appearance at the selection does not clothe them with the right to selection or appointment.
[366G H, 367A C] State of Haryana vs Subhash Chandra Marwaha, [1974] 3 S.C.C. 220 and LJ.
Divakar vs Government of Andhra Pradesh, A.I.R. , relied on.
Where the Rules have created a particular category, fixed its cadre strength and have also prescribed a quota for such categroy in the matter of promotion to the higher category, the Government would not be justified in not making appointments to such category for over a decade unless there are very strong and good reasons therefor.
The Government would not be justified in nullifying though not in word, but in spirit the Rules in this manner.
[367C D] 2.1.
There is no reason why the Government did not think it fit to 356 make some ad hoc.
appointments to the category of Assistant Executive Engineers when it was recruiting such a large number, on ad hoc basis, to the category of Assistant Engineers.
At the same time, the Courts have to think twice before adding the numbers to the already over loaded service.
It is not so much a question of 'punishing ' the errant but one of what to do with the surplus personnel and the consequent unwarranted burden upon the public exchequer.
On balancing the contending rights and equities, the Court is of the opinion that at least part of the cadre strength of Assistant Executive Engineers in the Irrigation Branch should be riled up in the near future.
[367E G] 3.
The selection held in which the appellants had appeared, cannot be directed to be finalised.
The only direction that can properly be made herein is to direct the Government to take steps for filling up the vacancies existing in the category of Assistant Executive Engineers in the Irrigation Branch as early as possible.
Atleast half the vacancies therein should be filed within a period of one year from today.
[367H, 368A B] I.J. Divakar vs Government of Andhra Pradesh, A.I.R. 1982 S.C. 1555, distinguished.
A reading of the first proviso to Sub.
Rule (2) of Rule 7 shows that it prescribes a minimum percentage of marks in the written test both for appointment as well as for being called for interview (viva voce).
It does not create a right in the candidate, who has obtained the prescribed percentage of marks, to be called for interview.
[363A] Ashok Kumar Yadav vs State of Haryana, A.I.R. 1987 S.C. 454, relied On.
Umesh Chandra vs Union of India, ; ; Nilima Shangla vs State of Haryana, ; and P.K Ramachandra Iyer & Ors.
vs Union of India & Ors.
, ; , referred to. </s> |
<s>[INST] Summarize the following judgement: Appeal No. 3719 of 1991.
From the Judgment and Order dated 3.9.1991 of the Andhra Pradesh High Court in Election Petition No. 22 of 1990.
P.P. Rao, D. Prakash Reddy and A.V.V. Nair for the Appellant.
C. Sitaramaiah, B. Rajeshwar Rao, Vimal Dave, Mrs. Rani Chhabra (NP) for the Respondent.
The Judgment of the Court was delivered by BHARUCHA, J.
This is an appeal under the provisions of the Representation of the People Act, 1951, against the judgment and order of the High Court of Andhra Pradesh whereby the election of the appellant before us to the Andhra Pradesh Legislative Assembly from the Tanuku Assembly constituency was declared void and set aside in view of the finding that he had committed the corrupt practice proscribed by section 123(3) of the Act.
Section 123(3), inter alia, states that "the appeal by a candidate or his agent or by any other person with the consent of a candidate or his election agent to vote or refrain from voting for any person on the ground of his religion. . or the use of or appeal to 348 religious symbols for the furtherance of the prospects of the election of that candidate or for prejudicially affecting the election of any other candidate is a corrupt practice".
The respondent, a candidate of the Telugu Desam Party, secured the largest number of votes at the said election, which was held on 22nd November, 1989.
The High Court found that during the election campaign posters depicting N.T. Rama Rao, the leader of the Telugu Desam Party, in the role of Lord Krishna, blowing a conch shell, had been used.
The offending poster bore at the top a 'sloka ' from the Bhagavad Gita, which said, roughly translated, that the Lord would be born upon this earth in age after age to establish dharma or righteouness.
At its bottom the offending poster stated that the deceitful Congress, which had sold out the country, should be defeated.
It was the contention of the election petitioner before the High Court, who was a voter in the Constituency, that the offending posters had been exhibited by or at the behest of the successful candidate.
It was held by the High Court that it had no doubt that the offending poster was a religious symbol, its implication being that N.T. Rama Rao, who was an incarnation of Lord Krishna, exhorted voters to defeat the deceitful Congress.
The High Court went on to consider whether the offending posters had been affixed by the successful candidate or his election agent or by any person with the consent of the successful candidate or his election agent.
It came to the conclusion that it was clear from the evidence "that the respondent or his agent or other persons with his consent have used religious symbol for the furtherance of the prospects of the respondent or for prejudicially affecting the election of the Congress I candidate '.
Accordingly, the corrupt practice under section 123(3) was found to have been established.
The High Court did not accept the case of the election petitioner in regard to the other corrupt practices that had been alleged.
Upon the basis of the finding in regard to the corrupt practice under section 123(3), the High Court allowed the election petition, declared the election of the successful candidate to be void and set it aside.
As aforestated, the successful candidate is in appeal.
The election petition alleged that the "respondent herein. . and, with his consent and connivance, his followers, supporters and his party men and election agent had resorted to large scale display of wall posters and paintings on the walls of the picture of Lord Krishna".
The offending 349 posters, which were described, had been pasted on walls at important places in all villages and towns throughout the Constituency and also on the sides of vans and vehicles used for canvassing.
The election petition stated that particulars of some of the instances where, inter alia, the offending posters were exhibited were given in Schedule A thereto.
Schedule A gave various addresses whereat the offending posters had been pasted.
Photographs would, it was stated, be produced in support of the allegation and four witnesses, would depose thereto, namely, Penicherla Rama Krishna Raju, Dukka Suri Appa Rao, Allabani Venkanna, Venni Subba Rao.
The schedule also referred to "oil painting and posters" on the publicity vans at three locations, which would be established by photographs and by leading the evidence of Bollina Satvanarayana and Kudapa Akkanna.
In his written statement the successful candidate denied the allegations afore stated.
The election petitioner filed documents along with the election petition, which included the affidavits of the four first named persons.
The affidavit of Dukkasuri Appa Rao is representative of the three affidavits of those who are alleged to have pasted the offending posters.
The fourth affidavit is of the photographer.
The affidavit of Dukkasuri Appa Rao stated that the successful candidate had assigned to him the work of pasting wall posters and he had been paid Rs. 25 per day.
Among these wall posters there were a few "photos showing Sri N.T. Rama Rao in the disguise of Lord Krishna Playing 'shanku" '.
The election petitioner examined Dukkasuri Appa Rao and Venne Subba Rao before the High Court.
He did not examine the third person who was alleged to have pasted the wall posters at the addresses mentioned in Schedule A to the petition.
The examination in chief of Dukkasuri Appa Rao and Venne Subba Rao is almost identical.
The cross examination of the former is more extensive.
It is therefore that we refer to his evidence.
Dukkasuri Appa Rao deposed that he was a labourer in Tanuku.
He and two others had pasted wall posters on behalf of the successful candidate.
They had affixed wall posters and door posters.
The posters had been given to them about 15 days prior to the election when they had gone to the Telugu Desam Party election office.
The successful candidate, his election agent and some others were present there.
The successful candidate had 350 engaged Dukkasuri Appa Rao and two others to affix the posters on wages of Rs. 25 per head.
They were given about 1500 wall posters and 5000 door posters.
The wall posters depicted N.T. Rama Rao in the role of Lord Krishna.
The wages had been paid daily.
Dukkasuri Appa Rao had retained with himself one poster because he had liked it and he had given it to the election petitioner about three months before the date of his deposition.
In cross examination Dukkasuri Appa Rao stated that he also did agricultural work.
He was not a member of the Telugu Desam Party.
He had not been called to the election office of that party either before or after the election.
while he had been working near a coffee hotel somebody, whose name he did not know, had come and called him to the Telugu Desam Party office.
The election petitioner had asked him in the Congress Party office whether he had any election posters.
He had replied that he had one and gave it to the election petitioner.
It was similar to the poster at exhibit A 2 (the offending poster).
His affidavit had been taken by the election petitioner at Tanuku.
After having made that affidavit the election petitioner had asked for the poster and he had given it to him.
It must be stated here that no evidence was led by the election petitioner to show that the offending posters had been got printed by or on behalf of the successful candidate.
Learned counsel for the election petitioner drew our attention to the cross examination of the successful candidate wherein it had been stated that he had incurred the expenditure of Rs. 4,000 upon writing wall posters, painting and other publicity and had also paid Rs. 8,000 to a printer.
These statements, however, were not followed up in further cross examination.
There is, therefore, no evidence to show that the offending posters were printed by or on behalf of the successful candidate.
There is no doubt in our mind that the offending poster is a religious symbol.
The depiction of anyone, be it N.T. Rama Rao or any other person, in the attire of Lord Krishna blowing a 'shanku ' and quoting the words from the Bhagavad Gita addressed by Lord Krishna to Arjuna that his incarnation would be born upon the earth in age after age to restore dharma is not only to a Hindu by religion but to every Indian symbolic of the Hindu religion.
The use by a candidate of such a symbol coupled with the printing upon it of words derogatory of a rival political party must lead to the conclusion that the religious symbol was used with a view to prejudicially affect the election of the candidate of the rival political party.
351 The question, therefore, is : is it established upon the record that the offending poster was used at the election by the successful candidate or his agent or by any other person with the consent of the successful candidate or his election agent.
As has been stated, there is no evidence to show that the offending poster was printed by or at the behest of the successful candidate.
The successful candidate himself in his evidence denied that he had had the offending posters printed or pasted.
The evidence of Dukkasuri Appa Rao and Venne Subba Rao is, in our view, not satisfactory.
In the first place, the averment in the election petition was that the offending posters had been pasted by the "respondent herein who is a Telugu Desam party candidate and with his consent and connivance his followers supporters and his party men and election agent. .
Both Dukkasuri Appa Rao and Venne Subba Rao stated in the witness box that they were not members of the Telugu Desam Party.
They were called to the Telugu Desam Party election office for the first time on the day on which they were engaged for a daily wage to paste the wall posters.
The averment in the election petition that the offending posters were pasted by followers, supporters and party men of the successful candidate is, therefore, not established.
If the evidence of Dukkasuri Appa Rao and Venne Subba Rao was true the election petition would have stated that the successful candidate and his election agent had engaged Dukkasuri Appa Rao and Venne Subba Rao on daily wages to affix the offending posters.
Secondly, the offending posters were not put to Dukkasuri Appa Rao and Venne Subba Rao in examination in chief and were not identified by them as being the posters that they had pasted.
Thirdly, neither of these two witnesses identified the places at which they had pasted the offending posters.
It was not stated by them that they had pasted the posters at any of the addresses in Tanuku mentioned in Schedule A to the election petition.
The evidence of Dukkasuri Appa Rao is suspect also because he claimed to have retained one offending poster which he gave to the petitioner; this is not borne out by the election petition or the affidavit made by him.
The standard of proof in an election petition is rigorous, having regard to the quasi criminal nature of the proceeding.
We are not satisfied that upon the evidence before us the charge laid against the successful candidate under section 123(3) has been established.
Learned counsel on behalf of the election petitioner drew our atten 352 tion to the statements made by the successful candidate 's election agent in regard to a van used for canvassing.
He stated that the van toured the Constituency.
There were photographs of N.T. Rama Rao in his various film roles exhibited in the van.
He said that exhibit A 13 was a photograph which showed "that a poster showing N.T. Rama Rao in the role of Krishna blowing a conch was affixed to publicity van but I have no personal knowledge about it".
The statement that the election agent had no personal knowledge in this behalf was not probed in further cross examination.
It is also not established that the poster shown by the photograph exhibit A 13 was what we have called the offending poster in that it not only showed N.T. Rama Rao in the role of Lord Krishna blowing a conch but also contained the afore mentioned 'sloka ' from the Bhagavad Gita and the statement that the Congress was a deceitful party which should be defeated.
So far as we can ascertain from the judgment under appeal, the offending posters were produced only at exhibits A 2 and A 18.
The evidence upon the record does not, to our mind, establish that the offending posters were used at the election by the successful candidate or his election agent or with their consent.
Having regard to our finding that the charge of corrupt practice under section 123(3) has not been established, we do not find it necessary to consider the argument that the election petition did not plead all necessary material facts and did not give all necessary particulars so that the election petition was liable to be dismissed in limine.
In the result the appeal is allowed and the election petition is dismissed.
The respondent shall pay to the appellant costs quantified at Rs. 10,000.
G.N. Appeal allowed. [/INST] The appellant 's election to the Legislative Assembly was challenged by the Respondent in his election petition before the High Court.
It was contended by the election petitioner that the respondent had used a religious symbol for the furtherance of his election prospects which was a corrupt practice under Section 123(3) of the Representation of the People Act, 1951.
The High Court declared the election of the successful candidate to be void and set it aside.
The successful candidate preferred the present appeal.
On the question whether the use of a religious symbol in the election of Respondent amounted to corrupt practice u/s 123(3) of the Representation of the People Act, 1951, this court, HELD:1.1.
There is no doubt that the offending poster is a religious symbol.
The depiction of anyone in the attire of Lord Krishna blowing a 'shanku ' and quoting the words from the Bhagavad Gita addressed by Lord Krishna to Arjuna that his incarnation would be born upon the earth in age after age to restore dharma is not only to a Hindu by religion but to every Indian symbolic of the Hindu religion.
The use by a candidate of such a symbol coupled with the printing upon it of words derogatory of a rival political party must lead to the conclusion that the religious symbol was used with a view to prejudicially affect the election of the candidate of the rival political party.
[350G H] 1.2.But there is no evidence to show that the offending poster was printed by or at the behest of the successful candidate.
The successful 346 347 candidate himself in his evidence denied that he had the offending posters printed or pasted.
The averment in the election petition that the offending posters were pasted by followers, supporters and party men of the successful candidate is not established.
[351B D] 1.3.The evidence on record does not establish that the offending posters were used at the election by the successful candidate or his election agent or with their consent.
[352D] 1.4.The standard of proof in an election petition is rigorous, having regard to the quasi criminal nature of the proceeding.
The charge laid against the successful candidate under section 123(3) has not been established on the basis of the evidence on record.
[351G] </s> |
<s>[INST] Summarize the following judgement: ivil Appeal No. 65 of 1956.
Appeal from the judgment and order dated August 31, 1954, of the Calcutta High Court in Income tax Ref.
No. 57 of 1953.
N. C. Chatterjee and B. P. Maheshwari, for the appellant.
K. N. Rajagopala Sastri, R. H. Dhebar and D. Gupta, for the respondent.
March 26.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
Messrs.
Howrah Trading Company, Ltd., Calcutta (hereinafter called the assessee) obtained on April 28, 1955, a certificate under section 66A(2) of the Indian Income tax Act from the Calcutta High Court, to appeal to this Court against the judgment dated August 31, 1954, in Income tax Reference No. 57 of 1953.
The Divisional Bench (Chakravarti, C. J., and Lahiri, J.) in the judgment under appeal merely followed their earlier judgment delivered the same day in Income tax Reference No. 22 of 1953, since reported as Hindustan Investment Corporation vs Commissioner of Income tax (1).
It is the latter judgment which gives the reasons for the decision.
The facts of the case have been stated with sufficient fulness, yet briefly, in the statement of the case submitted by the Income tax Appellate Tribunal (Calcutta Bench) and may be conveniently set out in its own words: (1) 57 450 " The applicant had received sums of Rs. 3,831, Rs. 6,606, Rs. 7,954 and Rs. 8,304 in the four assessment years, 1944 45, 1945 46, 1946 47 and 1947 48 as income from dividends.
The shares in respect of which this dividend income was received were the property of the Applicant but in the books of the various companies these stood in the names of other persons.
It appears that these shares were purchased by the Applicant from other persons under a blank transfer but the transfers had not been registered with the various companies.
The Applicant 's claim in these income tax proceedings was that these shares although not registered in the name of the applicant were the property of the applicant.
It was further claimed that this dividend income should be grossed up under section 16(2) and credit for the tax deducted should be allowed to the Applicant under section 18(5).
" The Income tax Officer did not accept this claim, and the appeals of the assessee were rejected by the Appellate Assistant Commissioner of Income tax, Calcutta, " A " Range and by the Appellate Tribunal.
The Tribunal, however, on being moved, referred the following question to the High Court: " Whether in the facts and circumstances of this case, the Applicant (the assessee) was entitled to have this dividend income grossed up under section 16(2) and claim credit for tax deducted at source under section 18(5) of the Income tax Act? " The High Court answered the question in the negative, thus affirming the decisions of the Department and the Appellate Tribunal.
The assessee contends that the decision of the High Court is erroneous, and that it is entitled to have the dividend income I grossed up ' under section 16(2) and also to claim credit for tax deducted at source, under s.18(5) of the Income tax Act.
The relevant sections are as follows: " 16(2) : For the purposes of inclusion in the total income of an assessee any dividend shall be deemed to be income of the previous year in which it is paid, credited or distributed or deemed to have been 451 paid, credited or distributed to him, and shall be increased to such amount as would, if income tax (but not super tax) at the rate applicable to the total income of the company without taking into account any rebate allowed or additional income tax charged for the financial year in which the dividend is paid, credited or distributed or deemed to have been paid, credited or distributed, were deducted therefrom, be equal to the amount of the dividend: (proviso omitted).
18 (5): Any deduction made and paid to the account of the Central Government in accordance with the provisions of this section and any sum by which a dividend has been increased under sub section (2) of section 16 shall be treated as a payment of incometax or super tax on behalf. . of the shareholder and credit shall be given to him therefor on the production of the certificate furnished under. .section 20 . in the assessment, if any, made for the following year under this Act: (proviso omitted).
49B(1): Where any dividend has been paid, credited or distributed or is deemed to have been paid, credited or distributed to any of the persons specified in section 3 who is a shareholder of a company which is assessed to income tax in the taxable territories or elsewhere, such person shall, if the dividend is included in his total income, be deemed in respect of such dividend himself to have paid income tax (exclusive of super tax) of an amount equal to the sum by which the dividend has been increased under sub section (2) of section 16.
" It was contended in the High Court that inasmuch as section 16(2) referred to an I assessee, the assessee company was entitled to have the dividend 'grossed up ' by the addition of income tax paid by the various companies at source and consequently to have the benefit of the credit allowed under the two remaining sections.
In the opinion of the High Court, an assessee whose name was not in the register of members of the companies was not entitled to the benefit of these provisions.
The learned Judges of the High Court were of the opinion that the word " shareholder " in 452 s.18(5) had the same signification as the word " member " used in the Indian Companies Act; and that the assessee was not qualified to be considered as a shareholder, even though by a blank transfer it had ,purchased the relevant shares.
In our opinion, the High Court was right in its conclusion.
A company when it pays income tax, does not do so on behalf of the shareholders.
It is itself chargeable under the Act, In Cull vs Inland Revenue Commissioners (1), Lord Atkin stated the law (which in substance is also the law in our country) thus: My Lords, it is now clearly established that in the case of a limited company the company itself is chargeable to tax on its profits, and that it pays tax in discharge of its own liability and not as agent for its shareholders. .
At one time it was thought that the company, in paying tax, paid on behalf of the shareholder; but this theory is now exploded by decisions in this House, and the position of the shareholders as to tax is as I have stated it.
" When the company pays its own income tax and declares a dividend from the balance of its profits, it deducts from such dividend a proportionate part of the amount of the tax paid by it.
This principle is explained in another English case, and it is substantially also the law in this country.
In Inland Revenue Commissioners vs Blott (2), Viscount Cave stated the law in these words: " Plainly, a company paying income tax on its profits does not pay it as agent for its shareholders.
It pays as a tax payer, and if no dividend is declared, the shareholders have no direct concern in the payment.
If a dividend is declared, the company is entitled to deduct from such dividend a proportionate part of the amount of the tax previously paid by the company; and, in that case, the payment by the company operates in relief of the shareholder.
But no agency, properly so called, is involved.
" The share holders, however, get the benefit of the payment of the tax by the company.
Though under (1) , 56 ; , 636.
(2) , 201.
453 s.16(2) of the Act their dividend is increased by a proportionate amount of tax paid by the company, the payment of the tax by the company is deemed tinder sections 18(5) and 49B(1) to be payment by the shareholders.
The rates of income tax applicable to the company are, in most instances, higher than the rates applicable to the individual shareholders, and by this process of 'grossing up ', as it is commonly called, the recipient of the dividend gets some benefit.
The position of a shareholder who gets dividend when his name stands in the register of members of the company causes no difficulty whatever.
But transfers of shares are common, and they take place either by a fully executed document such as was contemplated by Regulation 18 of Table A of the Indian Companies Act 1913, or by what are known as blank transfers '.
In such blank transfers, the name of the transferor is entered, and the transfer deed signed by the transferor is handed over with the share scrip to the trans feree, who, if he so chooses, completes the transfer by entering his name and then applying to the company to register his name in place of the previous holder of the share.
The company recognises no person except one whose name is on the register of members, upon whom alone calls for unpaid capital can be made and to whom only the dividend declared by the company is legally payable.
Of course, between the transferor and the transferee, certain equities arise even on the execution and handing over of 'a blank transfer ', and among these equities is the right of the transferee to claim the dividend declared and paid to the transferor who is treated as a trustee on behalf of the transferee.
These equities, however, do not touch the company, and no claim by the transferee whose name is not in the register of members can be made against the company, if the tranferor retains the money in his own hands and fails to pay it to him.
A glance at the scheme of the Indian Companies Act, 1913, shows that the words " member ", " shareholder " and " holder of a share " have been used interchangeably in that Act.
Indeed, the opinion of most of the writers on the subject is also the same.
454 Buckley on the Companies Act, 12th Edition, page 803 has pointed out that the right of a transferee is only to call upon the company to register his name and no more.
No rights arise till such registration ,takes place.
Section 2(16) of the Indian Companies Act, 1913, defines " share " as " share in the share capital of the company Section 5 deals with the mode of forming incorporated companies, and in the case of companies limited by shares, the liability of the members is limited to the amounts, if any, unpaid on the shares respectively held by them.
By section 18, Table A is made applicable to companies, unless by the Articles of any company the terms of Table A have been excluded or modified.
Regulation 18 of Table A reads as follows: " The instrument of transfer of any share in the company shall be executed both by the transferor and transferee, and the transferor shall be deemed to remain holder of the share until the name of the transferee is entered in the register of members in respect thereof.
" The words " holder of a share " are really equal to the word shareholder and the expression " holder of a share denotes, in so far as the company is concerned, only a person who, as a shareholder, has his name entered on the register of members.
A similar view of the Companies Clauses Consolidation Act, 1845, was taken in Nanney vs Morgan(1).
The learned Lord Justices held that under section 15 of that Act, the transferee bad not the benefit of a legal title till certain things were done, which were indicated by Lopes, L.J., in the following passage: " Therefore the transferor, until the delivery of the deed of transfer to the secretary, is subject to all the liabilities and entitled to all the rights which belong to a shareholder or stockholder, and, in my opinion until the requisite formalities are complied with, he continues the legal proprietor of the stock or shares subject to that proprietorship being divested, which it may be at any moment, by a compliance with the requisite formalities.
(1) , 356.
455 The same position obtains in India, though the completion of the transaction by having the name entered in the register of members relates it back to the time when the transfer was first made.
See Nagabushanam vs Ramachandra Rao (1).
During the period that the transfer exists between the transferor and the transferee without emerging as a binding document upon the company, equities exist between them, but not between the transferee and the company.
The transferee can call upon the transferor to attend the meeting, vote according to his directions, sign documents in relation to the issuance of fresh capital, call for emergent meetings and inter alia, also compel the transferor to pay such dividend as he may have received.
See E. D. Sassoon & Co. Ltd. vs Patch (2) approved in Mathalone vs Bombay Life Assurance Co. Ltd. (3 ).
But these rights though they, no doubt, clothe the transferee with an equitable ownership , are not sufficient to make the transferee a full owner, since the legal interest vis a vis the company still outstands in the transferor; so much so, that the company credits the dividends only to the transferor and also calls upon him to make payment of any unpaid capital, which may be needed.
The cases in Black vs Homersham (4) or Wimbush, In re Richards vs Wimbush (5) hardly advance the matter further than this.
The position, therefore, under the Indian Com panies Act, 1913, is quite clear that the expression " shareholder " or " holder of a share " in so far as that Act is concerned, denotes no other person except a " member ".
The question that arises in the present case is whether by reason of sections 16(2) and 18(5) the assessee, who was a transferee on a blank transfer ' is entitled to the benefits of the grossing up of the dividend income.
Learned counsel for the assessee strenuously contends that the assessee being an owner in equity of the shares and thus also of the dividend is entitled to this benefit.
He refers to the use of the word I assessee in section 16(2).
The Department, on the (1) Mad. 537.
(3) ; (2) (4) (1878 79) L. R. (5) 456 other hand, says that the dividend can be increased under section 16(2) and credit allowed under section 18(5) if the assessee is a 'shareholder ', because the benefit of section 18(5) can go only to the shareholder, i. e., a person with his name on the register of members, and not to a person holding an equity against such shareholder.
The assessee contends that the word " shareholder " includes even a person who holds a share as a result of a blank transfer, and does not necessarily mean a member of the company, whose name is on the register of members.
Authorities on this point are not wanting, and indeed, in the judgment of the Calcutta High Court they have all been referred to.
They are all against the assessee.
See Shree Shakti Mills Ltd. vs Commissioner of Income tax (1), Jaluram Bhikulal vs Commissioner of Income tax (2), Arvind N. Mafatlal vs Incometax Officer (3) and Bikaner Trading Co. vs Commissioner of Income tax (4).
The question that falls for consideration is whether the meaning given to the expression "shareholder" used in section 18(5) of the Act by these cases is correct.
No valid reason exists why " shareholder " as used in section 18(5) should mean a person other than the one denoted by the same expression in the Indian Companies Act, 1913.
In In re Wala Wynaad Indian Gold Mining Company (5), Chitty, J., observed: " I use now myself the term which is common in the Courts, I a shareholder ', that means the holder of the shares.
It is the common term used, and only means the person who holds the shares by having his name on the register.
" Learned counsel for the assessee cited a number of authorities in which the ownership of the dividend was in question, and it was held that the transferee whose name was not registered, was entitled to the dividend after transfer had been made.
These cases are Commissioners of Inland Revenue vs Sir John Oakley (6), Spence vs Commissioners of Inland Revenue (7) (1) (3) (5) , 854.
(2) (4) (6) , (7) 457 and others cited at page 367 in Multipar Syndicate, Ltd. vs Devitt (1).
No one can doubt the correctness of the proposition in these cases, but from an equitable right to compel the transferor to give up the dividend to the transferee, to a claim to the dividend by him as a " shareholder " against the company is a wide jump.
In so far as the company is concerned, it does not even issue the certificate under section 20 of the Income tax Act in the name of an unregistered transferee but only in the name of the transferor whom it recognises, because his name is borne on its books.
Section 20 lays down: " The principal officer of every company shall, at the time of distribution of dividends, furnish to every person receiving a dividend a certificate to the effect that the company has paid or will pay income tax on the profits which are being distributed, and specifying such other particulars as may be prescribed.
" The meaning of section 20 as also of section 18(5) is clear if they are read with section 19A, under which information regarding dividends has to be supplied by the company when demanded by the Income tax Officer.
It lays down: " The principal officer of every company . shall, on or before the 15th day of June in each year, furnish to the prescribed officer a return in the prescribed form and verified in the prescribed manner of the names and of the addresses, as entered in the register of shareholders maintained by the company, of the shareholders to whom a dividend or aggregate dividends exceeding Such amount as may be prescribed in this behalf has or have been, distributed during the, preceding year and of the amount so distributed to each such shareholder. " (Italics supplied).
Section 19A makes it clear, if any doubt existed, that by the term " shareholder " is meant the person whose name and address are entered in the register of " shareholders " maintained by the company.
There is but one register maintained by the Company.
There (1) 58 458 is no separate register of " shareholders " such as the assessee claims to be but only a register of " members ".
This takes us immediately to the register of members, and demonstrates that even for the purpose of the Indian Income tax Act, the words ',member and " shareholder " can be read as synonymous.
The words of section 18(5) must accordingly be read in the light in which the word " shareholder " has been used in the subsequent sections, and read in that manner, the present assessee, notwithstanding the equitable right to the dividend, was not entitled to be regarded as a "shareholder" for the purpose of section 18(5) of the Act.
That benefit can only go to the person who, both in law and in equity, is to be regarded as the owner of the shares and between whom and the company exists the bond of membership and ownership of a share in the share capital of the company.
In view of this, we are satisfied that the answer given by the Calcutta High Court on the question posed by the Tribunal was correct.
The appeal fails, and is dismissed with costs.
Appeal dismissed. [/INST] The assessee acquired shares in certain companies under "blank transfers " without getting the transfers registered with the companies and it received dividends in respect of these shares.
It claimed that the dividend income should be grossed up under section 16(2) Income tax Act and that it should be allowed credit under section 18(5) for the tax deducted at source on the dividend in the hands of the companies.
Held, that, the assessee was not entitled to the benefits of sections 16(2) and 18(5) as its name was not in the register of members of the companies.
The benefit of section 18(5) could only go to a shareholder; and a shareholder in that section meant the same thing as in the Indian Companies Act, 1913, i. e., a " member having his name on the register.
The scheme of the Indian Companies Act, 1913, shows that the words " member ", " shareholder " and " holder of a share " have been used interchangeably.
The words "holder of a share" are really equal to the word "shareholder" and the expression " holder of a share " denotes only a person who, as a shareholder, has his name entered on the register of members.
In re Wala Wynaad Indian Gold Mining Company, (1882) 21 Ch.
D. 849, Shree Shakti Mills Ltd. vs Commissioner of Income tax, , jaluram Bhikulal vs Commissioner of Income tax, , Arvind N. Mafatlal vs Incometax Officer, [1957] 32 I.T .
R. 350, Bikaner Trading Co. vs Commissioner of Income tax, , referred to.
A company when it pays income tax does not do so on behalf of the shareholders, but the shareholders get the benefit of such payment.
The rates of income tax applicable to the company are, in most instances, higher than the rates applicable to individual shareholders and by the process of grossing up the recipient of the dividend gets some benefit.
Cull vs Inland Revenue Commissioners, and Inland Revenue Commissioners vs Blott, , referred to.
440 In blank transfers the transfer deed signed by the transferor is handed over with the share scrip to the transferee who may complete the transfer by entering his name and applying to the company for registration of his name.
The company only recognises those persons whose names are on the register of members and they alone are legally entitled to the dividend declared.
In the case of a blank transfer equities exist between the transferor and the transferee and the transferee has a right to claim the dividend from the transferor who holds it in trust for him, but the company is only liable to the transferor and not to the transferee.
Though the transferee is clothed with an equitable ownership he is not a full owner, since the legal interest vis a vis the company still outstands in the transferor. </s> |
<s>[INST] Summarize the following judgement: minal Appeal No. 642 of 1991.
From the Judgment and Order dated 25.4.1991 of the Bombay High Court in Criminal Appeal No. 25 of 1990.
Lalit Chari, Peter D ' Souza and Mukul Mudgal for the Appellant.
J.S. Wad, and Ms. A. Subhashini for the Respondent.
340 The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J.
The appellant, a German National, has been convicted by the trial court under Section 20(b)(ii) of the ( 'Act ' for short) and sentenced to undergo 10 years R.I. and to pay a fine of Rs. 1 lakh, in default of payment of which to further undergo six months ' R.I.
The appeal filed by the appellant was dismissed by the High Court.
Hence the present appeal.
In brief the prosecution case is that on 29.9.89 the Police Sub Inspector Gaonkar, P.W3 alongwith a police party was patrolling at Calangute Beach near Panjim and they came across the accused who was sitting on a wooden log.
On suspicion they went near him and noticed a chillum (smoking pipe) in front of him lying on the log.
He secured the presence of panch witnesses and searched the accused and recovered a polythene pouch from his pyjama pocket in which there were tobacco, one cigarette paper packet and two cylindrical pieces of 'Charas".
The two pieces of Charas were weighed and found to be 7 gms.
and 5 gms.
respectively.
They were seized under a panchnama and were separately sealed in two different envelopes.
One of the pieces weighing less than 5 gms.
was? sent for chemical analysis and the other piece weighing 7 gms.
was not sent nor part of it by way of sample was sent for chemical analysis.
Maria Caldeira, P.W.1, the Junior Scientific Officer in the Directorate of Health Services carried out the chemical analysis of the substance weighing 4.570 gms.
consisting of three cylindrical pieces sticking together and she deposed that the substance which was examined by her was found to have contained Charas.
P.W.2, a panch witness supported the prosecution case.
The accused when examined under Section 313 Cr.
P.C. denied being in possession of any Charas and said that he had only a pouch containing tobacco and that he was taken to Calangute Police Station and was falsely impli cated.
The trial court relying on the evidence of P.Ws 1 to 3 convicted the accused.
The submissions on behalf of the accused before the trial court as well as the High Court have been that the search conducted on the person of the accused was in contravention of Section 50 of the and that there have been contradictions between the evidence of P.Ws 2 and 3 and that at any rate even if the prosecution case is to be accepted, the 341 accused can be, at the most, held to be in possession of less than 5 gins.
of Charas which is a small quantity and, therefore, is entitled to the benefit of Section 27.
Before us more or less the same submissions are made.
So far as the contentions in respect of seizure and drafting of panchnama and weight are concerned, the question is whether the accused has been told that if he so desires he would be taken to a Magistrate before the search, as provided under Section 50.
Whether this has been complied with or not mostly depends on the evidence and they are only questions of fact.
Both the courts below have considered the entire evidence and have rejected these submissions.
Though these are questions of fact, yet we have also considered the relevant evidence on these aspects and we agree with the findings of the courts below.
The next and most important submission of Shri Lalit Chari, the leaned senior counsel appearing for the appellant is that both the courts below have erred in holding that the accused was found in possession of 12 gins.
of Charas.
According to the learned counsel, only a small quantity i.e. less than 5 gms. has been sent for analysis and the evidence of P.W.1, the Junior Scientific Officer would at the most establish that only that much of quantity which was less than 5 gms.
of Charas is alleged to have been found with the accused.
The remaining part of the substance which has not been sent for analysis can not be held to be also Charas in the absence of any expert evidence and the same could be any other material like tobacco or other intoxicating type which are not covered by the .
Therefore the submission of the learned counsel is that the quantity proved to have been in the possession of the accused would be small quantity as provided under Section 27 of the and the accused should have been given the benefit of that Section.
Shri Wad, learned senior counsel appearing for the State submitted that the other piece of 7 gms.
also was recovered from the possession of the accussed and there was no need to send the entire quantity for chemical analysis and the fact that one of the pieces which was sent for analysis has been found to contain Charas, the necessary inference would be that the other piece also contained Charas and that at any rate since the accused has totally denied, he can not get the benefit of Section 27 as he has not discharged the necessary burden as required under the said Section.
Before examining the scope of this provision, we shall first consider whether the prosecution has established beyond all reasonable 342 doubt that the accused had in his possession two pieces of Charas weighing 7 gms.
and 5 gms.
respectively.
As already mentioned only one piece was sent for chemical analysis and P.W.1, the Junior Scientific Officer who examined the same found it to contain Charas but it was less than 5 gms.
From this report alone it can not be presumed or inferred that the substance in the other piece weighing 7 gms.
also contained Charas.
It has to be borne in mind that the applies to certain narcotic drugs and psychotropic substances and not to all other kinds of intoxicating substances.
In any event in the absence of positive proof that both the pieces recovered from the accused contained Charas only, it is not safe to hold that 12 gms.
of Charas was recovered from the accused.
In view of the evidence of P.W.1 it must be held that the prosecution has proved posi tively that Charas weighing about 4.570 gms.
was recovered from the accused.
The failure to send the other piece has given rise to this inference.
We have to observe that to obviate this difficulty, the concerned authorities would do better if they send the entire quantity seized for chemical analysis so that there may not be any dispute of this nature regarding the quantity seized.
If it is not practicable, in a given case, to send the entire quantity then sufficient quantity by way of samples from each of the packets or pieces recovered should be sent for chemical examination under a regular panchnama and as per the provisions of law.
Section 27 of the reads thus: "27.
Punishment for illegal possession in small quantity for personal consumption of any narcotic drug or psychotropic substance or consumption of such drug or substance whoever, in contravention of any provision of this , or any rule or order made or permit issued thereunder, possesses in a small quantity any narcotic drug or psychotropic substance, which is proved to have been intended for his personal consumption and not for sale or distribution, or consumes any narcotic drug or psychotropic substance, shall, notwithstanding anything contained in this Chapter, be punishable (a) Where the narcotic drug or psychotropic substance possessed or consumed is cocaine, morphine, diacetylmorphine or any other narcotic drug or any psychotropic 343 substance as may be specified in this behalf by the Central Government, by notification i n the Official Gazette, with imprisonment for a term which may extend to one year or with fine or with both; and (b) Where the narcotic drug or psychotropic substance possessed or consumed is other than those specified in or under clause (a) with imprisonment for a term which may extend to six months or with fine or with both Explanation (1) For the purposes of this section "small quantity ' means such quantity as may be specified by the Central Government by the notification in the Official Gazette.
(2) Where a person is shown to have been in possession of a small quantity of a narcotic drug or psychotropic substance, the burden of proving that it was intended for the personal consumption of such person and not for sale or distribution, shall lie on such person." In general possession of any narcotic drug or psychotropic substance has been prohibited by Section 8 of the and any person found in possession of the same contrary to the provisions of the or any rule or order made or permit issued thereunder is liable to be punished as provided thereunder to imprisonment for a term which shall not be less than 10 years and shall also be fined which shall not be less than Rs.1 lakh.
Section 27 of the , however, is an exception whereby lesser punishment is provided for illegally possessing any "smaller quantity ' for personal consumption of any narcotic drug or psychotropic substance, Under this section the following ingredient should be fulfilled: "(a) The person has been found in possession of any narcotic drug or psychotropic substance in "small quantity '; (b) Such possession should be in contravention of any provision of the or any rule of order made or permit issued thereunder; and (c) The said possession of any narcotic drug or psycho 344 tropic substance was intended for his personal consumption and not for sale or distribution.
" The first explanation to this Section lays down that the small quantity means such quantity as may be specified by the Central Government by a notification.
By virtue of the notification issued on 14.11.85 for the purpose of this 5 gms.
or less quantity of Charas shall be the small quantity.
Explanation 2 further lays down that the burden of proof that the substance was intended for the personal consumption and not for sale or distribution, lies on such person from whose possession the same was recovered.
As held above in the instant case the prosecution has proved that the quantity seized from the accused was less than 5 gms.
Therefore, it is within the meaning of 'small quantity" for the purpose of Section 27.
Then the other ingredient that has to be satisfied is whether the substance found in possession of the appellant was intended for his personal consumption and not for sale or distribution.
No doubt as the Section lays down the burden is on the appellant to prove that the substance was intended for his personal consumption.
As to the nature of burden of proof that has to be discharged depends upon the facts and circumstances of each case.
Whether the substance was intended for personal consumption or not has to be examined in the context in which this exception is made.
In the instant case the accused though in general has taken a plea of denial but his examination under Section 313 Cr.
P.C. by the Magistrate reveals that there was such a plea namely that it was meant for his personal consumption.
In the judgment of the trial court it is noted that the accused made an, application on 23.3.90 stating that the piece said to have been recovered from him was less than 5 gms.
and not 12 gms.
as alleged and that the application was written and signed by the appellant himself.
The prosecution case itself shows that he was having this substance in a pouch alongwith a chillum (smoking pipe) and smoking material.
The averments made by the appellant in the application and as extracted by the trial court would themselves show that it was meant for his personal consumption.
The above surrounding circumstances under which it was seized also confirm the same.
The appellant is a foreigner and as a tourist appears to have carried this substance for his personal consumption.
We are aware that the menace of trafficking in narcotic drugs and psychotropic substance has to be dealt with severely but in view of the provisions of Section 27, we are unable to hold that the small quantity found with the appellant was not 345 meant for his personal consumption and that on the other hand it was meant for sale or distribution.
Therefore, the appellant is liable to be punished as provided under Section 27 of the .
From the records it appears that the appellant has been in jail for more than three years but that may not be relevant since the sentence prescribed under Section27 is only six months.
We are only just mentioning it as a fact.
In the result the conviction of the appellant under Section 20(b)(ii) of the and sentence of 10 years R.I. are set aside.
Instead he is convicted under.
Section 27 of the and is sentenced to undergo 6 monghs ' R.I. and to pay a fine of Rs. 1 lac in default of payment of which to further undergo 6 months ' R.I. Subject to the above modifications, the appeal is disposed of N.P.V. Appeal disposed of. [/INST] The appellant, a foreign national, was convicted by the trial court under Section 20(b)(ii) of the and sentenced to undergo ten years ' rigorous imprisonment and to pay a fine of one lakh rupees, and in default, to further undergo rigorous imprisonment for six months.
According to the prosecution, two cylindrical pieces of charas, weighing 7 gms.
and 5 gms.
respectively, were seized from the appellant by a Police Patrol Party and on chemical analysis of one of the pieces, it was found that the substance contained charas.
The trial court, relying on the evidence of PW 1, Junior Scientific Officer of the Director of Health Services, who examined the substance, PW 2, a panch witness and PW 3, the Police Inspector, who was heading the Patrol Party, convicted the appellant.
The High Court dismissed the appellants appeal.
In the appeal before this Court, on behalf of the appellant it was contended that both the courts below had erred in holding that the accused was found in possession of 12 gins.
of Charas; since only a small quantity i.e. less than 5 gms. had been sent for analysis the remaining part of the substance, which had not been sent for analysis, could not be held to be also Charas and, therefore, the quantity proved to have been in the 338 possession of the accused would be small quantity, as provided under Section 27 of the Act and the accused should have been given the benefit of that Section.
On behalf of the State, it was submitted that there was no need to send the entire quantity for chemical analysis, and the fact that one of the pieces which was sent for analysis had been found to contain Charas, the necessary inference would be that the other piece also contained Charas and that, at any rate, since the accused had totally denied, he could not get the benefit of Section 27, as he had not discharged the necessary burden as required under the section.
Disposing of the appeal, this Court, HELD:1.1.
In the absence of positive proof that both the pieces recovered from the accused contained Charas only, it is not safe to hold that 12 gms.
of Charas was recovered from the accused.
In view of the evidence of P.W. 1, the prosecution has proved positively that Charas weighing about 4.570 gms.
was recovered from the accused.
[342C] 1.2.In general, possession of any narcotic drug or psychotropic substance has been prohibited by Section 8 of the and any person found in possession of the same contrary to the provisions of the Act or any rule or order made or permit issued thereunder is liable to be punished as provided thereunder to imprisonment for a term not less than 10 years and a fine not less than Rs. 1 lakh.
However, Section 27 is an exception, whereby lesser punishment is provided for illegally possessing any 'smaller quantity ' for personal consumption of any narcotic drug or psychotropic substance.
By virtue of the notification issued on 14.11.85 under Explanation (1) of the Section, 5 gms or less quantity of Charas has been specified by the Central Government to be the small quantity.
[343E F, 344B] 1.3.
In the instance case, the prosecution has proved that the quantity seized from the accused was less than 5 gms.
Therefore, it is within the meaning of"small quantity ' for the purpose of Section 27.
[344C] 1.4.
No doubt, as Section 27 lays down, the burden is on the appellant to prove that the substance was intended for his personal consumption As to the nature of burden of proof that has to be discharged 339 depends upon the facts and circumstances of each case.
Whether the substance was intended for personal consumption or not has to be examined in the context in which this exception is made.
[344D] 1.5.
The accused though in general has taken a plea of denial,but his examination under Section 313 Cr.
P.C. by the Magistrate reveals that there was a plea that it was meant for his personal consumption.
The trial court has also noted in its judgment that the accused had made an application stating that the piece said to have been recovered from him was less than 5 gms., and not 12 gms.
as alleged.
The prosecution case itself shows that he was having this substance in a pouch alongwith a chillum (smoking pipe) and smoking material.
The averments made by the appellant in the application and as extracted by the trial court would themselves show that it was meant for his personal consumption.
The surrounding circumstances under which it was seized also confirm the same.
[344E G] 1.6.The appellant is a foreigner and as a tourist appears to have carried this substance for his personal consumption.
No doubt, the menace of trafficking in narcotic drugs and psychotropic substance has to be dealt with severely, but in view of the provisions of Section 27, it cannot be held that the small quantity found with the appellant was not meant for his personal consumption.
Therefore, the appellant is liable to be punished as provided under Section 27 of the Act.
[344G H, 345A] 1.7.Accordingly, the conviction of the appellant under Section 20(b)(ii) of the Act and sentence of 10 years ' R.I. are set aside, and he is convicted under Section 27 of the Act and sentenced to undergo 6, months ' R.I. and to pay a fine of Rs. 1 lakh, in default of payment of which to further undergo 6 months ' R.I. [345C] </s> |
<s>[INST] Summarize the following judgement: minal Appeal No. 277 of 1993.
From the Judgment and Order dated 14.10.1991 of the Bombay High Court in Crl.
Application No. 2260/91 in Crl.
Revision Application No. 123 of 1991.
Altaf Ahmed, Addl.
Solicitor General, B.R. Handa, Mrs. Manjula Rao, S.M. Jadhav, A.S. Bhasme and A.M. Khanwilkar for the Appellant.
Dr. B. Subha Rao Respondent in person.
The Judgment of the Court was delivered by R.M. SAHAI, J.
The short question that arises for consideration in this appeal is if the High Court was justified in allowing the application filed by the accused for declaring that the charges framed by the Additional Sessions Judge by order dated 24/27th July, 1990 were null and void as they were obtained by fraud, practised by the State.
Merits or otherwise of the application, alleging fraud against the State, apart, what has left us completely surprised is not so much the entertaining of the application filed by the accused, for declaration that the charges framed against him were nullity having been procured by fraud as the procedure adopted by the learned Single Judge of granting the prayer 332 merely for failure of the State to file any reply by way of counter affidavit than by recording any finding that the State was guilty of procuring the order framing the charges by fraud.
One of the objections raised by the State was that since the High Court by its order passed on 25/26th March 1991 in Criminal Writ Petition No. 966 of 1990 had specifically held that the question of framing charge had become final, therefore, it could not be re opened, cannot be said to be without substance as the Division Bench had clearly held that it was not open to go behind the order passed by the learned Single Judge on 3rd/4th April 1990 directing that the charges be framed against the accused not only under Section 3 but under Section 5 as well.
Nor can any exception be taken to the finding of the Bench that the said order could not be said to have been passed without jurisdiction in as much as the learned Single Judge had jurisdiction to decide the revision application preferred under the provisions of the Code.
Even the question of fraud raised by the accused was negatived by the Division Bench and it was held that it was not capable of being gone into as it did not form part of the substratum of the case of the prosecution and was not germane to the question of deciding as to whether he was entitled to be discharged or not.
However, it is not necessary to rest the decision on this ground as the learned Single Judge having allowed the application as being vitiated by fraud it appears necessary to examine if the pleading on fraud in the application filed by the accused was sufficient in law to empower the High Court to take cognizance of it and even if it was, did the accuse succeed in proving it as even if the State did not file any counter affidavit the application could not be allowed unless it was found as a fact that the State by its acts or omissions acted ,deceitfully or it misled the court. 'Fraud ' is false representation by one who is aware that it was untrue with an intention to mislead the other who may act upon.
it to his prejudice and to the advantage of the representor.
It is defined in Oxford Dictionary as, ` using of false representations to obtain an unjust advantage or to injure the rights or interests of another '.
In Webster it is defined as, 'deception in order to gain by another 's loss; craft; trickery , guile; any artifice or deception practiced to cheat, deceive, or circumvent another to his injury.
It has been defined statutorily in Section 17 of the Contract Act as including certain acts committed with connivance or with intent to deceive another.
In Administrative Law it has been extended to failure to disclose 333 all relevant and material facts which one has a positive duty to disclose.
It is thus understood as deliberate act or omission to mislead other to gain undue advantage. 'It consists of some deceitful practice of wilful device, resorted to with intent to deprive another of his right or in some manner to do him an injury ' (Black 's Law Dictionary).
Effect of fraud on any proceeding, or transaction is that it becomes nullity.
Even the most solemn proceedings stand vitiated if they are actuated by fraud.
Such being the nature and consequence of it the law requires not only strict pleading of it but strict proof as well.
Did the averments in the application made out case of fraud ? Were the statements of fact capable of giving rise to an inference in law that the State was guilty of misleading the court ? From the charge sheet it is clear that it complied with the requirements of law and mentions not only the offence and the section but the particulars as to time, place and person.
Whether prosecution was possessed of sufficient evidence to prove each of the charges is different matter, but they were framed on basis of documents seized from possession of the accused at the airport, search of his residence, on the next day, interrogations of the accused and examination of prosecution witnesses.
In the connected appeal No. 276 of 1993 [Arising out of S.L.P. (Crl.) No. 986 of 1992] directed against the discharge of the accused for failure to obtain sanction a very brief summary has been given of various attempts made by the accused to get an order of discharge, on merits, without success.
It is not necessary to recount all that here.
Ul timately when the accused was discharged for failure of the State to obtain sanction under Section 197 of the Criminal Procedure Code (in brief 'the Code ') and the State challenged the correctness of the order by way of revision the accused filed the application for the declaration that the charge sheet be declared null and void.
In paragraph 3 of the application it was stated that the charges were vitiated by fraud as the Punchnama dated 30th May 1988 was fabricated as it did not contain his signature and it was ante dated.
It was further averred that three months even the copies of the remand application filed by the police were denied to the applicant and the orders thereon were not supplied to him.
It was also claimed that the complaint was in contradiction with the statement of witnesses.
May or may not be so but that could be relevant when the merits were gone into.
It certainly, could not be taken as a ground for claiming that the framing of charge was fraudulent, especially, when these aspects had been thrashed out once before the learned Single Judge who by his order dated 3rd/4th 334 April 1990 held that the charges against the accused were made out not only under Section 3 but under Section 5 of the Act.
In the same paragraph the accused extracted certain observations made by a learned Single Judge, in one of the orders and claimed that they furnished guidelines to distinguish between offences under Sections 3 and 5 of the O.S. Act.
According to him if honest and fair answer to the question, if any charge was made out, Was given by the State it would have exonerated the applicant but the State committed fraud by keeping the Trial Judge in the dark of real facts and induced him to entertain erroneous opinion and pass order on 24th July framing charges against him.
In paragraphs 4 to 8 various sentences from one or the other judgment rendered for or against the accused by different courts at one or the other stage were extracted and it was claimed that the State either knowingly did not place correct facts to substantiate those observations or deliberately concealed the truth and made fraudulent submissions inducing the Trial Judge thereby to frame the charges.
Emphasis was laid on the submissions advanced by the State and it was stated that it was result of fraudulent submissions that the Trial court was induced to frame charges against the accused.
No foundation giving rise to fraud was laid.
Facts which could be fished out from paragraphs averring fraudulent submissions could not in our opinion be said to be relevant for alleging fraud.
For instance in paragraph 4 it was stated, "the Ld. Addl.
Session Judge was deceived by the aforesaid fraudulent and false submission of the Respondent in February 1989 during the judicial proceedings and the Ld. Addl.
Session Judge was induced to believe that the applicant was also found and caught carrying books on 30 5 1988 at the Sahar Airport Bombay which books, as alleged by the Respondent, could not have come into possession of the Applicant even in the ordinary course, when the applicant was holding the office of the Captain of Navy.
The respondent knew very well that in the record of the Sessions Case No. 1084/88 there were no books as alleged by the Respondent and moreover the disputed documents were not deposited in the Sessions Court in February 1989 when the Learned Addl.
Session Judge was induced to believe the fraudulent submissions of the 335 Respondent in February 1989.
The above mentioned fraudulent submissions of the Respondent were clearly meant to deceive the Session Court in February 1989 and to see that the applicant was not discharged under Section 227 Cr.
P.C. ' Similarly in paragraph 5 it was stated, "It is significant to note that in February 1989 the documents were not deposited in the Session Court though it was mandatory under Section 209(c) Cr.
P.C. to deposit the documents in the Session Court after the Case was committed to the Sessions on 22.9.1988 by the Ld Magistrate.
Thus in actual position , there were no documents in February 1989 for 'consideration ' of the Ld. Addl.
Session Judge as prescribed under the provisions of Sec.
227 Cr.
P.C. and the Respondent took advantage of that situation and intentionally made the aforesaid fraudulent submissions in Feb. 1989 during the judicial proceedings before the Ld. Addl.
Session Judge Shri Patel and caused circumstances to induce the Ld.
Session Judge Shri Patel to entertain erroneous opinions and pass orders resulting in miscarriage of justice '.
In paragraph 7 it was stated as under "The Ld. Addl.
Session Judge Shri Patel passed two orders dated 11 9 1989 and 11 10 1989 to compel the Respondent to deposit the documents in the Session Court and accordingly the Documents were deposited in the Session Court only on 11 10 1989; which conclusively establishes that in February 1989 when "Charges" were framed the "Documents" were not with the Session Court and the fraudulent and false evidence advanced in February 1989 by the Respondent alone became the basis to frame 'Charges ' in February 1989.
" We must confess our inability to appreciate the worth of such averments to establish fraud.
Legal submissions cannot be equated to misrepresentation.
In our opinion the pleadings fell short of legal requirements 336 to establish fraud.
Various sentences extracted from different judgments between the accused and State in various proceedings could not give rise to an inference either in law or fact that the state was guilty of fraud.
Suffice it to say that it was complete misapprehension under which the accused was labouring and it was indeed unfortunate that the High Court not only entertained such application but adopted a course which amounted to reviewing and setting aside orders of his predecessor without sufficient material and accept the claim that all earlier judgments were, liable to be ignored under Section 44 of the Evidence Act as the proceedings were vitiated by fraud.
We are constrained to say that the learned Judge not only committed an error of procedure but misapplied the law.
In the result, this appeal succeeds and is allowed.
The order dated 14th October 1991 in Criminal Miscellaneous Application No. 2260 of 1991 is set aside and the application of the accused for declaring the order dated 24/27th February 1990 framing the charges against him as vitiated by fraud, is dismissed.
N.V.K. Appeal allowed. [/INST] The respondent, an ex Naval Officer and Computer Science graduate was accused of leaking Atomic Energy Secrets and charged for violating the provisions of the and the official Secrets Act.
Ultimately when he was discharged for failure of the State to obtain the necessary sanction under Section 197 Cr. P.C., and the State challenged the correctness of the order by way of revision, the respondent filed an application for the declaration that the charge sheet be declared null and void.
In para 3 thereof it was stated that the charges were vitiated by fraud as the Panchnama dated May 30, 1988 was fabricated as it did not contain his signature and it was ante dated.
It was further averred that for three months even the copies of the remand application filed by the police were denied to him, and that orders thereon were not supplied to him, and that the complaint was in contra on wit the statement of witnesses.
The High Court allowed this application.
In the State 's appeal to this Court on the question whether the High Court was justified in allowing the application flied by the respondent for declaring that the charges framed by the Additional Sessions Judge by his order dated 24/27th July, 1990 were null and void as they were obtained by fraud, practised by the state.
330 Allowing the appeal, setting aside the order of the High Court dated 14th October, 1991, and dismissing the application of the accused for declaring the order of the Additional Sessions Judge framing the charges against him as vitiated by fraud, this Court, HELD:1.
The High Court by its order passed on 25/26th March, 1991 in Criminal Writ Petition No. 966 of 1990 had specifically held that the question of framing charge had become final.
It could not be, therefore, re opened.
The Division Bench had clearly held that it was not open to go behind the order passed by the Single Judge on 3.4.1990 directing that the charges being framed against the accused not only under Section 3 but under Section 5 as well.
Nor can any exception be taken to the finding of the Bench that the said order could not be said to have been passed without jurisdiction in as much as the Single Judge had jurisdiction to decide the revision application preferred under the provisions of the Code.
[332B C] 2.
The question of fraud raised by the accused was negatived by the, Division Bench and it was held that it was not capable of being gone into as it did not form part of the substratum of the case of the prosecution and was not germane to the question of deciding as to whether he was entitled to be discharged or not.
[332D] 3. 'Fraud ' is false representation by one who is aware that it was untrue with an intention to mislead the other who may act upon it to his prejudice and to the advantage of the representor.
It has been defined statutorily in Section 17 of the Contract Act as including certain acts committed with connivance or with intent to deceive another.
In Ad ministrative Law it has been extended to failure to disclose all relevant and material facts which one has a positive duty to disclose.
[332G H] 4.
Even the most solemn proceedings stand vitiated if they are actuated by fraud.
Such being the nature and consequence of it the law requires not only strict pleading of it but strict proof as well.
[333B] 5.
Facts which could be fished out from paragraphs averring fraudulent submissions could not be said to be relevant for alleging fraud.
[334E] 6.
Legal submissions cannot be equated to misrepresentation.
The pleadings in the instant case fall short of the legal requirements to estab 331 lish fraud.
Various sentences extracted from different judgments between the accussed and State in various proceedings could not give rise to an inference either in law or fact that the State was guilty of fraud.
[335H, 336A] In the instant case the averments in paragraphs 3 and 4 to 8 of the application do not establish fraud.
No foundation giving rise to fraud was laid.
It was complete misapprehension under which the accused was labouring and it was indeed unfortunate that the Single Judge of the High Court not only entertained the respondent 's application but adopted a course which amounted to reviewing and setting aside orders of his predecessor without sufficient material and accepting the claim that all earlier judgments were liable to be ignored under Section 44 of the Evidence Act as the proceedings were vitiated by fraud.
The Single Judge not only committed an error of procedure but misapplied the law.
[336B] </s> |
<s>[INST] Summarize the following judgement: on (Civil) No.3 of 1990 etc.
(Under Article 32 of the Constitution of India).
K.T.S. Tulsi, Addl.
Solicitor General, M.K. Ramamurthy, Govinda Mukhoty and N. Santosh Hegde, Ms. C. Ramamurthi, M.A. Krishna Moorthy, M.A. Chinnaswamy, H. Subramaniam, Ms. C.M. Chopra, A Bhattacharjee, G.S. Chatterjee, H.K. Puri, M.P. Jha, Serva Mitter, R.K. Maheshwari, Vineet Maheshwari, Ms. Niranjan Singh, B.D. Prasad, K. Swamy and B.K. Prasad for the appearing parties.
The Judgment of the Court was delivered by KASLIWAL, J.
All these cases are an upshot of the case R.D. Gupta & Ors.
vs Lt. Governor, Delhi Administration & Ors.
; , It is not necessary for us to give the background and history of the constitution of the two main civic bodies namely, New Delhi Municipal Committee (in short 'MDMC ') and the Municipal Corporation of Delhi (in short 'MCD '), in the Union Territory of Delhi as the same has already been mentioned in detail in the above R.D. Gupta 's case (supra).
We would thus mention only such details which are relevant and necessary for the purpose of deciding the above cases.
All the above cages relate to the employees of the NDMC who are claiming the benefit of the report of Shiv Shankar Committee (in short 'SSC ') in respect of the grant of pay scales 416 as allowed to other employees of NDMC in R.D. Gupta 's case.
The Government accepted the report of the Third Pay Commission and granted pay scales as recommended to the employees of NDMC as well as to the MCD.
The technical staff of the Delhi Electricity Supply Undertaking (in short 'DESU ') claimed higher scales of pay as they were not satisfied with the pay scales recommended by the Third Pay Commission.
The Government therefore constituted Shiv Shankar Committee to go into the question of revision of pay scales of the technical staff of DESU.
The SCC submitted its report in 1973 according to which higher pay scales were allowed to the technical staff of DESU.
The non technical/ministerial staff of DESU who were not covered by the report of the SSC demanded that they should also be granted pay scales as recommended by the SSC.
The DESU considered the demand of the ministerial staff at its meeting held in May 1973 and decided to revise the pay scales of the non technical staff also working in DESU.
Since the technical as well as the ministerial staff working in the DESU were granted the pay scales recommended by SSC, the NDMC also.
by its resolution No.154 dated 19.10.1973 allowed the benefits of pay scales as recommended by SSC to its staff working in the electricity wing.
In view of the fact that the benefit of the SSC pay scales was granted by the NDMC to the ministerial staff working in the electricity wing only, the employees working in the general wing of the NDMC also raised a demand for granting them also the benefit o f the pay scales recommended by SSC.
Many orders were passed from time to time and writ petitions Were also filed by the concerned parties, but we do not think it necessary to give the details as the same have been narrated in R.D. Gupta 's case and we come to the resolution of the NDMC dated 27.6.1978 constituting the electricity wing with effect from 1.5.1978 or such subsequent date as may be fixed composed of 28 posts of pump drivers, two posts of welders, three posts of carpenters and one post of pump.
mechanic and 496 posts of ministerial staff and to give all of them scales of pay as per SS Committee Report.
Three petitions under Article 226 of the Constitution viz. CW Nos.
1231, 557 and 280 of 1978 were filed in the Delhi High Court.
We are only concerned with the grievance of the ministerial staff who were claiming to be treated at par with the ministerial staff of the electricity win in the matter of pay and allowances.
The ministerial staff in the general wing having not received the full relief in the High Court filed C.A. 2969 of 1973 417 before this Court.
It was claimed in the said appeal that instead of restricting the payment of SS Committee pay scales to the 496 ex cadre posts in the electricity wing and directing the NDMC to fill up those posts on the basis of seniority cum option, the High Court should have directed the NDMC to give the SS Committee pay scales to all the members of the ministerial staff.
In R.D. Gupta 's case, this Court decided many appeals by a common order, but we are only concerned with the C.A. No. 2969 of 1983 which relates to the ministerial staff in the general wing of the NDMC.
It was contended by the appellants in the said appeal that the electricity wing of the NDMC was not a distinct and independent unit entitled to have its own scales of pay and secondly the ministerial staff of the NDMC belonged to a unified cadre and the staff members were liable to transfer from one branch of the NDMC to another and as such the NDMC cannot create a cadre within a cadre and fix different scales of pay for those in the carved out cadre.
It was also urged that the nature of the duties performed by the ministerial staff in all the three wings of the NDMC is more or less similar, if not identical, and hence the well established rule of 'equal pay for equal work ' should govern the staff members.
This Court in R.D. Gupta 's case held that the grievance of the ministerial staff of the general wing was well founded.
The ministerial staff in the NDMC constituted a unified cadre.
The recruitment policy for the selection of the ministerial staff is a common one and the recruitment is also done by a common agency.
They are governed by a common seniority list.
The ministerial posts in three wings of the NDMC, viz. the general wing, the electricity wing and the water works wing are interchangeable posts and the postings are made from the common pool according to administrative convenience and exigencies of service and not on the basis of any distinct policy or special qualifications.
It was held that it would be futile to say that merely because a member of the ministerial staff had been given a posting in the electricity wing, either due to force of circumstances or due to voluntary, preferment, he stands on a better or higher footing or in a more advantageous position than its counterparts in the general wing.
It was thus held that all sections of the ministerial staff should be treated alike and all of them were entitled to the same scales of pay for the work of equal nature done by them.
After the above decision in R.D. Gupta 's case, the employees of NDMC working in different departments have filed the above writ petitions under Article 32 of the Constitution or Civil Miscellaneous Petitions in 418 R.D. Gupta 's case which have been directed by this Court to be treated as Writ Petitions by order dated 17.11.1989.
In all these cases the employees have prayed for granting the same pay scales including the ex gratia benefits as was recommended by SSC.
Writ Petition No.1 of 1990 has been filed by NDMC Workship Employees Association on behalf of the employees of Auto Workship of NDMC.
In Writ Petition No.5 of 1990, the petitioners are Class IV employees of NDMC holding the posts of Duplicating Machine Operators and Gunmen/Dog Shooters.
In Writ Petition No.3 of 1990, the petitioners were initially appointed as Junior Clerks and subsequently promoted to the posts of Junior Technical Assistants (Hindi) also knows as Translator (Hindi).
In Writ Petition No.13 of 1990, the petitioner is working on the post of Assistant Store Keeper.
In Writ Petition No.292 of 1990, the petitioners are pump drivers in the water supply, horticulture and civil wings of NDMC.
In Writ Petition No.1109 of 1990, the petitioners are the employees of Junior Navyug School run by NDMC.
In Writ Petition No.409 of 1990, the petitioners are working as Telephone Operators under the NDMC.
The short controversy to be decided in the above cases is whether the petitioners fall within the cadre of ministerial staff or fall in similar cadres which have already been granted the benefit of SSC pay scales? It is no longer in controversy now that the ministerial staff working in all the wings are also entitled to the same benefit of SSC pay scales as has been given to the ministerial staff working in the electricity wing of the NDMC.
It has already been decided in R.D. Gupta 's case that the entire ministerial staff in the NDMC constitutes a unified cadre.
The ministerial post in the three wings of the NDMC viz., the General Wing, the Electricity Wing the the Water Works Wing are interchangeable posts and the postings are made from the common pool according to administrative convenience and exigencies of service and not on the basis of any distinct policy or special qualifications.
It may be further noted that the NDMC itself in order to extend the benefit of R.D. Gupta 's case in a meeting dated 9.6.1988 resolved as under: "IMPLEMENTATION OF BENEFIT OF S.S. SCALE SLP.
11270 OF 1982 SHRI R.D. GUPTA 419 AND OTHERS VERSUS LG.
DELHI AND OTHERS.
The Committee as per the advice of the Law Deptt.
and the opinion given by our counsel, justice V.D. Mishra on 26.2.1988 had decided that following categories of employees who constitutes 496 posts created by the.
NDMC while forming the Electricity Cell vide Reso.
passed on 27.6.1978 should be extended the benefits: 1.
Office Supdt.
HA/Accountant 3.
Personal Asstt.
Clear 5.
Stenographers 6.
Jr. Clerk 7.
Asstt.
Storekeepers 8.
Adrema Operators 9.
Asstt.
Adrema Operators 10.
Asstt.
Record Keepers 11.
Daftry 12.
Peon 13.
Bill Collector 14.
Sorter 15.
Ferro Printer 16.
Chowkidar 17.
Sewerman 18.
Sweeper Accordingly, the Committee passed orders to extend the benefits vide orders dated 26.2.1988 to all the above 420 categories.
These employees have already been paid a part of the arrears and salaries under S.S. Scale.
The CAP while checking the pay fixation have required a formal resolution of the Committee for processing the cases.
Accordingly, this is noted to the Committee for information in continuation of Reso.
No.26 dated 9.2.1988.
ADMINISTRATOR 'S DECISION Information noted.
" By another order dated 27.7.1988 the benefit of S.S. Committee 's scales was extended to the following cadre of employees: "NEW DELHI MUNICIPAL COMMITTEE DATED: 27.7.1988 OFFICE ORDER Under the orders of the Administrator dated 18.7.1988 the following allied categories of sweepers are extended the benefit of S.S. Scales in terms of Reso.
No.26 dated 9.2.1988 read with Reso.
No.52 dated 9.6.1988 as they form the common cadre of sweepers.
Lorry Belders 2.
Dumping ground beldars 3.
Bhisties 4.
Rat catchers 5.
Verandha Beldars 6.
Hawker Raid Van beldars 7.
Sweepers cum chockidars 8.
Dog catchers.
Sd/ Asstt.
(Health) 421 Copy to: 1.
All Estts.
: with the request to fix the pay of the above mentioned categories in the S.S. Scales.
DS (E) 3.
A.S. (AIC) 4.
P.A. to Secy.
NDMC 5.
C.A.0.
O.S. (CBS) 7.
Supdt.
A/Cs. 8.
File 9.
P.A. to F.A. 10.
OS (CE 1) The case is laid before the Committee of Officers presided over by the Administrator for consideration and decision if the benefit of Supreme Court Judgment dated 7.8.1987 be extended to all the Drivers in anticipation of the approval of the Lt. Governor, Delhi and in the anticipation of the confirmation of the Minutes of the Committee.
ADMINISTRATOR 'S DECISION Resolved by the Committee of Officers and decided by the Administrator that benefit of Supreme Court judgment dated 7th Aug. 87 is extended to all the Drivers of the Committee in the anticipation of the approval of the L.G. Delhi.
The action be taken in anticipation of confirmation of the minutes of the Committee. ' In Writ Petition No.1 of 1990, the contention of the petitioners is that they are employees working in the Auto Workshop of NDMC which is a part and parcel of the electricity establishment and their duties are mini , sterial in nature.
It has been further contended that the Auto Workshop ' 422 employees have to work throughout on the ground beneath the vehicles belonging to all departments whether it belongs to electricity, water or the administrative staff and they have to work for such time till a vehicle is fit for traffic and have to maintain the vehicle not only for administrative staff but also for the electrical, health, water etc.
It has been further urged that Auto Workshop employees are part and parcel of electrical wing and their appointments, promotions, pension, salaries, increments, transfers, main tenance of personal filing is done by the electricity establishment.
Moreover, their services are inter transferable such as drivers, cleaners, helper, peon, chowkidar, sweepers, fitters, khalasis working in the Auto Workshop can be and are transferred to other departments.
It has also been urged that a discriminatory treatment has been given in the case of the petitioners inasmuch as a fitter which is a promotional post from amongst peon or chowkidar or sweeper is getting less pay scale than the peon or chowkidar and likewise clearner which is a promotional post is getting less pay scale than a chowkidar, peon and sweeper.
We find force in the submission of the petitioners.
As already mentioned above the benefit of the pay scales recommended by the SSC has been allowed to the NDMC to the 18 categories of employees which includes, daftry, peon, chowkidar, sweeper etc.
and we find no valid justification for discriminating the employees of the Auto Workshop which forms a part and parcel of the electricity wing of the NDMC.
In Writ Petition No.5 of 1990, the petitioners are Class IV employees of NDMC holding posts of Duplicating Machine Operators and Gunmen/Dog Shooters.
Needless to say that NDMC has allowed the benefit of SS Committee 's scales to Rat Catchers and Dog Catchers vide order dated 27.7.1978 as already quoted above and we find to valid justification for denying such benefit to Duplicating Machine Operators and Gunmen/Dog Shooters.
When such benefit has been allowed to Rat Catchers and Dog Catchers, there is no essential difference in the job work done by Genmen/Dog Shooters.
The Duplicating Machine Operators are also Class IV employees and such post is transferable and interchangeable from other Class IV employees of the NDMC who have already been granted the benefit of SSC 's pay scales vide order dated 9.6.1988 already mentioned above.
In Writ Petitoin No.3 of 1990, the petitioners are working as Junior 423 Technical Assistants (Hindi) and are also known as Translator (Hindi).
In Writ Petition No.13 of 1990, the petitioner is working on the post of Assistant Store Keeper.
Both the above posts of Junior technical Assistants (Hindi) and Assistant Store Keeper are such posts which clearly fall within the ministerial cadre.
Learned counsel appearing for the NDMC was unable to show any material on record for taking a contrary view.
In Writ Petition No.292 of 1990, the petitioners are pump drivers employed in the water supply, horticulture and civil wings of NDMC.
The benefit of SSC pay scales has already been extended to the pump drivers in the electricity wing and there in no valid ground or justification to deny such benefit to the pump drivers working in the water supply, horticulture and civil wings of NDMC.
In Writ Petition No.1109 of 1990, the petitioners are the employees of Junior Navyug School run by NDMC.
In our view, the employees of the school though run by NDMC fall in a different cadre altogether and as such cannot claim the benefit of SSC pay scales on the basis of R.D. Gupta 's Judgment.
It is not their case that their posts are interchangeable or transferable from any other post under NDMC.
The nature and the duties performed by the petitioners are totally different and they cannot be granted the benefit of the SSC pay scales on the basis of any equality with the other employees of NDMC who have been granted such benefit.
In Writ Petition No.409 of 1990, the petitioners are working as Telephone Operators.
The Telephone Operators fall in a separate cadre and their posts are neither interchangeable nor transferable with the other members of the service in NDMC.
That apart the petitioners are Trained Telephone Operators and Senior Telephone Operators and as such do not fall within the category of ministerial staff and ' as such are not entitled to the benefit of SSC pay scales on the basis of R.D. Gupta 's case.
In the above cases we are only concerned with the granting of benefit of SSC pay scales on the basis of R.D. Gupta 's case and as such we are holding that the petitioners working in the Navyug School in Writ Petition No.1109 of 1990 and Telephone Operators in Writ Petition No. 409 of 1990 are not entitled to the benefit of the SSC pay scales.
These petitioners are free to make their claim if any, for the revision of their pay scales to the competent authorities.
424 In the result, we allow Writ Petition Nos. 1, 3, 5, 13, and 292 of 1990 and grant them the benefit of SSC pay scales in the same manner as granted to other employees vide Resolution No.26 dated 9.2.1988 read with Resolution No.52 dated 9.6.1988.
The respondent Delhi Administration and NDMC shall take appropriate steps within three months of the notice of this order and make payment of the entire arrears and grant future benefit in the pay scales as recommended by SS Committee.
The Writ Petition Nos.1109 of 1990 and 409 of 1990 are dismissed.
No order as to costs. [/INST] The New Delhi Municipal Committee by its resolution dated 19.10.
1973 extended the benefit of higher pay scales recommended in the Shiv Shankar Committee Report, to its staff working in the electricity wing.
Following this, the employees working in the general wing of the NDMC also raised demand for granting them the benefit of those pay scales.
In the meantime, by its resolution dated 27.6.1978 the NDMC constituted, with effect from 1.5.1978, the electricity wing composed of 28 technical and 496 ministerial posts and decided to give all of them scales of pay as per S.S. Committee 's Report.
In the writ petitions filed in the High Court the ministerial staff failed to receive full relief.
This Court in R.D. Gupta & Ors. etc.
vs Lt. Governor, Delhi Administration & Ors.
; , found that the entire ministerial staff in the NDMC constitutes a unified cadre.
The ministerial posts in the general wing, the electricity wing and the water works wing are interchan geable posts and postings are made from the common pool according to administrative convenience and exigencies of service and not on the basis of any distinct policy or special qualifications.
It was thus held that all sections of the ministerial staff should be treated alike and all of them were entitled to the same scales of pay for the work of equal nature done by them.
In order to extend the benefit of R.D. Gupta 's case, the NDMC by its order dated 9.6.1988, revised the pay scales of ' 18 categories of employees who constituted 496 posts forming the electricity cell.
By another order 414 dated 27.7.1988 the NDMC extended the benefit of S.S. Committee 's scales to eight allied categories of sweepers, subsequently, all the drivers of the NDMC were extended benefit of R.D. Gupta 's case.
On the question: whether the petitioners fall within the cadre of ministerial staff or fall in similar cadres which have already been granted the benefit of S.S. Committee 's pay scales.
Disposing of the writ petitions, the Court, HELD: 1.
There is no valid justification for discriminating the employees of the Auto Workshop which forms a part and parcel of the electricity wing of the NDMC, since the benefit of the pay scales recommended by the S.S. Committee has been allowed by the NDMC to the 18 categories of employees which include daftry, peon, chowkidar, sweeper etc.
[422D E] 2.
The NDMC having allowed the benefit of S.S. Committee 's scales to rat catchers and dog catchers vide order dated 27.7.1988, there is no valid justification for denying such benefit to duplicating machine operators and gunmen/dog shooters.
There is no essential difference in the job work done by gunmen/dog shooters.
The post of duplicating machine operators in transferable and interchangeable from other class IV employees of the NDMC who have already been granted benefit of S.S. Committee 's pay scales vide order dated 9.6.1988.
[422E] 3.
Both the posts of Junior Technical Assistant (Hindi) and Assistant Store Keeper are such posts which clearly fall within the ministerial cadre.
They are thus entitled to the benefit of S.S. Committee 's scales.
[423B] 4.
The benefit of S.S. Committee 's pay scales having already been extended to the pump drivers in the electricity wing, there is no valid ground or justification to deny such benefit to the pump drivers working in the water supply, horticulture and civil wings of NDMC.
[423C] 5.
The employees of Junior Navyug School run by NDMC fall in a different cadre altogether and as such cannot claim the benefit of S.S. Committee 's pay scales on the basis of R.D. Gupta 's judgment.
Their posts are not interchangeable or transferable from any other post under the NDMC.
The nature and the duties performed by them are totally different and they cannot be granted the benefit of the S.S. Committee 's pay scales 415 on the basis of any equality with the other employees of NDMC who have been granted such benefit.
[423D E] 6.
The telephone operators working in the NDMC fall in a separate cadre and their posts are neither interchangeable nor transferable with the other members of the service in the NDMC.
That apart, the petitioners are trained Telephone Operators and Senior Telephone Operators and as such do not fall within the category of ministerial staff and are not entitled to the benefit of S.S. Committee 's pay scales on the basis of R.D. Gupta 's case.
[423F] 7.
The respondent Delhi Administration and NDMC are directed to take appropriate steps within three months and make payment of the entire arrears and grant future benefit in the pay scales as recommended by S.S. Committee.
[424B] </s> |
<s>[INST] Summarize the following judgement: Appeal Nos.
1334 43 of 1993.
From the Judgments and Orders dated 29.10.1991 of the Andhra Pradesh High Court in W.P. Nos.
9133, 8920, 8074, 7932 and 11119/90 8113/91 (dt.
31.10.91), 8201/90, 8987/91 (dt.
30.10.91), 9165 & 7656 of 1990 K.K. Venugopal,C.S. Vaidyanathan, Vijayanarayana and Ms. Vijayalakshmi Menon for the Appellants.
K. Swamy and Ms. A. Subhashini for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
Special leave granted in all the petitions.
The appellants petitioners challenged the constitutional validity of Clause 16 of the Textile (Control) Order, 1986 [the 1986 Order] and the notification, issued thereunder, dated March 29, 1990 as amended on May 11, 1990 and May 17, 1990 (the notification) by the Textile Commissioner before the Andhra Pradesh High Court by way of writ petitions under Article 226 of the Constitution of India.
The High Court by its judgment dated October 29, 1991 dismissed the writ petitions.
These appeals by way of special leave are against the judgment of the High Court The appellants are the Spinning and Weaving Mills in the State of Andhra Pradesh.
The cotton yarn manufactured by the mills is of different 406 varieties.
It is classified on the basis of counts.
Yarn with 1 to 40 counts is coarse, 40 to 60 medium, between 60 and 100 fine and anything above 100 counts is described as very fine.
There are two methods of packing the yarn.
One is the cone form packing which is used in power loom and hosiery industry.
The other is hank form packing which is exclusively consumed by the handloom industry.
Spinning and packing are the two stages of manufacturing yarn.
Raw cotton has to pass through the process of blow room, carding, drawing, simplex and finally the ring frame to complete the process of spinning.
The process of packing starts thereafter.
For the cone form packing the ring frame cops are fed to the winding machines and for the hank form packing the cops are fed to the reeling machines.
According to the appellants they are packing the yarn in cone form.
They have not installed the reeling machines and as such it is not possible for them to pack the yarn in hank form.
The 1986 Order was issued by the Government of India in exercise of its powers under section 3 of the .
Clause 16 of the 1986 Order is as under : "16 (1) The Textile Commissioner, may from time to time, issue directions in writing to any manufacturer or class of manufacturers or manufacturers generally, regarding, (a) the clauses or specifications of cloth or yarn which each manufacturer or class of manufacturers of or manufacturers generally shall or shall not manufacture; (b) the maximum or minimum quantities of cloth or yarn which such manufacture or class of manufacturers or manufacturers generally shall manufacture during such period as may be specified in the Order; (c) the maximum price ex factory, wholesale or retail at which any class or specification of cloth or yarn may be sold; or (d) the principles on which and the manner in which such maximum prices may be determined by a manufacturer; and (e) the manner of packing of yarn in hanks, cones or in 407 any other form and in such proportion as he may consider necessary or expedient: Provided that in issuing any direction under this clause, the Textile Commissioner shall have regard to: (i) the demand for cloth or yarn; (ii) the needs of the general public; (iii)the special requirements of the industry for such cloth or yarn; (iv) the capacity of the manufacturer or class of manufacturers or manufacturers generally, to manufacture or pack different descriptions or specifications of cloth or yarn; and (v) the necessity to make available to the general public cloth of mass consumption.
(2) While issuing any direction under sub clause (1), the Textile Commissioner may also provide that such direction shall be with reference to the quantity of cloth or yarn packed by the manufacturer or class of manufacturers or manufacturers generally during the period specified in the direction.
(3) Every manufacturer, or class of manufacturers or manufacturers generally, to whom a direction has been issued shall comply with it.
(4) Where, on an application made by any manufacturer or class or manufacturers or otherwise the Textile Commissioner is satisfied that any direction issued by him under this clause causes undue hardship or difficulty to any such manufacturer or class of manufacturers, he may, by order and for reasons, to be recorded in writing, direct that the direction shall not apply, or shall apply subject to such modification as may be specified in the order to such manufacturer or class of manufacturers.
" 408 In exercise of the powers under Clause 16 of the 1986 Order the Textile Commissioner issued the notification.
The operative part of the notification is re produced hereunder : "2.
Every producer of yarn shall pack yarn for civil consumption in hank form in each half yearly period commencing from April September, 1990, period and in every subsequent half yearly period in proportion of not less than fifty percent of total yarn packed by him during each half yearly period for civil consumption: Provided that not less than eighty percent of the yarn required to be packed in hank form shall be of counts 40s and below in regard to category 1 at Annexure I to this Notification : Provided further that the obligation to pack hank yarn pertaining to a particular half yearly period can be fulfilled before the end of the month succeeding such period to which the obligation pertains.
" At this stage we may briefly notice the earlier litigation which ended with the judgment of the Madras High Court in Sri Rani Lakshmi G.S. & W. Mills Pvt. Ltd. & Others vs Textile Commissioner, Bombay & Ors., AIR 1986 Madras 66.
In Rani Lakshmi Mills ' case the constitutional validity of Clause 21(5) of the cotton textile (Control) Order, 1948 [1948 Order] and the notification dated June 29, 1979 issued thereunder were challenged.
The said Notification was in similar terms as the notification before us in these appeals.
Clause 21(5) of the 1948 Order was as under : "(5) The Textile Commissioner may, by General or Special Order, direct any manufacturer or class of manufacturers to pack yarn in hanks, cones or in any other form and in such proportion as he may consider necessary or ex pedient: and thereupon such manufacturers or class of manufacturers shall be bound to comply with such directions".
It was argued before the Madras High Court that Clause 21(5) of the 1948 Order did not provide any guidelines for the exercise of power by the 409 Textile Commissioner and as such was arbitrary and violative of Article 14 of the Constitution of India.
The High Court accepted the argument and struce down Clause 21(5) of the 1948 Order on the following reasoning "A bare reading of the provision of clause 21(5) would therefore show that the proviso under that clause gives completely uncontrolled and uncanalized power which can only be described as an arbitrary power depending upon what he considers is necessary or expedient." Special leave petitions 12569 92/84 against the judgment of the Madras High Court were dismissed by this Court on February 21, 1991.
Because of the judgment of the Madras High Court in Rani Lakshmi Mills case the 1948 Order was repealed and the 1986 Order was promulgated.
Clause 16(1) of the 1986 Order gives power to the Textile Commissioner to issue directions providing the manner of packing of yarn in hanks, cones or in any other form and in such proportion as he may consider necessary or expedient.
Proviso to Clause 16(1) lays down complete guidelines for the exercise of power by the Textile Commissioner.
Relying upon Rani Lakshmi Mills ' case the learned counsel for the appellants have contended that identical notification having been struck down by the Madras High Court and the judgment upheld by this Court, the respondents are bound by the same and the Textile Commissioner had no authority to issue fresh notification in similar terms.
In any case according to the learned counsel the impugned notification is liable to be struck down on the same grounds.
We do not agree with the learned counsel.
The notification struck down by the Madras High Court was issued under Clause 21(5) of the 1948 Order.
The High Court held Clause 21(5) of the 1948 Order unconstitutional and as a consequence struck down the notification dated June 29, 1979.
The present notification has been issued under Clause 16(1) of the 1986 Order.
Unlike Clause 21(5) of the 1948 Order proviso to Clause 16(1) of the 1986 Order provides complete guidelines to the Textile Commissioner to issue the directions envisaged thereunder.
As such the ground of attack which was available to the petitioners before the Madras High Court is not available to the appellants before us.
We, therefore, reject the contention based on the judgment of the Madras High Court in Rani Lakshmi Mills ' case.
410 Mr. Venogopal and Mr. Vaidyanathan learned counsel for the appellants have then contended that the appellants do not manufacture hank yarn.
The contention is that the respondents cannot compel the appellants to manufacture something for which the appellants have not installed the necessary machinery and other superstructure.
The notification according to the learned counsel infracts their fundamental right under Article 19(1)(g) of the Constitution of India.
We see no force in the contention.
The Textile Industry in this country is the second largest industry, next to agriculture, providing employment to millions of people.
This industry is accounting for 20% of the total industrial output.
The appellant mills are part of the textile industry in the State of Andhra Pradesh.
The respondents, in their written statement before the High Court, have elaborately explained the spinning and the packing processes undertaken by the appellant mills.
According to the respondents it is not correct that the appellants are being forced to manufacture something which they are not manufacturing already.
The five stages of spinning (blow room, carding, drawing, simplex and ring frame) are common and only thereafter the ring frame cops are either packed in hank form or in cone form.
The respon dents have given cogent reasons for issuing the impugned notification.
We may briefly state the same.
The textile industry consists of three sectors namely, Mill Sector, Powerloom Sector and Handloom Sector.
The primary product in the industry is yarn.
It is produced only by the Mill sector.
The Powerloom and Handloom Sectors manufacture fabrics and they depend upon the Mill Sector for yarn.
The yarn is packed in two forms namely, cone form and hank form.
The cone form is consumed entirely by the Powerloom Sector and the hank form by the Handloom Sector.
The handloom industry is the largest cottage industry in India.
Nearly one third of the country 's requirement of cloth is met by this Sector.
As per the National Handloom Census, 1987 88 there were 3.9 million handlooms spread all over the country out of which three million were engaged in production of cotton cloth.
The Handloom Sector provided direct employment to 8.4 million during 198889 and indirect employment to millions of people.
The production target for Handloom Sector for the Seventh Plan was 4600 million mts.
In order to achieve the said production target a minimum of 460 million kgs. of hank was required.
The employment generated in the three sectors during the year 1988 was 84.22, 50.95 and 11.81 lakh persons in Handloom Sector, Powerloom Sector and Mill Sector respectively.
The production of cloth 411 for Handloom Sector during the Eighth Plan has been targeted at 7000 million mts.
out of which cotton cloth is 5610 million mts.
In order to achieve this target 561 million kgs. of hank yarn is required.
Against the said requirement only 355 million kgs.
of cotton yarn is being packed in hank form.
According to the respondents there is a big gap between the demand and supply.
This causes scarcity of yarn in the market and results in spiralling of prices.
It further results in unemployment in Handloom Sector.
In order to make available sufficient quality of hank yarn at reasonable prices and also for the sustenance of Handloom workers, it became necessary to reserve hank yarn for Handloom Sector by making it obligatory on the part of the manufacturers of yarn to pack a certain percentage of their production packet for civil consumption in the form of hanks.
We are satisfied that impugned notification has been issued in the interest of the general public and also for the larger interest of the textile industry.
It is not disputed that under Clause 4 of the Industrial Licence granted to the appellants one of the conditions is as under : "the packing of yarn in hank form and count wise production shall be in accordance with the policy in force and the directions issued by the Textile Commissioner in this regard from time to time.
" The appellants, having accepted the above condition while taking the licence, cannot now turn round and say that they are not bound by the same.
Mr. Vaidhyanathan further contended that under the impugned notification unequals have been treated as equals.
According to him different mills have installed different machinery and have different equipments.
The contention is that the impugned notification is violative of Article 14 as it has been made uniformly applicable to mills which do not have the same capacity to produce hank yarn.
We see no force in the contention.
The impugned notification has been made applicable uniformly to all the producers of yearn.
The appellants are required to pack yarn in hank form in the proportion as provided in the notification keeping in view the total yarn packed by the mill concerned.
In any case the grievance of 412 the appellants has been substantially mitigated by the press note dated May 11, 1990 issued by the Textile Commissioner, Bombay.
The relevant part is re produced hereunder : "2.
The Government have now reinstituted the erstwhile relaxation of getting hank yarn obligation fulfilled by transfer of surplus hank yarn packing of another producer.
Secondly, the Government have also allowed a producer to get Hank yarn reeled through another producer having extra relying capacity with the permission of the Central Excise Authorities and with the arrangements through the State Handloom Corporations and Apex.
Handloom Cooperative Organisations in the areas having concentration of handloom weavers.
" We, see no ground to interfere with the judgment of the High Court.
We, therefore, dismiss the appeals with costs.
We assess the costs as Rs. 5000 to be paid by each of the appellants.
G.N. Appeals dismissed. [/INST] Different varieties of cotton yarn were manufactured by the appellant Mills.
Packing of the yarn was done in two forms, viz. cone form which was used in powerloom and hosiery industry and hank form which was exclusively consumed by the handloom industry.
For the cone form of packing the ring frame cops were fed to the winding machines and for the hank form of packing the cops were fed to the reeling machines.
The appellants were packing the yarn in cone form only.
Since they had not installed the reeling machines, they could not pack the yarn in hank form.
In exercise of powers under S.3 of the , Textile (Control) Order, 1986 was issued by the Government.
Clause 16 of the said order gave power to the Textile Commissioner to issue directions providing the manner of packing of yarn in hanks, cones or in any other form and in such proportion as he deemed necessary or ex pedient.
It also laid down the complete guidelines for exercise of the powers by the Textile Commissioner.
Exercising his powers under clause 16 of the 1986 Order, the Textile Commissioner issued a notification on 293.90, which was amended on 11.5.90 and 17.5.90.
According to the Notification every producer of yarn should pack in hank form at least 50% 404 of the total yarn packed by him during each half yearly period for civil consumption.
The appellants challenged the constitutional validity of clause 16 of the Textile (Control) Order, 1986 and the Notification issued thereunder, by filing Writ Petitions before the High Court.
The Writ Petitions were dismissed and the appellant Mills preferred the present appeals.
The appellants contended that an identical notification dated 29.6.1979 issued under the Textile (Control) Order, 1948 was struck down by the High Court and the said judgment having been upheld by this Court, the respondents were bound by the same and the Textile Commissioner had no authority to issue a fresh notification in similar terms; and that the appellants could not be compelled to manufacture something for which the appellants have not installed necessary machinery and other super structure.
It was further contended that the Notification was violative of Articles 14 and 19(1)(g) of the Constitution of India.
Dismissing the appeals, this Court, HELD: 1.
The present notification under challenge has been issued under Clause 16(1) of the Textile (Control) Order, 1986.
Unlike Clause 21(5) of the 1948 Order, proviso to Clause 16(1) of the 1986 Order provides complete guidelines to the Textile Commissioner to issue the directions envisaged thereunder.
[409G H] Sri Rani Lakshmi G.S. & W. Mills Pvt. Ltd. & Others vs Textile Commissioner, Bombay & Ors., AIR 1986 Madras 66, distinguished.
In order to make available sufficient quantity of hank yarn at reasonable price and also for the sustenance of Handloom workers engaged in the largest cottage industry in India, it became necessary to reserve hank yarn for Handloom sector by making it obligatory on the part of the manufacturers of yarn to pack a certain percentage of their production packet for civil consumption in the form of hanks.
Thus the notification has been issued in the interest of the general public and also for the larger interest of the textile industry, and is not violative of article 19(1)(g) of the Constitution of India.
[411B C] 3.
Having accepted the condition regarding packing of yarn in hank form, while taking the licence, under clause 4 of the Industrial Licence, the 405 appellants cannot now turn round and say that they are not bound by the same.
[411F] 4.
There is no violation of article 14 of the Constitution since the notification has been made applicable uniformly to all the producers of yarn.
The appellants are required to pack yarn in hank form in the proportion as provided in the notification keeping in view the total yarn packed by the mill concerned.
In any case the grievance of the appellants has been substantially mitigated by the press note dated May 11, 1990 issued by the Textile Commissioner, reinstituting the erstwhile relaxation getting yarn obligation fulfilled by transfer of surplus yarn packing of another producer, and allowing a producer to get hank yarn reeled through another producer having extra relying capacity.
[411G H; 412A] </s> |
<s>[INST] Summarize the following judgement: ivil Appeal No. 1210 of 1984.
From the Judgment and Order dated 28.8.1980 of the Madras High Court in Appeal No. 213 of 1978.
K. Ram kumar for the Appellant.
R. Mohan, T. Raja and R. Nedumaran for the Respondent. 891 The following Order of the Court was delivered: Ten acres of land belonging to the appellant had been acquired under the Land Acquisition Act.
The Land Acquisition Officer awarded compensation at the rate of one rupee one paise per sq.
On a reference under section 18 of the Act, the Court enhanced the rate of compensation to Rs. 2.25 per sq.
On appeal by the State, the High Court by the impugned judgment reduced the compensation to Rs. 2.00 per sq.
The reason stated by the High Court for so reducing the rate of compensation was that the acquired area was a compact plot of 10 acres which was laid out as building sites with fully formed roads and drainage.
The High Court held that since the roads and drainage occupied a part of the area acquired, proportionate deduction in compensation ought to be made.
Counsel for the appellant submits that what was acquired was a compact area of 10 acres.
The fact that roads and drainage had been laid out does not reduce the value of the land acquired.
In fact the appellant had incurred expenditure in preparing the land as building sites, and the High Court ought to have accepted his contention that he was entitled to higher compensation.
We see no reason why the High Court should have reduced the compensation awarded by the Reference Court on the ground that roads and drainage had been laid out.
The fact that these improvements had been made on the land shows that what was acquired was more valuable than what it would have been without the improvements.
The reason given by the High Court for reducing the compensation awarded by the Reference Court was wrong in principle.
Accordingly, we set aside the impugned judgment of the High Court and restore that of the Reference Court.
The appeal is allowed in the above terms.
No Costs.
R.P. Appeal allowed. [/INST] On State 's appeal against enhancement of compensation for a compact area of 10 acres of land laid out as building sites with fully formed roads and drainage, and acquired under the Land Acquisition Act, 1894, the High Court reduced the compensation holding that since the roads and drainage occupied a part of the area acquired, proportionate deduction in compensation ought to be made.
The claimant filed appeal by special leave to this Court.
Allowing the appeal, this Court, Held: 1.1.
The High Court was wrong in principle in reducing the compensation on account of roads and drainage.
The fact that these improvements had been made on the land acquired shows that what was acquired was more valuable than what it would have been without the improvements.
[p. 891E F] 1.2.
Accordingly, the judgment of the High Court is set aside and that of the Reference Court is restored.
[p.891F] </s> |
<s>[INST] Summarize the following judgement: minal Appeal No. 757 of 1985.
From the Judgment and Order dated 6.11.1984 of the Gauhati High Court in Criminal Appeal No. 11 of 1979.
Sunil Kumar Jain, P.D. Tyagi and Vijay Hansaria for the Appellant.
S.K. Nandy for the Respondent.
ANAND, J. Anil Phukan and his brothers Mahendra Phukan and Jojneswar Phukan were tried for an offence under Section 302/34 IPC for the murder of one Trinavan Chandra Baruah on 21.3.1976 at about 8 p.m.
The learned Sessions Judge convicted all the three brothers for the said offence and sentenced each one of them to suffer imprisonment for life 392 An appeal was preferred by all the three brothers against their conviction and sentence in the Gauhati High Court.
A Division Bench of that court vide judgment dated 6.11.1984 upheld the conviction and sentence of all the three.
A Special Leave Petition (Crl.) No. 561/85, was preferred by Mahendra Nath Phukan, and Anil Phukan, the third brother Jojneswar, however, did not file any special leave petition.
On 2.9.1985, the special leave petition as regards Mahendra Nath Phukan was dismissed while notice was issued in the petition as regards Anil Phukan.
Subsequently, on 29.10.1985, special leave was granted to Anil Phukan and on 29.4.1986, he was also directed to be released on bail to the satisfaction of the Chief Judl.
Magistrate, Golaghat, ' Assam.
We are, therefore, at this stage concerned only with the criminal appeal by special leave, of Anil Phukan.
In brief, the prosecution case is that the appellant, Anil Phukan had borrowed a sum of Rs. 450 from Trinayan Chandra Baruah, deceased and had executed two hand notes exhibit 7 and exhibit 8, promising to repay the amount on 21.3.1976.
However, he did not repay the amount, On 21.3.1976, the deceased accompanied by his nephew, Ajoy Baruah PW3, proceeded to the village of the appellant and as he was getting late, Ajoy Baruah PW3 carried with him a torch light.
The distance of the house of the deceased from that of the appellant is about one furlong.
Anil appellant was present in the fields in front of his house and on being asked as to why he had not come to return the money, he asked them to wait there and proceeded towards his house.
Later on, when Anil did not return for some time, the deceased alongwith Ajoy PW3 proceeded towards the house of the appellant when they found all the three brothers coming towards them variously armed.
Mahendra had a crowbar while jojneswar had a crooked dao and Anil a kupi dao.
Ajoy PW3 apprehended some danger from the appellant and his brothers but his uncle told him that since they had done no wrong, they need not be afraid of any assault.
On coming near the deceased and Ajoy PW3, Mahendra, who came first, gave a blow to Trinayan on his head with the crowbar, the other two brothers also allegedly assaulted the deceased thereafter.
Ajoy PW3 pulled the deceased towards his house and implored the accused not to assault him.
At the asking of his uncle, Ajoy PW3 ran away to his house and gave the information to the wife of the deceased PW5 Debayani Baruah, about the occurrence.
He also narrated the occurrence to PW4, Bijoy Baruah.
the wife of the deceased went to PW6, Punaram Gogoi, and after telling him as to what had been told to her by Ajoy PW3, she requested him to accompany her to the place of 393 occurrence.
On reaching the place of occurrence, they found Trinayan lying on the spot with injuries on his person but he was still alive.
Pws Bijoy and Ajoy brought a bullock cart from Sabharam Bora PW7 and after lifting the body of Trinayan with some difficulty brought it to his house and kept it in the verandah.
However, before any medical aid could be provided, the deceased succumbed to the injuries at night.
The first information report was lodged at Golaghat Police Station the next day in the afternoon at 12.30 p.m. by Surendra Nath Gogoi PW2.
During the investigation, some weapons including an axe were seized from the house of Mahendra accused.
On the same day, Mahendra was arrested at about 6.45 p.m.
The other two brothers Anil and Jojneswar surrendered subsequently in the court.
The I.O. prepared the sketch plan of the place of occurrence and sent the body for postmortem examination.
The autopsy revealed that the deceased had two incised injuries on the head besides one swelling and an injury on the inner part of his thigh.
The prosecution in all examined 12 witnesses to connect 'the accused with the crime.
This case primarly hinges on the testimony of a single eye witness Ajoy PW3.
Indeed, conviction can be based on the testimony of a single eye witness and there is no rule of law or evidence which says to the contrary provided the sole witness passes the test of reliability.
So long as the single eye witness is a wholly reliable witness the courts have no difficulty in basing conviction on his testimony alone.
However, where the single eye witness is not found to be a wholly reliable witness, in the sense that there are some circumstances which may show that he could have an interest in the prosecution, then, the courts generally insist upon some independent corroboration of his testimony, in material particulars, before recording conviction.
It is only when the courts find that the single eyewitness is a wholly unreliable witness that his testimony is discarded in toto and no amount of corroboration can cure that defect.
It is in the light of these settled principles that we shall examine the testimony of PW3 Ajoy.
Ajoy PW3, on his own showing, is the nephew of the deceased.
He had accompanied the deceased to the place of occurrence when the later went to recover the loan from Anil appellant.
This witness, therefore, is a relative of the deceased and an interested witness.
Of course, mere relationship with the deceased is no ground to discard his testimony if it is otherwise found to be reliable and trustworthy.
In the normal course of events, a close relation would be the last person to spare the real assailant 394 of his uncle and implicate a false person.
However, the possibility that he may also implicate some innocent person along with the real assailant cannot be ruled out and therefore, as a matter of prudence, we shall look for some independent corroboration of his testimony, to decide about the involvement of the appellant in the crime.
Since, there are some doubtful aspects in the conduct of Ajoy PW3, it would not be safe to accept his evidence without some independent corroboration, direct or circumstantial.
The unnatural conduct of Ajoy PW3 which has come to our notice from the record is that though he was present alongwith the deceased at the time of occurrence, on 21.3.1976, at about 8 p.m., he made no attempt to save his uncle from the assault.
He did not even continue to stay there, though of course according to him, he ran for his life on being advised so by his uncle.
He was not assaulted though both he and his uncle were unarmed.
Even if Mahendra was engaged in assaulting the deceased, Anil, who was also allegedly armed neither made an attempt to assault Ajoy PW3 nor even chased him.
PW3 Ajoy did not himself lodge the FIR.
Of course, he gave information about the occurrence to PW4, PW5, PW7 and others immediately after the occurrence describing the manner of assault and the names of the assailants but why he did not lodge the FIR has not been explained by him.
In his testimony in the court he deposed that after Mahendra accused gave blow with the crowbar on the head of the deceased "other accused also assaulted him".
He did not describe as to on which part of the body of the deceased, had Anil and Jojneswar caused the injuries and made a general vague statement without assigning any particular injury to either of them.
When we look to the medical evidence, we find that the deceased had suffered two injuries on his head and no other injury on any other part of the body.
In all, four injuries were recorded in the post mortem report.
The other two injuries, according to the doctor, could have been the result of a fall and indeed looking to the nature of those injuries, which are in the nature of a swelling on the back of the interscapular region and a lacerated wound on the interior aspect of the right thigh, it is possible to agree with the medical witness PWl Dr. Ganesh Ch.
Buragohain, that those injuries could have been caused by a fall and were not the result of any direct impact with a weapon of assault.
Both the head injuries are almost of the same dimensions.
The possibility, therefore, that both the injuries had been caused to the deceased by Mahendra with the crowbar, who according to PW3 had hit the deceased on the head cannot be ruled 395 out.
In this connection, it would also be relevant to not that according to the testimony of the Investigating Officer, PW11 Abhiram Taye, all the weapons like the crowbar Ex.M5, a dao, an axe and a hand dag were recovered only from the house of Mahendra.
We have it from the testimony of PW3 and the first informant PW2 that all the three brothers lived separately.
No recovery was affected from the house of the appellant Anil at all.
All that was seized from his house were two bonds Ex.7 and Ex.8, undertaking to repay the loan to the deceased.
Unlike Mahendra accused he was not even arrested on the date of the occurrence and the mere ipse dixit of the investigating officer, that Anil had absconded is not acceptable, particularly when the investigating officer is totally silent as to where all he had made the search for the appellant and when.
He was not questioned under Section 313 Cr.
PC about the allegation of absconding either.
The deceased was still alive when his wife and the other co villagers, who have appeared as witness reached the place of occurrence.
The deceased did not name the appellant as his assailant before anyone.
The crowbar exhibit 5 was recovered from the house of Mahendra and according to the testimony of PW3, it was the same weapon with which Mahendra had hit deceased on his head which position also receives corroboration from medical evidence.
The deposition of PW4, who is the sister of PW3 Ajoy to the effect that when Ajoy PW3 came running to the house, he told her that her uncle had been killed by Anil and his brothers does not stand scrutiny because admittedly according to PW3 himself, when he ran from the place of occurrence, the deceased was still alive and as a matter of fact he was alive even when the wife of the deceased and other neighbours reached there and brought him to the house.
It was only at the house while the deceased was kept in the verandah that he succumbed to the injuries.
There could have been, therefore, no occasion for Ajoy PW3 to have told his sister PW4, that her uncle had been 'killed ' by Anil and his brothers.
This also shows that Ajoy PW3 has the tendency to exaggerate matters.
The medical evidence is consistent with the theory that the deceased had been assualted only by one person and not by all the three brothers as alleged by the prosecution.
The possibility, therefore, that Mahendra accused alone had caused injuries on the deceased cannot be ruled out.
May be on account of the recovery of the two bonds Ex.7 and Ex.8 from the house of Anil, he was also implicated.
We cannot be sure.
The origin of the fight is totally in obscure and the prosecution has not explained the genesis of the origin of the fight either.
It is not even the case of the prosecution that Anil had refused to repay the loan or that any hot words 396 or abuses had exchanged between Anil and the deceased when the later had demanded from him the repayment of the loan.
In view of the infirmities pointed out above, it would not be safe to rely upon the testimony of Ajoy PW3, the sole eye witness, without looking for independent corroboration and as already noticed, the corroboration furnished by the prosecution unlike in the case of Mahendra, is negative in character in so far as the involvement of Anil appellant is concerned.
In our considered opinion, therefore, it would not be safe to hold that the prosecution has established its case against Anil appellant beyond a reasonable doubt.
The appellant in our opinion, is entitled to the benefit of doubt and granting him that benefit, we set aside his conviction and sentence for the offence under Section 302/34 IPC and consequently the judgment of the High Court in so far as Anil appellant is concerned, is set aside and he is hereby acquitted.
Anil appellant is on bail.
His bail bonds shall stand discharged.
N.V.K. Appeal allowed. [/INST] The prosecution alleged that the appellant borrowed a sum of Rs. 450 from the deceased and had executed two hand notes exhibit 7 and exhibit 8, promising to repay the amount on 21.3.1976.
On the said date the deceased accompanied by his nephew, PW.3 proceeded to the village of the appellant and as he was getting late, PW.3 carried with him a torch light.
The distance of the house of the deceased from that of the appellant was about one furlong.
The appellant was present in the fields in front of his house and on being asked as to why he had not come to return the money, he asked them to wait there and proceeded towards his house When the appellant did not return for some time, the deceased alongwith PW.3 proceeded towards the house of the appellant when they found him and his two brothers coming towards them variously armed, one had a crowbar while the others had a crooked dao and a kupi dao with them.
PW.3 apprehended some danger from the appellant and his brothers, but his uncle told him that since they had done no wrong, they need not be afraid of any assault.
On coming near the deceased and PW.3, one of the brothers gave a blow with a crowbar, while the other two brothers assaulted the deceased thereafter.
PW.3 pulled the deceased towards his house and implored the accused not to assault him.
At the asking of his uncle PW3 ran away to his house and gave the information to the wife of the deceased and also narrated the occurrence to PW.4.
The wife of the deceased went to PW.6, and after telling him as to what had been told to 390 her by PW3 she requested him to accompany her to the place of occurrence.
On reaching the place of occurrence, they found him lying on the spot with injuries on his person but he was still alive.
Two of the PWs brought a bullock cart and PW.7 after lifting the body with some difficulty brought it to his house and kept it in the verandah.
However, before any medical aid could be provided, the deceased succumbed to the injuries at night.
The first information report was lodged at the police station at 12.30 p.m. by PW.2.
During the investigation, some weapons including an axe were seized from the house of the accused and on the same day one of the brothers was arrested at 6.45 p.m. and the other two brothers surrendered subsequently in the court.
The Investigation Officer prepared a sketch of the place of occurrence and sent the body for postmortem examination.
The appellant alongwith his brothers were tried for offences under section 302/34 IPC for the murder of the deceased, and the Sessions Judge convicted all the three brothers for the said offence and sentenced them for life.
On appeal by the three brothers the Division Bench of the High Court upheld the conviction and sentence of all the three.
The instant SLP was admitted as regards one petitioner only and notice was issued.
The S.L.P. of the second petitioner was dismissed while the third brother did not file any appeal.
Allowing the appeal and acquitting the appellant, this court, HELD: 1.
Conviction can be based on the testimony of a single eye witness and there is no rule of law or evidence which says to the contrary provided the sole eye witness passes the test of reliability.
So long as the single eye witness is a wholly reliable witness the courts have no difficulty in basing conviction on his testimony alone.
However, where the single eye witness is not found to be a wholly reliable witness, in the sense that there are some circumstances which may show that he could have an interest in the prosecution, then the courts generally insist upon some independent corroboration of his testimony, In material particulars, before recording conviction.
It is only when the courts find that the single eye witness is a wholly unreliable witness that his testimony is discarded in toto and no amount of corroboration can cure that defect.
[393E F] 391 2.
The instant case, the medical evidence is consistent with the theory that the deceased had been assaulted only by one person and not by all the three brothers as alleged by the prosecution.
The possibility, therefore, that Mahendra accused alone had caused injuries on the deceased cannot be ruled 'Out.
May be on account of the recovery of the two bonds Ext.
7 and Ext 8, from the house of Anil, he was also implicated.
[395G] 3.
The origin of the fight is totally obscure, and the prosecution has not explained the genesis of the origin of the fight either.
It is not even the case of the prosecution that Anil had refused to repay the loan or that any hot words or abuses had been exchanged between Anil and the deceased when the later had demanded from him the repayment of the loan.
[395H, 396A] 4.
In view of the infirmities of the prosecution evidence it would not be safe to rely upon the testimony of Ajoy PW.3, the sole eye witness, without looking for independent corroboration and as already noticed, the corroboration furnished by the prosecution, unlike in the case of Mahendra the appellant 's brother, is negative in character in so far as the involvement of Anil appellant is concerned.
[396B] 5.
The appellant, was held entitled to the benefit of doubt and granting him that benefit, his conviction and sentence for the offence under Section 302/34 IPC were set aside.
[396C] </s> |
<s>[INST] Summarize the following judgement: Appeal No. 251 of 1982.
From the Judgment and Order dated 24.10.81 of the Disciplinary Committee of the Bar Council of India, Delhi in B.C.I.T R. Case No. 28 of 1979.
B.Singh, S.K.Gambhir and Davinder Singh for the Appellant.
R.P.Kapur and Rajiv Kapur for the Respondents.
The Judgment of the Court was delivered by 491 KULDIP SINGH, J.
D.S. Dalal was a practising advocate in Delhi.
The Bar Council of India by its order dated October 24, 1981, removed his name from the rolls of advocates of the Bar Council of Delhi and the sanad granted to him has been withdrawn.
This appeal under Section 30 of the is against the order of the Bar Council of India.
The State Bank of India lodged a complaint before the Bar Council of Delhi on September 4, 1978.
It was alleged in the complaint that the appellant along with two other advocates was practising under the name and style of "M/s Singh and Company" a firm of advocates and solicitors having their office at 2670, Subzi Mandi, Delhi.
It was alleged that the advocates were duly engaged by the Asaf Ali Road branch of the State Bank of India to file a recovery suit against M/s Delhi Flooring (Pvt) Ltd. for the recovery of Rs. 6,12,164.10.
"Singh and Company" (the firm) at that time was represented by Mr. D.S. Dalal, Mr. B. Singh and Ms V.Singh, Advocates, who were the partners of the said firm and were conducting cases for and on behalf of the firm.
It is the case of the complainant that in the year 1975, the file relating to the case which was to be filed against m/s Delhi Flooring (Pvt) Ltd., containing original and valuable documents, was handed over to the Firm by the complainant.
Thereafter, the Firm submitted a bill for filing the recovery suit which included the professional fees and other miscellaneous charges.
An amount of Rs. 11,475 was paid to the Firm on November 15, 1975, for filing the suit which included 1/3rd of the professional fee plus the miscellaneous charges.
This was acknowledged by the Firm under a receipt which was placed on the record.
Till December 19, 1975, the Firm did not inform the bank as to whether the suit was filed and if so what was the stage of the proceedings.
The bank wrote a letter dated December 05, 1975 to the Firm asking it to send a copy of the plaint before December 8, 1975, for signatures and verification failing which the bank would be compelled to withdraw the case from the firm.
At that stage Mr. B. Singh, Advocate, one of the partners of the Firm, in his letter dated December 15, 1975 informed the bank that the suit had been filed on December 15, 1975 in the High Court of Delhi.
Thereafter, the bank appears to have received no communication from the said advocates despite repeated reminders oral and other ,vise and the bank was kept in the dark about the fate of the case entrusted to the appellant and his associates.
492 As there was no response from the appellant, the bank engaged the services of Mr. R.P. Arora, Advocate, in order to find out as to what happened to the suit filed by the appellant and his associates on behalf of the bank.
R.P. Arora in his letter dated March 2, 1977, informed the bank that the suit which had been filed on December 15, 1975 was returned by the original Branch on January 31, 1976 to the Registry of the High Court with objections.
Mr. Arora in his letter dated March 31, 1977 further informed the bank that the entire suit paper book had been returned to Mr. B. Singh, Advocate on July 27, 1976 for removing the objection and thereafter the suit has not been re filed in the Registry of the High Court of Delhi.
The complainant, therefore, claimed that the appellant and his associates were guilty of serious professional misconduct as they failed to discharge their professional duties and responsibilities entrusted to them by the bank in its capacity as a client.
It was further claimed by the bank that the appellant and his associates had misappropriated the money paid to them for court fee, miscellaneous expenses and one third of the professional fee.
The complainant further stated that even the documents and other papers handed over to the appellant and his associates for filing the suit were not returned.
The complainant was originally registered with the Bar Council of Delhi.
On September 19, 1979, the Disciplinary Committee of the Bar Council of Delhi transferred the case to the Bar Council of India on the ground that the case had been pending for more than one year.
The Bar Council of India issued notices returnable on November 2, 1980.
On that date the respondents were not present and as such fresh notices were issued for December 20, 1980.
Mr. D.S. Dalal, though served was not present on December 20, 1980 and as such ex parte proceedings were ordered.
Notice to Mr. B. Singh, Advocate was returned with the postal endorsement "refused".
He was also ordered to be proceeded ex parte.
The case was posted for January 23, 1981 for the evidence of the complainant.
On that day the appellant moved an application for setting aside the ex parte order dated December 20, 1980.
The ex parte order was set aside conditionally permitting the appellant to participate in the proceedings and the case was adjourned to February 27, 1981.
On February 27, 1981, three witnesses were examined in the presence of the appellant and he cross examined them.
Thereafter the case was adjourned from time to time and finally fixed for evidence on August 22, 1981.
The appellant again sent an application for adjournment which was rejected.
The evidence was con 493 cluded, arguments were heard and the order reserved.
The Bar Council of India in the impugned order observed as under : "From a perusal of the order sheet of the Disciplinary Committee of the Bar Council of Delhi and also of the order sheet before us, it reveals that the respondents have throughout adopted the tactics of non cooperation purposely with a view to protract the proceedings unnecessarily '.
It may be mentioned that the complainant had given up its case against Ms. V. Singh, Advocate and as such the Bar Council of India ultimately did not proceed against her.
So far as Mr. B. Singh and Mr. D.S. Dalal are concerned, the case against them was proved beyond reasonable doubt and their names were removed from the rolls of advocates of Bar Council of Delhi and the sanads granted to them were ordered to be withdrawn.
The appeal before us is by D.S. Dalal.
We have been informed that Mr. B. Singh Advocate filed a review petition before the Bar Council of India on October 22,1989 which is still pending.
The Bar Council has also granted stay of the order dated October 24, 1981 with the result that Mr.B. Singh is continuing with his legal practise.
This appeal was argued before us by Mr.
B.Singh, Advocate.
It is not disputed before us that Mr.B.Singh and Mr. D.S.Dalal were the main partners of the Firm.
It is also not disputed that an amount of Rs.11,475 was received by these advocates towards the filing of the suit and further that the connected documents and papers were received by them.
B.Singh, learned counsel for the appellant primarily argued that the suit was filed by the appellant in the Delhi High Court on December 15, 19 '/5 but the record of the suit file was misplaced/lost by the High Court registry.
He further stated that by his letter dated August 20, 1977, he informed the bank about the suit file being not traceable and further that the record of the suit was to be re structured and refiled.
We have been taken through the copy of the letter dated August 20, 1977, written by Mr.B.Singh on behalf of the Firm to the Regional Manager, State Bank of India, Parliament Street, New Delhi.
The relevant paragraph is as under 494 "However, as already intimated two bank cases one of Delhi Flooring (P) Ltd. of Asaf Ali Road branch and second of J.M.A.I.E. Corporation of Jungpura branch filed by the undersigned in Delhi High Court have been misplaced/lost by High Court Registry and the record reconstruction petitions have already been given to the branches in March, 1976 itself.
In case the said suits have not already been got restored through some other learned counsel and the assistance the undersigned is required for the restoration/reconstruction then he is willing to cooperate fully without charging any fee and without insisting on the payment of his outstanding bills first.
The undersigned can work only when he is allowed to work in terms of his approved schedule of fees and the payment is made of all his bill, forthwith.
" The letter dated August 20, 1977, quoted above was not produced before the Bar Council of India.
It has been placed before us for the first time.
Apart from the ipse dixit of the appellant and Mr.B. Singh in the above letter, there is no evidence on the record to show that the suit file was misplaced or lost by the High Court Registry.
On the other hand, there is cogent and reliable evidence on the record to show that the Delhi High .
Court Registry returned back the papers to, Mr. B. Singh for removing the objections raised by it.
Mr. R.P. Arora, Advocate, appeared as a witness before the Bar Council of India.
The relevant part of his evidence is as under "I know the respondents in the case.
I was instructed by the complainant in case to find out as to whether the respondents had filed the suit against the Delhi Flooring (P) Ltd. in the High Court of Delhi which was entrusted by the complainant with the respondents.
Accordingly I went to Delhi High Court and made enquiries to find out whether such a suit has been filed.
On enquiry I came to know from the registers of the High Court that the suit had been filed on behalf of the complainant against Delhi Flooring (P) Ltd. on 15th December, 1975.
1 found from the records that the office has not registered the suit 495 because of certain objections raised by the office.
I also came to know that the entire suit filed had been returned to the respondents for complying with the objections and to refile the suit.
This was so returned on 27.7.76.
The enquiries that were made by me in the High Court office was during March 1977 and till that date the suit had not been refiled by the respondents." Mr. R.P. Arora, Advocate, after examining the records of the Delhi High Court had sent two reports to the State Bank of India.
In his report dated March 2, 1977 he stated as under : "As desired by you, to know the whereabouts of the above noted case, I contacted the concern clerk in the Original Branch of High Court of Delhi at New Delhi and also inspected the registers of the Original suits.
The above noted case was filed by M/s Singh & Co. on 15.12.1975, but there were certain objections by the original branch and on 31.1.76 the said case (file) was returned to the registree by the original branch.
The register of the registree in respect of the period from 31.1.1976 is not available and I shall let you know the upto date information, when the said case was returned to M/s. Singh & Co. within a short period.
" Subsequently in his report dated March 31, 1977, Mr. R.P.Arora, Advocate gave the following information to the bank: "I have enquired from the Original section of High Court of Delhi at New Delhi, that the file of the above stated case was returned to Shri B.Singh on 27.7.1976 as the said case was under objections.
So far he has not again filed the said case in High Court.
" Both the above quoted reports have been proved on the record of the Bar Council of India as evidence.
The Bar Council of India on appreciation of the evidence before it came to the conclusion that the charge against the appellant and Mr. B. Singh was proved beyond doubt.
The Bar Council of India concluded as under: 496 ".
After having gone through the evidence and the documents produced in the case carefully, we have come to the conclusion that the complainant had entrusted the suit to be filed against M/s Delhi Flooring (Pvt) Ltd. with the necessary papers and Rs. 11,400.74 for expenses etc.
to the respondent advocates.
It is also established that the respondents have filed the suit on 15.12.1975 with some objections deliberately and when the papers were returned by the High Court, they had not refiled the suit for a pretty long time and as is established tiff this day.
So, we have no hesitation to conclude that the respondents, have misappropriated the amount realised by them from the Bank without filing the suit in a proper manner.
" We have given our thoughtful consideration to the evidence on the record against the appellant.
We see no ground to interfere with the order of the Bar Council of India.
We agree with the reasoning and the conclusions reached therein.
We, therefore, dismiss the appeal.
No costs.
V.P.R. Appeal dismissed. [/INST] Respondent Bank lodged a complaint before the Bar Council of Delhi against the appellant Advocate, alleging that the appellant and two other Advocates of the M/s. Singh and Company, (a Firm of Advocates and solicitors) were guilty of serious professional misconduct, as they failed to discharge their.professional duties and responsibilities entrusted to them.
The case of the Bank was that in 1975, the Bank engaged the Firm to rile a recovery suit for the recovery of Rs. 6,12,164.10 from M/s. Delhi Flooring (P) Ltd. and handed over the case rile containing original and valuable documents.
The Firm submitted a bill for riling the recovery suit which included the professional fees and other miscellaneous charges.
On 15.11.1975 the Bank paid a sum of Rs. 11,475 which included 1/3rd of the professional fee and the miscellaneous charges.
It did not inform the Bank whether the suit was filed or not.
On 5.12.1975 the Bank wrote a letter to the Firm to send a copy of the plaint before 8.12.1975 or the Bank would be compelled to withdraw the case from the Firm.
On 15.12.1975, one of the partner of the firm informed the Bank the suit was filed on 15.12.1975 in the High Court.
Thereafter the Bank was kept in the dark about the fate of the case.
Hence the Bank engaged the services of one Mr. Arora, Advocate, in order to find out as to what happened to the suit.
On 23.1977, the Bank was informed by Mr. Arora, Advocate that 489 suit was filed on 15.12.1975 in the High Court and on 31.1.1976, it was returned by the Original Branch to the Registry with objections.
Mr. Arora, Advocate further informed the Bank on 31.3.1977 that the entire suit paper book was returned to Mr. Singh, Advocate of the Firm on 27.7.1976 for removing the object ions and thereafter the suit was not refiled.
The respondent Bank, therefore, claimed before the Bar Council of Delhi that the appellant and his associates misappropriated the money paid to them for court fee, miscellaneous expenses and one third of the professional fee.
The Disciplinary Committee of the Bar Council of Delhi transferred the case of the Bar Council of India, as the case was pending for more than one year.
The Bar Council of India issued notices returnable on 2.11.1980.
The appellant and his associates were not present on that date.
Therefore fresh notices were issued for 20.12.1980.
The appellant did not present on 20.12.1980and ex parte proceedings were ordered.
The case was posted for 23.1.1981 for the evidence of the complainant.
On 23.1.1981 the appellant moved an application for setting aside the ex parte order dated 20.12.1980, which was allowed and the case was adjourned to 27.2.1981.
The case was adjourned from time to time and finally fixed for evidence on 22.8.1981.
On 22.8.1981, the appellant 's application for adjournment was rejected.
The evidence was concluded, ar guments were heard and the order was reserved.
(The complainant had given up its case against one Ms. V.Singh, Advocate an associate of the appellant, and the Bar Council of India did not proceed against her.
One Mr. B.Singh, Advocate the other associate of the appellant, was also proceeded against.
Notice to him was returned with the postal endorsement "refused" and ex parte proceeding were ordered.) The Disciplinary Committee of the Bar Council of India held that the case against the appellant and his associate was proved beyond reasonable doubt.
Their names were removed from the rolls of Advocates of the Bar Council of Delhi and the Sanads granted to them were ordered to be withdrawn.
490 The appellant riled the appeal before this Court, while his associate, riled a review petition before the Bar Council of India, which was still pending.
The Bar Council of India granted him stay of the order dated 24.10.1981 in the review proceeding.
The appellant contended that the suit was filed by the appellant on 15.12.11975 but the record of the suit file was misplaced/lost by the Registry of the High Court; that by his letter dated 20.8.1977, he informed the Bank about the suit rile being not traceable; and that the record of the suit was to be structured and refiled.
Dismissing the appeal, this Court, HELD : 1.01.
The letter dated August 20,1977 was not produced, before the Bar Council of India.
It has been placed before this Court for the first time.
Apart from the ipse dixit of the appellant and Mr.
B.Singh in the said letter, there is no evidence on the record to show that the suit rile was misplaced or lost by the High Court Registry.
On the other hand, there is cogent and reliable evidence on the record to shows that the Delhi High Court Registry returned back the papers to, Mr. B. Singh for removing the objections raised by it.
[494D E] 1.02.
Both the reports of Mr.R.P.Arora, Advocate have been proved on the record of the Bar Council of India as evidence.
The Bar Council of India on appreciation of the evidence before it came to the conclusion that the charge against the appellant and Mr.
B.Singh was proved beyond doubt.
There is no ground to interfere with the order of the Bar Council of India.
[495H, 496D] </s> |
<s>[INST] Summarize the following judgement: Appeal No. 447 of 1982.
From the Judgment and Order dated 6.7.1981 of the Bombay High Court in W.P. No. 1967 of 1981.
475 B.K. Mehta and Vimal Dave for the Appellant.
U.R. Lalit, Mrs. J. Wad and Mrs. Tamali Wad for the Respondents.
The Judgment of the Court was delivered by VENKATACHALA, J.
In this appeal by special leave, the summary rejection by the Bombay High Court of an application filed, under Article 227 of the Constitution, for setting aside an eviction order made by the Court of Small Causes at Bombay the trial court, under clause (c) of sub section (1) of section 13 of the Bombay Rents Hotel and Lodging House Rates Control Act, 1947, to be referred to as 'the Act ' and upheld by the appellate Division Bench of the same court the appellate court, is questioned.
Sudarshan Building No. 2, Shivaji Park Road No.3, Bombay 28 is a storeyed building comprised of a large number of flats occupied by different tenants.
Flat No. 10 in the Second Floor of that building (to be referred to as 'the premises ') was in occupation of the appellant defendant eversince the year 1952 as its tenant under Kherodkar, the owner of the whole of that building.
In the year 1958, when Kherodkar mortgaged with possession the said building in favour of respondents plaintiffs, the defendant and other tenants in different flats of that building became tenants under plaintiffs (usufructuary mortgages) and continued as such tenants on payment of monthly rents to them.
But, by a quit notice dated July 3, 1967 the plaintiffs determined the monthly tenancy of the defendant respecting the premises in his occupation and sought to recover from him the possession of the premises by instituting a suit in the court of Small Causes at Bombay on the very ground on which his tenancy was terminated, that is, that the defendant had been guilty of conduct which was a nuisance or annoyance to the adjoining or neighbouring occupiers.
That was a ground which entitled the landlord under clause (c) of sub section (1) of section 13 of the Act, to recover possession of the premises from the tenant.
That ground had been based on plaintiffs ' allegations of threats of murder posed by the defendant to the neighbouring occupiers; abuses hurled at neighbouring occupiers by his sons; whistling at neighbouring occupiers by the defendant 's sons; spitting against the walls and in the common staircase area of the building by the defendant 's sons; obstructions offered by the defendant, his wife, sons and servants to the neighbouring occupiers to reach the common terrace of the building by a staircase and removal by 476 them of aerials of radios of the tenants in the other flats of the building,, which had been fixed above the common terrace; obstructions offered to the landlords and their workers to inspect the common terrace; unauthorised errection by the defendant in the common terrace area certain machinery and running it during nights causing disturbance to sleep of neighbouring occupiers and also unauthorised used by the defendant of the water in common over head storage tanks in the common terrace area for his business purposes depriving other tenants of the normal use of such water.
The defendant, however, resisted the claim for recovery of possession of the premises, made.
in that suit filing a written statement thereto, denying the allegations of nuisance and annoyance levelled against him, his wife, sons and servants and urging that those allegations, even if established, did not constitute the ground of nuisance or annoyance envisaged under clause (c) of sub section (1) of section 13 of the Act, as a ground for recovery of possession of premises from a tenent.
It was also urged therein by the defendant that the ground for recovery of possession of premises from a tenant under clause (c) thereof was not available to plaintiffs, for they being usufructuary mortgagees of the building were not 'landlord ' within the meaning of that expression in sub section (1) of section 13 of the Act as would entitle them to recover possession of premises from a tenant.
In so far as the common terrace, the defendant 's unauthorised use of which was complained of by the plaintiffs, the defendant urged therein that he being a tenant of that terrace in addition to the premises, was entitled to put it for the use of his choice and prevent other tenants in the building from its common use.
It was further urged therein that the suit having been instituted by the plaintiffs to pressurise the defendant and extract from him higher rent for the premises was vitiated by malafides.
The trial court which tried the suit, on an appraisal of the oral and documentary evidence adduced by the parties, recorded its findings on issues arising for its determination in that suit in favour of the plaintiffs and against the defendant.
Consequently, it decreed the suit of the plaintiffs for recovery of possession of the premises from the defendant.
The appellate court before which the decree of the trial court was appealed against by the defendant, on its re appraisal of the evidence, affirmed the findings of the trial court and dismissed the appeal.
Feeling aggrieved by the decree of the trial court and its affirmation by the appellate court, the defendant impugned the same by filing a writ petition under Article 227 of the Constitution before the High Court of Bombay, but that writ petition was rejected by the High Court in limine.
The defendant has questioned 477 in this appeal by special leave, the correctness of the decree of the trial court made against him for recovery of possession of the premises by the plaintiff, the decree of the appellate court affirming the decree of the. trial court and the order of the High Court rejecting his writ petition.
In support of the appeal, three contentions were raised before us by Shri B.K. Mehta, the learned senior counsel for the appellant defendant.
But those contentions were strongly refuted by Shri U.R. Lalit, the learned senior counsel for respondents plaintiffs.
Taking into consideration the serious nature of the contest, we shall examine the merit in every one of the contentions, rather in detail.
First of the said contentions which was urged as a legal contention by the learned counsel for the appellant, was that an usufructuary mortgagee was not entitled to recover possession of a premises from a tenant under section 13(1) (c) of the Act pleading the ground that the tenant or any person residing with him in such premises was guilty of conduct which is a nuisance or annoyance to the adjoining and neighbouring occupiers, when the expression 'Land lord ' in section 13 of the Act cannot be said to include an usufructuary mortgagee.
Provisions in the Act in so far as they become necessary for a proper appreciation of the said contention could be excerpted at the outset.
Section 13(1) of the Act "13.
When landlord may recover possession.
(1) Notwithstanding anything contained in this Act a landlord shall be entitled to recover possession of any premises if the Court is satisfied (a) (b) (c) that the tenant or any person residing with the tenant has been guilty of conduct which is a nuisance or annoyance to the adjoining or neighbouring occupiers. . (d) 478 (e) (f) (g) that the premises are reasonably and bona fide required by the landlord for occupation by himself or by any person for whose benefit the premises are held (or where the landlord is a trustee of public charitable trust that the premises are required for occupation for the purposes of the trust; or) (h) (hh) (hhh) (2) No decree for eviction shall be passed on the ground specified in clause (g) of sub section (1) if the Court is satisfied that, having regard to all the circumstances of the case including the question whether other reasonable accommodation is available for the land lord or the tenant, greater hardship would be caused by passing the decree than by refusing to pass it.
Where the court is satisfied that no hardship would be caused either to the tenant or to the landlord by passing the decree in respect of a part of the premises, the Court shall pass the decree in respect of such part only.
Explanation For the purposes of clause (g) of subsection (1), (a) (b) the expression "landlord" shall not include a rentfarmer or rent collector or estate manager; Section 5(3) of the Act : "5.
Definitions.
In this Act unless there is anything repugnant to the subject or context, 479 (3) "landlord" means any person who is for the time being, receiving, or entitled to receive, rent in respect of any premises whether on his own account or on account, or on behalf, or for the benefit of any other person or as a trustee, guardian, or receiver for any other person or who would so receive the rent or be entitled to receive the rent if the premises were let to a tenant, and includes any person not being a tenant who from time to time derives title under a landlord and further includes in respect of his sub tenant, a tenant who has sub let any premises; (and also includes in respect of a licensee deemed to be a tenant by section 15A, the licensor who has given such licence;)" Whether the expression 'landlord ' in sub section (1) of section 13 of the Act cannot be said to include 'an usufructuary mortgagee ' where the tenanted premises is the subject of usufructuary mortgage, is the question which requires our answer in the light of the provisions of the Act.
As could be seen from the definition of 'usufructuary mortgage ' in clause (d) of section 58 of the the T.P. Act, an usufructuary mortgagee is a transferee of a right to possession of the mortgaged property and the right to receive the rents and profits accruing from such property.
When a lessor of a leased property creates an usufructuary mortgage in respect of such property what he transfers under section 109 of the T.P. Act as a mortgagor in favour of the usufructuary mortgagee includes his right to possession of such property and the right to receive the rents and profits accruing from it.
Thus section 109 of the T.P. Act entitles the usufructuary mortgagee from the lessor, as against the lessee, for all rights which the lessor had against such lessee.
From this, it follows that tenanted premises, if is mortgage by the landlord by way of usufructuary mortgage, the usufructuary mortgagee thereunder would become entitled to receive the rents and profits accruing from such property in his own right and on his own account.
Clause (3) of section 5 of the Act which contains the definition of 'landlord ', states that under the Act 'landlord ' means any person who is for the time being receiving or entitled to receive rent in respect of any premises on his own account and includes any person 480 not being a tenant who from time to time derives title under a landlord, unless there is anything repugnant to the subject or context.
There, comes section 13(1) of the Act entitling landlord to recover possession of any premises from his tenant on the ground envisaged under clause (c) thereof, that is, the tenant or any person residing with the tenant being guilty of conduct which is a nuisance or annoyance to the adjoining or neighbouring occupiers, and that section 13(1) contains nothing repugnant in its subject or context which would disentitle an usufructuary mortgagee, as a landlord of the tenanted premises to recover its possession from the tenant on the said ground.
Further, if the legislative intendment was that the usufructuary mortgagee was not to be regarded as a landlord for recovering possession of a tenanted premises on any of the grounds envisaged under sub section (1) of section 13 of the Act, it would not have omitted to state so, expressly, particularly when it had been so stated in clause (b) of the explanation to sub section (2) of section 13 of the Act, as regards 'rent farmer ' or a 'rent collector ' or an 'estate manager ' who would have been otherwise a landlord entitled to recover possession of a tenanted premises from the tenant under clause (g) of sub section (1) of that section.
Indeed, the decision of this Court in S.B. Abdul Azeez (By Lrs.) vs Af.
Maniyappa Setty, and Others, ; , throws full light on the question under consideration, for the question decided there, is virtually identical.
That question was whether an usufructuary mortgagee was entitled to recover possession of a premises under section 21(1) proviso (h) of the Karnataka Rent Control Act, 1961 the K.R.C. Act, as a landlord envisaged therein.
In deciding that question with reference to the expression 'landlord ' found in section 21(1) proviso (h) of K.R.C. Act, the definition of that expression 'landlord ' found in section 3(h) of the K.R.C. Act and the explanation to clause (4) found in section 21(1) proviso of K. R.C. Act excluding a rent farmer, a rent collector and an estate manager from being a landlord for recovery of possession of a premises from a tenant on the ground of bona fide use and occupation and certain provisions of the T.P. Act, this Court stated thus: "It, therefore, follows that the Legislature if wanted that a mortgagee with possession should not be equated with the owner of the premises and should be denied the benefit of seeking a tenant 's eviction under section 21(1) 481 (h), the legislature would have undoubtedly categorised a mortgagee with possession also as one of the excluded class of landlords for the purposes of section 21(1) (h) of the Act.
Obviously therefore the legislature has not wanted a mortgagee with possession to be excluded of his right to seek eviction of a tenant from the mortgaged premises under section 21(1) (h) of the Act.
Thirdly, a mortgagee with possession is enjoined by section 76(a) of the to manage the property as a man of ordinary prudence would manage it if it were his own.
As such the mortgagee 's acts, if prudently done, could bind the mortgagor even after the redemption of the mortgage.
A mortgagee with possession, steps into the shoes of the mortgagor and becomes entitled to all the rights of the mortgagor and the only right left with the mortgagor is the right of redemption.
A mortgagee with possession is entitled to be in possession of the mortgage property as long as it is not redeemed.
If the mortgagee with possession leases back the property to the mortgagor, he acquires the rights of a lessor and is entitled to enforce the terms of the lease against the mortgagor (vide Mathura lal vs Keshar Bai,).
On account of all these factors there can be no doubt that a mortgagee with possession stands very differently from other kinds of landlords en visaged under section 3(h) of the Act.
He is therefore entitled, as much as the owner himself, to seek recovery of possession of the leased premises from a tenant for his own bona fide requirements of use.
" What is said by this Court in the above decision as regards the right of the usufructuary mortgagee to recover possession of a premises from tenant as a landlord envisaged therein under section 21(1) proviso (h), in our view, must necessarily apply to a landlord envisaged in section 13(1) of the Act.
It would be so because (i) that the expression 'landlord ' in section 13(1) (C) of the Act is not used in a context different from the one in which the expression 'landlord is used in section 21(1) proviso (h) of the K.R.C. Act, (ii) that the definition of 'landlord ' and explanation as to is not the 'landlord ' are common to both the Acts and (iii) that the legal position of an usufructuary mortgagee under the K.R.C. Act is not different 482 from the legal position of an usufructuary mortgagee under the Act since the rights and liabilities of an usufructuary mortgagee concerned in both Acts are governed by the provisions of T.P. Act.
Thus it becomes clear that the expression 'landlord ' in sub section (1) of section 13 of the Act includes an usufructuary mortgagee where the tenanted premises is the subject of usufructuary mortgage.
The decision in Nanalal Girdharlal and Anr.
vs Gulamnabi Jamalbhai Motorwala and Ors., 1972 (13) Gujarat Law Reporter 880 relied upon by leaned counsel for the appellant in support of the first contention, does not lend such support.
One of the questions with which the Gujarat High Court was concerned in that decision was whether one out of several co owners was entitled to maintain a suit for eviction against the tenant under the Act.
In considering that question the Court took the view that the landlord referred to in section 12 and section 13(1) of the Act was not a landlord as defined in section 5(3) but was a landlord who was entitled to possession of the premises on a determination of the tenancy under the ordinary law of landlord and tenant, that is, under section 106 of the T.P. Act.
It is this view which was sought to be made use of by learned counsel for the appellant to contend that the landlord under section 13(1) of the Act cannot be an usufructuary mortgagee.
But, the said view of the High Court that a landlord referred to under sections 12 and 13(1) of the Act is a landlord who is entitled to possession of premises on determination of the tenancy under section 106 of the T.P. Act, itself cannot now be good law because of the nine Judges ' Bench decision of this Court in V. Dhanapal Chettiar vs Yesodal Ammal, ; , where the scope of the provisions of sections 5, 12 and 13 of the Act in the context of section 106 of the T.P. Act is considered and held otherwise, thus : "Adverting to the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 it would be found from the definition of section 5 that any person remaining in the building after the determination of the lease is a tenant within the meaning of clause (11).
Section 12 of the Bombay Act says that the landlord shall not be entitled to the recovery of possession of any premises so as long as the conditions mentioned in sub section (1) are fulfilled nor any suit for recovery of possession shall be 483 instituted by a landlord against a tenant on the happening of the event mentioned in sub section (2) until the expiration of one month next after the notice is served on the tenant in the manner provided in section 106 of the , as required by the said sub section.
Section 13 provides that a landlord may recover possession on certain grounds.
Is it not plain then that on the happenings of the events or on the fulfilment of the conditions mentioned in sections 12 and 13 etc.
the landlord becomes entitled to recover possession from the tenant, otherwise not.
It will bear repetition to say that under the in order to entitle the landlord to recover possession determination of the lease is necessary as during its continuance he could not recover possession while under the State Rent Act the landlord becomes entitled to recover possession only on the fulfilment of the rigour of law provided therein.
Otherwise not.
He cannot recover possession merely by determination of tenancy.
Nor can he be stopped from doing so on the ground that he has not terminated the contractual tenancy".
The first contention urged in support of the appeal that an usufructuary mortgagee of tenanted premises cannot file a suit for recovery of its possession from the tenant under section 13(1) (c) of the Act does not, therefore, merit acceptance and is rejected.
The second contention of the learned counsel for the appellant defendant relates of correctness of the findings of the appellate court recorded respecting acts of nuisance and annoyance constituting the ground for recovery of possession of premises by the plaintiffs from the defendants.
According to the learned counsel, those findings, not having been based on the evidence on record, become unsustainable.
We are unable to find any merit in this contention.
The findings as to the acts of nuisance id annoyance attributable to the defendant and the persons who were residing in the premises are (i) that the defendant, who was a tenant in a premises (tenament) in the storeyed building, erected a Rangeen Min (Textile Printing Mill) on the terrace of the storeyed and ran it during nights so as to make the occupiers of the adjoining and neighbouring 484 tenaments in the storeyed, residential building suffer the vibrations and noise in the building arising on account of the running of the Mill and loose their quiet and sleep during night; (ii) that the defendant unauthorisedly utilised the water stored in the common over head tanks on the terrace, meant for domestic use of all the occupiers of the tenaments in the building, for running his run Rangeen Mill a non domestic purpose; (iii) that the defendant and the persons residing with him in the premises had often removed the radio aerials and T.V. antenas of the occupiers of the adjoining and neighbouring tenaments which had been fixed above the common terrace of the building; (iv) that the defendant and the persons residing in the premises were wrongly preventing the plaintiffs and their workers in reaching the common terrace for repairs of radio aerials, T.V. antenas, telephone lines and the like of the occupiers of the neighbouring tenaments in the building by blocking its staircase.
These finding of the lower appellate court, it cannot be said, are not supported by the evidence on record of the case.
In fact, some of the findings are, to a great extent, based on the facts which were admitted by the defendant himself.
Besides, the findings receive support from the evidence given in the case by the occupiers of the adjoining and neighbouring tenaments of the same building.
The defendant and the persons residing with him in the premises have committed some of the acts respecting which the aforesaid findings are recorded by the appellate court because of the defendant 's unfounded claim that he had taken the terrace on lease independently of the premises in which he was an occupant and as such was not only entitled to its exclusive use but also had the right to prevent the neighbouring occupiers of the tenaments in the building from its use.
The trial Court as well as the appellate court, on examining the claim put forth by the defendant, have found on the basis of material on record, that it was a false claim and the defendant had not taken on lease the disputed terrace, as was pleaded by him.
Therefore, as seen from the judgment of the appellate court, its findings in relation to the aforesaid acts of the defendant and persons residing with him in the premises are based on appreciation of ample evidence that was on record and the same cannot be said to have been based on no evidence, or even improper appreciation of evidence as contended for.
Thus, we are unable to see any justification in this Appeal by Special Leave, to interfere with such findings of facts recorded by the appellate court virtually affirming the findings of fact 485 recorded by the trial court.
The second contention raised in support of the appeal must, therefore, fail.
It is accordingly rejected.
The third and the last contention urged in support of the appeal was that the acts found to have been committed by the appellant defendant and the persons residing with him in the premises, even if are true, they could not have been regarded as acts amounting to nuisance or annoyance forming a ground for recovery of possession of a premises from the tenant under section 13(1) (c) of the Act.
In support of the said contention, reliance was placed on decisions of the Gujarat High Court in Dhabhi Lalji Kalidas vs Ramniklal Somchand Mehta, 1975 (16) Gujarat Law Reporter, 824 and Gaurishanker @ Babulal Govindji vs Bhikhalal Chhaganlal & Ors., 1977 (18) Gujarat Law Reporter, 805.
This contention, in our view, again, is devoid of merit.
The decisions relied upon also do not support the contention.
There are no statutory definitions of 'nuisance ' or 'annoyance ' which under section 13(1) (c) of the Act constitute a ground for recovery of possession by landlord of a premises in the occupation of tenant.
In the case with which we are concerned, the acts of nuisance or annoyance complained of are committed by the tenant and persons residing with him in the premises which is a tenament (flat) lying amidst other tenaments (flats) of the one and same storeyed building.
The acts of the defendant or persons residing with him in the tenanted premises which are found as acts causing nuisance or annoyance to adjoining or neighbouring occupiers, cannot fall short of being acts of nuisance or annoyance if regard is had to their nature, intensity and duration and the consequential ill effects which might have been produced by them on the normal living of such occupiers.
Further, when the particular acts of the defendant or persons residing with him in the premises (flat) of a storeyed building, said to have caused nuisance or annoyance to the occupiers of adjoining or neighbouring occupiers of tenaments (flats) in the very same storeyed building are seen, they cannot make us think that they were not clear acts of nuisance or annoyance envisaged under section 13(1) (c) of the Act because of the intolerable inconveniences, sufferings, humiliations which must have been caused to the adjoining or neighbouring occupiers, due regard being given to the locality of the storeyed building, the class of the people living in the tenAments of the storeyed building and the nature of living to which they 486 were accustomed.
Even otherwise the acts, said to have been committed by the defendant and persons residing with him in the premises when are, as stated, found by the fact finding courts to have amounted to acts of nuisance or annoyance entitling the plaintiff under section 13(1) (c) of the Act to recover possession of the premises from the defendant and when the High Court has refused to interfere with such fInding in exercise of its writ jurisdiction there could be no justification whatever for us to interfere with the same in this appeal under Article 136 of the Constitution.
The decision in Dhabhi Lalji Kalidas vs Ramniklal Somchand Mehta, (supra) relied upon to support the third contention is a case decided by Single Judge of the Gujarat High Court.
The learned Single Judge who examined in that case the question whether the use by washerman, who was tenant of a premises, some chemicals for washing clothes in a tenanted premises could have amounted to act of nuisance or annoyance to adjoining or neighbouring occupiers as entitling the landlord to recover possession of tenanted premises under section 13(1) (c) of the Act, held that the ill effects produced on adjoining or neighbouring occupants cannot be found out in the absence of evidence of chemical experts and therefore, the ground for recovery of possession of tenanted premises under section 13(1) (c) of the Act, was unavailable.
We are unable to see, how this decision could help the contention of the appellant under our considera tion.
The decision in Gaurishanker (supra) relied upon to support the third contention is again that of a Single Judge of the Gujarat High Court.
It was a case where the learned Judge was concerned with the question whether a quarrel in the household of a tenant could be a ground for eviction of a tenant under section 13(1) (c) of the Act.
The learned Judge, who held that quarrels in a domestic household of a tenant can never constitute a nuisance or annoyance within section 13(1) (c) of the Act pointed out that nuisance or annoyance contemplated under section 13(1) (c) of the Act as ground for eviction of tenant from a premises must be of a serious character in nature, intensity and frequency.
We do, not see how this decision could advance the contention of the appellant now under consideration.
In fact, in the case on hand, we have held that the courts below, having regard to the nature, intensity and duration of the acts complained of and their HI effects on the normal living of adjoining or neighbouring occupiers have rightly found them as acts of nuisance or annoyance envisaged under section 13(1) (c) of the Act.
487 Hence, the third and the last contention urged in support of the appeal, being also devoid of merit, is rejected.
In the result, this Appeal fails and is dismissed with costs.
The advocate 's fee payable by the appellant defendant to respondents plaintiffs is fixed at Rs. 2,000.
T.N.A. Appeal dismissed. [/INST] The appellant defendant was in occupation of a flat as its tenant in a storeyed building comprised of a large number of flats occupied by different tenants.
When the owner of that building mortgaged with possession the said building in favour of respondents plaintiffs, the appellant defendant and other tenants in different flats of that building became tenants under respondents plaintiffs (usufructuary mortgagees) and continued as such tenants on payment of monthly rents to them.
But by a quit notice dated July 3, 1967 the respondents plaintiffs determined the monthly tenancy of the appellant respecting the premises in his occupation and sought to recover from him the possession of the premises by instituting a suit in the court of Small Causes at Bombay on the very ground on which his tenancy was terminated, that is, that the defendant had been guilty of conduct which was a nuisance or annoyance to the adjoining or neighbouring occupiers, under clause (c) of sub section (1) of Section 13 of the Bombay Rents Hotel and Lodging House Rates Control Act.
The trial court, on an appraisal of the oral and documentary evidence adduced by the parties, recorded its findings on issues in favour 471 472 of the respondents plaintiffs.
Consequently it decreed the suit of the respondent plaintiffs for recovery of possession of the premises.
The appellate court before which the decree of the trial court was appealed against by the appellant defendant, on its re appraisal of the evidence, affirmed the findings of the trial court and dismissed the appeal.
The findings as to the acts of nuisance and annoyance attributable to the appellant and the persons who were residing in the premises are (i) that the appellant erected a Textile Printing Mill on the terrace of the storeyed building and ran it during nights so as to make the occupiers of the adjoining and neighbouring tenements suffer the vibrations and noise in the building arising on account of the running of the Mill and loose their quiet and sleep during nights; (ii) that he unauthorisedly utilised the water stored.
in the common over head tanks on the terrace, meant for domestic use of all the occupiers of the tenements in the building, for running his Mill a non domestic purpose; (iii) that the appellant and the persons residing with him in the premises had often removed the radio aerials and T.V. antenas of the occupiers of the adjoining and neighbouring tenaments which had been fixed above the common terrace of the building , (iv) that they were wrongly preventing the respondents plaintiffs and their workers in reaching the common terrace for repairs of radio aerials, T.V. antenas, telephone lines and the like of the occupiers of the neighbouring tenaments in the building by blocking its staircase.
Feeling aggrieved by the decree of the trial court and its affirmation by the appellate court, the defendant impugned the same by filing a writ petition under Article 227 of the Constitution before the High Court of Bombay, but that writ petition was rejected in limine.
In appeal to this Court it was contended on behalf of the appellants (a) that an usufructuary mortgage of tenanted premises cannot rile a suit for recovery of its possession from the tenant under section 13(1) (c) of the Act; (b) the findings of the appellate court recorded respecting acts of nuisance and annoyance not having been based on the evidence on record, become unsustainable; (c) the acts found to have been committed by the appellant defendant and the persons residing with him in the premises, even if are true, they could not have been regarded as acts amounting to nuisance or annoyance under section 13(1) (c) of the Act.
Dismissing the appeal, this Court, 473 HELD 1.
The expression 'landlord ' in sub section (1) of section 13 of ' the Act includes an usufructuary mortgagee where the tenanted premises is the subject of usufructuary mortgage.
Section 13(1) contains nothing repugnant in its subject or context which would disentitle an usufructuary mortgagee, as a landlord of the tenanted premises to recover its possession from the tenant on the ground envisaged under clause (c).
[482A, 480B] S.B. Abdul Azeez (By Lrs.) vs M. Maniyappa Setty and Ors., ; , relied on.
V. Dhanapal Chettiar vs Yesodal Ammal, A.I.R. 1979 S.C. 1745, referred to.
Nanalal Girdharlal and Anr.
vs Gulamnabi Jamalbhai Motorwala and Ors., 1972 (13) Gujrat law Reporter 880, referred to as no longer good law.
1.1 Under the definition of 'usufructuary mortgage ' in clause (d) of Section 58 of the an usufructuary mortgagee is a transfer of a right to possession of the mortgaged property and the right to receive the rents and profits accruing from such property.
When a lessor of a leased property creates an usufructuary mortgage in respect of such property what he transfers under Section 109 of the T.P. Act as a mortgagor in favour of the usufructuary mortgagee includes his right to possession of such property and the right to receive the rents and profits accruing from it.
Thus Section 109 of the T.P. Act entitles the usufructuary mortgagee from the lessor, as against the lessee, for all rights which the lessor had against such lessee.
From this, it follows that tenanted premises, if is mortgaged by the landlord by way of usufructuary mortgage, the usufructuary mortgagee thereunder would become entitled to receive the rents and profits accruing from such property in his own right and on his own account.
[479E G] 2.
It cannot be said that the findings of the lower appellate court are not supported by the evidence on record of the case.
In fact, some of the findings are, to a great extent, based on the facts which were admitted by the appellant himself.
Besides, the findings receive support from the evidence given in the case by the occupiers of the adjoining and neighbouring tenaments of the same building.
Therefore, as seen from the judgment of the appellate court, its findings in relation to the acts of the appellant 474 and persons residing with him in the premises are based on appreciation of ample evidence that was on record and the same cannot be said to have been based on no evidence, or even improper appreciation of evidence.
Thus, there is no justification to interfere with such findings of facts recorded by the appellate court virtually affirming the findings of fact recorded by the trial court.
[484D, G H, 485A] 3.
There are no statutory definitions of 'nuisance ' or 'annoyance ' which under section 13(1) (c) of the Act constitute a ground for recovery of possession by landlord of a premises in the occupation of a tenant.
However, the acts of the appellant or persons residing with him in the tenanted premises which are found as acts causing nuisance or annoyance to adjoining or neighbouring occupiers, cannot fall short of being acts of nuisance or annoyance if regard is had to their nature, intensity and duration and the consequential ill effects which might have been produced by them on the normal living of such occupiers.
They cannot make the Court to think that they were not clear acts of nuisance or annoyance envisaged under section 13(1) (c) of the Act.
Therefore, the courts below have rightly found them as acts of nuisance or annoyance envisaged under section 13(1) (c) of the Act.
[485D G] Dhabhi Lalji Kalidas vs Ramniklal Somchand Mehta, 1975 (16) Gujarat Law Reporter 824; Gaurishanker @ Babulal Govindji vs Bhikhalal Chhaganlal & Ors., 1977 (18) Gujarat Law Reporter, 805, held inapplicable.
Even otherwise, the acts, said to have been committed by the defendant and persons residing with him in the premises when are, as stated, found by the fact finding courts to have amounted to acts of nuisance or annoyance entitling the plaintiff under section 13(1) (c) of the Act to recover possession of the premises from the defendant and when the High Court has refused to interfere with such finding in exercise of its writ jurisdiction there could be no justification whatever for this Court to interfere with the same in appeal under Article 136 of the Constitution.
[485H, 486A B] </s> |
<s>[INST] Summarize the following judgement: o. 3 of 1992.
IN Civil Appeal No. 732 of 1973.
From the Judgment and Order dated 29.9.79 of the Delhi High Court in Civil Writ 734 of 1971.
Satish Chandra, Pramod B. Agarwala and Mohinder Rupral for the Appellants.
V.R. Reddy Additional Solicitor General, P. Chidambaram, Syed Akhtar, C.L. Sahu, R.C. Bhalla, P. Parmeshwaran, C.V.S. Rao, K. Swamy and E.C. Agarwala for the Respondents.
J. Shri Chiranjilal Shrilal Goenka was involved in several suits and one of which is the pending appeal at his behest.
He died on November 25, 1985 leaving behind last Will dated October 29.,1982 said to have been executed in which he appointed his younger daughter Mrs. Sushila N. Rungta as sole executrix of his Will.
Radhey Shyam claims to be the adopted son of Shri C.S. Goenka.
Radhey Shyam is the natural son of Shri Mangal Chand Kedia and Mrs. Sita another daughter of Sri C.S. Goenka.
The applicant executrix; Radhey Shyam and his wife filed substitution applications under order 22 Rule 3 CPC setting up rival claims.
When the dispute arose as to who would represent the estate of Shri C.S. Goenka, by order dated October 7, 1991 this Court brought all the three on record as legal representatives.
By further order dated November 1, 1991 this Court passed the following order .lm15 " By consent of parties Justice V.S. Deshpande, retired Chief Justice of the Bombay High Court is appointed as arbitrator to settle the dispute as to who would be the 459 legal heirs to the estate of the late Chiranjilal Shrilal Goenka.
" The rest of the order is not necessary for the purpose of this case, hence omitted.
Pursuant thereto Shri Justice V.S. Deshpande entered upon the arbitration.
Preceding the order counsel for Sri Radhey Shyam had enclosed a letter giving details of all the pending suits and item No. 19, Suit No. 65 of 1985, titled S.N. Rungta vs R. C Goenka, was one such case.
The schedule of the suits was annexed to the order of appointment of the arbitrator.
On filing the respective pleadings, the arbitrator framed diverse issues.
Issues No. 1 and 2 relate to two Wills and are as under: "1. Does Claimant No.1 prove execution of the Will dated 29th (28th) October, 1982 and prove the same to be the last and genuine Will of late Shri G.S. Goenka.
If not does she prove the execution of the Will dated 4.7.1978and prove the same to be the last and genuine Will of the late Shri G.S. Goenka".
Simultaneously proceedings in the probate suit is being pursued in Bombay High Court where in the learned Judge, on application, expressed doubt, whether arbitrator has jurisdiction to decide probate suit.
Similarly, on application made before the arbitrator seeking clarification, he too had stated that when the appointment of him as arbitrator was made and all the pending proceedings were referred to in the schedule, it would be assumed that this Court applied its mind and referred to him the probate suit as well but he cannot give any clarification in that behalf.
It would be expedient to the applicant to seek clarification from this Court.
Thus the prayers in the application are : "A. That this Hon 'ble Court may be pleased to allow the applicant to proceed with the Probate Suit No. 65 of 1987 pending before the Hon 'ble High Court of Bombay in accordance with law; and B. to pass such order and other orders as this Hon 'ble Court may deem fit and proper in the circumstances".
Shri Satish Chandra, learned Senior counsel for the applicant contended, placing reliance on Gopi Rai vs B.N. Rai, AIR 1930 Allahabad 840 460 Chellan Bhai vs Nandu Bhai, ILR 21 Bombay, 337 and Manmohini Guha vs Banga Chandra Das, ILR that probate court has exclusive jurisdiction to grant probate of the Will to the applicant for due implementation of the directions contained in the Will as the executrix.
That issue cannot be referred to arbitration and the arbitrator thereby is devoid of jurisdiction to decide issuses Nos.1 and 2.
He also further contended that the applicant had not consented to refer the probate suit for arbitration.
Shri P. Chidambaram, learned Senior counsel for the respondents contended that preceding the order of this Court dated November 1, 1991, the counsel for the respondents addressed a letter to the counsel for the petitioner including the probate suit for reference to arbitration.
This was to obviate the litigation pending in all the courts as to who are the leg heirs of Shri C.S. Goenka.
Thereafter this Court appointed Shri Justice S.V. Deshpande.
The contention, therefore, of the applicant that she did not consent to refer the probate suit for arbitration is an after thought and cannot be accepted.
He further contended that this Court, with a view to put an end to the litigation in all the suits pending 'in different courts, appointed the arbitrator to decide all the disputes in pending suits go that it would bind them.
The arbitrator had accordingly framed Issues Nos. 1 and 2, referred to herein before which pertinently relate to the Wills 'in ' the probate suit alongwith other suits.
Therefore, the arbitrator alone has got jurisdiction.
The award of the arbitrator would be subject to approval or disapproval by this Hon 'ble Court and on putting its seal it would bind all the parties and the courts including the probate court.
Therefore, it is expedient that instead of parallel proceedings before the probate court and the arbitrator to be permitted to continue, it is desirable that the arbitrator should decide issues Nos.1 and 2 with other issues and determine as to who would be the legal heirs and his decision would be binding in the probate suit.
If any clarification is necessary it may be indicated accordingly.
Having given our anxious consideration we will proceed further in deciding the scope and effect of the order passed by this Court.
As seen the order of reference to the arbitrator relates "to settle dispute as to who would be the legal heirs to the estate of Shri C.S. Goenka".
Section 2(11) of CPC Act 5 of 1908 defines legal representatives means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representatives character the person on whom the estate 461 devolves on the death of the party so suing or sued.
Order 22 rule 3 says that if one or two or more plaintiffs die and the right to sue does not survive to the surviving plaintiff or plaintiff, , alone, or a sole plaintiff or sole surviving plaintiffs dies and the right to sue survives, the Court on an application made in this behalf, shall cause the legal representatives of the deceased plaintiff to be made a party and shall proceed with the suit.
Mutatis Mutandis by operation of Order 22 Rule 11 this rule applies to the appellants at the appeal stage.
Similarly, Order 22 Rule 4 applies in the case of death of one of several defendants or of sole defendant and in case of a dispute under Rule 5 such a question shall be determined by the court.
Inheritance is in some sort a legal and fictitious continuation of the personality of the dead man, for the presentation is in some sort identified by the law with him who he represents.
The rights which the dead man can no longer own or exercise in propria persona and the obligations which he can no longer in propria person a fulfil, he owns, exercise and fulfils in the persons of a living substitute.
To this extent, and in this fiction, it may be said that legal personality of a man survives his natural personality until his, obligation being duty performed, and his property duly disposed of, his representation among the living is no longer called for.
In Black 's Law Dictionary the meaning of the world 'Legal Representative ' is : The term is its broadest sense means one who stands in place of, and represents the interests of another.
A person who overseas the legal affairs of another.
Examples include the executors or administrator of an estate and a court appointed guardian of a minor or incompetent person.
Term "Legal representative" which is almost always held to be synonymous with term "personal representative", means in accident cases, member of family entitled to benefits under Wrongful death statute.
Unsatisfied claim and judgment fund.
In The Andhra Bank Ltd. vs R. Srinivasan and Ors., 1963 (1) and.
W.R.(S.C.) 14 this Court considered the question whether the legatee under the Will is the legal representative within the meaning of Section 2(11) of the Code.
It was held that it is well known that the expression "Legal Representative" had not been defined in the Code of 1882 and that led to a difference of judicial opinion as to its denotation.
Considering the case law developed in that behalf it was held that respondents 2 to 12, the legatees under the Will of the estate are legal 462 representatives of the deceased Raja Bahadur and so it follows that the estate of the deceased was sufficiently represented by them when the judgment were pronounced.
In The Official Liquidator vs Parthasarathi Sinha and Ors., ; this Court considered whether the legal representative would be bound by the liability for misfeasance proceeding against the deceased.
While considering that question under section 50 CPC this Court held that the legal representative, of course, would not be liable for any sum beyond the value of the estate of the deceased in his hands.
Mulla on CPC 14th Ed., Vol.
I at P.27 stated that a person on whom the estate of the deceased devolves would be his legal representative even if he is not in actual possession of the estate.
It includes heirs and also persons who without title either as executors, administrators were in possession of the estate of the deceased.
It is, therefore, clear that the term legal representative is wide and inclusive of not only the heirs but also intermeddlers of the estate of the deceased as well as a person who in law represents the estate of the deceased.
It is not necessarily confined 'to heirs alone.
The executor, administrators, assigns or persons acquired interest by devolution under Order 22 Rule 10 or legatee under a Will, are legal representatives.
Section 3(f) of the defines "heirs" means any person, male or female who is entitled to succeed to the property of an intestate under this Act.
Section 8 thereof provides that the property of a male Hindu dying intestate shall devolve according to the provisions of this Chapter 'Chapter 11 ' (Inestate succession) firstly upon the heirs, being the relatives specified in Class 1 of the Schedule. .
Schedule provides Class 1 heirs are Son, daughter, widow, mother. .
Thus under the personal law of , if a Hindu dies intestate, the heirs either male or female specified in Schedule 1 Class 1, are heirs and succeed to the estate as per law.
In ' their absence, the next class or classes are entitled to succeed to the property of an intestate under the Act.
In Sudama Devi and Ors.
vs Jogendra Choudhary and Ors., AIR.
1987 Patna 239, (Full Bench) considered the question whether father of the minor in possession of his property and who himself was a party to the suit alongwith the minor is legal representative.
The minor died.
The father was held per majority to be legal representatives under section 2(11) of the Code as an intermeddler.
It must therefore be held that not only that Class I heirs under Section 8 read with Schedule of the but also 463 the executor of the Will of the deceased Goenka are legal representatives within the meaning of Section 2(11) of the Code.
Section 213 of the (Act 39) of 1925 for short 'the Succession Act ' provides right to the executor to obtain probate of the Will thus "(1) No right as executor. can be established in an), Court of Justice, unless court of competent jurisdiction in (India) has granted probate of the will under which the right is claimed with a copy of the Will annexed.
By operation of sub section 2(i) only in the case of wills made by any Hindu . where such wills are of the classes specified in Cls.
(a) and (b) of Sec.
Section 57 provides that the provisions of part which are set out in Schedule 111, shall, subject to the restrictions and modifications specified therein apply (a) to all wills made by any Hlndu, on or after the first day of September, 1870, within the local limits of the ordinary original civil jurisdiction of the High Court of Judicature at Madras and Bombay. (c) to all wills and codicils made by any Hindu on or after the first day of January, 1927, to which those provisions are not applied by Cls.
(a) and (b).
In other places the Dist.
Court or Court to whom the power is delegated alone are entitled to grant probate.
Section 276 provides the procedure to obtain probate, namely (1) application for probate . with the Will annexed, shall be made by a distinctly written in English. the will as the case may be, the particulars are the details mentioned in ' Cls.(a) to ' (e) and further details provided in sub sections (2) and (3), the mention of the details whereof are not material for the purpose of this case.
The petition shall be verified in the manner prescribed under section 280 and also further to be verified by at least one of the witnesses to the will in the manner and to the affect specified therein.
The Caveator is entitled to object to its grant by operation of Section 284 When it is contested Section 295 directs that probate proceedings shall take, as nearly as may be, the form of a regular suit, according to the provisions of C.P.C. and the petitioner for probate . shall be the plaintiff and the person who had appeared to oppose the 464 grant shall be the defendant.
Section 217 expressly provides that save as otherwise provided by this Act or by any other law for the time being in force, all grants or probate . with the will annexed . shall be made or carried out, as the case may be, in accordance with the provisions of Part IX.
Section 222 declares that (1) Probate shall be granted only to an executor appointed by the will.
(2) The appointment may be expressed or by necessary implication Section 223 prohibits grant of probates to the persons specified therein.
Section 224 gives power to appoint several executors.
Section 227 declares the effect of probate thus: Probate of a will when granted establishes the will from the.
death of the testator, and renders valid all intermediate acts of the executor as such.
Section 248 envisages grant of probate for special purposes, namely, if an executor is appointed for any limited purpose specified in the will, the probate shall be limited to that purpose, and if he should appoint an attorney. . with the will annexed, shall be limited accordingly.
Section 273 declares conclusiveness of probate thus : Probate shall have the effect over all the property and estate moveable or immovable, of the deceased, throughout the State in which the same is or are granted, and shall be conclusive as to the representative title against the debtors of the deceased and all persons holding property which belongs to him, and shall afford full indemnity to all debtors, paying their debts and all persons delivering up such property to the person to whom such probate have been granted.
The further details are not necessary for the purpose of this case.
Under section 294 it shall be the duty of the court to preserve original Wills.
Section 299 gives right of appeals against an order or the decree of the court of probate.
By operation of Section 211(1) the executor of a deceased person is his legal representative for all purposes, and all the property of the deceased person vests in him as such.
In Inswardeo Narain Singh vs Smt.
Kanta Devi & Ors., AIR 1954 SC 280 this court held that the court of probate is only concerned with the question as to whether the document put forward as the last will and testament of a deceased person was duly executed and attested in accordance with law and whether at the time of such execution the testator had sound disposing mind.
The question whether a particular bequest is good or bad is not within the purview of the Probate Court.
Therefore the only issue in a probate proceeding relates to the genuineness and due execution of the Will and the court itself is under duty to determine it and preserve 465 the preserve the original Will in its custody.
The Succession Act is a self contained code in so far as the question of making an application for probate, grant or refusal of probate or an appeal carried against the decision of the probate court.
This is clearly manifested in the fasecule of the provision of Act.
The probate proceedings shall be conducted by the probate court in the manner prescribed in the Act and in no other ways.
The grant of probate with a copy of the Will annexed establishes con clusively as to the appointment of the executor and the valid execution of the will.
Thus it does no more than establish the factum of the will and the legal character of the executor.
Probate court does not decide any question, of title or of the existance of the property itself.
The grant of a Probate by Court of competent jurisdiction is in the nature of a proceeding in rem.
So long as the order remains in force it is conclusive as to the due execution and validity of the will unless it is duly revoked as per law.
It binds not only upon all the parties made before the court but also upon all other persons in all proceedings arising out of the Will or claims under or connected therewith.
The decision of the Probate Court, therefore, is the judgment in rem.
The probate granted by the competent court is conclusive of the validity of the Will until it is revoked and no evidence can be admitted to impeach it except in a proceeding taken for revoking the probate.
In Sheoparsan Singh vs Ramnandan Prasad Singh, Cal., 694 PC the judicial committee was to consider, whether the Will which had been affirmed by a Court of competent jurisdiction, would not be impugned in a court exercising original jurisdiction (Civil Court) in suit to declare the grant of probate illegal etc.
The privy council held that the Civil Court has no jurisdiction to impugne the grant of probate by the court of competent jurisdiction.
In that case the subordinate court of Muzafarbad was held to be had no jurisdiction to question the validity of the probate granted by the Calcutta High Court.
In Narbheram Jivram vs Jevallabh Harjivan, AIR 1933 Bombay, 469 probate was granted by the High Court exercising probate jurisdiction.
A civil suit on the Original Side was filed seeking apart from questioning the probate, also other reliefs.
The High Court held that when a probate was granted.
, it operates upon the whole estate and establishes the Will from the death of the testator.
Probate is conclusive evidence not only of the factum, but also of the validity of the Will and after the probate has been granted, in is incumbent on a person who wants to have the Will declared null and void, to have the probate revoked before proceeding further.
That could 466 be done only before the Probate Court and not on the original side of the High Court.
When a request was made to transfer the suit to the Probate Court, the learned Judge declined to grant the relief and stayed the proceeding on the original side.
Thus it is conclusive that the court of probate alone had jurisdiction and is competent to grant probate to the will annexed to the petition in the manner prescribed under the Succession Act.
That court alone is competent to deal with the probate proceedings and to grant or refuse probate of the annexed will.
It should keep the original will in its custody.
The probate thus granted is conclusive unless it is revoked.
It is a judgment in rem.
We agree with Mr. Chidambaram that the applicant had consented to refer the dispute for arbitration of dispute in the pending probate proceedings, but consent cannot confer jurisdiction nor an estoppel against statute.
The other legatees in the will were not parties to it.
In A.R. Antulay VI R.S. Naik; , when a Constitution Bench directed the High Court Judge to try the offences under the Prevention of Corruption Act with which the petitioner therein was charged and the trial was being proceeded with, he 'questioned by way of writ petition the jurisdiction of this Court to give such a direction.
A Bench of seven judges per majority construed meaning of the word 'jurisdiction ', Mukerjee, J. as he then was, speaking per himself.
Oza and Natarajan, JJ. held that the power to create or enlarge jurisdiction is legislative in character.
So also the power to confer a right of appeal or to take away a right of appeal.
The Parliament alone can do it, by law and not Court, whether interior or both combine, can enlarge the jurisdiction of a Court and divest a person of his rights of appeal or revision.
Ranganath Misra, J. as he then was, held that jurisdiction comes solely from the law of the land and cannot be exercised otherwise.
In this country, jurisdiction can be exercised only when provided for either in the Constitution or in the laws made by the Legislature.
Jurisdiction is thus the authority or power of the Court to deal with a matter and make an order carrying binding force in the facts.
Oza, J. supplementing the question held that the jurisdiction to try a case could only be conferred by law enacted by the legislature.
The Supreme Court could not confer jurisdiction if it does not exist in law.
Ray, J. held that the Court cannot confer a jurisdiction on itself which is not provided in the law.
In the dissenting opinion Venkatachaliah, J., as he then was to lay down that the expression jurisdiction or prior determination is a "verbal coat of many colours".
In the case of a Tribunal an error of law might 467 become not merely an error in jurisdiction but might partake of the character of an error of jurisdiction.
But, otherwise, jurisdiction is a 'legal shelter ' and a power to bind despite a possible error in the decision.
The existence of jurisdiction does not depend on the correctness of its exercise.
The authority to decide embodies a privilege to bind despite error, a privilege which is inherent in and indispensable to every judicial function.
The characteristic attribute of a judicial act is that it binds whether it be right or it be wrong.
Thus this Court laid down as an authoritative proposition of law that the jurisdiction could be conferred by statute and this Court cannot confer jurisdiction or an authority on a tribunal.
In that case this Court held that Constitution Bench has no power to give direction contrary to Criminal Law Amendment Act, 1952.
The direction per majority was held to be void.
It is settled law that a decree passed by a court without jurisdiction on the subject matter or on the grounds on which the decree made which goes to the root to its jurisdiction of lacks inherent jurisdiction is a corum non judice.
A decree passed by such a court in a nullity and is nonest.
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 very authority of the court to pass decree which cannot be cured by consent or waiver of the party.
In Bahadur Singh & Anr.
vs Muni Subrat Dass & Anr., an eviction petition was filed under the Rent Control Act on the ground of nuisance.
The dispute was referred to the arbitration.
An award was made directing the tenant to run the workshop upto a specified time and thereafter to remove the machinery and to deliver vacant possession to the landlord.
The award was signed by the arbitrators, the tenant and the landlord.
It was filed in the court.
A judgment and decree were passed in terms of the award.
On expiry of the time and when the tenant did not remove the machinery nor delivered vacant possession, execution was levied under Delhi and Ajmer Rent Control Act.
It was held that a decree passed in contravention of Delhi and Ajmer Rent Control Act was void and the landlord could not execute the decree.
The same view was reiterated in Smt.
Kaushalya Devi and Ors.
vs KL.
Bansal, AIR 1970 SC 838.
In Ferozi Lal Jain vs Man Mal & Anr., AIR 1979 SC 794 a compromise dehore grounds for eviction was arrived at between the parties under section 13 of the Delhi and Ajmer Rent Control Act.
A decree in terms thereof was passed.
The possession was not delivered and execution was 468 laid.
It was held that the decree was nullity and, therefore, the tenant could not be evicted.
In Sushil Kumar Mehta vs Gobind Ram Bohra (dead) through his Lrs.
JT 1989 (SUPPI.) SC.329 the Civil Court decreed eviction but the building was governed by Haryana Urban (Control of Rent & Eviction) Act 11 of 1973.
It was held that the decree was without jurisdiction and its nullity can be raised in execution.
In Union of India vs M/s. Ajit Mehta and Associates.
Pune and Ors.
, AIR 1990 Bombay 45 a Division Bench to which Sawant, J. as he then was, a member was to consider whether the validity of the award could be questioned on jurisdictional issue under section 30 of the Arbitration Act.
The Division Bench held that Clause 70 of the, Contract provided that the Chief Engineer shall appoint an engineer officer to be sole arbitrator and unless both.
parties agree in writing such a reference shall not take place until after completion of the works or termination or determination of the Contract.
Pursuant to this contract under section 8 of the Act, an Arbitrator was appointed and award was made, Its validity was questioned under section 30 thereof.
The Division Bench considering the scope of Sections 8 and 20(4) of the Act and on review of the case law held that Section 8 cannot be invoked for appointment of an Arbitrator unilaterally but be available only.
under section 20(4) of the Act.
Therefore, the very appointment of the Arbitrator without consent of both parties was held void being without jurisdiction.
The Arbitrator so appointed inherently lacked jurisdiction and hence the award made by such Arbitrator is nonest.
In Chellan Bhai 's case Sir C. Farran, Kt.
, C.J. of Bombay High Court held that the Probate Court alone is to determine whether probate of an alleged will shall issue to the executor named in it and that the executor has no power to refer the question of execution of Will to arbitration.
It was also held that the executor having propounded a Will, and applied for probate, a caveat was filed denying the execution of the alleged Will, and the matter was duly registered as a suit, the executor and the caveatrix subsequently cannot refer the dispute to arbitration, signing a submission paper, but such an award made pursuant thereto was held to be without jurisdiction.
In Gopi Rai 's case, Sulaiman, J. as he then was, speaking for the Division Bench held that the Civil Court has no jurisdiction to allow the dispute relating to the genuineness of a Will in a probate proceedings pending before him to be referred to the arbitration of an arbitrator.
He has got to be specified that the Will is a genuine document before the order of granting probate is passed.
He cannot delegate those functions to a 465 private individual and decide the point through him.
Similar was the view laid in Manmohini Guha 's case, Sarda Kanta Das vs Gobinda Das 6 Indian.
Cases 912 and Khelawati vs Chet.
Ram Khub Rain, AIR 1952 Punjab 67.
When the plea of estoppel was raised, Sulaiman.
J. in Gopi Rai 's case held that "We cannot hold that there is any estoppel against Gopi Rai on this question of jurisdiction.
That is a matter which we can take into account only when ordering costs. ', ' The decision in Nalla Ramudamma vs Nalla Kasi Naidu, AIR 1945 Madras 269 relied on by Shri Chidambaram does not help his clients.
Therein the question was the matrimonial dispute.
The Arbitrator had decided at the request of the parties and a decree was passed.
It was held that the dispute would come under section 21 of the Arbitration Act.
The question of jurisdiction was not raised therein.
Equal ly the decision in Mt. Mahasunader Kuer and Anr.
vs Ram Ratan Prasad Sahi.
is also of little assistance.
The question of adoption, it was held, cannot be decided in the probate proceedings.
On a conspectus of the above legal scenario we conclude that the Probate Court has been conferred with exclusive jurisdiction to grant probate of the Will of the deceased annexed to the petition (suit); on grant or refusal thereof, it has to preserve the original Will produced before it.
The grant of probate is final subject to appeal, if any, or revocation if made in terms of the provisions of the Succession Act.
It is a judgment in rely and conclusive and binds not only the parties but also the entire world The award deprives the parties of statutory right of appeal provided under section 299.
Thus the necessary conclusion is that the Probate Court alone has exclusive jurisdiction and the Civil Court on original side or the Arbitrator does not get jurisdiction even if consented to by the parties, to adjudicate upon the proof or validity of the Will propounded by the executrix, the applicant.
It is already seen that the executrix was nominated expressly in the will is a legal representative entitled to represent the Estate` of the deceased but the heirs cannot get any probate before the Probate Court.
They are entitled only to resist the claim of the executrix of the execution and genuineness of the Will.
The grant of probate gives the executrix the right to represent the estate of the deceased, the subject matter in other proceedings.
We make it clear that our exposition of law is only for the purpose of finding the jurisdiction of the arbitrator and not an expression of opinion on merits in the probate suit.
From this perspective we are constrained to conclude that the Ar.
470 bitrator cannot proceed with the probate suit to decide the dispute in issues Nos.1 and 2 framed by him.
Under these circumstances the only course open in the case is that the High Court is requested to proceed with the probate suit No.65/85 pending on the probate jurisdiction of the High Court of Bombay and decide the same as expeditiously as possible.
The learned Judge is requested to fix the date and proceed day to day at his convenience till it is concluded and decide the matter according to law preferably within six months.
Till then the Arbitrator is requested not to decide issue Nos.1 and 2.
He may be at liberty to proceed with the other issues.
He is requested to await the decision of the Probate Court; depending upon the result thereon, he would conclude his findings on Issues Nos.1 and 2 and then make the award and take the proceedings according to law.
The application is accordingly ordered but without cost.
N.V.K Application disposed of. [/INST] The appellant Shri Chiranjilal Shri Lal Goenka was involved in several suits, one of which was the present appeal.
He died on November 25, 1985 leaving behind his last Will dated October 29, 1982 in which he appointed his younger daughter Mrs. Sushila N. Rungta as the sole executrix Radhey Shyam, the natural son of Shri Mangal Chand Kedia and Mrs. Sita daughter of Shri C.S. Goenka; claimed to be the adopted son of Shri C.S. Goenka.
The applicant, executrix; Radhey Shyam and his wife filed substitution applications under Order 22 Rule 3 CPC setting up rival claims.
When the dispute arose as to who should represent the estate of Shri C.S. Goenka by order dated October 7, 1991 this Court brought all the three on record as legal representatives; and by a further order dated November 1, 1991 by consent of parties appointed a retired Chief Justice of the Bombay High Court as an Arbitrator to settle the dispute as who would be the legal heirs to the estate of late Chiranjilal Shri Lal Goenka.
The arbitrator entered upon the reference and on the riling of pleadings by the parties framed diverse issues.
Issues No. 1 and 2 related to the two Wills and were : (1) Does the claimant No. 1 prove.
execution of the Will dated 29th Oct. 1982 and prove the same to be the last and genuine Will of Shri G.S. Goenka.
(2) If not does she prove the execution of the Will dated 4.7.78 and prove the same 455 to be the last and genuine Will of the late Shri G.S. Goenka.
Simultaneous proceedings in the probate suit were being pursued in Bombay High Court, and a Single Judge expressed doubt whether the arbitrator had jurisdiction to decide the probate suit.
Similarly, on an application made before the arbitrator seeking clarification, he too stated that with his appointment as arbitrator all the pending suits in the schedule should be assumed to have been referred for arbitration and that includes the probate suit as well, but that he cannot give any clarification in that behalf.
An Interlocutory Application was, therefore, moved in this Court for clarification, and it was contended on behalf of the applicant that the probate court had exclusive jurisdiction to grant probate of the Will to the applicant for due implementation of the directions contained in the Will as the executrix, and that this issue cannot be referred to arbitration and the arbitrator thereby is devoid of jurisdiction to decide Issue Nos. 1 and 2 that had been framed by him, and that the applicant had not consented to refer the probate suit for arbitration.
The application was contested on behalf of the respondents by contending that proceeding the order of the Court dated November 1, 1991 the counsel for the respondents addressed a letter to the counsel for the petitioner including the probate suit for reference to arbitration, and this was to obviate the litigation pending in all the courts as to who were the legal heirs of Shri C.S.Goenka, and thereafter this court appointed the arbitrator, ' that with a view to put an end to the litigation in all the suits pending in different courts, this Court appointed the arbitrator to decide all the disputes in pending suits.
It is, therefore, desirable that the arbitrator should decide Issue Nos. 1 and 2 that have been framed.
Disposing of the Application, this Court, HELD : 1. Section 2(11) of Code of Civil Procedure 1908 defines "legal representatives" to mean a person who in law represents the estate of a deceased person; and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representative character the person on whom the estate devolves on the death of the party so suing or sued.
Order 22 rule 3 says that if one or two or more plaintiffs dies and the right to sue survives, the Court on an application made in this behalf, shall cause the legal representatives of the deceased plaintiff 456 to be made a party and shall proceed with the suit.
Mutatis Mutandis by operation of Order 22 Rule 11 this rule applies to the appellants at the appeal stage.
Similarly, Order 22 Rule 4 applies in the case of death of one of several defendants or of sole defendant and in case of a dispute under Rule 5 such a question shall be determined by the Court.
[460H, 461A B] 2.
Inheritance is In some sort a legal and fictitious continuation of the personality of the dead man, for the prepresentation is in some sort identified by the law with him who he represents.
The rights which the dead man can no longer own or exercise in propria persona and the obligations which he can no longer in propria persona fulfil, he owns exercises, and fulfils in the person of a living substitute.
To this extent, and in this fiction, it may be said that legal personality of a man survives his natural personality, until his obligations being duty performed, and his property duly disposed of, his representation among the living is no longer called for.
1461D] 3.
The grant of Probate by a Court of competent jurisdiction is in the nature of a proceeding in rem.
So long as the order remains in force it is conclusive as to the due execution and validity of the will unless it is duly revoked as per law.
It binds not only upon all the parties made before the Court but also upon all other persons in all proceedings arising out of the Will or claims under or connected therewith.
The decision of the Probate.
Court, therefore, is the judgment in rem.
The probate granted by the competent court is conclusive of the validity of the Will until it is revoked and no evidence can be admitted to impeach it except in a proceeding taken for revoking the probate.
[465D] Slieoparsan Singh vs Ramnandan Prasad Singh, Cal.
694 PC and Narbharam Jivram vs Jayvallabh Harjiwan, AIR 1933 Bom.
469, approved.
[465E F] 4.
It is settled law that a decree passed by a court without jurisdiction on the subject matter or on the grounds on which the decree made which goes to the root of its jurisdiction or lacks inherent jurisdiction is a corum non judice.
A decree passed by such a court is a nullity and is nonest.
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 or execution or in collateral proceedings.
The defect of jurisdiction strikes at the very authority of the court to pass decree which cannot be cured by consent or 457 waiver of the party.
[467D] A.R. Antulay vs R.S. Naik, ; ; Bahadur Singh & Anr.
vs Muni Subrat Dass & Anr ; Smt.
Kaushalya Devi and Ors.
vs KL.
Bansal, AIR 1970 SC 838; Ferozi Lal Jain vs Man Mal & Anr, AIR 1979 SC 794 and Sushil Kumar Mehta vs Gobind Rain Bohra (dead) through his Lrs, JT 1989 (suppl.) SC 329.
In the instant case, the applicant had consented to refer for arbitration the dispute in the pending probate proceedings, but consent cannot confer jurisdiction nor an estoppel against statute.
The other legatees in the Will were not parties to it.
The Probate Court has been conferred with exclusive jurisdiction to grant probate of the Will of the deceased annexed to the petition (suit); on grant or refusal thereof, it has to preserve the original will produced before it.
The grant of probate is final subject to appeal, if any, or revocation if made in terms of the provision of the Succession Act It is a judgment in rem and conclusive and binds not only the parties but also the entire world.
The award deprives the parties of statutory right of appeal provided under section 299.
Thus the necessary conclusion is that the Probate Court alone has exclusive jurisdiction and the Civil Court on original side or the Arbitrator does not get jurisdiction, even if consented to by the parties, to adjudicate upon the proof or validity of the Will propounded by the executrix, the appellant [468D F] 6.
The executrix was nominated expressly in the Will as a legal representative entitled to represent the Estate of the deceased but the heirs cannot get any probate before the Probate Court.
They are entitled only to resist the Claim of the executrix of the execution and genuiness of the Will.
The grant of probate gives the executrix the right to represent the estate of the deceased, the subject matter in other proceedings.
This exposition or the law is only for the purpose of finding the jurisdiction of the arbitrator and not an expression of opinion on the merits in the probate suit.
[468G] 7.
The Arbitrator cannot therefore proceed with the probate suit to decide the dispute in Issue Nos. 1 and 2 framed by him.
The High Court is to proceed with the Probate suit, the Judge to fix the date and proceed day to day till it is concluded and decide the matter within six months.
Till 458 then the Arbitrator is not to decide Issue Nos. 1 and 2, but at liberty to proceed with the other issues, to await the decision of the probate Court and depending upon the result thereon, conclude the findings on issue Nos.1 and 2 and then make the award and take the proceedings according to law.
[469H, 470A B] </s> |
<s>[INST] Summarize the following judgement: Appeal No. 1890 of 1974.
From the Judgment and Order dated 6.8.1973 of the Gujarat High Court in Second Appeal No.98 of 1973.
M.V. Goswami for the Appellants.
S.K. Dholakia and P. Narasimhan for the Respondents.
The following Order of the Court was delivered: This appeal under Article 136 is against the judgment of the High Court of Gujarat in Second Appeal No.98 of 1973 dated August 6, 1973.
The appellants ' predecessor was inducted in Field Nos.439 and 676 as, an usufructuary mortgagee in the year 1945.
On expiry of the period of redemption prescribed therein, that is, 25 years, the suit for redemption was filed in 1970 by the respondents.
The trial court decreed the suit subject to payment of damages for improvements.
On appeal, the District Court confirmed the decree for redemption but set aside the decree for damages.
In second appeal, the High Court confirmed the decree of the appellate court.
Thus this appeal.
In the High Court, the appellants sought two contentions, namely, by operation of Section 2 A which was brought by way of amendment of Section 48 to the Bombay Tenancy Act, 1939, the mortgagee became a deemed tenant.
It was not permitted to argue as is not a pure question of law but is a mixed question of law and fact which need investigation of facts.
It was neither raised in the pleadings nor argued either before the trial court or the appellate court.
Therefore, the question raised in the second appeal for the first time was disallowed.
The second question namely, the jurisdiction of the civil court to declare the tenancy rights by operation of the Amendment Act 5/73 which brought Section 85 A on statute with retrospective effect.
It ousted the jurisdiction of the civil court to decide the dispute of tenancy rights in pending suit.
This contention too was negatived as when the Amendment Act came into force, the second appeal was pending and therefore the High Court held that the civil court was not ousted to exercise the jurisdiction and to refer the matter to the Revenue Court for jurisdiction for adjudication whether the appellants 580 were or were not deemed tenants.
The same contention was reiterated before us.
Placing reliance on a Division Bench judgment of the Gujarat High Court in Salman Raje vs Madhavsang Benesang, reported in ILR 1963 Guj.722, Shri M.V. Goswami, the learned counsel for the appellants contended that by operation of Section 2 A, the appellants are deemed tenants.
Once the appellants are deemed tenants, the Revenue Court has to decide that issue.
The second appeal is a continuation on the suit and therefore, the High Court is not right in rejecting the claims of the appellants.
It is not necessary to express any opinion on the correctness of the judgment of the Division Bench of the Gujarat High Court.
Suffice it to say that the appellants had not specifically pleaded that the appellants are deemed tenants by operation of Section 2 A of the Act.
What was pleaded in the written statement was that initially the appellants ' predecessor was continuing as cultivating tenant.
But by virtue of the mortgage, their tenancy right merged in the right as usufructuary mortgagee.
On redemption pre existing tenancy rights get revived.
But that plea was not pursued.
A new plea based on Section 2 A was sought to be raised for the first time in the High Court.
The High Court rightly did not permit the appellants to raise the plea of a deemed tenancy as the said claim needs investigation based on factual foundation which was lacking.
Once the right of tenancy is not permitted to be raised, the question of construction of Section 85 A whether the Civil Court had jurisdiction or not is an academic issue.
Accordingly, we are not going into that question.
The learned counsel for the appellants also contended that the appellants are entitled to the improvements.
The High Court did not go into that question as the same was not canvassed and the decree of the appellate court is quite right.
We cannot go into that question which is accordingly rejected.
The appeal, is accordingly dismissed but in the circumstances without costs.
T.N.A. Appeal dismissed. [/INST] The appellants ' predecessor was inducted as an usufructuary mortgagee of certain fields.
On the expiry of redemption period the respondents filed a suit for redemption which was decreed subject to payment of damages for improvements.
On appeal, the District Court confirmed the redemption decree but set aside the decree for damages.
In second appeal, the appellants raised a new plea: that they were deemed tenants by operation of Section 2 A of the Bombay Tenancy Act, 1939.
It was also contended on their behalf that Section 85 A of the Act ousted the jurisdiction of the Civil Court to decide the dispute of tenancy rights In pending suit.
Rejecting both the contentions the High Court confirmed the decree of the appellate court.
Against the judgment of the High Court an appeal was flied in this Court.
Dismissing the appeal, this Court, HELD: 1.
The plea based on Section 2 A was sought to be raised for the first time in second appeal before the High Court.
It was neither raised in the pleadings nor argued either before the trial Court or the appellate court.
Therefore, the High Court rightly did not permit the appellants to raise the plea of a deemed tenancy as the said claim needs investigation based on factual foundation which was lacking.
Consequently, the question whether under Section 85 A the Civil Court had jurisdiction or not need not be gone into.
[580 D E, Salman Raje vs Madhavsang Benesang I.L.R. 1963 Guj. 722, cited. </s> |
<s>[INST] Summarize the following judgement: Appeals Nos. 220 to 223 of 1953.
Appeals from the Judgment and decrees dated April 14,1943, of the Bombay High Court in Appeals Nos. 183, 184, 185 and 186 of 1942, arising out of the judgments and decrees dated February 16, 1942, of the Court of the 1st Class Sub Judge, Poona, in Suits Nos.
900/37, 392/35, 875/36 and 1202/33.
V. P. Rege and Naunit Lal, for the appellants.
N. C. Chatterjee, K. V. Joshi and Ganpat Rai, for respondents Nos.
1 to 6 (In all the Appeals).
478 1959.
March 26.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
These four appeals represent the last stage of a long and tortuous litigation between the appellants Waghmares (also called Guravs) who claim the rights of hereditary worshippers in the Shree Dnyaneshwar Maharaj Sansthan, Alandi, and respondents 1 to 6 who are the trustees of the said Sansthan.
Alandi , which is a small town situated on the banks of the river Indrayani at a dis tance of about 14 miles from Poona, is regarded as a holy place of pilgrimage by thousands of Hindu devotees.
In the last quarter ' of the 13th century Shree Dnyaneshwar Maharaj, the great Maharashtra Saint and Philosopher, lived at Alandi.
He was a spiritual teacher and reformer; by his saintly life and his inspiring and illuminating commentary on the Bhagvad Gita, known as Dnyaneshwari, he helped to create a popular urge and fervour for religious and social revolution which led to the foundation of a devotional cult; the followers of this cult are known as Warkaris in Maharashtra.
They refuse to recognise any barriers of caste or class; and amongst them prevails a feeling of real and genuine spiritual brotherhood.
Every year, in the months of July and November, thousands of them proceed on pilgrimage on foot and accompany the annual palanquin procession from Alandi to Pandharpur.
Pandharpur is the chief centre of pilgrimage in Maharashtra and it is regarded by devotees as the Banares of Southern India.
About 1300 A. D. Shree Dnyaneshwar Maharaj took Samadhi at Alandi and since then Alandi also has become a place of pilgrimage.
In or about 1500 A. D. a big temple was erected in front of the idol of Shiva called Siddeshwar where the said Shree Dayaneshwar Maharaj took his Samadhi.
In due course the Mahratta Kings and the Peshwas of Poona granted the village of Alandi in inam for the upkeep of the temple and the Samadhi.
About 1760 A. D. Peshwa Balaji Baji Rao framed a budget called Beheda or Taleband in order to regulate the management and worship of the shrine and provided for proper 479 administration of its annual revenue amounting to Rs. 1,725.
The appellants claim that their ancestors were then in possession of the temple and management of its affairs especially the worship of the shrine.
The budget framed by the Peshwa shows that out of the sum of Rs. 1,725 an amount of Rs. 361 was assigned to the worshippers for some of their services.
After the fall of the Mahratta power the management of Alandi passed into the hands of the East India Company which continued the old arrangement without any interference.
In 1852, under orders from the Government of Bombay the Collector of Poona drew up a yadi or memorandum appointing six persons as Punchas (trustees) with directions to them for the management of the temple in accordance with the old tradition and practice as well as for the administration of the revenue of the village subject to the control and sanction of the Collector.
This arrangement came to be described as " the scheme of 1852".
In 1863 the Religious Endowment Act was passed, and inconsequence, in 1864 the Government of Bombay withdrew their superintendence over the affairs of the Alandi Sansthan; and the trustees continued to manage the affairs of the temple without any supervision on the part of the Government.
It was during this period that the appellants ' ancestors began to assert that they were the owners of the shrine while the trustees insisted on treating them as the servants of the shrine.
This conflict inevitably led to several disputes between the worshippers and the trustees.
Matters appear to have come to a crisis in 1911 when the trustees dismissed eleven Guravs from the temple service on the ground that they were found guilty of gross misconduct.
The Guravs nevertheless asserted that they were the owners of the shrine and that the trustees had no authority or power to dismiss them.
Taking their stand on their ownership of the shrine some of the dismissed Guravs filed Civil Suit No. 485 of 1911 in the Court of the Subordinate Judge, Poona, against the trustees and this was the beginning of the long drawn out litigation which followed between the parties.
In that suit the Guravs 480 claimed a declaration that they were the owners of the temple and not the servants of the temple committee; and as owners they were entitled to perform the worship at the shrine and to appropriate the offerings made to the idol of the Saint.
This claim was resisted by the trustees who pleaded that the Guravs were merely the servants of the temple committee and not the owners at all.
On April 20, 1917, the learned trial judge dismissed the suit because he held that the Guravs were not the owners of the shrine and were not entitled to the declarations claimed by them.
Against this decision the Guravs preferred several appeals but these appeals were dismissed on August 3, 1921.
While dismissing their appeals the High Court incidentally expressed the view that it was open to the Guravs to come to terms with the temple committee and that the terms on which the Guravs could be reinstated can be decided appropriately in a suit filed under section 92 of the Code of Civil Procedure.
It was also observed by the High Court in its judgment that the temple committee did not dispute the fact that the Guravs were the hereditary pujaris and that they had some rights in that capacity.
No doubt the committee claimed that under the scheme framed in 1852 it was competent to dismiss hereditary servants for a substantial cause such as gross misconduct.
It appears that instead of adopting the course indicated in the judgment of the High Court and filing a suit under section 92 of the Code, the Guravs chose to take the law into their own hands, and obtained forcible possession of the temple premises on July 25, 1922, and began to perform the puja and to take the offerings placed before the deity as they had been doing prior to their dismissal.
This was followed by a suit filed by the trustees on September 12, 1922 (Suit No. 1075 of 1922) under section 9 of the Specific Relief Act.
This suit terminated in a decree in favour of the committee on November 4, 1922.
In pursuance of this decree the committee recovered possession of the temple on November 16, 1922.
Thus the Guravs had occupied the temple precincts for about three and a half months.
481 When the Guravs were thus dispossessed by the committee in execution of the decree obtained by it, some of them proceeded to file Suit No. 19 of 1922 in the District Court of Poona; this suit purported to be one under section 92 of the Code but it claimed the same reliefs as had been claimed by the Guravs in theirs earlier suit of 1911.
On April 25, 1927, the District A Court dismissed this suit on the ground that the Guravs could not reagitate the same questions over again.
it was held that their claim was barred by the deci sion of the earlier Suit No. 485 of 1911.
Against this decision the Guravs appealed to the High Court (First Appeal No. 507 of 1927); but the High Court agreed with the conclusion of the District Court and dismissed the Guravs" appeal on June 20, 1933.
It was held by the High Court that the suit as framed was not properly constituted under section 92 of the Code.
It was at this stage that a properly constituted suit, No. 7 of 1934, was filed under section 92 of the Code by the general public of Alandi along with two Guravs in the District Court at Poona.
This suit claimed that a proper scheme should be framed for the management of the temple.
Even so, one of the allegations made in the plaint referred to the Guravs ' rights as hereditary worshippers.
It was apparently apprehended that this allegation would be treated as outside the scope of a scheme suit under section 92 and so the Guravs took the precaution of filing four separate suits on behalf of four branches in the Waghmare family one after the other.
These suits were numbered as 1202 of 1933, 392 of 1935, 875 of 1936 and 900 of 1937; the plaintiffs in these suits were respectively the members of the third, the fourth, the first and the second branch of the Waghmare family '.
It appears that the hearing of these suits were stayed by an order of the District Judge pending the final decision of the scheme suit which was being tried by him.
The scheme suit was taken, up for hearing in 1937.
As many as 22 issues were framed in this suit and voluminous evidence Was recorded.
In the result the learned judge substantially confirmed the original 61 482 scheme of 1852, though he issued certain directions modifying it.
This decree was passed on December 11, 1937.
The trustees felt aggrieved by this decree and challenged its propriety by preferring an appeal, No. 92 of 1938, in the Bombay High Court.
On November 16, 1939, the High Court dismissed the appeal though it made some amendments in the scheme framed by the District Judge by consent of the parties.
After the scheme suit was thus disposed of by the High Court, the four suits filed by the pujaris were taken up for trial by the learned Subordinate Judge, First Class, Poona.
In all these suits the appellants claimed their rights as hereditary vatandar Pujari Gurav Servants of the Sansthan.
They alleged that they were under a duty to perform worship according to certain rites in Shree Dayaneshwar Sansthan and that they were also under an obligation to perform other incidental duties enumerated by them in their plaints.
Likewise they claimed that for remuneration they were entitled to receive coins and perishable articles offered by the devotees and the committee as well as yearly emoluments from the committee.
On these allegations the appellants claimed a declaration about their respective rights and an injunction permanently restraining the trustees from obstructing the appellants in the exercise of the said rights.
They also claimed accounts from the trustees in regard to the offerings prior to the institution of the suit as well as those made after the institution of the suit and before the passing of the decree.
These allegations were denied by respondents 1 to 6.
Their case was that the appellants were the servants of the temple committee and as such had no hereditary rights set up, by them.
In the alternative, it was pleaded by them that even if the appellants had any hereditary rights the same had been lost by their misconduct and had been otherwise extinguished by limitation.
Against the appellants ' claim pleas of res judicata and estoppel were also raised.
On these pleadings as many as 21 issues were framed in the trial court.
The trial court found in favour 483 of the appellants on all the issues.
The learned judge held that the Guravs had established the hereditary rights set out by them and he was inclined to take the view that the respondents could not deprive the appellants of their hereditary rights of service because of the misconduct of some of their ancestors.
He also found that there was no substance in the plea of estoppel or res judicata and that the suits were not barred by limitation.
In the result the appellants ' suits were decreed on February 16, 1942.
Thereupon the respondents challenged these decrees by preferring appeals against them in the Bombay High Court.
The four suits accordingly gave rise to First Appeals Nos.
183, 184, 185 and 186 of 1942 respectively.
In these appeals the High Court agreed with the trial court in holding that on the merits the appellants had established their case and that their claim was not barred either by res judicata or by estoppel.
However, on the question of limitation the High Court took the view that the appellants ' suits were governed by article 120 of the Limitation Act and that they had been filed beyond the period of six years prescribed by the said article.
That is why the High Court set aside the decrees passed by the trial court, allowed the respondents ' appeals and dismissed the appellants ' suits.
However, in view of the special facts of the case the High Court directed that each party should bear its own costs throughout.
This judgment was pronounced on April 14, 1943.
Like the trial court the High Court also dealt with all the four cases by one common judgment.
It appears that after this judgment was pronounced by the High Court but before it Was signed, the appellants moved the High Court on July 2, 1943, for a rehearing of one of the appeals (No. 186 of 1942).
It was urged before the High Court that even if article 120 applied the claim made by the appellant in the said appeal (which arose from Suit No. 1202 of 1933) could not be held to be barred by limitation.
The High Court was not impressed by this plea and so the motion for rehearing was discharged.
Subsequently a Civil Application, No. 1039 of 1944, 484 was made by the appellant in the said appeal seeking to raise the same point over again but this application was rejected by the High Court on September 12, 1944.
The appellants then applied for leave to appeal to the Privy Council on August 15, 1944.
Their applications were heard together and were disposed of by an order passed on March 26, 1946, whereby leave was granted to them to appeal to the Privy Council and their prayer for consolidating all the appeals was also allowed.
These appeals could not, however, be disposed of by the Privy Council before the jurisdiction of the Privy Council to deal with Indian appeals came to an end and so they ultimately came to this Court and were numbered as Appeals Nos. 220 to 223 of 1953.
It may be convenient to state that these appeals arise respectively from Suits Nos.
907 of 1937, 392 of 1935, 875 of 1936 and 1202 of 1933.
It would thus be seen that the litigation which began between the parties in 1911 has now reached its final stage before us in the present appeals.
As we have already indicated, both the courts below have found in favour of the appellants on most of the issues that arose in the present litigation; but the appellants have failed in the High Court on the ground of limitation.
In the trial court the respondents had urged that the present suits were governed by article 124 of the Limitation Act and that since the Guravs had been dismissed from service in 1911 and other Guravs refused to serve in 1913 and 1914 limitatation began to run against them at least from 1914 and so the suits were beyond time.
The learned trial judge held that article 124 was inapplicable.
He also found alternatively that, even if the said article applied, the trustees did not have continuous possession of the suit properties from 1911 or 1914 for twelve years and so the suits were not barred by time.
According to him the case was really covered by section 23 of the Limitation Act, and so the plea of limitation could not succeed.
The High Court has agreed with the trial court in holding that article 124 is inapplicable.
It has, however, 485 come to the conclusion that the suits are governed by article 120 of the Limitation Act, and, according to its findings, limitation began to run against the appellants either from September 12, 1922, when the trustees filed their suit under section 9 of the Specific Relief Act, or, in any case from November, 1922 when, in execution of the decree passed in the said ' suit, the appellants were driven out of the temple precincts by the trustees.
The High Court has also held that section 23 can have no application to the present case.
That is how the High Court has reached the conclusion that the appellants ' suits are barred by time under article 120.
The question which arises for our decision in the present appeals, therefore, is one of limitation; it has to be considered in two aspects: Was the High Court right in holding that article 120 applies and that the cause of action accrued more than six years before the dates of the institution of the present suits ?; Was the High Court also right in holding that section 23 does not apply to the suits ? On behalf of the appellants Mr. Rege has contended that in substance, in their present suits the appellants have made a claim for possession of an hereditary office and as such they would be governed by article 124 of the Limitation Act.
In this connection he has referred us to the relevant allegations in the plaint to show that the appellants ' prayer for a declaration about their hereditary rights and for a consequential permanent injunction amount to no more and no less than a claim for possession of the said hereditary office.
In support of this argument reliance has been placed on the decision of the Bombay High Court in Kunj Bihari Prasadji vs Keshavlal Hiralal (1).
In that case the plaintiff had made a claim to the gadi of the Swaminarayan temple at Ahmedabad and had asked for a declaration that the will of the last Acharya which purported to appoint defendant 14 as his adopted son and successor was null and void.
As a consequence a perpetual injunction was also claimed restraining the defendants from offering any obstruction to the plaintiff in occupying the said gadi.
The (1) Bom.
567. 486 principal point which was decided in the case had reference to the effect of the provisions of section 42 of the Specific Relief Act.
, The plaintiff 's suit had been dismissed in the courts below on the ground that he had omitted to ask for further relief as he was bound to do under section 42 of the said Act and the High Court held that the section did not empower the court to dismiss the suit under the said section.
In considering the nature of the claim made by the plaintiff Jenkins, C. J., observed that " in the plaintiff 's view the suit was not one of possession of land appertaining to the gadi but to determine who was to occupy the gadi and thus as gadinishin become the human agent of the deity.
If that was so, then the injunction restraining all interference with the occupancy by the plaintiff of the gadi secures in the most complete manner to him the rights he claims ".
The learned Chief Justice also observed that " the plaintiff might in terms have asked for possession of the office he said was his ", but be asked " how would practical effect be given to an award of possession of office otherwise than by preventing interference with the rights of which it was made up ".
Even so, having reversed the decree passed by the courts below, when the High Court remanded the case for retrial, the plaintiff was advised to amend his plaint and to define more precisely the terms of the injunction he sought.
It is urged that, in the present appeals also, by asking for a declaration of their rights and for an appropriate injunction against the respondents, the appellants were in effect asking for possession of the hereditary office.
It is doubtful if the claims made by the appellants in their respective suits are exactly analogous to the claim made by the plaintiff in Kunj Bihari Prasad 's case (1).
The appellants have not only asked for an injunction but also for an account of the income received by the trustees from July 23, 1933, up to the date of the suit as well as for similar account from the date of the suit until the date of the decree.
A claim for accounts in the form in which it is made may not be quite consistent with the appellants ' contention that their suits are for nothing more than possession (1) Bom.
567. 487 of the hereditary office ; but in dealing with the present appeals we are prepared to assume that they have in substance claimed possession of the office.
The question which then arises is: Does this claim for possession attract the application of article 124 of the Limitation Act ? Article 124 governs suits for possession of an hereditary office.
The period of limitation prescribed by the article is twelve years and the said period begins to run when the defendant takes possession of the office adversely to the plaintiff.
This is explained to mean that the hereditary office is possessed when the profits thereof are usually received or (if there are no profits) when the duties thereof are usually performed.
It is clear that before this article can apply it must be shown that the suit makes claim for possession of an office which is hereditary; and the claim must be made against the defendant who has taken possession of the said hereditary office adversely to the plaintiff.
Unlike article 142 the fact that the plaintiff, is out of possession of the hereditary office for more than twelve years before the date of his suit would not defeat his claim for possession of the said office.
What would defeat his claim is the adverse possession of the said office by the defendant for the prescribed period.
As the explanation makes it clear usually the receipt of the profits may amount to the possession of the office; but if the defendant merely receives the profits but does not perform the duties which are usually performed by the holder of the office, the receipt of the profits by itself may not amount to the possession of office.
The cause of action for possession in suits falling under article 124 is the wrongful dispossession of the plaintiff and the adverse possession by the defendant of the office in question.
Claims for possession of hereditary offices which attract the application of this article are usually made by holders of the said offices against persons who claim adverse possession of the said offices; in other words, in suits of this kind, the contest is usually between rival claimants to the hereditary office in question.
In the present appeals the claim for possession is 488 made by the appellants against the trustees of the Sansthan.
It is significant that the persons who are actually performing the duties of the worshippers are not impleaded ; and they do not claim to hold office as hereditary officers either.
They have been appointed by the trustees as servants of the institution and they perform the duties of worship as such servants.
The trustees, on the other hand, cannot be said to have taken possession of the office themselves adversely to the appellants.
They do not take the profits themselves nor do they perform the duties associated with the said office.
They have, in exercise of their authority and power as trustees, dismissed the appellants ' predecessors from office and have made fresh appointments of servants to perform the worship at the Sansthan; and in making the said appointments, have in fact destroyed the hereditary character of the office.
The dispute in the present appeals is between the worshippers who claim hereditary rights and the trustees of the institution who claim to have validly terminated the services of some of the predecessors of the appellants and to have made valid appointments to the said office.
It is, therefore, impossible to accept the argument that the claim made by the appellants in their respective suits attracts the provision& of article 124.
It is conceded by Mr. Rege that if article 124 does, not apply, the suits would be governed by article 120 which is a residuary article.
It may prima facie appear somewhat strange that whereas a suit against a person claiming to hold the hereditary office adversely to the plaintiff is governed by a period ' of twelve years, a claim against the trustees like the respondents in the present appeals who have dismissed the hereditary worshippers should be governed by a period of six years.
It may be possible to suggest that there is a substantial difference in the nature of the two disputes ; but apart from it, it is well known that the artificial provisions of limitation do not always satisfy the test of logic or equity.
Mr. Rege, however, argued that in determining the scope of article 124 we need not consider the provisions of col. 3 to the said article.
His contention appears 489 to be that once it is shown that the suit is for possession of an hereditary office, article 124 must apply though the claim for possession may not have been made ,against a person who has taken possession of the office adversely to the plaintiff.
He also urged alternatively that the trustees should be deemed to have, taken possession of the office adversely to the appellants.
We have already held that the conduct of the trustees shows that they have not taken possession of the office adversely within the meaning of col. 3 of article 124; and we do not think it is possible, to ignore the provision of col. 3 in deciding whether or not article 124 applies.
It is true that in Jalim Singh Srimal vs Choonee Lall Johurry (1), while holding that the adjustment on which the plaintiff 's claim was based in that case was in time both under articles 115 and 120, Jenkins, C. J, has observed that the function of the third column of the second schedule is not to define causes of action but to fix the starting point from which the period of limitation is to be counted ; but this observation does not support the appellants ' case that article 124 would govern the suit even though the third column is wholly inapplicable to it.
That obviously is not the effect of the observations made in Jalim Singh 's case (1).
The question about the nature and scope of the provisions of article 124 has been considered by the Madras High Court in Thathachariar vs Singarachariar (2).
" If we take into consideration the terminology used in the three columns of article 124 ", observed Srinivasa Aiyangar, J., in that case, " it is clear that the nature of the suit intended to be covered by that article must be a suit filed by a plaintiff who claims the office from a person who at that time holds the office himself ".
In our opinion this view is correct.
We may also refer to another decision of the Madras High Court in which this question has been considered.
In Annasami vs Adivarachari (3) a Full Bench of the Madras High Court was dealing with a suit in (1) (2) A.I.R. 1928 Mad, 377.
(3) I.L.R. 62 490 which the plaintiff had claimed an injunction restraining the trustee and the archakas of the Sri Bhuvarabaswami temple at Srimushnam from interfering with the performance of the duties of his office of mantrapushpam of the temple.
This suit had been filed in 1929.
The office of mantrapushpam was a hereditary office and the plaintiff had succeeded to it on the death of his father in 1906.
The emoluments of the office consisted of a ball of cooked rice per them and twelve annas per month.
It appears that the plaintiff was a Vadagalai while the archakas of the temple were Thengalais and there was animosity between them; and as a result of this animosity the plaintiff bad never been able to perform the duties of his office.
It was common ground that the plaintiff was the lawful holder of the office and that he had been receiving its emoluments month by month until 1927.
The archakas who resisted the plaintiff 's claim did not claim that they were in possession of the office or that they had performed the duties of the said office.
The Full Bench held that, where a person is admittedly the lawful holder of the office and he is enjoying its emoluments, he must in law be regarded as being in possession of the office itself, especially where no one else is performing the duties of the said office; and so under article 124 it was enough for the plaintiff to show that he had been in receipt of the emoluments of the office to save his claim from the bar of limitation.
The Full Bench also rejected the contention that under article 120 the suit was barred because it was held that every time the trustee and the archakas prevented the plaintiff from performing his duties as a hereditary officer a. fresh cause of action arose and so there can be no bar of limitation under article 120.
It would be noticed that the basis of this decision was that, in the eyes of law, the plaintiff was in possession of the hereditary office since he was receiving the emoluments of the said office month by month, and so every act of obstruction on the part of the archakas and the trustee was in the nature of a continuing wrong which gave rise to a fresh cause of action to the plaintiff from time to time.
In other words, on the facts the Full Bench held that 491 s.23 helped the plaintiff and saved his suit from the bar of limitation.
As we will presently point out there is no scope for applying section 23 to the facts of the present cases, and so the decision in Annasami Iyengar 's case (1) cannot assist the appellants.
In this connection it is relevant to consider the decision of the Privy Council in Jhalandar Thakur vs, Jharula Das (2) in which it was held that article 124 was inapplicable.
The defendant Jharula Das had obtained a decree for money on a mortgage which bad been executed in his favour by Mst.
Grihimoni, the widow of the shebait of the temple.
In execution of the said decree the defendant had caused 3 1/2 as.
share of the judgment debtor including her right in the nett income of the daily offerings made before the idol to be put up for sale and had himself purchased it at the auction sale.
As such purchaser he was in possession of the income of the said share.
The judgment debtor attempted to challenge the said sale by two suits but her attempts failed and the ' auction purchaser continued to be in possession of the income.
On the death of Mst.
Grihimoni, Bhaiaji Thakur, who succeeded to the office of the shebait, sued the defendant for possession of certain lands and claimed a declaration that he was entitled to receive the 3 1/2 as.
share of the nett income from the offerings to the temple with other reliefs.
This claim was resisted by the defendant Jharula Das.
In regard to the plaintiff 's claim in respect of the said 3 1/2 as share, the High Court had held that article 124 applied and that the claim was barred under the said article.
That is why the decree passed by the trial court in favour of the plaintiff in respect of the said income was reversed by the High Court.
This decision was challenged by the plaintiff before the Privy Council and it was urged on his behalf that article 124 did not apply.
The Privy Council upheld this contention.
It was clear that the office of the shebait of the temple was a hereditary office which could not be held by anyone who was not a Brahmin Panda.
Jharula Das was not a Brahmin Panda.
He was of an inferior caste and was not (1) I.L.R. (2) Cal.
492 competent to hold the office of the shebait of the temple, or to provide for the performance of the duties of that office.
On these facts the Privy Council held that the appropriation from time to time by Jharula Das of the income derivable from the said 3 1/2 as share did not deprive Mst.
Grihimoni, and after her death, Bhaiaji Thakur, of the possession of the office of the shebait although that income was receivable by them .in right of the shebaitship.
The basis of this decision is that, on each occasion on which Jharula Das received and wrongfully appropriated to his own use a share of the income to which the shebait was entitled, he committed a fresh actionable wrong in respect of which a suit could be brought against him by the shebait; but it did not constitute him a shebait for the time being or affect in any way the title of the office.
Thus this decision emphasises that for the application of article 124 it is essential that the defendant to the suit must be in adverse possession of the hereditary office in question.
We must, therefore, hold that article 124 does not apply to the suits filed by the appellants; and as we have already observed, if.
article 124 does not apply, article 120 does.
The next point which arises for our decision is whether under article 120 the suits are barred by limitation.
Under article 120 time begins to run against the plaintiffs when the right to sue accrued to them, and that naturally poses the question as to when the right to sue accrued to the appellants.
In deciding this question it would be necessary to recall briefly the material facts in regard to the past disputes between the appellants and the trustees.
These disputes began in 1911.
On January 31, 1911, the trustees wrote a yadi (memorandum) to the Collector of Poona asking his permission to dismiss eleven Guravs from service.
They set out in detail several items of misconduct of which the said Guravs were guilty; and they expressed their opinion that for the proper management of the affairs of the institution it was necessary to terminate the services of the off ending Guravs (exhibit 407).
On April 1, 1911, the Collector sent a reply to the trustees and told them that, as a result of the Government 493 Resolution No. 4712 passed on November 29,1864, it was unnecessary for the trustees to obtain the Collector 's sanction because it was competent to the trustees to settle their own affairs without any such sanction.
The trustees then met in a committee on September 18, 1911, and decided to dismiss from service the said eleven Guravs.
In its resolution the committee stated that the Guravs were violent and arrogant and it was likely that they may commit riot at the time when the committee would seek to take charge from them.
The committee also apprehended that the rest of the Guravs would make a common cause with those who had been dismissed from service and would refuse to serve the Sansthan.
Even so the committee decided to appoint six Brahmins temporarily to perform the service, because the committee was prepared to allow the rest of the Guravs to render service to the Sansthan if they were ready to act according to the orders of the committee and were willing to enter into a formal agreement in that behalf.
In accordance with this resolution the committee served notice on the eleven Guravs on October 13, 1911, terminating their services and calling upon them to hand over to the committee all articles in their charge and forbidding them from entering the temple in their capacity as servants.
Notice was likewise served on the rest of the Guravs calling upon them to agree to serve the Sansthan on conditions specified in the notice.
These terms were not acceptable to the Guravs and so, on behalf of two Guravs Eknath and his brother Ramachandra, notice was served on the trustees on October 26, 1911, complaining against the trustees ' conduct in forcibly removing the Guravs from the temple and thereby wrongfully denying their rights.
The notice warned the trustees that unless they retraced their steps and gave possession to the Guravs as claimed in the notice legal steps would be taken against them.
This notice was followed by the Guravs ' Suit No. 485 of 1911.
In the suit the plaintiffs claimed declaration about their rights of ownership and asked for consequential reliefs.
This claim was denied by the 494 trustees who claimed the right to dismiss the Guravs.
It was alleged on their behalf that some of the plaintiffs had been dismissed and others had resigned their employments and so all of them had lost their rights.
This suit was seriously contested but in the end the Guravs lost and their suit was dismissed on January 31, 1918.
The Guravs then preferred appeals in the High Court but these appeals were also dismissed on August 3, 1921.
We have already pointed out that, while dismissing the said appeals, the High Court made certain observations about the Guravs ' hereditary rights of worship and suggested that these rights could be adjudicated upon in a suit filed under section 92 of the Code.
Thus at the time when the Guravs ' appeals were dismissed the position was that the claim of ownership set up by them had been rejected; but the question as to whether they were entitled to the lesser rights of hereditary worshippers was left open.
The Guravs then obtained forcible possession of the temple and that led to the trustees ' suit under section 9 of the Specific Relief Act, No. 1075 of 1922, on September 12, 1922.
In this suit the trustees specifically alleged that the relationship of the defendants as servants of the Sansthan had ceased as from September, 1911, and they averred that the defendants had therefore no right to obtain possession of the temple.
The defendants no doubt disputed this claim and pleaded that they were the hereditary vatandar pujari servants but their claim was negatived and a decree for possession was passed on November 4, 1922.
In execution of this decree the defendants were dispossessed.
On these facts the High Court has held in favour of the appellants, and rightly we think, that it was difficult to accept the respondents ' contention that the cause of action for the present suits which were expressly based upon the status of the Guravs as hereditary servants arose in 1911.
But, the High Court felt no doubt that the cause of action to file the present suits had accrued either on September 12, 1922, when the trustees filed their suit under section 9 of the Specific Relief Act or in any event on November 4, 495 1922, when the said suit was decreed and the Guravs were consequently dispossessed.
In our opinion this conclusion is also right.
One of the Guravs who was examined in the present litigation has stated that, " if in any year when it is the turn of any takshim to serve, if a person outside the Gurav family is appointed by the trustees, all the takshims have a right to , object ".
There is also no dispute that since the dismissal of eleven Guravs in 1911 till the institution of, the present suits none from the Gurav family has served the temple except for 3 1/2 months in 1922 when the Guravs had wrongfully obtained possession of the temple.
In 1922 the Guravs knew that their claim of ownership had been rejected and that the only right which they could set up was as hereditary worshippers of the temple and not its owners.
This right was specifically denied by the trustees in their plaint while it was specifically set up in defence by the Guravs in their written statement; and the decree that followed upheld the trustees ' case and rejected the defendant 's claim.
On these facts the conclusion is irresistible that the right to sue accrued to the Guravs at the latest on November 4, 1922, when a decree was passed under section 9 of the Specific Relief Act.
If not the plaint in the suit, at least the decree that followed clearly and effectively threatened the Guravs ' rights as hereditary worshippers and so the cause of action to sue on the strength of the said rights clearly and unambiguously arose at that time.
If that be the true position it follows that the present suits which have been filed long after the expiration of six years from 1922 are barred by time under article 120.
It is then contended by Mr. Rege that the suits cannot be held to be barred under article 120 because section 23 of the Limitation Act applies; and since, in the words of the said section, the conduct of the trustees amounted to a continuing wrong, a fresh period of limitation began to run at every moment of time during which the said wrong continued.
Does the conduct of the trustees amount to a continuing wrong under section 23 ? That is the question which this contention raises for our decision.
In other words, did the 496 cause of action arise de die in them as claimed by the appellants ? In dealing with this argument it is necessary to bear in mind that section 23 refers not to a continuing right but to a continuing wrong.
It is the very essence of a continuing wrong that it is an act which creates a continuing source of injury and renders the 'doer of the act responsible and liable for the continuance of the said injury.
If the wrongful act causes an injury which is complete, there is no continuing wrong even though the damage resulting from the act may continue.
If, however, a wrongful act is of such a character that the injury caused by it itself continues, then the act constitutes a continuing wrong.
In this connection it is necessary to draw a distinction between the injury caused by the wrongful act and what may be described as the effect of the said injury.
It is only in regard to acts which can be properly characterised as continuing wrongs that section 23 can be invoked.
Thus considered it is difficult to hold that the trustees ' act in denying altogether the alleged rights of the Guravs as hereditary , worshippers and in claiming and obtaining possession from them by their suit in 1922 was a continuing wrong.
The decree obtained by the trustees in the said litigation had injured effectively and completely the appellants ' rights though the damage caused by the said decree subsequently continued.
Can it be said that, after the appellants were evicted from the temple in execution of the said decree, the continuance of their dispossession was due to a recurring act of tort committed by the trustees from moment to moment ? As soon as the decree was passed and the appellants were dispossessed in execution proceedings, their rights had been completely injured, and though their dispossession continued, it cannot be said that the trustees were committing wrongful acts or acts of tort from moment to moment so as to give the appellants a cause of action de die in diem.
We think there can be no doubt that where the wrongful act complained of amounts to ouster, the resulting injury to the right is complete at the date of the ouster and so there would be no scope for the application of section 23 in such a case.
That is 497 the view which the High Court has taken and we see no reason to differ from it.
We would now like to refer to some of the decisions which were cited before us on this point.
The first case which is usually considered in dealing with the application of section 23 is the decision of the Privy Council in Maharani Rajroop Koer vs Syed Abdul Hossein (1) In order to appreciate this decision it is necessary to refer, though briefly, to the material facts.
The plaintiff had succeeded in establishing his right to the pyne or an artificial watercourse and to the use of the water flowing through it except that which flowed through the branch channel; he had, however, failed to prove his right to the water in the tal except to the overflow after the defendants as owners of mouzah Morahad used the water for the purpose of irrigating their own land.
It was found that all the obstructions by the defendants were unauthorised and in fact the plaintiff had succeeded in the courts below in respect of all the obstructions except two which were numbered No. 3 and No. 10.
No. 3 was a khund or channel cut in the side of the pyne at a point below the bridge whereas No. 10 was a dhonga also below the bridge and it consisted of hollow palm trees so placed as to draw off water in the pyne for the purpose of irrigating the defendants ' lands.
It was in regard to these two obstructions that the question about the continuing wrong fell to be considered; and the Privy Council held that the said obstructions which interfered with the flow of water to the plaintiff 's mehal were in the nature of continuing nuisance as to which the cause of action was renewed de die in them so long as the obstructions causing such interference were allowed to continue.
That is why the Privy Council allowed the plaintiff 's claim in respect of these two obstructions and reversed the decree passed by the High Court in that behalf.
In fact the conduct of the defendant showed that whenever he drew off water through the said diversions he was in fact stealing plaintiff 's water and thereby committing fresh wrong every time.
Thus this is clearly not a case of exclusion or ouster.
(1) (1880) L.R. 7 I.A. 240.
63 498 Similarly, in Hukum Chand vs Maharaj Bahadur Singh (1) the Privy Council was dealing with a case where the defendants ' act clearly amounted to a continuing wrong and helped the plaintiff in getting the benefit of section 23.
The relevant dispute in that case arose because alterations had been made by the Swetambaris in the character of the charans in certain shrines and the Digambaris complained that the said alterations amounted to an interference with their rights.
It had been found by the courts in India that the charans in the old shrines were the impressions of the footprints of the saints each bearing a lotus mark.
"The Swetambaris who preferred to worship the feet themselves have evolved another form of charan not very easy to describe accurately in the absence of models or photographs which shows toe nails and must be taken to be a representation of part of the foot.
This the Digambaris refused to worship as being a representation of a detached part of the human body ".
The courts had also held that the action of the Swetambaris in placing the charans of the said description in three of the shrines was a wrong of which the Digambaris were entitled to complain.
The question which the Privy Council had to consider was whether the action of the Swetambaris in placing the said charans in three of the shrines was a continuing wrong or not; and in answering this question in favour of the plaintiffs the Privy Council referred to its earlier decision in the case of Maharani Rajroop Koer (2 ) and held that the action in question was a continuing wrong.
There is no doubt that the impugned action did not amount to ouster or complete dispossession of the plaintiffs.
It was action which was of the character of a continuing wrong and as such it gave rise to a cause of action de die in diem.
In our opinion, neither of these two decisions can be of any assistance to the appellants.
On the other hand the decision of the Patna High Court in Choudhury Bibhuti Narayan Singh vs Maharaja Sir Guru Mahadev Asram Prasad Sahi Bahadur(3) (1) (1933) L.R. 60 I.A. 313.
(2) (1880) L.R. 7 I.A. 240.
(3) Pat. 208.
499 as well as that of the Full Bench of the Punjab High Court in Khair Mohammad Khan vs Mst.
Jannat support the respondents ' contention that where the s, impugned act amounts to ouster there is no scope for the application of section 23 of the Limitation Act.
We are, therefore, satisfied that there is no substance in the appellants ' contention that section 23 helps to save limitation for their suits.
The result no doubt is unfortunate.
The appellants have succeeded in both the courts below in proving their rights as hereditary worshippers; but their claim must be rejected on the ground that they have filed their suits beyond time.
In this court an attempt was made by the parties to see if this long drawn out litigation could be brought to an end on reasonable terms agreed to by them, but it did not succeed.
In the result the appeals fail and are dismissed.
We would, however, direct that the parties should bear their own costs throughout.
Appeals dismissed. [/INST] The appellants who were the hereditary worshippers, called Guravs, of the Shree Dnyaneshwar Sansthan of Alandi, claimed to be its owners.
The respondents as trustees of the said Sansthan dismissed eleven of the Guravs in 1911, served a notice on the rest calling upon them to agree to act according to the orders of the Temple committee and appointed six Brahmins to carry on the services of the Sansthan.
The Guravs did not agree and sued the respondents for a declaration of their rights of ownership and consequential reliefs.
That litigation ended in the High Court in 1921 with the result that their claim of ownership stood rejected but their rights as hereditary worshippers were left open.
Thereafter the Guravs took forcible possession of the temple on July 25,1922.
The trustees brought a suit under section 9 of the Specific Relief Act on September 12, 1922, and obtained a decree on November 4, 1932.
In execution of that decree the Guravs were dispossessed.
The suits, out of which the present appeals arise, were filed by the appellants against the trustees for declaration of their rights as hereditary servants of the Sansthan, a permanent injunction restraining the trustees from obstructing them in the exercise of the said rights and accounts.
The respondents claimed that the appellants were servants of the Temple committee and had no hereditary rights as claimed by them; even if they had, their claim to such rights was barred by limitation.
The trial Court decreed the suits.
In appeal the High Court, while agreeing with the trial court on the merits, disagreed on the question of limitation, held the suits to be barred by limitation under article 120 Of the Limitation Act, the cause of action arising either on the filing of the section 9 suit by the respondents or, in any event, on the date when the said suit was decreed, section 23 of the Act having no application, and allowed the appeals.
It was contended on behalf of the appellants in this Court that the suits were governed by article I24 Of the Limitation Act, and even if article 120 applied, section 23 saved limitation.
Held, that the High Court was right in holding that article 120 and not article 124, of the Limitation Act applied and that section 23 had no application to the suits in question.
477 Article 124 Of the Limitation Act applies only where the cause of action for the suit is wrongful dispossession of the plaintiff and adverse possession by the defendant in respect of the hereditary office in question.
In such suits, the contest usually is between rival claimants to the hereditary office and not between such claimants and trustees.
It is impossible to ignore the provision Of Col. 3 to that article in deciding its applicability.
Kunj Bihari Prasadji vs Keshavlal Hiralal, Bom.
567 and jalim Singh Srimal vs Choonee Lall Johurry, , held inapplicable.
Thathachariar vs Singarachariar, A.I.R. 1928 Mad. 377, ap proved.
Annasami vs Advarachari, I.L.R. , distin guished.
Jhalandar Thakur vs jharula Das, Cal. 2444, referred to.
Section 23 Of the Limitation Act refers not to a continuing right but to a continuing wrong.
A continuing wrong is essentially one that creates a source of continuing injury as opposed to one that was complete and makes the doer liable for such continuance.
A completed inJury would not be a continuing wrong even though it might give rise to continuing damage.
Thus tested, the injury to the appellants resulting from the decree obtained by the trustees in the section 9 suit, which amounted to a ouster, was complete at the date of the ouster and section 23 Of the Limitation Act could not apply so as to save limitation.
Choudhury Bibhuti Narayan Singh vs Maharaja Sir Guru Mahadeu Asram Prasad Saki Bahadur, Pat. 208 and Khair Mohammad Khan vs Mst.
jannat, Lah. 22, referred to.
Maharani Rajroop Koer vs Syaed Abdul Hossein, [1880] L.R. 7 I.A. 240 and Hukum Chand vs Maharaj Bahadur Singh, [1933] L.R. 60 I.A. 313, distinguished and held inapplicable. </s> |
<s>[INST] Summarize the following judgement: minal Appeal No. 554 of 1984.
From the Judgment and Order dated 27.9.1984 of the Allahabad High Court in Government Appeal No. 1634 of 1977 M.R. Sharma, Ms. Anjana Sharma and R.D. Upadhayaya for the Appellant.
Arvind K. Nigam, Ms. Kamini Jaiswal and A.S. Pundir for the Respondent.
The Judgment of the Court was delivered by G.N. RAY, J.
This appeal is directed against the Judgment dated September 27, 1984 passed by the Division Bench of the Allahabad High Court setting aside the judgment dated April 30, 1977 passed by the learned Additional Sessions Judge, Second Court, Kanpur (Dehat).
By the impugned Judgment, the Division Bench of the Allahabad High Court allowed the appeal preferred by the State of Uttar Pradesh against the judgment of acquittal.
in Sessions Trial No. 235 of 1976 and convicted the accused/appellant Mohd. Aslam under Section 302 I.P.C. and sentenced him to imprisonment for life.
The prosecution story in short is that there is long standing enmity between Abdul Salem and Abdul Hamid Kham Pradhan on one side and the complainant Abdul Hamid on the other.
Such enmity arose out of rival claim in placing 'sawai 'on the Akbara of Tajias at the time of Moharram.
Sawai is a kind of flag which is put on Tajias at the time of Moharram.
Over such dispute a civil litigation was going on between the said parties and there were also criminal proceedings under Section 107 read with Section 117 of the Code of Criminal Procedure between the said parties.
Shamim Raza was nephew and son in law of Abdul Hamid, the complainant and the said Shamim Raza was doing pairvi of the said cases on behalf of Abdul Hamid.
For the aforesaid reasons, Abdul Salem and Abdul Hamid Khan Pradhan, became inimical towards Shamim Raza and Abdul Hamid.
Mohd. Aslam, the accused/appellant is the son of Abdul Salem.
Both the parties were residents of village Bara, 448 within Police Station Akbarpur in the District of Kanpur.
On December 25, 1975 at about 6.00 P.M. Shamim Raza was sitting on a wooden bench in front of a hair cutting shop of Iiyas in village Raza.
Mohd. Umar and Abdul Khaliq (P.W.1) were also sitting with him and the said three persons were talking.
The Gumti of one Mohd. Laiq was at a short distance towards the east of that place.
Bhurey (P.W.2), Qamruddin (P.W.3) and Abdul Hamid were standing near the said Gumit and had also been talking.
There was light coming from electric bulbs at that place.
At that time, the accused/appellant, Mohd. Aslam came there armed with a double barrel gun.
He challenged Shamim Raza and threatened to kill anyone who would come forward.
Thereafter, he fired two shots.
By said shots, Shamim Raza and Mohd. Umar sustained gun shot injuries and both of them fell down.
Shamim Raza died on the spot and the condition of Mohd. Umar also became serious.
Such occurrence was seen by Mohd. Umar, Abdul Hamid, Bhurey and Qamruddin.
Peer Mohammed (P.W.10) took Mohd. Umar to Lala Lajpatrai Hospital at Kanpur for treatment and at 7.50 PM.
R.C. Asthana (P.W.8) examined Mohd. Umar.
Abdul Hamid went to his house and got a report of the occurrence written by Mohd. Raizwan (P.W.4) and took the said report to Akbarpur Police Station which was about 4 miles away and lodged the F.I.R. at 7.15 P.M. Station Officer incharge of the Akbarpur Police Station, Mr. Jagdamba Prasad Misra, took up the investigation of the case and he interrogated Abdul Hamid at the Police Station and thereafter reached the scene of occurrence at about 7.55 P.M.
He found the dead body of Shamim Raza lying at the scene of occurrence and he prepared inquest report and other connected papers.
He also interrogated Bhurey, Qamruddin and Abdul Khaliq who were the eye witnesses, He, also prepared the site plan and found blood on the wooden bench and also on the ground and collected portion of the blood stained wooden bench and blood stained bricks.
The injured Mohd. Umar was interrogated in the hospital on January, 1976.
The post mortem examination on the body of Shamim Raza was performed by Dr. Prakash (P.W.6).
Mohd. Umar died in the hospital on January 4, 1976 and his post mortem examination was performed by Dr. B.D. Misra at Kanpur on January 5,1976.
The accused/appellant Mohd. Aslam denied the prosecution allegations against him and alleged that he was falsely implicated on account of enmity and party faction.
He also denied that he had been absconding from the village and he examined two witnesses in defence.
The learned Additional Sessions Judge did not find the prosecution case and the evidences acceptable.
Accordingly, he acquitted the accused/appellant.
The State 449 thereafter preferred an appeal before the Allahabad High Court and as aforesaid, the Allahabad High Court allowed the said appeal, set aside the judgment of acquittal passed by the learned Sessions Judge and convicted the accused/appellant under Section 302 I.P.C. and sentenced him to suffer rigorous imprisonment for life.
Learned counsel appearing for the accused/appellant has strenuously contended that the High Court did not appreciate the salutory principles governing the judgment of acquittal.
He has contended that the learned Sessions Judge had taken pains in analysing in detail the evidences adduced in the case and gave reasonings for each of the findings as to why the prosecution case could not be accepted and what were the intrinsic deficiency in the evidences adduced in the case in support of the prosecution.
The learned counsel has contended that the law is well settled that in a case of acquittal, the appellate Court should not interfere with the judgment of acquittal if such judgment is based on consideration of the evidences adduced in the case and there is no perversity in coming to the finding for passing the judgment of acquittal.
In such a case of acquittal, the High Court in exercise of its appellate power should not endeavour to appreciate the evidence on its own in order to come to different finding unlike in an appeal arising from the judgment of conviction.
The learned counsel has contended that it has been established convincingly that there was party faction between the two groups over a dispute to place Sawai on Tajias and both civil and criminal proceedings were instituted between the two groups.
The learned counsel has contended that Abdul Hamid, the father in law of the deceased, Shamim Raza, was the principal man with whom Abdul Salem and Abdul Hamid Khan Pradhan had disputes and differences.
There was no earthly reason to bear malice and grudge against Shamim Raza who was only a son in law of Abdul Hamid Khan Pradhan.
Accordingly, there was no reason to kill him particularly in the presence of eye witnesses as alleged.
Such fact was taken note of by the learned Sessions Judge in analysing the acceptability of the prosecution case and credibility of the witnesses examined in support of the prosecution case.
The learned counsel for the appellant has also submitted that there was no reason for injuring Mohd. Umar by the accused/appellant.
He has contended that the alleged incident of gun shot injuries had not happened in the manner alleged by the prosecution but after such incident, the complainant and the other alleged eve witnesses falsely implicated the ac 450 cused/appellant because of the old enmity between the two groups.
The learned counsel has contended that in a very short time, a written complaint was lodged in the Akbarpur Police Station which is admittedly four miles away from the place of occurrence.
The prosecution story is that after the incident the said written complaint was reduced in writing by a person other than the complainant and thereafter the complainant went to the Police Station to file the written complaint.
If the incident had taken place at about 6.00 P.M. as alleged by the prosecution, it is practically impossible to lodge the said written F.I.R. at Akbarpur Police Station by 7.15 P.M., particularly when Abdul Hamid, the complainant did not straightaway go to the Akbarpur Police Station but he had been to his house and got a report of the occurrence written by Mohd. Raizwan (P.W.4) and then lodged the F.I.R. at the Akbarpur Police Station.
The learned Sessions Judge had taken note of this very important fact in not accepting the prosecution case.
Unfortunately, the High Court failed to appreciate the strong reasonings given by the learned Sessions Judge in not accepting the prosecution case.
The learned counsel has also submitted that there is serious discrepancy so far as the injury of Mohd. Umar is concerned.
Admittedly, Mohd. Umar got injured by a gun shot at the back but the manner in which the injured was sitting and the direction from which the gun was fired by the appellant, could not have caused gun shot injuries at the back of Mohd. Umar.
The learned Sessions Judge having noted such discrepancies had rightly rejected the prosecution case implicating the accused/appellant.
He has also submitted that the doctor had noted that Mohd. Umar sustained gun shot injuries from a bullet but the injuries sustained by the other deceased, namely, Shamim Raza was a gun shot injury from pellets.
It was nobody 's case that different guns had been used by the accused/appellant for injuring the said two persons differently.
Because of such discrepancy, the learned Sessions Judge was not inclined to accept the prosecution case and the suggestion.given by the prosecution witnesses that Mohd. Umar might have turned his back in a reflex and received the gun shot injuries at the back was not accepted by the learned Sessions Judge.
The learned counsel for the appellant has also contended that the alleged eye witness were in the faction of the complainant Abdul Hamid and they were partisan witnesses.
Accordingly, their testimonies were required to be considered with extreme care and caution.
The learned Sessions Judge, therefore, after noting the various discrepancies in the prosecution case, was not inclined to place reliance on the evidences adduced by the alleged eye witnesses and acquitted the accused/appellant.
451 Such order of acquittal, in the facts of the case and the reasons indicated by the learned Sessions Judge, was not required to be interfered with in appeal by the High Court.
We are, however, unable to accept the submissions made by the learned counsel for the appellant.
In an appeal arising from an order of acquittal, the appellate Court is not precluded from appreciating the evidences on its own if the reasons given by the learned trial Judge in passing the order of acquittal, do not stand scrutiny and are against the weight of the evidences adduced in the trial.
The appellate Court, will be quite justified in setting aside the order of acquittal if it appears to the court of appeal that improper consideration of the materials and evidences on record was made and the reasonings of the trial Judge are wholly unjustified.
It is only necessary that the court of appeal should weigh the reasonings of the learned trial Judge with care and caution in the light of the evidences adduced in the case by giving cogent reasons as to why such findings are unreasonable and against the evidence.
In the instant case, the High Court has taken care in analysing each and every finding of the learned Sessions Judge in the light of the evidences adduced in the case and has given cogent reasons as to why such findings were unreasonable and not acceptable.
It is an admitted position that the two persons suffered gun shot injuries on December 25, 1975 in the evening and one of the injured persons died on the spot and the other was removed to hospital.
He got serious injuries and later on sccummbed to such injuries.
The mere fact that there was enmity and bitterness between the two groups, by itself, does not establish that the eye witnesses falsely implicated the accused/appellant.
Shamim Raza was the son in law of Abdul Hamid and it was established in evidence that he was looking after the cases between the parties and making 'pairvi 'in civil and criminal cases.
In our view, the High Court is justified in holding that because of such positive role taken by Shamim Raza, he had incurred displeasure of the other group which acted as a motive for the gun shot injuries.
The learned Sessions Judge doubted the prosecution case because of lodging the F.I.R. at 7.15 p.m. at Akbarpur Police Station which was about four miles away from the place of occurrence where the incident, according to the prosecution, had taken place at about 6.00 P.M.
We do not think that such F.I.R. could not have been lodged by that time.
The High Court has considered the reasonings of the learned Sessions Judge on the question of lodging the F.I.R. at Akbarpur Police Station within a short time and has, in our view, given very good 452 reasons in not accepting the views entertained by, the learned Sessions Judge.
In our view, the learned Sessions Judge was also not justified in holding that the gun shot injuries suffered by Mohd. Umar had not been property explained by the prosecution because the doctor had noted that such injuries were caused by bullet and not by pellets.
The injuries suffered by Mohd. Umar as noted by the doctor do not run counter to the prosecution case that such injuries were caused by the gun used by the accused/ap pellant.
The High Court is right, in our view, in holding that the size of the pellet depends on the type of cartridge used in a gun.
It cannot be held as a matter of course that simply because the pellets injuring the deceased Shamim Raza were smaller in size than the size of the pellets used in injuring Mohd. Umar, both the injuries could not have been inflicted by the same gun.
The High Court, in our view, is also justified in not accepting the reasonings of the learned Sessions Judge that the injuries caused at the back of Mohd. Umar were not possible and run counter to the evidences adduced by the prosecution.
There was interval though very short between the two shots and it is not at all unlikely or highly improbable that because of the inherent reflex, the other injured, Mohd. Umar, had turned his side and received the injuries at the back portion.
In the instant case, there are eye witnesses to the occurrence and there are no intrinsic discrepancies in their evidences.
Even if it is assumed that such eye witnesses belong to the group of the complainant, their evidences are not liable to be discarded on that score if such evidences otherwise inspire confidence and get corroborated by other evidences and from the nature of injuries, sustained by the deceased persons.
The High Court is right in holding that although Abdul Khaliq (P.W.1) belonged to a group and appeared to be a partisan witness, his evidence was not required to be discarded on that ground but was required to be closely scrutinised.
The High Court, in our view, is also justified in holding that Qamruddin (P.W.3) was not related to Shamim Raza, deceased or the complainant and he did not belong to any of the rival groups.
This witness had no enmity with the accused/appellant or his father.
Qamruddin (P.W.3) has been rightly held by the High Court, as an independent and reliable witness.
It appears to us that all the findings made by the learned Sessions Judge were considered in detail by the High Court and the findings of the learned Sessions Judge were not accepted by the High Court by indicating that such findings were against the weight of the evidences and the same were wholly unreasonable.
In the aforesaid circumstances, we do not find 453 any reason to take a contrary view in this appeal and set aside the order of conviction made by the High Court.
The appeal therefore fails and is dismissed.
By the Order dated April 8, 1986, this Court granted bail to the accused/appellant.
In view of the dismissal of this appeal the bail stands cancelled and the accused/appellant is directed to surrender and serve out the sentence.
V.P.R. Appeal dismissed. [/INST] The prosecution case was that there was long standing enmity between appellant 's father and one Khan on one side and the complainant on the other, which rose out of rival claim in placing 'sawai ' on the Akhara of Tajias.
A Civil litigation was pending between the parties over the dispute.
Criminal proceedings under section 107 read with section 117 of the Code of Criminal Procedure were also pending between them.
The nephew and son in law of the complainant was doing pairvi of the cases on behalf of the complainant and because of that the father of the appellant and one Khan became inimical to the son in law of the complainant.
At about 6.00 P.M. on the date of the occurrence namely 25.12.1975, the son in law of the complainant was sitting on a wooden bench in front of a hair cutting shop of his village.
One Umar and P.W.1 were also sitting with him and all the three were talking.
P.Ws. 2 and 3 and the complainant were standing near a Gumti, at a short distance and were talking.
At the time, the appellant armed with a double barrel gun came there.
He challenged the complainants son in law and threatened to kill anyone who would come forward.
He fired two shots which hit the complainant 's son in law add one Umar.
Both of them fell down.
Complainant 's son in law 445 died on the spot.
P.W. 10 took Umar to Hospital.
The Complainant went to his home and got a report of the occurrence written by P.W.4 and taking the report to the Police Station, about 4 miles away, he lodged the F.I.R at 7.15 P.M. Investigation of the case was immediately commenced.
Umar died on 4.1.1976, prior to his death on 1.1.1976, the Police had interrogated the deceased.
The case of accused appellant was that he was falsely implicated on account of enmity and party faction.
He denied all the allegations of the prosecution.
The Sessions Court acquitted the accused appellant, as it did not rind the prosecution case and the evidence acceptable.
Allowing the State 's appeal against acquittal, the High Court convicted the appellant under section 302 I.P.C. and sentenced him to imprisonment for life.
In the appeal before this Court, the accused contended that the High Court did not appreciate the salutory principles governing the judgment of acquittal; that the Sessions Judge had taken pains in analysing in detail.
the evidences adduced in the case and gave reasonings for each of the finding as to why the prosecution case could not be accepted and what were the intrinsic deficiency in the evidences adduced in the case in support of the prosecution; that the law was well settled that in a case of acquittal, the appellate Court should not interfere with the judgment of acquittal if such judgment was based on consideration of the evidences adduced in the case and there was no perversity in coming to the finding for passing the judgment of acquittal and in such a case of acquittal, the High Court in exercise of its appellate power should not endeavour to appreciate the evidence on its own in order to come to different finding Unlike in an appeal arising from the judgment of conviction: that it has been established convincingly that there was party faction between the two groups over a dispute to place Sawai on Tajias and both civil and criminal proceedings were instituted between the two groups: that the eye witnesses were in the faction of the complainant and they were partition witnesses; that the Sessions Judge, therefore, after nothing the various discrepancies in the prosecution case, was not inclined to place reliance on the evidences adduced by the alleged eye witnesses and acquitted the accused/appellant; 446 and that such order of acquittal, in the facts of the case and the reasons indicated by the Sessions Judge, was not required to be interfered with in appeal by the High Court.
Dismissing the appeal, this Court, HELD: 1.
In an appeal arising from an order of acquittal, the appellate Court is not precluded from appreciating the evidences on its own if the reasons given by the learned trial Judge in passing the order of acquittal, do not stand scrutiny and are against the weight of the evidences adduced in the trial.
The appellate Court, will be quite justified in setting aside the order of acquittal if it appears to the court of appeal that improper consideration of the materials and evidences on record was made and the reasonings of the trial Judge are wholly unjustified.
It is only necessary that the court of appeal should weigh the reasonings of the learned trial Judge with care and caution in the light of the evidences adduced in the case by giving cogent reasons as to why such findings are unreasonable and against the evidence.
[451B C] 2.01.
In the instant case, the High Court has taken care in analysing each and every finding of the learned Sessions Judge in the light of the evidences adduced in the case and has given cogent reasons as to why such findings were unreasonable and not acceptable.
It is an admitted position that two persons suffered gun shot injuries and one of the enjured persons died on the spot and the other was removed to hospital.
He got serious injuries and later on sccummbed to such injuries.
The mere fact that there was enmity and bitterness between the two groups, by itself, does not establish that the eye witnesses falsely implicated the accused/appellant.
[451D E] 2.02.
There are no intrinsic discrepancies in the evidences of the eye witnesses.
Even if it is assumed that such eye witnesses belong to the group of the complainant, their evidences are not liable to be discarded on that score if such evidences otherwise inspire confidence and get cor roborated by other evidences and from the nature of injuries, sustained by the deceased persons.
[452E] 2.03.
All the findings made by the Sessions Judge were considered in detail by the High Court and the findings of the learned Sessions judge were not accepted by the High Court by indicating that such findings were 447 against the weight of the evidences and the same were wholly unreasonable.
In the circumstances, there is no reason to take a contrary view in this appeal.
[452H] </s> |
<s>[INST] Summarize the following judgement: Appeal No. 2860(NT) of 1979.
From the Judgment and Order dated 8.3.1979 of the, Patna High Court in Civil writ jurisdiction case No.2909 of 1978.
V.A. Babde, R.F. Nariman and Ms. Kamakshi (For Gagrat & Co.) for the appellant.
Dr. section Narayan P. Parmeshwaran and Manoj Prasad for the Respondents.
The Judgment of the Court was delivered by, VENKATACHALA, J.
The short, question which needs our decision in this appeal by special leave is whether a person who credits to the account of or pays to a contractor any sum payable by any of the organisations specified in section 194C(1) of Income Tax Act, 1961 'the Act ' for carrying out any work including supply of labour for carrying out any work) in pursuance of a contract between the contractor and the specified organisation is liable to deduct two per cent of such sum as income tax as required under that sub section.
The facts 'which, have lad to the need for our decision on the said question are briefly these.
The Associated Cement Company Ltd. the appellant, issued a letter dated 5th November, 1973 to Mr.
S.P Nag contractor Jhiakpani Containing the terms and conditions of a contract of leading packed cement bags,from its Packing Plants.
Nos.1 & 2 into wagons or trucks.
Under clause.
12 of those terms and conditions, there 541 was a stipulation that the contractor shall be paid a sum for his work at a flat rate of 41 paise for such tonne of cement handled in Packing Plant No.1.
and 30 paise for each, tonne o f cement handled in Packing Plant No.2.
Clause 13 thereof, which contained a recital that the rate of loading in clause 12 had been worked out on the basis of daily basic wages of Rs.2.35 paise, D.A. of Rs. 1.21 paise and H.R.A. of Rs.0.50 paise, per day per worker stipulated a term of reimbursement by the appellant to the contract of the difference in D.A. over the amount of Rs.1.21 paise and annual increment etc.
payable from month to month to every worker by him as per the Second Wage Board Recommendation.
As the contractor carried out his work according to the terms and conditions in the contract during the years 1973 74 and 1974 75, the appellant made payments of the sums payable to him under clause 12 of the contract and the sums reimbursable to him under clause 13 thereof But the deductions made 'under section 194C(1) of the Act by the appellant out of the sums paid or reimbursed to the contractor fell short of the deductions required to be made thereunder.
As the appellant took the stand that it was not liable to deduct any amount under section 194(1), out of the sums paid on its behalf to the contractor as per clauses 12 & 13 of the contract, the Income Tax Officer, Jamshedpur, served on the principal officer of the appellant a notice dated 30th March, 1978 to show cause as to why action should not be taken against the appellant under sections 276B(1), 281 and 221 of the Act in respect of assessment years 1973 74 and 1974 75 for short deductions out of the sums paid to contractor without observing the requirement of section 194C(1) of the Act.
Another notice dated 8th May, 1978.relating to the assessment years 1974 75 to 1977 78 of a similar nature, was also served on the principal officer of the appellant.
The appellant, although impugned both the said notices in a Writ Petition filed under Articles 226 and 227 of the Constitution before the High Court of Judicature at Patna, that Writ Petition was dismissed by the High Court by its order dated 8th March, 1979.
The appellant has, therefore, filed this appeal by special leave before this Court seeking the quashing of the notices which it had unsuccessfully impugned before the High Court, in its Writ Petition.
It was argued by Mr. V.A. Bobde, the learned senior counsel appearing for the appellant, that the amount deductible under section 194C(1) out of the sums credited to the account of or paid to a contractor would arise only when such sums are paid, on account of a contractor executing a works contract, that is, a contract which produces a tangible property.
542 According to him, the 'work ' for the the carrying of which the sum is required to be credited to the account of or paid to a contractor under section 194C(1) of the Act is only a 'works contract ' and hence deduction under that sub section could arise only to the extent where the sum credited to the account of or paid to a contractor for executing such 'works contract ' is comprised of the element of income (profit) of the contractor, as held by this Court in Brij Bhushan Lal Parduman Kumar etc.
vs Commissioner of Income Tax Haryana, Himachal Pradesh and New Delhi III, [1979] 2 SCR 16 and not otherwise.
It was also his argument that the words in the sub section 'on income comprised therein ', appearing immediately after the words 'deduct an amount equal to two per cent of such sum as income tax ' found in the concluding part of that sub section, must be taken to mean the percentage amount deductible on the income received by the contractor under the contract and not on the sum credited to the account of or paid to the contractor in pursuance of the contract.
These arguments were, however, strongly refuted by Dr. section Narayan, the learned counsel for the Revenue.
It is how, the question mentioned at the outset needs our decision.
Section 194C(1) of the Income Tax Act on the proper construction of which the decision on the aforesaid question should necessarily rest, runs thus: '194C(1).
Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and (a) the Central Government or any State Government; or (b) any local authority; or (c) any corporation established by or under a Central, State or Provincial Act; or (d) any company , or (e) any co operative society , or (f) any authority, constituted in India by or under any law, 543 engaged either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both; or (g) any society registered under the (21 of 1860) or under any law corresponding to that Act in force in any part of India; or (h) any trust; or (i) any University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the (3 of 1956 , shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to two per cent of such sum as income tax on income comprised therein.
" No ambiguity is found in the language employed in the subsection.
What is contained in the sub section, as appears from its plain reading and analysis admit of the following formulations: (1) A contract may be entered into between the contractor and any of the organisations specified in the sub section.
(2) Contract in Formulation 1 could not only be for carrying out any work but also for supply of labour for carrying out any work.
(3) Any person responsible for paying any sum to a contractor in pursuance of the contract in Formulations 1 and 2, could credit that sum to his account or make its payment to him in any other manner.
(4) But, when the person referred to in Formulation 3 either credits the sum referred to therein to the account 544 of or pays it to the contractor, he shall deduct out of that sum an amount equal to two per cent as income tax on income comprised therein.
Thus, when the percentage amount required to be deducted under the sub section as income tax is on the sum credited to the account of or paid to a contractor in pursuance of a contract for carrying out a work or supplying labour for carrying out a work, of any of the organisations specified therein, there is nothing in the sub section which could make us hold that the contract to carry out a work or the contract to supply labour to carry out a work should be confined to 'works contract ' as was argued on behalf of the appellant.
We see no reason to curtail or to cut down the meaning of plain words used in the Section.
"Any work" means any work and not a 'works contract", which has a special connotation in the tax law.
Indeed, in the sub section, the 'work ' referred to therein expressly includes supply of labour to carry out a work.
It is a clear indication of legislature that the 'work ' in sub section is not intended to be confined to or restricted to 'works contract '. 'Work ' envisaged in the sub section, therefore, has wide import and covers 'any work ' which one or the other of the organisations specified in the sub section can get carried out through a contractor under a contract and further it includes obtaining by any of such organisations supply of labour under a contract with a contractor for carrying out its work which, would have fallen outside the 'work ', but for its specific inclusion in the sub section.
In Brij Bhushan (supra) this Court was concerned with the question whether the cost of materials supplied by the Government for being used in execution of works is liable to be taken into consideration while estimating the income or profits of a contractor.
That question was answered by this Court, thus: "It is true that ordinarily when a works contract is put through or completed by a contractor the income or profits derived by the contractor from such contract is determined on the value of the contract as a whole and cannot be determined by considering several items that go to form such value of the contract but in our view where certain stores/material is supplied at fixed rates by the Department to the Contractor solely for being used or 545 fixed or incorporated in the works undertaken on terms and conditions mentioned above, the real total value of the entire contract would be the value minus the cost of such stores/material so supplied.
Therefore, since no element of profit was involved in the turnover represented by the cost of stores/material supplied by the M.E.S. to the assessee firms, the income or profits derived by the assessee firms from such contracts will have to be determined on the basis of the value of the contracts represented by the cash payments received by the assessee firms from the M.E.S. Department exclusive to the cost of the material '/stores received for being used, fixed or incorporated in the works undertaken by them.
" The above decision cannot be of any help to the appellant for it does not lay down that the percentage amount deductible under section 194C(1) should be out of the income of the contractor from the sum or sums credited to the account of or paid to him.
The words in the sub section 'on income comprised therein ' appearing immediately after the words deduct an amount equal to two per cent of such sum as income tax ' from their purport, cannot be understood as the percentage amount deductible from the income of the contractor out of the sum credited to his account or paid to him in pursuance of the contract.
Moreover, the concluding part of the sub section requiring deduction of an amount equal to two per cent of such sum as income tax, by use of the words 'on income comprised therein ' makes it obvious that the amount equal to two per cent of the sum required to be deducted is a deduction at source.
Indeed, it is neither possible nor permissible to the payer to determine what part of the amount paid by him to the contractor constitutes the income of the latter.
It is not also possible to think that the Parliamer ' could have intended to cast such impossible burden upon the payer nor could it be attributed with the intention of enacting such an impractical and unworkable provision.
Hence, on the express language employed in the sub section, it is impossible to hold that the amount of two per cent required to be deducted by the payer out of the sum credited to the account of or paid to the contractor has to be confined to his income component, out of that sum.
There is also nothing in the language of the sub section which permits exclusion of an amount paid on behalf of the Organisation to the contractor according to clause 13 of the terms and conditions of the contract in reimbursement of the amount 546 paid by him to workers, from the sum envisaged therein, as was suggested on behalf of the appellant.
For the foregoing reasons, our decision on the question under consideration, is held in the affirmative and in favour of the Revenue.
In the result, this appeal fails and is dismissed directing the appellant to pay the costs of the respondent the Revenue in this appeal.
Advocate 's fee is fixed at Rs 3000.
T.N.A. Appeal dismissed. [/INST] The appellant Company issued a letter to its Contractor containing the terms and conditions of a contract of loading packed cement bags from its Packing Plants Into wagons or trucks.
Under Clause 12 there was a stipulation that the Contractor shall be paid a sum for his work at a flat rate of 41 paise for each tonne of cement handled In Packing Plant No.1 and 30 paise for each tonne of cement handled in Packing Plant No.2 Clause 13 thereof, which contained a recital that the rate of loading in Clause 12 had been worked out on the basis of daily basic wages of Rs.2.35 paise, DA of Rs.1.21 paise and H.R.A of Rs.0.50 paise per day per worker, stipulated a terms of reimbursement by the appellant to the Contractor of the difference in DA over the amount of Rs.1.21 paise and annual increment etc.
payable from mouth to month to every worker by him.
The Contractor carried out his work and the appellant made payments of the sums payable to him under the contract.
But no deductions of tax were made under Section 194C(1) of the Income Tax Act, 1961.
The Income Tax Officer served two notices One in respect of assessment years 1973 74 and 1974 75 and the other for 1974 75 to 1977 78 on the principal officer of the appellant Company to show cause as to why action should not be taken against the appellant for non compliance with Section 194C(1).The appellant filed a Writ Petition before the High Court of Patna seeking the quashing of the notices but the same was dismissed.
In appeal to this Court it was contended on behalf of the appellant 538 539 that (1) the 'work ' for the carrying of which the sum is required to be credited to the account of or paid to a Contractor under Section 194C(1) of, the Act ' is only a 'works contract ' and hence deduction "under that sub section could arise only to the extent where the sum credited to the account of or paid to a Contractor for, executing such works contract ' is comprised of the element of Income of the Contractor, (2) that the words 'on income.
comprised therein ',appearing immediately after the words ' deduct an amount equal to two per cent of such sum as income tax in the concluding part of the sub section must be taken to mean the percentage amount deductible on the Income received by the Contractor under the contract and not on the sum credited 'to the account of 'or paid to the Contractor.
Dismissing the appeal, this Court, HELD. 1.
Them is nothing fit sub section (1) of Section 194C to show that the contract to carry out a work or the contract to supply labour to carry out a work should be confined to 'works contract '.There is no mason to curtail or to cut down the meaning of plain words used in the Section.
.Any work ' means any work and not &."works contract ', which has a special connotation in the tax law. 'Work ' envisaged In the sub section, therefore has.
a wide import and covers 'any work ' which one or the other of the organisations specified in the sub section can get carried out through a Contractor under a contract and further It includes obtaining by any of such organisations supply of labour under a contract with a Contractor for carrying out its work which, would have fallen outside the 'work ', but forks specific inclusion in the sub section.
[544 B E] Brij Bhushan Lal Parduman Kumar etc.
vs C.I. T., Haryana, Himachal Pradesh and New Delhi [1979] 2 S.C.R. 16, distinguished.
The words in the sub section 'on income comprised therein ' appearing Immediately after the words 'deduct an amount equal to two per cent of such sum as income tax ' from their purport, cannot be understood as the percentage amount deductible from the income of the Contractor out of the sum credited to his account or paid to him in pursuance of the co Moreover the concluding part of the sub section requiring deduction of an amount equal to two per cent of such sum as income tax by, use of the words 'on income comprised therein ' makes It obvious that the amount equal to two per cent of the sum required to be deducted Is a 540 deducts at source.
Hence on the express language employed in the sub section, it, is impossible to hold that the amount of the two per cent required to be deducted by the prayer out of the sum credited to the account of or paid to the Contractor has to be confined to his income component out of that sum, [545 D G] 2.1.
There is also nothing in the language of the sub section which permits exclusion of, an amount paid on behalf of the organisaiton to the Contractor according to, the termsand conditions ofthe contract in reimbursement, of.
the amount paidby to workers,from, the sum envisaged therein.
[545 G H, 546 A] </s> |
<s>[INST] Summarize the following judgement: (C) No. 1237 of 1988.
(Under Article 32 of the Constitution of India).
P.P. Rao and Ms. K Amreshwari, B. Rajeshwar Rao and Vimal Dave for the Petitioners.
V.R. Reddy, Addl.
Solicitor General, K. Madhaya Reddy, G. Prabhakar, B. Kanta Rao, A. Ranganathan and A.V. Rangam for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
The petitioners and respondents 4 to 16 are District and Sessions Judges in the State of Andhra Pradesh.
The petitioners are direct recruits whereas the respondents were promoted from the Subordinate judiciary.
The respondents were initially appointed on temporary basis in the year 1978/1979 but they were made substantive in the year 1983.
The petitioners who were appointed substantively in the year 1981 claim seniority over the respondents by way of this petition under Article 32 of the Constitution of India.
The recruitment to the Andhra Pradesh Higher Judicial Service (the Service) is governed by the Rules called "The Andhra Pradesh State Higher Judicial Service Special Rules" (the Special Rules).
Rules 1, 2, 4 and 6 of the Special Rules which are relevant are as under: "Rule 1.
Constitution: The service shall consist of the following categories: 550 Category 1 : District and Sessions Judges 1st Grade.
Category II : District and Sessions Judges, Second Grade including Chairman, Andhra Pradesh Sales Tax Appellate Tribunal, Chief Judge, City Civil Court, Additional Chief Judge, City Civil Court, Chief Judge, Court of small Causes, Chief City Magistrate, Chairman, Tribunal for Disciplinary Proceedings, Presiding Officers, Labour Courts and Addl.
District and Sessions Judges.
Rules 2.
Appointment : (a) Appointment to Category 1 shall be made by promotion from Category II and appointment to Category II shall be made: (i) by transfer from among: (a) Sub Judges in the Andhra State Judicial Service; or in the Hyderabad State Judicial Service; and (ii) by direct recruitment from the Bar: Provided that 33 1/3% of the total number of permanent posts shall be filed or reserved to be filled by direct recruitment.
Explanation: In the determination of 33 1/3% of the total number of permanent posts, fractions exceeding one half shall be counted as one and other fractions shall be disregarded.
(b) All promotions shall be made on grounds of merit and ability, seniority being considered only when merit and ability are approximately equal.
Rule 4.
Probation: Every person appointed to Category II otherwise than by transfer, shall, from the date on which he joins duty be on probation for a total period of one year on duty.
Rule 6.
Seniority: The seniority of a person appointed to Category 1 or Category 2 shall be determined with refer 551 ence to the date from which he was continuously on duty in that category.
" We may briefly notice the scheme of the Special Rules.
Rule 1 constitutes the Service.
Category 1 consists of District and Sessions Judges ' 1st grade and Category II consists of District and Sessions Judges Second grade.
Rule 1 does not say that Service shall consist of only permanent posts.
All the posts designated as District and Sessions Judges Second grade under Category II are part of the service under Rule 1.
In other words, as and when a post of District and Sessions Judge Second grade is created permanent or temporary it becomes part of the Service under Rule 1 of the special Rules.
Rule 2 provides the method of appointment.
Appointment to Category 1 is from Category II.
Appointment to Category II is from two sources.
By transfer from amongst the Subordinate Judges and by direct recruitment from the Bar.
Proviso to Rule 2 states that 33 1/3% of the total number of permanent posts shall be filled or reserved to be filled by direct recruitment.
All the posts of District and Sessions Judges Second grade are part of the Service but quota for the direct recruits is provided only in the permanent posts.
Rule 6 of the Rules provides for the fixation of seniority.
Under Rule 6 the seniority of persons appointed to Category 1 or Category II posts is fixed on the basis of continuous length of service in their respective posts.
On the plain reading of the Special Rules the salient features of the Service can be culled out as under: 1.
Rule 1 provides for the constitution of the Service.
All the posts of District and Sessions Judges Second grade created from time to time are part of the Service.
The natural corollary is that the Service consists of permanent as well as temporary posts.
The recruitment to Category II of the service is by transfer from amongst the Subordinate Judges and also by direct recruits from the Bar.
33 1/3% of the total number of permanent posts in Category II of the Service are to be filled by way of direct recruitment.
The seniority under Rule 6 is to be determined with reference to the date from which a person is continuously on duty.
Whether the person 552 is continuously on duty against a temporary post or permanent post is of no consequence.
A person is entitled to the fixation of his seniority on the basis of continuous length of service rendered either against permanent post or temporary post.
The three petitioners were appointed as District and Sessions Judges Second grade by direct recruitment on October 12, 1981.
Petitioners 1 and 2 joined service on October 23, 1981 and petitioner 3 on October 30, 1981.
Respondents 4 to 16 were appointed District and Sessions Judges Second grade by transfer from amongst the Subordinate Judges during the years 1978/79.
It is not disputed that permanent vacancies in their quota became available in the year 1983.
We, therefore, proceed on the basis that the petitioners were appointed substantive members of the Service earlier to respondents 4 to 16.
We may at this stage notice Rule 10(a)(i) of the Andhra Pradesh State and Subordinate Service Rules (the State Rules).
The State Rules are general rules which are applicable to all the services in the State of Andhra Pradesh.
Needless to say that to the extent the Special Rules are applicable to the Service the State Rules are excluded.
Rule 10(a)(i) of the State Rules is as under: "10.
Temporary appointment.
(a)(i) Where it is necessary in the public interest to fill emergently a vacancy in the post borne on the cadre of a service, class or category and if the filling of such vacancy in accordance with the rules is likely to result in undue delay, the appointing authority may appoint a person temporarily otherwise than in accordance with the said rules.
" Mr. P.P. Rao, learned counsel for the petitioners has raised the following contentions for our consideration: 1.
That the Service consists of only permanent posts under the Special Rules.
There is no provision under the Special Rules for adding temporary posts to the cadre.
The appointment of respondents to the posts of District and Sessions Judges Second grade on temporary basis can at best be treated under rule 10(a)(i) of the State Rules.
553 2.
The temporary service rendered by respondents.4 to 16 being outside the cadre cannot be counted towards seniority.
Proviso to Rule 2 and Rule 6 of the Special Rules have to be read together and doing so the permanent vacancies having been made available for respondents 4 to 16 in the year 1983 their service prior to that date cannot be counted towards seniority.
Before dealing with Mr. Rao 's contentions, we may notice two preliminary contentions raised by Mr. K. Madava Reddy, learned counsel for the respondents.
Mr. Madava Reddy has invited our attention to the judgment of a Division Bench of Andhra Pradesh High Court in T.H.B. Chalapathi and others vs High Court of Andhra Pradesh and others, Writ Petition Nos.
1968/82, 52/83 and 12282/85 decided on December 28, 1985.
Those writ petitions were filed before the Andhra Pradesh High Court by the direct recruits to Category II of the Service claiming seniority over the persons who were appointed to category 11 on temporary basis earlier to them.
Similar questions were raised as are being raised by Mr. P.P. Rao before us.
By a well reasoned judgment the High Court rejected all the contentions of the direct recruits and dismissed the writ petitions.
It is not disputed that Special Leave Petition No.1035 of 1986 against the said judgment was dismissed by this Court on January 30, 1988.
Mr. Madava Reddy plausibly contends that all the contentions which are being raised by the petitioners in this Court, having been rejected by the High Court and special leave petition against the judgment of the High Court having been dismissed by this Court the same cannot be agitated once over again.
Mr. Madava Reddy then contended that the petitioners were appointed in the years 1981 and since then till the year 1988 twelve seniority lists have been published showing the petitioners below respondents 4 to 16.
At no point of time they challenged the seniority lists in the Court.
Even when the writ petitions filed by Chalapathi and others were pending they did not intervene before the High Court.
The petitioners, according to Mr. Madava Reddy, are guilty of gross delay and latches and as such are not entitled to get relief by way of this petition under Article 32 of the Constitution of India.
554 We see considerable force in both the contentions raised by Mr. Madava Reddy.
We are, however, of the view that it would be in the larger interest of the Service to dispose of this petition on merits.
We see no force.
in the contention of Mr. Rao that the Service consists of only permanent posts under the Special Rules.
We have already interpreted Rule 1 to mean that the Service under the Special Rules consists of all the posts permanent and temporary which have been designated as District and Sessions Judges Second grade.
Even otherwise in the absence of any prohibition under the Special Rules the State Government can always create temporary posts as additions to the cadre.
Rule 10(a)(i) of the State Rules has no application to the Service which is governed by the Special Rules.
Rule 10(a)(i) provides for emergency appointments made on stop gap basis to meet a temporary exigency.
Apart from that the temporary appointments under the said Rules are made without following the procedure prescribed under the Rules governing the relevant service.
The appointments of respondents 4 to 16, on the other hand, Were made under Rule 2 of the Special Rules by the State Government in consultation with the High Court.
We are of the view that the Special Rules provide a complete scheme for the appointment and seniority of the members of the Service.
Rule 10(a)(i) of the State Rules has no application to the Service Constituted under the Special Rules.
We, therefore, reject the contention raised by Mr. Rao.
Having taken the view that the Service under the Special Rules consists of permanent as well as temporary posts the second contention of Mr. Rao looses its ground.
Temporary, posts of District and Sessions Judges Second grade being part of the Service the seniority has to be counted on the basis of length of service including the service against a temporary post.
The third contention of Mr. Rao is mentioned to be rejected in view of Rule 6 of the Special Rules.
Rule 6 of the Special Rules is in no way dependent on proviso to Rule 2 of the Special Rules.
Both are to be operative independently.
In the scheme of the rules the seniority rule is not dependent on the quota Rule.
Quota has been provided for the direct recruits only against permanent posts.
The seniority rule permits the counting of total period of service from the date a person is on duty against a 555 post in the category.
Even though, the petitioners were appointed substantively to the service earlier to respondents 4 to 16 but in view of Rule 6 they cannot be declared senior on the basis of continuous length of service against temp orary as well as permanent posts respondents 4 to 16 have been rightly given seniority above the petitioners.
We, therefore, find no force in any of the contentions raised by Mr. Rao.
The writ petition is consequently dismissed.
No costs.
N.V.K. Petition dismissed. [/INST] Recruitment to the Andhra Pradesh Higher Judicial Service is governed by "The Andhra Pradesh State Higher Judicial Service Special Rules".
Rule 1 constitutes the service.
Category 1 consists of District and Sessions Judges 1st grade and Category 11 consists of District and Sessions Judges, Second Grade.
Appointment to Category 1 is from Category 11.
Appointment to Category 11 is from two sources by transfer from amongst the Subordinate Judges and by direct recruitment from the Bar.
The petitioner were direct recruits whereas respondents 4 to 16 were promoted from the Subordinate judiciary.
The respondents were Initially appointed on temporary basis in the yew 1978/1979 but they were made substantive in the year 1983.
The petitioners who were appointed substantively in the year 1981 claimed seniority over the said respondents, and riled the Writ Petition under Article 32 of the Constitution of India for relief.
It was contended on their behalf that: (1) The Service consists of only permanent posts, there is no provision under the Special Rules for adding temporary posts to the cadre, consequently the appointment of respondents 4 to 16 to the post of District and Sessions Judges, Second Grade on temporary basis can at best be treated under Rule 10(a)(i) of the Andhra Pradesh State and Subordinate Service Rules.
(2) The temporary service rendered by the respondents 4 to 16 being outside the cadre cannot be counted towards seniority.
(3) Porviso to Rule 2 and Rule 6 of the Special Rules have to be read together, and as such the permanent vacancies having been made available for them in the year 1983 their service 548 prior to that date cannot be counted towards seniority.
The respondents constested the writ petition by contending that the petitioners were appointed in the year 1981 and since then till the year 1988, twelve seniority lists have been published showing the petitioners below respondents 4 to 16, and at no point of time they challenged the seniority lists in the Court.
Even when the Writ Petition T.H.B. Chalapathi & Ors.
vs High Court of Andhra Pradesh & Ors., was pending in the High Court they did not intervene.
The petitioners were thus guilty of gross delay and latches and as such are not entitled to get relief in the Writ Petition.
Dismissing the writ petition, this Court, HELD: 1.
(i) Rule 1 has to be interpreted to mean that the service under the Special Rules consists of all the posts permanent and temporary which have been designated as District and Sessions Judge Second Grade.
Even otherwise in the absence of any prohibition under the Special Rules, the State Government can always create temporary posts as addi tions to the cadre.
[554 B] (ii) Rule 10(a)(i) of the Andhra Pradesh State and Subordinate Service Rules has no application to the Andhra Pradesh Higher Judicial Service which is governed by the Special Rules.
Rule 10(a)(i) provides for emergency appointments made on stop gap basis to meet a temporary exigency.
Apart from that the temporary appointments under the said Rules are made without following the procedure prescribed under the Rules governing the relevant Service.
[554 C D] In the instant case, the appointments of respondents 4 to 16 were made under Rule 2 of the Special Rules by the State Government in consultation with the High Court.
The Special Rules provide a complete scheme for the appointment and seniority of the members of the Service.
[554 D] 2.
Temporary posts of District and Sessions Judges Second Grade being part of the Service, the seniority has to be counted on the basis of length of service including the service against the temporary posts.
[554 F] 3.
Rule 6 of the Special Rules is in no way dependent on the proviso to Rule 2 of the Special Rules.
Both are to be operative independently.
In 549 the scheme of the rules, the seniority rule is not dependent on the quota Rule.
Quota has been provided for the direct recruits only against permanent posts.
The seniority rule permits the counting of total period of service from the date a person is on duty against a post in the category.
[554 G H] In the instant case, even though the petitioners were appointed substantively to the service earlier to respondents 4 to 16 but in view of Rule 6 they cannot be declared senior on the basis of continuous length of service.
Respondents 4 to 16 have been rightly given seniority above the petitioners.
[555 A] </s> |
<s>[INST] Summarize the following judgement: minal Appeal Nos.
375 & 376 of 1985.
From the Judgment and Order dated 17.5.1983 of the Patna High Court in Criminal Misc.
1931/83 and 9240 of 1982.
S.N. Misra, Manish Misra and P.C. Kapur for the Appellants.
Mrs. K. Amareswari, C.V.S. Rao, A.D.N. Rao and S.N. Jha for the Respondents.
J The appellants on the relevant date, were managing director and directors of a Public Limited Company registered as M/s Bihar Cable and Wire Industries Limited (hereinafter referred to as "the Company").
A case was instituted by the Central Bureau of Investigation (hereinafter referred to as "the CBI") against the appellants and others on basis of a complaint made by the then Deputy Secretary, Ministry of Industrial Development and Company Affairs, Government of India.
It was alleged that after the registration of the company aforesaid as a Public Limited Company, the appellants as managing director and directors issued prospectus inviting public subscriptions of 42,000 equity shares and 3,000 preference shares.
It was given out by the appellants to the investors that application was being made to the Calcutta Stock Exchange for enlisting the shares of the company for official quotation.
Such application which was made on behalf of the company was rejected by the stock 702 exchange.
In spite of the rejection the share money collected from different investors was held by the appellants and none of the share holders were either informed or were repaid.
It was also alleged that money lying in the bank, on account of the share applications, were transferred to another account of the Company.
The circumstances were pointed out in the complaint made to the CBI as to how the acts of the appellant, clearly indicated their dishonest intentions to convert the share application money for their own benefit, and as such they had committed the offence under section 409 read with section 405 of the Penal Code.
After investigation of the allegations made in the complaint aforesaid the CBI submitted a chargesheet against the appellants along with some others for their trial for the offence under section 409 of the Penal Code.
When the Special Judicial Magistrate, CBI Cases, Patna, rejected the prayer of the appellants to discharge them, validity of that order was questioned by filing an application under section 482 of the Code of Criminal Procedure.
The High Court rejected the said application.
The criminal proceeding pending against the appellants has been challenged saying that it amounted to an abuse of the process of court because instead of invoking the different provisions of the Companies Act which are meant to cover such situations and to protect the interest of share holders, a prosecution has been launched against the appellants before a Criminal Court for offences under the Penal Code.
It was pointed out that in view of section 69 of the Companies Act all moneys received from the applicants for shares have to be deposited and kept in an account and in event the shares are not issued the moneys so received have to be repaid with interest.
Reference was also made to section 73 of the Act which requires every company intending to offer shares or debentures to the public for subscriptions by the issue of prospectus has to make an application before such issue to one or more recognised stock exchanges, for permission for shares or debentures intended to be so offered to be dealt with in the stock exchange.
All moneys received from applicants in pursuance to the prospectus, has to be kept in a separate bank account until the permission is granted and where permission is not granted, such money has to be repaid within time, in the manner specified and if default is made in complying with the same the company and every officer of the company who is in default is liable to be punished with a fine which may extend to Rs. 5,000.
In other words, the provisions of the Companies Act 703 take care of the investors and they put restrictions on the misbehavior of the promoters and the directors of the Company and for any lapse on their part in such matters, they cannot be summoned to stand trial for offenses under the Penal Code.
It is true that the Companies Act contains provisions regarding the issuance of prospectus, applications for shares and allotment thereof and provides different checks over the misuse of the fund collected from the public for issuance of shares or debentures.
But can it be said that where persons issue prospectus and collect moneys from public assuring them that they intend to do business with the public money for their benefit and the benefit of such public, but the real intention is to do no business other than collecting the moneys from the public for their personal gain, still such persons are immune from the provisions of the Penal Code? Originally the concept of a company implied association of persons for some common object having a juristic entity separate from those of its members.
In due course the gap between the investors in such companies and those in charge of management was widened.
A situation has reached today that in bulk of the companies in which many individuals have property rights as share holders and to the capital of which they have directly or indirectly contributed, have no idea how their contributions are being utilised.
It can be said that modern share holder in many companies has simply become supplier of capital.
The savings and earnings of in dividuals are being utilised by persons behind such corporate bodies, but there is no direct contact between them.
The promoters of such companies are not even known to many investors in shares of such companies.
It is a matter of common experience that in some cases later it transpires to the investors that the promoters had the sole object to form a bogus company and foist it off on the public to the latter 's detriment and for their own wrongful gain.
In this process the public becomes victim of the evil design of the promoters who enrich themselves by dishonest means without there being any real intention to do any business.
From time to time amendments have been introduced in the Companies Act to safeguard the interest of the share holders and to provide regulatory and penal provisions for misuse of the power by those who are in charge of the management of such companies.
But,if the promoters or those in charge of managing affairs of the company are found to have committed offenses like cheating, criminal breach of trust, criminal misappropriation or alike, then whether the only 704 remedy to which the investor is entitled is to pursue under and in accordance with the provisions of the Companies Act? The persons managing the affairs of such company cannot use the juristic entity and corporate personality of the company as a shield to evade themselves from prosecution for offenses under the Penal Code, if it is established that primary object of the incorporation and existence of the company is to defraud public.
But, at the same time, while taking cognizance of alleged offenses in connection with the registration, issuance of prospectus, collection of moneys from the investors and the misappropriation of the fund collected from the share holders which constitute one offence or other under the Penal Code, court must be satisfied that prima facie an offence under the Penal Code has been disclosed on the materials produced before the court.
If the screening on this question is not done properly at the stage of initiation of the criminal proceeding, in many cases, some disgruntled share holders may launch prosecutions against the promoters, directors and those in charge of the management of the company concerned and can paralyse the functioning of such company.
It need not be impressed that for prosecution for offenses under the Penal Code the complainant has to make out a prima facie case against the individuals concerned, regarding their acts and omissions which constitute the different ingredients of the offenses under the Penal Code.
It cannot be overlooked that there is a basic difference between the offenses under the Penal Code and acts and omissions which have been made punishable under different Acts and statutes which are in nature of social welfare legislations.
For framing charges in respect of those acts and omissions, in many cases, mens rea is not an essential ingredient; the concerned statute imposes a duty on those who are in charge of the management, to follow the statutory provisions and once there is a breach of contravention, such persons become liable to be punished.
But for framing a charge for an offence under the Penal Code, the traditional rule of existence of mens rea is to be followed.
In the facts of the present case itself, the prosecution has to prove that the appellants as promoters or directors, had dishonest intention since very beginning while collecting the moneys from the applicants for the shares and debentures or that having collected such moneys they dishonestly misappropriated the same.
The ingredients of the different offenses under the Penal Code need not be proved only by direct evidence; they 705 can be shown from the circumstances of a particular case that the intention of the promoters or the directors was dishonest since very inception or that they developed such intention at some stage, for their wrongful gain and causing wrongful loss to the investors.
All the circumstances and the materials to prove such a charge have to be collected during investigation and enquiry and ultimately have to be produced before the court at the stage of trial for a verdict as to whether the ingredients of offence in question have been established on behalf of the prosecution.
The complaint made by the Deputy Secretary to the Government of India to the CBI mentions different circumstances to show that the appellants did not intend to carry on any business.
In spite of the rejection of the.
application by the Stock Exchange, Calcutta, they retained the share moneys of the applicants with dishonest intention.
Those allegations were investigated by the CBI and ultimately chargesheet has been submitted.
On basis of that chargesheet cognizance has been taken.
In such a situation the quashing of the prosecution pending against the appellants only on the ground that it was open to the applicants for shares to take recourse to the provisions of the Companies Act, cannot be accepted.
It is a futile attempt on the part of the appellants, to close the chapter before it has unfolded itself.
It will be for the trial court to examine whether on the materials produced on behalf of the prosecution it is established that the appellants had issued the prospectus inviting applications in respect of shares of the Company aforesaid with a dishonest intention, or having received the moneys from the applicants they had dishonestly retained or misappropriated the same.
That exercise cannot be performed either by the High Court or by this Court.
If accepting the allegations made and charges leveled on their face value, the Court had come to conclusion that no offence under the Penal Code was disclosed the matter would have been different.
This court has repeatedly pointed out that the High Court should not while exercising power under section 482 of the Code usurp the jurisdiction of the trial court.
The power under section 482 of the Code has been vested in the High Court to quash a prosecution which amounts to abuse of the process of the court.
But that power cannot be exercised by the High Court to hold a parallel trial, only on basis of the statements and documents collected during investigation or enquiry, for purpose of expressing an opinion whether the accused concerned is likely to be punished if the trial is allowed to proceed.
706 The appeals are accordingly dismissed.
The trial court should proceed with the case in accordance with law.
We make it clear that we have not expressed any opinion on the merit of.
charges leveled against the appellants.
G.N. Appeals dismissed. [/INST] The appellant, a Public Limited Company issued prospectus Inviting public subscriptions of equity shares and preference shares.
The prospectus stated that application was being made to the Stock Exchange for enlisting the shares of the Company for official quotation.
Though the application was rejected by the Stock Exchange, the share money collected from different investors was held by the appellants and the share holders were neither informed of the rejection by the Stock Exchange nor paid back the share money.
Further, the money was transferred to another account of the Company.
The Secretary, Industrial Development and Company Affairs lodged a complaint with the CBI against the Company.
CBI started investigations and submitted a charge sheet against the appellant along with some others for trial for the offence under s.409 IPC.
The Special Judicial Magistrate, CBI cases, rejected the prayers made before it discharge the appellants.
The validity of the said order was challenged by the appellants by filing an application under S.482 Cr.
P.C. and the High Court rejected the same.
Hence these appeals.
It was contended that the provisions of the Companies Act took care of the investors by putting restrictions on the misbehavior of the promoters and the Directors of the Company for any lapse on their part In such matters and they could not be summoned to stand trial for offenses under the Penal Code.
Dismissing the appeals, this Court, 700 HELD:1.1.
The modern share holder in many companies has simply become supplier of capital.
The savings and earnings of individuals are being utilised by persons behind such corporate bodies, but there is no direct contact between them.
The promoters of such companies are not even known to many investors in shares of such companies.
In some cases later it transpires to the investors that the promoters had the sole object to form a bogus company and foist it off on the public to the latter 's detriment and for their own wrongful gain.
In this process, the public becomes victim of the evil design of the promoters who enrich themselves by dishonest means without there being any real intention to do any business.
[703 D G] 1.2.From time to time amendments have been introduced in the Companies Act to safeguard the interest of the share holders and to provide regulatory and penal provisions for misuse of the power by those who are in charge of the management of such companies.
The persons managing the affairs of such company cannot use the juristic entity and corporate personality of the company as a shield to evade themselves from prosecution for offenses under the Penal Code, if it is established that the primary object of the incorporation and existence of the company is to defraud public.
[703 G H; 704 A B] 2.1.While taking cognizance of alleged offenses in connection with the registration, issuance of prospectus, collection of moneys from the investors and the misappropriation of the fund collected from the shareholders which constitute one or the other offence under the Penal Code, court must be satisfied that prima facie an offence under the Penal Code has been disclosed on the materials produced before the court.
[704 C] 2.2.In the present case, the prosecution has to prove that the appellants as promoters or directors had dishonest intention since the very beginning while collecting the moneys from the applicants for the shares and debentures or that having collected such moneys they dishonestly misappropriated the same.
[704 G] 2.3.The prosecution pending against the appellants cannot be quashed only on the ground that it was open to the applicants for shares to take recourse to the provisions of the Companies Act.
[705 D] 3.The power under section 482 Cr.
P.C. has been vested in the High Court to quash a prosecution which amounts to abuse of the process of 701 the court.
But that power cannot be exercised by the High Court to hold a parallel trial, only on the basis of the statements and documents collected during investigation or enquiry, for the purpose of expressing an opinion whether the accused concerned is likely to be punished if the trial is allowed to proceed.
[705 G H] 4.It will be for the trial court to examine whether on the materials produced (in behalf of the prosecution it is established that the appellants had issued the prospectus inviting applications in respect of shares of the Company with a dishonest intention or having received the moneys from the applicants they had dishonestly retained or misappropriated the same.
That exercise cannot be performed either by the High Court or by this Court.
[705 E F] </s> |
<s>[INST] Summarize the following judgement: minal Appeal No. 818 of 1985.
From the Judgment and Order dated 4.7.1985 of the Kerala High Court in Criminal Appeal No. 251 of 1982.
P.S. Poti and Ms. Malini Poduval for the Appellant.
M.T. George for the Respondent.
The Judgment of the Court was delivered by N.P. SINGH, J.
The appellant along with others was put on trial for offenses under sections 302 read with 149, 148, 323 of the Penal Code on the charge of committing the murder of Moideen Kutty (hereinafter referred to as the deceased).
The Trial Court on consideration of the 695 materials on record came to the conclusion that the charges leveled against the accused persons have not been established, beyond all reasonable doubt and on that finding acquitted the appellant as well others.
On appeal being filed on behalf of the State of Kerala the High Court convicted the appellant under section 302 of the Penal Code and sentenced him to undergo rigorous imprisonment for life.
So far another accused Alavi who had been acquitted by the Trial Court was also convicted by the High Court under section 323 of the Penal Code and sentenced to pay a fine of Rs. 250 and in default thereof to suffer simple imprisonment for a term of one month.
The acquittal of other accused persons was affirmed by the High Court by dismissal of the appeal against them.
The case of the prosecution is that on 16.9.1980 Mammed Kutty at 6.00 A.M. in the morning pelted stones at the house of the deceased.
At about 12.00 in the noon while Mammed Kutty and his brother Abdulla Kutty were passing in front of the house of the deceased, a protest was made by the deceased in respect of the morning incident.
They denied that any stone had been pelted by them.
It is the further case of the prosecution that at about 2 P.M. while the deceased was sitting with his wife (PW4) and others on the varandah of his house, five persons including the appellant came to his courtyard and challenged him to come out, if he wanted to beat aforesaid Mammed Kutty and Abdulla.
The deceased stepped out into his courtyard and asked the accused persons not to create a scene.
At this the appellant and the other accused (since acquitted) gave some blows to the deceased on his hand.
Thereafter the deceased raised his hand to give a blow to the appellant.
At this very moment, the appellant took out a dagger from his waist and gave an injury on the upper part of the chest of the deceased near the left shoulder and above the armpit.
The deceased ran towards the house of PW1 and fell on the varandah.
Thereafter the accused persons escaped.
The victim was removed to the Medical Hospital Calicut, where he was examined by PW9.
But soon thereafter he expired.
The First Information Report was lodged at 7.15 P.M.
After investigation the charge sheet was submitted against five accused persons.
At the trial prosecution examined four eye witnesses PW1 to PW4.
The doctor who held the post mortem examination was examined as PW8.
He found only one incised penetrating wound vertically placed on the front of left shoulder above the left armpit 'tailing 6 cm.
in length running towards from the lower sharp end.
" According to his opinion, "The an 696 died because the artery was cut. .
This injury became dangerous only because it cut the artery. .
In the cross examination PW8 stated that it was impossible to cause an injury like one which was found on the person of the victim by the assailant standing in front of the victim.
He also stated that the tailing of the injury show that either the knife was dragged after stabing or that the injury was caused during the course of the struggle.
According to him, if the accused had given a direct blow, as is normally done, there would not have been the tailing of the injury.
The learned counsel appearing for the appellant placed the statement made in the First Information Report, the evidence of the eye witnesses, in connection with the morning incident of pelting of stones, to show that it was a concoction and none had pelted any stone on the house of the deceased.
According to the learned counsel, if this part of the prosecution case is disbelieved then it shall have a bearing on the main occurrence itself.
It was also pointed out that the prosecution has suppressed real manner of occurrence in as much as one Abdulla on the side of the accused persons was first assaulted by the prosecution party on the same day at about 1.30 P.M. and he was hospitalised after having received the injuries.
That incident was an integral part of the occurrence which has not been disclosed by the prosecution.
In this connection our attention was drawn to the evidence of DW1 who has stated that he had examined the injuries on the person of one Abdulla on 16.9.1980 at 4.30 P.M. and found three injuries on his person, (i) A contusion on the left shoulder 4 x 2 cm, (ii) abrasion below the right collar bone 3 x 5 cm.
and (iii) injury on the outer side of the left ankle 4 x 3 cm.
He has also stated that the said Abdulla had alleged that he had been assaulted with a wooden stick at 1.30 P.M. the same day.
The Trial Court while acquitting the accused persons has attached great importance to the injury found on the person of aforesaid Abdulla and has drawn adverse inference against the prosecution case.
The High Court has rightly pointed out that merely non disclosure of the aforesaid superficial injuries on the person of Abdulla even if those injuries had been caused in the same occurrence, shall not in any manner affect the prosecution case: It is well settled that if the evidence of the eye witnesses are held to be reliable and inspire confidence then the accused cannot be acquitted solely on the ground that some superficial injuries found on the person of the accused concerned, had not been explained by the prosecution.
697 According to us, if the evidence of four eve witnesses including the evidence of the son and the wife of the deceased are accepted as reliable and trust worthy then the prosecution case cannot be rejected merely on .the ground that the incident of pelting of the stones on behalf of the accused in the early morning had not been proved or established or that some minor injuries on the person of Abdulla caused in the same occurrence had not been disclosed and explained by the prosecution.
So far the four eve witnesses are concerned they have been named in the First Information Report.
The First Information Report was lodged at 7.15 P.M. the same evening, within two hours of the death of the victim.
In the First Information Report the details of the occurrence was men tioned.
The version disclosed in the First Information Report has been supported by the eye witnesses before the Court.
The learned counsel appearing for the appellant could not point out any reason why their evidence against the appellant should not be accepted.
It may be pointed out that in the First Information Report itself PW1, the informant, stated that this appellant came to the house of the deceased and challenged him as to who was there to beat Abdulla and Muhammed Kutty.
He further stated that having heard this the deceased moved towards them and asked them to go back.
At that very moment this appellant and the other co accused Alavi gave him blows on his hand.
Thereafter the deceased tried to give counter blow to the appellant.
Then the appellant took out a knife from his waist and gave a blow from the said knife, to the deceased at his left collar bone.
The prosecution very fairly admitted that accused persons were not carrying any weapon in their hands and during the protest made, a sudden quarrel and fight took place between the prosecution party and the accused persons.
Even at trial evidence the eve witnesses have admitted this part of the version and have stated that first the appellant and the other co accused gave blows on the hand of the deceased.
The knife blow was given by the appellant when the deceased was trying to give a counter blow to the appellant.
There is no dispute that the appellant suddenly took out the knife during the course of the quarrel and fight from his waist.
From the evidence of doctor PW8 referred to above it appears that injury aforesaid could not have been caused by the assailant standing in front of the victim.
It could have been caused only during the struggle.
In view of the admitted position that a sudden fight and quarrel preceded the giving of the knife 698 blow by the appellant to the victim which in all probabilities was given not while the victim and the appellant were standing face to face but during a struggle between them, causing tailing of the injury, it shall not be just and proper to hold that appellant had an intention to cause the death of the victim.
Taking the evidence of the witnesses along with circumstances of the case, according to us, the appellant had the knowledge that injury which he was causing was likely to cause death but he had no intention to cause the death of the victim.
In such a circumstances it is not possible to uphold the conviction of the appellant under section 302 of the Penal Code.
Accordingly, the conviction and sentence passed against the appellant under section 302 of the Penal Code are set aside.
The appellant is convicted under section 304 part 11 of the Penal Code and sentenced to undergo rigorous imprisonment for seven years.
The appeal is allowed in part to the extent indicated above.
The bail bond is cancelled.
N.V.K. Appeal partly allowed. [/INST] The appellant along with others was tried for offences under Section 302 read with Sections 148, 149 and 323 of the Indian Penal Code.
The case of the prosecution was that on 16.9.80 Mammed Kutty at 6.00 a.m. in the morning pelted stones at the house of the deceased.
At about 12.00 noon while Mammed Kutty and his brother Abdulla Kutty were passing in front of the house of the deceased, a protest was made by the deceased in respect of the morning incident which was denied.
At about 2.00 p.m. when the deceased was sitting with his wife (PW 4) and others on the varandah of his house, 5 persons including the appellant came to his courtyard and challenged him to come out, if he wanted to beat Mammed Kutty and Abdulla.
The deceased stepped out into his courtyard and asked the accused persons not to create a scene, when the appellant and the other accused gave some blows to the deceased on his hand.
Thereafter the deceased raised his hand to give a blow to the appellant, when the appellant took out a dagger from his waist and gave an injury on the upper part of the chest of the deceased near the left shoulder and above the armpit.
The deceased ran towards the house of PW1 and fell on the varandah.
Therefore, the accused persons escaped.
The victim was removed to the Medical Hospital where he was examined by PW 9, but soon thereafter expired.
The F.I.R. was lodged at 7.15 p.m. and after investigation the chargesheet was submitted against the five accused persons.
At the trial the prosecution examined 4 eye witnesses, PW1 to PW4, and PW8 the doctor who held the post mortem examination.
693 The trial court on consideration of the materials on record came to the conclusion that the charges leveled against the accused persons had not been established beyond all reasonable doubt, and on that finding acquitted all the accused including the appellant.
Great importance was attached to the injury found on the person of Abdulla and adverse inference was drawn against the prosecution case.
On appeal by the State, the High Court convicted the appellant under Section 302 and sentenced him to undergo rigorous imprisonment for life.
Another accused (Alavi) was convicted under Section 323 of the Penal Code and sentenced to payment of fine of Rs. 250.
The acquittal of the remaining 3 accused persons by the Trial Court was affirmed.
The High Court held that mere non disclosure of the superficial injuries on the person of Abdulla even if those injuries had been caused in the same occurrence, do not in any manner affect the persecution case.
In the appeal to this court it was contended on behalf of the appellants that the statements made in the First Information Report, the evidence of the eye witnesses in connection with the morning incident of pelting of stones, show that it was a concoction and that none had pelted any stone on the house of the deceased, and that if this part of the prosecution case is disbelieved then it has a bearing on the main occurrence itself.
It was further submitted, that the prosecution had suppressed the real manner of occurrence in as much as Abdulla was first assaulted by the prosecution party on the same day at about 130 p.m. and that he was hospitalised after receiving the injuries, reliance being placed on the evidence of DW1 who had stated that he had examined the injuries on the person of Abdulla on 16.9.80 at 430 p.m.
Allowing the appeal in part, this Court, HELD:1.
It is well settled that if the evidence of the eye witnesses is held to be reliable and inspires confidence then the accused cannot be acquitted solely on the ground that some superficial injuries found on the person of the accused concerned, had not been explained by the prosecution.
[696 H] In the instant case, so far as the four eye witness are concerned they have been named in the FIR.
The FIR was lodged at 7.15 p.m., the same evening, within two hours of the death of the victim.
The FIR mentions the 694 details of the occurrence, and the version disclosed therein had been supported by the eye witness before the Court.
No reason has been shown as to why the evidence of these P.Ws should not be accepted.
[697 C] 2.The prosecution has admitted that the accused persons were not carrying any weapon in their hands and during the protest made, a sudden quarrel and fight took place between the prosecution party and the accused persons.
This part of the version had been admitted at the trial by the eye witnesses in their evidence, who also stated that first the appellant and the other co accused gave blows on the hand of the deceased and that the knife blow was given by the appellant when the deceased was trying to give a counter blow to the appellant.
[697 F] In view of the admitted position that a sudden right and quarrel preceded the giving of the knife blow by the appellant to the victim which in all probability was given not while the victim and the appellant were standing face to face but during struggle between them, causing tailing of the injury, it shall not be just and proper to hold that the appellant had an intention to cause the death of the victim, but only knowledge that injury which he was causing was likely to cause death.
In such a circumstance it is not possible to uphold the conviction of appellant under Section 302 of the Indian Penal Code.
It is therefore set aside, and the appellant convicted under Section 304 Part 11 of the Indian Penal Code and sentenced to undergo rigorous imprisonment for 7 years.
[697 H,698 A C] </s> |
<s>[INST] Summarize the following judgement: (Crl.) No. 488 of 1988.
(Under Article 32 of the Constitution of India).
M.S. Ganesh for the Petitioner.
Altaf Ahmed, Addl.
Solicitor General, A.K. Panda and Naresh Kumar Sharma for the Respondents.
The Judgments of the Court were delivered by VERMA, J. A letter dated 14.9.1988 sent to this Court by Smt.
Nilabati Behera alias Lalita Behera, was treated as a Writ Petition under Article 32 of the Constitution for determining the claim of compensation made therein consequent upon, the death of petitioner 's son Suman Behera, aged about 22 years, in police custody.
The said Suman Behera was taken from his home in police custody at about 8 a.m. on 1.12.1987 by respondent No.6, Sarat Chandra Barik, Assistant Sub Inspector of Police of Jaraikela Police Outpost under Police Station Bisra, Distt.
Sundergarh in Orissa, in connection with the investigation of an offence of theft and detained at the Police Outpost.
At about 2 p.m. the next day on 2.12.1987, the petitioner came to know that the dead body of her son Suman Behera was found on the railway track near a bridge at some distance from the Jaraikela railway station.
There were multiple injuries on the body of Suman Behera when it was found and obviously his death was unnatural, caused by those injuries.
The allegation made is that it is a case of custodial death since Suman Behera died as a result of the multiple injuries inflicted to him while he was in police custody; and thereafter his dead body was thrown on the railway track.
The prayer made in the petition is for award of compensation to the petitioner, the mother of Suman Behera, for contravention of the fundamental right to life guaranteed under Article 21 of the Constitution.
The State of Orissa and its police officers, including Sarat Chandra 590 Barik, Assistant Sub Inspector of Police and Constable No.127, Chhabil Kujur of Police Outpost Jeraikela, Police Station Bisra, are impleaded as respondents in this petition.
The defence of the respondents is that Suman Behera managed to escape from police custody at about 3 a.m. on the night between the 1st and 2nd December, 1987 from the Police Outpost Jeraikela, where he was detained and guarded by Police Constable Chhabil Kujur; he could not be apprehended thereafter in spite of a search; and the dead body of Suman Behera was found on the railway track the next day with multiple injuries which indicated that he was run over by a passing train after he had escaped from police custody.
In short, on this basis the allegation of custodial death was denied and consequently the respondents ' responsibility for the unnatural death of Suman Behera.
In view of the controversy relating to the cause of death of Suman Behera, a direction was given by this Court on 4.3.1991 to the District Judge, Sundergarh in Orissa, to hold an inquiry into the matter and submit a report.
The parties were directed to appear before the District Judge and lead the evidence on which they rely.
Accordingly, evidence was led by the parties and the District Judge has submitted the Inquiry Report dated 4.9.1991 containing his finding based on that evidence that Suman Behera had died on account of multiple injuries inflicted to him while he was in police custody at the Police Outpost Jeraikela.
The correctness of this finding and Report of the District Judge, being disputed by the respondents, the matter was examined afresh by us in the light of the objections raised to the Inquiry Report.
The admitted facts are, that Suman Behera was taken in police custody on 1.12.1987 at 8 a.m. and he was found dead the next day on the railway track near the Police Outpost Jeraikela, without being released from custody, and his death was unnatural caused by multiple injuries sustained by him.
The burden is, therefore, clearly on the respondents to explain how Suman Behera sustained those injuries which caused his death.
Unless a plausible explanation is given by the respondents which is consistent with their innocence, the obvious inference is that the fatal injuries were inflicted to Suman Behera in police custody resulting in his death, for which the respondents are responsible and liable.
To avoid this obvious and logical inference of custodial death, the learned Additional Solicitor General relied on the respondent 's defence 591 that Suman Behera had managed to escape from police custody at about 3 a.m. on the night between the 1st and 2nd December, 1987 and it was likely that he was run over by a passing train when he sustained the fatal injuries.
The evidence adduced by the respondents is relied on by the learned Additional Solicitor General to support this defence and to contend that the responsibility of the respondents for the safety of Suman Behera came to an end the moment Suman Behera escaped from police custody.
The learned Additional Solicitor General, however, rightly does not dispute the liability of the State for payment of compensation in this proceeding for violation of the fundamental right to life under Article 21, in case it is found to be a custodial death.
The argument is that the factual foundation for such a liability of the State is absent.
Shri M.S. Ganesh, who appeared as amicus curiae for the petitioner, however, contended that the evidence adduced during the inquiry does not support the defence of respondents and there is no reason to reject the finding of the learned District Judge that Suman Behera died in police custody as a result of injuries inflicted to him.
The first question is: Whether it is a case of custodial death as alleged by the petitioner? The admitted facts are: Suman Behera was taken in police custody at about 8 a.m. on 1.12.1987 by Sarat Chandra Barik, Asstt.
Sub Inspector of Police, during investigation of an offence of theft in the village and was detained at Police Outpost Jeraikela; Suman Behera and Mahi Sethi, another accused, were handcuffed, tied together and kept in custody at the police station; Suman Behera 's mother, the petitioner, and grand mother went to the Police Outpost at about 8 p.m. with food for Suman Behera which he ate and thereafter these women came away while Suman Behera continued to remain in police custody , Police Constable Chhabil Kujur and some other persons were present at the Police Outpost that night; and the dead body of Suman Behera with a handcuff and multiple injuries was found lying on the railway track at Kilometer No.385/29 between Jeraikela and Bhalulata railway stations on the morning of 2.12.1987.
It is significant that there is no cogent independent evidence of any search made by the police to apprehend Suman Behera, if the defence of his escape from police custody be true.
On the contrary, after discovery of the dead body on the railway track in the morning by some railwaymen, it was much later in the day that the police reached the spot to take charge of the dead body.
This conduct of the concerned police 592 officers is also a significant circumstance to assess credibility of the defence version.
Before discussing the other evidence adduced by the parties during the.
inquiry, reference may be made to the injuries found on the dead body of Suman Behera during postmortem.
These injuries were the following: "Extemal injuries (1) Laceration over with margin of damaged face.
(2) Laceration of size 3" x 2" over the left temporal region upto bone.
(3) Laceration 2 ' above mastoid process on the right side of size 1 1/2" x 1/4" bone exposed.
(4) Laceration on the forehead left side of size 1 1/2" x 1/4" upto bone in the mid line on the forehead 1/2" x 1/4" bone deep on the left lateral to it 1" x 1/4" bone exposed.
(5) Laceration 1" x 1/2" on the anterior aspect of middle of left arm, fractured bone protruding.
(6) Laceration 1" x 1/2" x V2" on medial aspect of left thigh 4" above the knee joint.
(7) Laceration 1/2" x 1/2" x 1/2" over left knee joint.
(8) Laceration 1" x 1/2" x 1/2" on the medial aspect of right knee joint.
(9) Laceration 1" x 1/2" x 1/2" on the posterior aspect of left leg, 4" below knee joint.
(10) Laceration 1" ' x 1/4" x 1/2" on the plantar aspect of 3rd and 4th toe of right side.
(11) Laceration of 1" x 1/4" x 1/2" on the dorsum of left foot.
Injury on the neck 593 (1) Bruises of size 3" x 1" obliquely alongwith sternocleidomastoid muscle 1" above the clavical left side (2) lateral to this 2" x 1" bruise (3) and 1" x 1" above the clavial left side (4) posterial aspect of the neck 1" x 1 ' obliquely placed right to mid line.
Right shoulder (a) Bruise 2" x 2", 1" above the right scapula.
(b) Bruise 1" x 1 ' on the tip of right shoulder.
(c) Bruise on the dorsum of right palm 2" x 1".
(d) Bruise extenses surface of forearm left side (e) Bruise on right elbow 4" x 1" (f) Bruise on the dorsum of left palm 2" x 1".
(g) Bruise over left patela 2" x 1".
(h) Bruise 1" above left patel 1" x 1".
(i) Bruise on the right illiac spine 1" x 1/2".
(j) Bruise over left scapula 4" x 1".
(k) Bruise 1" below right scapula 5" x 1".
(l) Bruise 3" medial to inferior angle of right scapula 2"x 1".
(m) Bruise 2" below left scapula of size 4" x 2".
(n) Bruise 2" x 6" below 12th rib left side.
(o) Bruise 4" x 2" on the left lumber region.
(p) Bruise on the buttock of left side 3" x 2".
(q) On dissection found (l) Fracture of skull on right side parietal and occipital bone 6" length. 594 (2) Fracture of frontal bone below laceration 2" depressed fracture.
(3) Fracture of left temporal bone 2" in length below external injury No.2 i.e. laceration 2" above left mastoid process.
(4) Membrane ruptured below depressed fracture, brain matter protruding through the membrane.
(5) Intracraneal haemorrhage present.
(6) Brain lacerated below external injury No.3, 1" x 1/2" x 1/2".
(7) Bone chips present on temporal surface of both sides.
(8) Fracture of left humerous 3 ' above elbow.
(9) Fracture of left femur 3" above knee joint.
(10) Fracture of mendible at the angle mendible both sides.
(11) Fracture of maxillary.
The face was completely damaged, eye ball present, nose lips, cheeks absent.
Maxila and a portion of mendible absent.
No injury was present on the front side of body trunk.
There is rupture and laceration of brain.
" The doctor deposed that all the injuries were caused by hard and blunt object the injuries on the face and left temporal region were postmortem while the rest were ante mortem.
The doctor excluded the possibility of the injuries resulting from dragging of the body by a running train and stated that all the ante mortem injuries could be caused by lathi blows.
It was further stated by the doctor that while all the injuries could not be caused in a train accident, it was possible to cause all the injuries by lathi blows.
Thus, the medical evidence comprising the testimony of the doctor, who conducted the postmortem, excludes the possibility of all the injuries 595 to Suman Behera being caused in a train accident while indicating that all of them could result form the merciless beating given to him.
The learned Additional Solicitor General placed strong reliance ore the written opinion of Dr. K.K. Mishra, Professor & Head of the Department of Forensic Medicine, Medical College, Cuttack, given on 15.2.1988 on a reference made to him wherein he stated on the basis of the documents that the injuries found on the dead body of Suman Behera could have been caused by rolling on the railway track in between the rail and by coming into forceful contact with projecting part of the moving train/engine.
While adding that it did not appear to be a case of suicide, he indicated that there was more likelihood of accidental fall on the railway track followed by the running engine/train.
In our view, the opinion of Dr. K.K. Mishra, not examined as a witness, is not of much assistance and does not reduce the weight of the testimony of the doctor who conducted the postmortem and deposed as a witness during the inquiry.
The opinion of Dr. K.K. Mishra is cryptic, based on conjectures for which there is no basis, and says nothing about the injuries being both anti mortem and post mortem.
We have no hesitation in reaching this conclusion and preferring the testimony of the doctor who conducted the postmortem.
We may also refer to the Report dated 19.12.1988 containing the findings in a joint inquiry conducted by the Executive Magistrate and the Circle Inspector of Police.
This Report is stated to have been made under Section 176 Cr.
P.C. and was strongly relied on by the learned Additional Solicitor General as a statutory report relating to the cause of death.
In the first place, an inquiry under Section 176 Cr.
P.C. is contemplated independently by a Magistrate and not jointly with a police officer when the role of the police officers itself is a matter of inquiry.
The joint finding recorded is that Suman Behera escaped from police custody at about 3 a.m. on 2.12.1987 and died in a train accident as a result of injuries sustained therein.
There was hand cuff on the hands of the deceased when his body was found on the railway track with rope around it.
It is significant that the Report dated 11.3.1988 of the Regional Forensic Science Laboratory (Annexure 'R 8 ', at p. 108 of the paper book) mentions that the two cut ends of the two pieces of rope which were sent for examination do not match with each other in respect of physical appearance.
This finding about the rope negatives the respondents ' suggestion that Suman Behera managed to escape from police custody by chewing off the rope with which he was tied.
It is no necessary for us to refer to the other evidence including 596 the oral evidence adduced during the inquiry, from which the learned District Judge reached the conclusion that it is a case of custodial death and Suman Behera died as a result of the injuries inflicted to him voluntarily while he was in police custody at the Police Outpost Jeraikela.
We have reached the same conclusion on a reappraisal of the evidence adduced at the inquiry taking into account the circumstances, which also support that conclusion.
This was done in view of the vehemence with which the learned Additional Solicitor General urged that it is not a case of custodial death but of death of Suman Behera caused by injuries sustained by him in a train accident, after he had managed to escape from police custody by chewing off the rope with which he had been tied for being detained at the Police Outpost.
On this conclusion, the question now is of the liability of the respondents for compensation to Suman Behera 's mother, the petitioner, for Suman Behera 's custodial death.
In view of the decisions of this Court in Rudul Sah vs State of Bihar and Another, ; , Sebastian M. Hongray vs Union of India and Others, ; and ; , Bhim Singh vs State of J&K [1984] Supp.
S.C.C. 504 and , Saheli, A Women 's Resources Centre and Others vs Commissioner of Police, Delhi Police Headquarters and Others, ; and State of Maharashtra and Others vs Ravikant S.Patil, , the liability of the State of Orissa in the present case to pay the compensation cannot be doubted and was rightly not disputed by the learned Additional Solicitor General.
It ,would, however, be appropriate to spell out clearly the principle on which the liability of the State arises in such cases for payment of compensation and the distinction between this liability and the liability in private law for payment of compensation in an action on tort.
It may be mentioned straightaway that award of compensation in a proceeding under Article 32 by this court or by the High Court under Article 226 of the Constitution is a remedy available in public law, based on strict liability for contravention of fundamental rights to which the principle of sovereign immunity does not apply, even though it may be available as a defence in private law in an action based on tort.
This is a distinction between the two remedies to be borne in mind which also indicates the basis on which compensation is awarded in such proceedings.
We shall now refer to the earlier decisions of this Court as well as some other decisions before further discussion of this principle.
597 In Rudul Sah (supra), it was held that in a petition under Article 32 of the Constitution, this Court can grant compensation for deprivation of a fundamental right.
That was a case of violation of the petitioner 's right to personal liberty under Article 21 of the Constitution.
Chandrachud, C.J., dealing with this aspect, stated as under: "It is true that Article 32 cannot be used as a substitute for the enforcement of rights and obligations which can be enforced effecaciously through the ordinary processes of Courts, Civil and Criminal A money claim has therefore to be agitated in and adjudicated upon in a suit instituted in a court of lowest grade competent to try it.
But the important question for our consideration is whether in the exercise of its jurisdiction under article 32, this Court can pass an order for the payment of money if such an order is in the nature of compensation consequential upon the deprivation of a fundamental right.
The instant case is illustrative of such cases. . ordinary remedy of a suit if his claim to compensation was factually controversial, in the sense that a civil court may or may not have upheld his claim.
But we have no doubt that if the petitioner files a suit to recover damages for his illegal detention, a decree for damages would have to be passed in that suit, though it is not possible to predicate, in the absence of evidence, the precise amount which would be decreed in his favour.
In these circumstances, the refusal of this Court to pass an order of compensation in favour of the petitioner will be doing mere lip service to his fundamental right to liberty which the State Government has so grossly violated.
Article 21 'which guarantees the right to life and liberty will be denuded of its significant content if the power of this Court were limited to passing orders to release from illegal detention.
One of the telling ways in which the violation of that right can reasonably be prevented and due compliance with the mandate of Article 21 secured, is to mulct its violaters in the payment of monetary compensation.
Administrative sclerosis lead 598 ing to flagrant infringements of fundamental rights cannot be corrected by any other method open to the judiciary to adopt.
The right to compensation is some palliative for the unlawful acts of instrumentalities which act in the name of public interest and which present for their protection the powers of the state as shield.
If Civilisation is not to perish in this country as it has perished in some others too well known to suffer mention, it is necessary to educate ourselves into accepting that, respect for the rights of in dividuals is the true bastion of democracy.
Therefore, the State must repair the damage done by its officers to the petitioner 's rights.
It may have recourse against those officers" (pp.513 14) (emphasis supplied) It does appear from the above extract that even though it was held that compensation could be awarded under Article 32 for contravention of a fundamental right, yet it was also stated that 'the petitioner could have been relegated to the ordinary remedy of a suit if his claim to compensation was factually controversial ' and 'Article 32 cannot be used as a substitute for the enforcement of rights and obligations which can be enforced efficaciously through the ordinary processes '.
These observation may tend to raise a doubt that the remedy under Article 32 could be denied 'if the claim to compensation was factually controversial ' and, therefore, optional not being a distinct remedy available to the petitioner in addition to the ordinary processes.
The later decisions of this Court proceed on the assumption that monetary compensation can be awarded for violation of constitutional rights under Article 32 or Article 226 of the Constitution, but this aspect has not been adverted to.
It is, therefore, necessary to clear this doubt and to indicate the precise nature of this remedy which is distinct and in addition to the available ordinary processes, in case of violation of the fundamental rights.
Reference may also be made to the other decisions of this Court after Rudul Sah.
In Sebastian M. Hongray vs Union of India and Others, (1); , , it was indicated that in a petition for writ of habeas 599 corpus, the burden was obviously on the respondents to make good the positive stand of the respondents in response to the notice issued by the court by offering proof of the stand taken, when it is shown that the person detained was last seen alive under the surveillance, control, and command of the detaining authority.
In Sebastian M. Hongray vs Union of India & Ors., (11); , , in such a writ petition, exemplary costs were awarded on failure of the detaining authority to produce the missing persons, on the conclusion that they were not alive and had met an unnatural death.
The award was made in Sebastian M. Hongray II apparently following Rudul Sah, but without indicating anything more.
In Bhim Singh vs State of J&K and Others, , illegal detention in police custody of the petitioner Bhim Singh was held to constitute violation of his rights under Articles 21 and 22(2) and this Court exercising its power to award compensation under Article 32 directed the State to pay monetary compensation to the petitioner for violation of his constitutional right by way of exemplary costs or otherwise, taking this power to be settled by the decisions in Rudul Sah and Sebastian M. Hongray.
In Saheli, ; , the State was held liable to pay compensation payable to the mother of the deceased who died as a result of beating and assault by the police.
However, the principle indicated therein was that the State is responsible for the tortious acts of its employees.
In State of Maharashtra and Others vs Ravikant section Patil, , the award of compensation by the High Court for violation of the fundamental right under Article 21 of an undertrial prisoner, who was handcuffed and taken through the streets in a procession by the police during investigation, was upheld.
However, in none of these cases, except Rudul Sah, anything more was said.
In Saheli, reference was made to the State 's liability for tortious acts of its servants without any reference being made to the decision of this Court in Kasturilal Ralia Ram fain vs The State of Uttar Pradesh; , , wherein sovereign immunity was upheld in the case of vicarious liability of the State for the tort of its employees.
The decision in Saheli is, therefore, more in accord with the principle indicated in Rudul Sah.
In this context, it is sufficient to say that the decision of this Court in Kasturilal upholding the State 's plea of sovereign immunity for tortious acts of its servants is confined to the sphere of liability in tort, which is distinct from the State 's liability for contravention of fundamental rights to 600 which the doctrine of sovereign immunity has no application in the constitutional scheme, and is no defence to the constitutional remedy under Articles 32 and 226 of the Constitution which enables award of compensation for contravention of fundamental rights, when the only practicable mode of enforcement of the fundamental rights can be the award of compensation.
The decisions of this Court in Rudul Sah and others in that line relate to award of compensation for contravention of fundamental rights, in the constitutional remedy under Articles 32 and 226 of the Constitution.
On the other hand, Kasturilal related to value of goods seized and not returned to he owner due to the fault of Government servants, the claim being of damages for the tort of conversion under the ordinary process, and not a claim for compensation for violation of fundamental rights.
Kasturilal is, therefore, inapplicable in this context and distinguishable The decision of Privy Council in Maharaj vs 'Attomey General of Trinidad and Tobago, (No.2), , is useful in this context.
That case related to Section 6 of the Constitution of Trinidad and Tobago 1962, in the chapter pertaining to human rights and fundamental freedoms, wherein Section 6 provided for an application to the High Court for redress.
The question was, whether the provision permitted an order for monetary compensation.
The contention of the Attorney General therein, that an order for payment of compensation did not amount to the enforcement of the rights that had been contravened, was expressly rejected.
It was held, that an order for payment of compensation, when a right protected had been contravened, is clearly a form of 'redress ' which a person is entitled to claim under Section 6, and may well be the 'only practicable form of redress '.
Lord Diplock who delivered the majority opinion, at page 679, stated.: "It was argued on behalf of the Attorney General that s.6(2) does not permit of an order for monetary compensation despite the fact that this kind of redress was ordered in Jaundoo vs Attorney General of Guyana, Reliance was placed on the reference in the subsection to 'enforcing, or securing the enforcement of, any of the provisions of the said foregoing sections ' as the purpose for which orders etc.
could be made.
An order for payment of compensation, it was submitted, did not 601 amount to the enforcement of the rights that had been contravened.
In their Lordships ' view an order for payment of compensation when a right protected under s.1 'has been ' contravened is dearly a form of 'redress ' which a person is entitled to claim under section 6(1) and may well be the only practicable form of redress, as by now it is in the instant case.
The jurisdiction to make such an order is conferred on the High Court by para (a) of s.6(2), viz. jurisdiction 'to hear and determine any application made by any person in pursuance of sub section (1) of this section.
The very wide powers to make orders, issue writs and give directions are to this. ' Lord Diplock further stated at page 680, as under: "Finally, their Lordships would say something about the measure of monetary compensation recoverable under s.6 where the contravention of the claimant 's constitutional rights consists of deprivation of liberty otherwise than by due process of law.
The claim is not a claim in private law for damages for the tort of false imprisonment under which the damages recoverable are at would include damages for loss of reputation.
It is a claim in public law for compensation for deprivation of liberty alone .
(emphasis supplied) Lord Hailsham while dissenting from the majority regarding the liability for compensation in that case, concurred with the majority opinion on this principle and stated at page 687, thus: expression 'redress ' in sub s(1) of s.6 and the expression 'enforcement ' in sub s(2), although capable of embracing damages where damages are available as part of the legal consequences of contravention, do not confer and are not in the context capable of being construed so as to confer a right of damages where they have not hitherto been available, in this case against the state for the judicial errors of a judge. " 602 Thus, on this principle, the view was unanimous, that enforcement of the constitutional right and grant of redress embraces award of compensation as part of the legal consequences of its contravention.
It follows that 'a claim in public law for compensation ' for contravention of human rights and fundamental freedoms, the protection of which is guaranteed in the Constitution, is an acknowledged remedy for enforcement and protection of such rights, and such a claim based on strict liability made by resorting to a constitutional remedy provided for the enforcement of a fundamental right is 'distinct from, and in addition to, the remedy in private law for damages for the tort ' resulting from the contravention of the fundamental right.
The defence of sovereign immunity being inap plicable, and alien to the concept of guarantee of fundamental rights, there can be no question of such a defence being available in the constitutional remedy.
It is this principle which justifies award of monetary compensation for contravention of fundamental rights guaranteed by the Constitution, when that is the only practicable mode of redress available for the contravention made by the State or its servants in the purported exercise of their powers, and enforcement of the fundamental right is claimed by resort to the remedy in public law under the Constitution by recourse to Articles 32 and 226 of the Constitution.
This is what was indicated in Rudul Sah and is the basis of the subsequent decisions in which compensation was awarded under Articles 32 and 226 of the Constitution, for contravention of fundamental rights.
A useful discussion on this topic which brings out the distinction between the remedy in public law based on strict liability for violation of a fundamental right enabling award of compensation, to which the defence of sovereign immunity is inapplicable, and the private law remedy, wherein vicarious liability of the State in tort may arise, is to be found in Ratanlal & Dhirajlal 's Law of Torts, 22nd Edition, 1992, by Justice G.P. Singh, at pages 44 to 48.
This view finds support from the, decisions of this Court in the Bhagalpur blinding cases: Kharti and Others (II) vs State of Bihar and Others, ; and Kharti and Other (TV) vs State of Bihar and Others, [1981] 2 S.C.C. 493, wherein it was said that the court is not helpless to grant relief in a case of violation of the right to life and personal liberty, and it should be prepared to forge new tools and devise new remedies ' for 603 the purpose of vindicating these precious fundamental rights.
It was also indicated that the procedure suitable in the facts of the case must be adopted for conducting the inquiry, needed to ascertain the necessary facts, for granting the relief, as the available mode of redress, for enforcement of the guaranteed fundamental rights.
More recently in Union Carbide Corporation and Others vs Union of India and Others, ; , Misra, C.J. stated that 'we have to develop our own law and if we find that it is necessary to construct a new principle of liability to deal with an unusual situation which has arisen and which is likely to arise in future. there is no reason why we should hesitate to evolve such principle of liability . .
To the same effect are the observations of Venkatachaliah, J. (as he then was), who rendered the leading judgment in the Bhopal gas case, with regard to the court 's power to grant relief.
We respectfully concur with the view that.
the court is not helpless and the wide powers given to this Court by Article 32, which itself is a fundamental right, imposes a constitutional obligation on this Court to forge such new tools, which may be necessary for doing complete justice and enforcing the fundamental rights guaranteed in the Constitution, which enable the award of monetary compensation in appropriate cases, where that is the only mode of redress available.
The power available to this Court under Article 142 is also an enabling provision in this behalf The contrary view would not merely render the court powerless and the constitutional guarantee a mirage but may, in certain situations, be an incentive to extinguish life, if for the extreme contravention the court is powerless to grant any relief against the State, except by punishment of the wrongdoer for the resulting offence, and recovery of damages under private law, by the ordinary process.
It the guarantee that deprivation of life and personal liberty cannot be made except in accordance with law, is to be real, the enforcement of the right in case of every contravention must also be possible in the constitutional scheme, the mode of redress being that which is appropriate in the facts of each case.
This remedy in public law has to be more readily available when invoked by the have not, who are not possessed of the wherewithal for enforcement of their rights in private law, even though its exercise is to be tempered by judicial restraint to avoid circumvention of private law remedies, where more appropriate.
We may also refer to Article 9(5) of the International Covenant on Civil and Political Rights, 1966 which indicates that an enforceable right to 604 compensation is not alien to the concept of enforcement of a guaranteed right.
Article 9(5) reads as under: "Anyone who has been the victim of unlawful arrest or detention shall have an enforceable right to compensation.
" The above discussion indicates the principles on which the Court 's power under Articles 32 and 226 of the Constitution is exercised to award monetary compensation for contravention of a fundamental right.
This was indicated in Rudul Sah and certain further observations therein adverted to earlier, which may tend to minimise the effect of the principle indicated therein, do not really detract from that principle.
This is how the decisions of this Court in Rudul Sah and others in that line have to be understood and Kasturilal distinguished therefrom.
We have considered this question at some length in view of the doubt raised, at times, about the propriety of awarding compensation in such proceedings, instead of directing the claimant to resort to the ordinary process of recovery of damages by recourse to an action in tort.
In the present case, on the finding reached, it is a clear case for award of compensation to the petitioner for the custodial death of her son.
The question now, is of the quantum of compensation.
The deceased Suman Behera was aged about 22 years and had a monthly income between Rs.1200 to Rs.1500.
This is the finding based on evidence recorded by the District Judge, and there is no reason to doubt its correctness.
In our opinion, a total amount of Rs.1,50,000 would be appropriate as compensation, to be awarded to the petitioner in the present case.
We may, however, observe that the award of compensation in this proceeding would be taken into account for adjustment, in the event of any other proceeding taken by the petitioner for recovery of compensation on the same ground, so that the amount to this extent is not recovered by the petitioner twice over.
Apart from the fact that such an order is just, it is also in consonance with the statutory recognition of this principle of adjustment provided in Section 357(5) Cr.
P.C. and Section 141(3) of the .
Accordingly, we direct the respondent State of Orissa to pay the sum of Rs.1,50,000 to the petitioner and a further sum of Rs.10,000 as to be paid to the Supreme Court Legal Aid Committee.
The mode of payment of Rs.1,50,000 to the petitioner would be, by making a term 605 deposit of that amount in a scheduled bank in the petitioner 's name for a period of three years, during which she would receive only the interest payable thereon, the principal amount being payable to her on expiry of the term.
The Collector of the District will take the necessary steps in this behalf, and report compliance to.
the Registrar (Judicial) of this Court within three months.
We clarify that the award of this compensation, apart from the direction for adjustment of the amount as indicated, will not affect any other liability of the respondents or any other person flowing from the custodial death of petitioner 's son Suman Behera.
We also expect that the State of Orissa would take the necessary further action in this behalf, to ascertain and fix the responsibility of the individuals responsible for the custodial death of Suman Behera, and also take all available appropriate actions against each of them, including their prosecution for the offence committed thereby.
The writ petition is allowed in these terms.
ANAND, J. (CONCURRING) The lucid and elaborate judgment recorded by my learned brother Verma J. obviates the necessity of noticing facts or reviewing the case law referred to by him.
I would, however, like to record a few observations of my own while concurring with his Lordship 's judgment.
This Court was bestirred by the unfortunate mother of deceased Suman Behera through a letter dated 14.9.1988, bringing to the notice of the Court the death of her son while in police custody.
The letter was treated as a Writ Petition under Article 32 of the Constitution.
As noticed by Brother Verma J., an inquiry was got conducted by this Court through the District Judge Sundergarh who, after recording the evidence, submitted his inquiry report containing the finding that the deceased Suman Behera had died on account of multiple injuries inflicted on him while in police custody.
Considering, that it was alleged to be a case of custodial death, at the hands of those who are supposed to protect the life and liberty of the citizen, and which if established was enough to lower the flag of civilization to fly half mast, the report of the District Judge was scrutinized and analysed by us with the assistance of Mr. M.S. Ganesh, appearing amicus 606 curiae for the Supreme Court Legal Aid Committee and Mr. Altaf Ahmad, the learned Additional Solicitor General carefully.
Verma J., while dealing with the first question i.e. whether it was a case of custodial death, has referred to the evidence and the circumstances of the case as also the stand taken by the State about the manner in which injuries were caused and has come to the conclusion that the case put up by the police of the alleged escape of Suman Behera from police custody and his sustaining the injuries in a train accident was not acceptable.
I respectfully agree.
A strenuous effort was made by the learned Additional Solicitor General by reference to the injuries on the head and the face of the deceased to urge that those injuries could not be possible by the alleged police torture and the finding recorded by the District Judge in his report to the contrary was erroneous.
It was urged on behalf of the State that the medical evidence did establish that the injuries had been caused to the deceased by lathi blows but it was asserted that the nature of injuries on the face and left temporal region could not have been caused by the lathis and, therefore, the death had occurred in the manner suggested by the police in a train accident and that it was not caused by the police while the deceased was in their custody.
In this connection, it would suffice to notice that the Doctor, who conducted the postmortem examination, excluded the possibility of the injuries to Suman Behera being caused in a train accident.
The injuries on the face and the left temporal region were found to be post mortem injuries while the rest were ante mortem.
This aspect of the medical evidence would go to show that after inflicting other injuries, which resulted in the death of Suman Behera, the police with a view to cover up their crime threw the body on the rail track and the injuries on the face and left temporal region were received by the deceased after he had died.
This aspect further exposes not only the barbaric attitude of the police but also its crude attempt to fabricate false clues and create false evidence with a view to screen its offence.
The falsity of the claim of escape stands also exposed by the report from the Regional Forensic Science Laboratory dated 11.3.1988 (Annexure R 8) which mentions that the two pieces of rope sent for examination to it, did not tally in respect of physical appearance, thereby belying the police case that the deceased escaped from the police custody by chewing the rope.
The theory of escape has, thus, been rightly disbelieved and I agree with the view of Brother Verma J. that the death of Suman Behera was caused while he was in custody of the police by police torture.
A custodial death is perhaps one of the worst 607 crimes in a civilised society governed by the Rule of Law.
It is not our concern at this stage, however, to determine as to which police officer or officers were responsible for the torture and ultimately the death of Suman Behera.
That is a matter which shall have to be decided by the competent court.
I respectfully agree with the directions given to the State by Brother Verma, J. in this behalf.
On basis of the above conclusion, we have now to examine whether to seek the right of redressal under Article 32 of the Constitution, which is without prejudice to any other action with respect to the same matter which way be lawfully available, extends merely to a declaration that there has been contravention and infringement of the guaranteed fundamental rights and rest content at that by relegating the party to seek relief through civil and criminal proceedings or can it go further and grant redress also by the only practicable form of redress by awarding monetary damages for the infraction of the right to life.
It is exiomatic that convicts, prisoners or under trials are not denuded of their fundamental rights under Article 21 and it is only such restrictions, as are permitted by law, which can be imposed on the enjoyment of the fundamental right by such persons.
It is an obligation of the State, to ensure that there is no infringement of the indefeasible rights of a citizen to life, except in accordance with law while the citizen is in its custody.
The precious right guaranteed by Article 21 of the Constitution of India cannot be denied to convicts, under trials or other prisoners in custody, except according to procedure established by law.
There is a great responsibility on the police or prison authorities to ensure that the citizen in its custody is not deprived of his right to life.
His liberty is in the very nature of things circumscribed by the very fact of his confinement and therefore his interest in the limited liberty left to him is rather precious.
The duty of care on the part of the State is strict and admits of no exceptions.
The wrongdoer is accountable and the State is responsible if the person in custody of the police is deprived of his life except according to the procedure established by law.
I agree with Brother Verma, J. that the defence of "sovereign immunity ' in such cases is not available to the State and in fairness to Mr. Altaf Ahmed it may be recorded that he raised no such defence either.
608 Adverting to the grant of relief to the heirs of a victim of custodial death for the infraction or invasion of his rights guaranteed under Article 21 of the Constitution of India, it is not always enough to relegate him to .the ordinary remedy of a civil suit to claim damages for the tortuous act of the State as that remedy in private law indeed is available to the aggrieved party.
The citizen complaining of the infringement of the indefeasible right under Article 21 of the Constitution cannot be told that for the established violation of the fundamental right to fife, he cannot get any relief under the public law by the courts exercising writ jurisdiction.
The primary source of the public law proceedings stems from the prerogative writs and the courts have, therefore, to evolve 'new tools ' to give relief in public law by molding it according to the situation with a view to preserve and protect the Rule of Law.
While concluding his first Hamlyn Lecture in 1949 under the title 'Freedom under the Law ' Lord Denning in his own style warned: "No one can suppose that the executive will never be guilty of the sins that are common to all of us.
You may be sure that they will sometimes do things which they ought not to do: and will not do things that they ought to do.
But if and when wrongs are thereby suffered by any of us what is the remedy? Our procedure for securing our personal freedom is efficient, our procedure for preventing the abuse of power is not.
Just as the pick and shovel is no longer suitable for the winning of coal, so also the procedure of mandamus, certiorari, and actions on the case are not suitable for the winning of freedom in the new age.
They must be replaced by new and up to date machinery, by declarations, injunctions and actions for negligence.
This is not the task for Parliament. . the courts must do this.
Of all the great tasks that lie ahead this is the greatest.
Properly exercised the new powers of the executive lead to the welfare state; but abused they lead to a totalitarian state.
None such must ever be allowed in this Country.
" The old doctrine of only relegating the aggrieved to the remedies available in civil law limits the role of the courts too much as protector and guarantor of the indefeasible Fights of the citizens.
The courts have the obligation to satisfy the social aspirations of the citizens because the courts 609 and the law are for the people and expected to respond to their aspirations.
The public law proceedings serve a different purpose than the private law proceedings.
The relief of monetary compensation, as exemplary damages, in proceedings under Article 32 by this Court or under Article 226 by the High Courts, for established infringement of the indefeasible right guaranteed under Article 21 of the Constitution is a remedy available in public law and is based on the strict liability for contravention of the guaranteed basic and indefeasible rights of the citizen.
The purpose of public law is not only to civilize public power but also to assure the citizen that they live under a legal system which aims to protect their interests and preserve their rights.
Therefore, when the court molds the relief by granting "compensation" in proceedings under Article 32 or 226 of the Constitution seeking enforcement or protection of fundamental rights, it does so under the public law by way of penalising the wrongdoer and fixing the liability for the public wrong on the State which has failed in its public duty to protect the fundamental rights of the citizen.
The payment of compensation in such cases is not to be understood, as it is generally understood in a civil action for damages under the private law but in the broader sense of providing relief by an order of making 'monetary amends ' under the public law for the wrong done due to breach of public duty, of not protecting the fundamental rights of the citizen.
The compensation is in the nature of exempellary damages ' awarded against the wrong doer for the breach of its public law duty and is independent of the rights available to the aggrieved party to claim compensation under the private law in an action based on tort, through a suit instituted in a court of competent jurisdiction or/and persecute the offender under the penal law.
This Court and the High Courts, being the protectors of the civil liberties of the citizen, have not only the power and jurisdiction but also an obligation to grant relief in exercise of its jurisdiction under Articles 32 and 226 of the Constitution to the victim or the heir of the victim whose fundamental rights under Article 21 of the Constitution of India are established to have been flagrantly infringed by calling upon the State to repair the damage done by its officers.to the fundamental rights of the citizen, notwithstanding the right of the citizen to the remedy by way of a civil suit or criminal proceedings.
The State, of course has the right to be indemnified by and take such action as may be available to it against the wrongdoer in accordance with law through appropriate proceedings.
Of 610 course, relief in exercise of the power under Article 32 or 226 would be granted only once it is established that there has been an infringement of the fundamental rights of the citizen and no other form of appropriate redressal by the court in the facts and circumstances of the case, is possible.
The decisions of this Court in the line of cases starting with Rudul Sah vs State of Bihar and Anr., ; granted monetary relief to the victims for deprivation of their fundamental rights in proceedings through petitions filed under Article 32 or 226 of the Constitution of India, notwithstanding the rights available under the civil law to the aggrieved party where the courts found that grant of such relief was warranted.
It is a sound policy to punish the wrongdoer and it is in that spirit that the Courts have molded the relief by granting compensation to the victims in exercise of their writ jurisdiction.
In doing so the courts take into account not only the interest of the applicant and the respondent but also the interests of the public as a whole with a view to ensure that public bodies or officials do not act unlawfully and do perform their public duties properly particularly where the fundamental rights of a citizen under Article 21 is concerned.
Law is in the process of development and the process necessitates developing separate public law procedures as also public law principles.
It may be necessary to identify the situations to which separate proceedings and principles apply And the courts have to act firmly but with certain amount of circumspection and self restraint, lest proceedings under Article 32 or 226 are misused as a disguised substitute for civil action in private law.
Some of those situations have been identified by this Court in the cases referred to by Brother Verma, J.
In the facts of the present case on the findings already recorded, the mode of redress which commends appropriate is to make an order of monetary amend in favour of the petitioner for the custodial death of her son by ordering payment of compensation by way of exemplary damages.
For the reasons recorded by Brother Verma, J., I agree that the State of Orissa should pay a sum of Rs.1,50,000 to the petitioner and a sum of Rs.10,000 by way of costs to the Supreme Court Legal Aid Committee Board.
I concur with the view expressed by Brother Verma, J. and the directions given by him in the judgment in all respects.
V.P.R. Petition allowed. [/INST] Petitioner 's son, aged about 22 years was taken from his home In police custody at about 8 a.m. on 1.12.1987 by respondent No.6, Assistant Sub Inspector of Police of the Police Outpost in connection with the investigation of an offence of theft.
He was detained at the Police outpost On 2.12.1987, at about 2 p.m. the petitioner came to know that the dead body of her son was found on the railway track There were multiple injuries on the body and his death was unnatural, caused by those injuries.
The petitioner alleged in her letter dated 14.9.1988, which was treated as a writ petition under Article 32 of the Constitution, that it was a case of custodial death since her son died as a result of the multiple injuries inflicted to him while he was in police custody and thereafter his dead body was thrown on the railway track.
It was prayed in the petition that award of compensation be made to her, for contravention of the fundamental right to life guaranteed under Article 21 of the Constitution.
The defence of the respondents was that petitioner 's son managed to 582 escape from police custody at about 3 a.m. on 2.12.1987 from the Police.
Outpost, where he was detained; that thereafter he could not be apprehended in spite of a search and that his dead body was found on the railway track on 2.12.1987 with multiple injuries, which indicated that he was run over by a train.
The respondents denied the allegation of custodial death and their responsibility for the unnatural death of petitioner 's son.
On 4.3.1991, this Court directed the District Judge to hold an inquiry into the matter and to submit a report.
After hearing the parties and appreciating the evidence the District Judge submitted the Inquiry Report dated 4.9.1991.
The District Judge found that petitioner 's son died on account of multiple injuries inflicted to him while he was in police custody at the Police Outpost.
The correctness of the finding of the District Judge in his report was assailed in this Court.
The respondents contended that petitioner 's son managed to escape from police custody at about 3 a.m. on 2.12.1987; that he was run over by a passing train and sustained the fatal injuries; that the responsibility of the respondents for his safety came to an end the moment he escaped from police custody; and that the factual foundation for State 's liability for payment of compensation for violation of the fundamental right to life under Article 21 was absent.
Allowing the petition, this Court, HELD: (per LS.
Verma, J. on his behalf and on behalf of N. Venkatachala, J) 1.01.
There is no cogent independent evidence of any search made by the police to apprehend petitioner 's son, if the defence of his escape from police custody be true.
On the contrary, after discovery of the dead body on the railway track in the morning by some railwaymen, it was much later in the day that the police reached the spot to take charge of the dead body.
This conduct of the concerned police officers is also a significant circumstance to assess credibility of the defence version.
[591 G H] 1.02.
The medical evidence comprising the testimony of the doctor, who conducted the postmortem, excludes the possibility of all the injuries to the deceased being caused in a train accident while indicating that all of 583 them could result from the merciless beating given to him.
[594 H 595 A] 1.03.
An inquiry under Section 176 Cr.
P.C. is contemplated independently by a Magistrate and not jointly with a police officer when the role of the police officers itself is a matter of inquiry.
There was hand cuff on the hands of the deceased when his body was found on the railway track with rope around it.
It is significant that the Report dated 11.3.1988 of the Regional Forensic Science Laboratory mentions that the two cut ends of the two pieces of rope which were sent for examination do not match with each other in respect of physical appearance.
This finding about the rope negatives the respondents ' suggestion that the petitioner 's son managed to escape from police custody by chewing off the rope with which he was tied.
1595 G H] 1.05.
It is a case of custodial death, and the deceased died as a result of the injuries inflicted to him voluntarily while he was In police custody at the Police Outpost.
[596 A] 2.01.
Award of compensation in a proceeding under Article 32 by this Court or by the High Court under Article 226 of the Constitution is a remedy available in public law, based on strict liability for contravention of fundamental rights to which the principle of sovereign immunity does not apply, even though it may be available as a defence in private law in an action based on tort.
This is a distinction between the two remedies to be borne in mind which also indicates the basis on which compensation is awarded in such proceedings.
[596 G] 2.02.
Enforcement of the constitutional right and grant of redress embraces award of compensation as part of the legal consequences of its contravention.
[602 A] 2.03.
A claim in public law for compensation for contravention of human rights and fundamental freedoms, the protection of which is guaranteed in the Constitution, is an acknowledged remedy for enforcement and protection, of such rights, and such a claim based on strict liability made by resorting to a constitutional remedy provided for the enforcement of a fundamental right is distinct from, and in addition to, the remedy in private law for damages for the tort resulting from the contravention of the fundamental right.
The defence of sovereign immunity 584 being inapplicable, and alien to the concept of guarantee of fundamental rights, there can be no question of such a defence being available in the constitutional remedy.
It is this principle which justifies award of monetary compensation for contravention of fundamental rights guaran teed by the Constitution, when that is the only practicable mode of redress available for the contravention made by the State or its servants in the purported exercise of their powers, and enforcement of the fundamental right is claimed by resort to the remedy in public law under the Constitution by recourse to Articles 32 and 226 of the Constitution.
[602 B D] 2.04.
The Court is not helpless and the wide powers given to this Court by Article 32, which itself is a fundamental right, imposes a constitutional obligation on this Court to forge such new tools, which may be necessary for doing complete justice and enforcing the fundamental rights guaranteed in the Constitution, which enable the award of monetary compensation In appropriate cases, where that is the only mode of redress available.
[603 D] 2.05.
The power available to this Court under Article 142 is also an enabling provision in this behalf The contrary view would not merely render the court powerless and the constitutional guarantee a mirage, but, may, in certain situations, be an incentive to extinguish life, if for the extreme contravention the court is powerless to grant any relief against the State, except by punishment of the wrongdoer for the resulting offence, and recovery of damages under private law, by the ordinary process.
[603 E F] 2.06.
If the guarantee that deprivation of life and personal liberty cannot be made except in accordance with law, is to be real, the enforcement of the right in case of every contravention must also be possible in the constitutional scheme, the mode of redress being that which is appropriate In the facts of each case.
This remedy in public law has to be more readily available when invoked by the havenots, who are not possessed of the wherewithal for enforcement of their rights in private law, even though its exercise is to be tempered by judicial restraint to avoid circumvention of private law remedies, where more appropriate.
[603 G] 2.08.
The principle of which the Court 's power under Articles 32 and 226 of the Constitution is exercised to award monetary compensation for 585 contravention of a fundamental right.
[604 B] Rudul Sah vs State of Bihar and Another, [1983] 3 S.C.R. 508; Sebastian M. Hongray vs Union of India and Others, ; and ; ; Bhim Singh vs State of J. & K, [1984] Supp.
S.C.C. 504 and ; Saheli, A Women 's Resources Centre and Others vs Commissioner of Police, Delhi Police Headquarters and Others, ; ; State of Maharashtra and Others vs Ravikant section Patil, ; Maharaj vs Attomey General of Trinidad and Tobago, (No.2), ;, Khatri and Others (IV) vs State of Bihar and Others, and Union Carbide Corporation and Others vs Union India and Others, ; , referred to.
Kasturilal Ralia Rain Jain vs The State of Uttar Pradesh ; , distinguished.
Ratanlal & Dhirajlal 's Law of Torts, 22nd Edition, 1992, by Justice G.P. Singh, at pages 44 to 48, referred to.
In the present case, on the finding reached, It Is a clear case for award of compensation to the petitioner for the custodial death of her son.
[604 D] 2.10.
The deceased was aged about 22 years and had a monthly income between Rs.1200 to Rs.1500.
A total amount of Rs.1,50,000 would be appropriate as compensation, to be awarded to the petitioner in the present case.
[604 E] 2.11.
The respondent State of Orissa is directed to pay the sum of Rs.1,50,000 lo the petitioner as compensation and a further sum of Rs.10,000 as costs to be paid to the Supreme Court Legal Aid Committee.
The mode of payment of Rs.1,50,000 to the petitioner would be, by making a term deposit of that amount in a scheduled bank in the petitioner 's name for a period of three years, during which she would receive only the Interest payable thereon, the principal amount being payable to her on expiry of the term.
The Collector of the District will take the necessary steps in this behalf, and report compliance to the Register (judicial) of this Court within three months.
[604 H, 605 A] 2.12.The State of Orissa is expected to take the necessary further action to ascertain and fix the responsibility of the Individuals responsible 586 for the custodial death of petitioner 's son and also take all available appropriate actions against each of them.
[605 C] Per Dr. A.S. Anand, J. (Concurring) 1.01.
Convicts, prisoners or under trials are not denuded of their fundamental rights under Article 21 and It is only such restrictions, as are permitted by law, which can be imposed on the enjoyment of the fundamental rights by such persons.
It is an obligation of the State, to ensure that there is no infringement of the indefeasable rights of a citizen to life, except in accordance with law while the citizen is in its custody.
[607 E] 1.02.
The precious right guaranteed by Article 21 of the Constitution of India cannot be denied to convicts, under trials or other prisoners in custody, except according to procedure established by law.
[607 E] 1.03.
There is a great responsibility on the police or prison authorities to ensure that the citizen in its custody is not deprived of his right to life.
His liberty is in the very nature of things circumscribed by the very fact of his confinement and therefore his interest in the limited liberty left to him is rather precious.
The duty of care on the part of the State is strict and admits of no exceptions.
wrongdoer is accountable and the State is responsible if the person in custody of the police is deprived of his life except according to the procedure established by law.
[607 G] 1.05.The death of petitioner 's son was caused while he was in custody of the police by police torture.
A custodial death is perhaps one of the worst crimes in a civilised society governed by the Rule of Law.
The defence of 'sovereign immunity"in such cases is not available to the State.
[607 G] 2.01.
Adverting to the grant of relief to the heirs of a victim of custodial death foe the infraction or invasion of his rights guaranteed under Article 21 of the Constitution of India, it is not always enough to relegate him to the ordinary remedy of a civil suit to claim damages for the tortious act of the State as that remedy in private law indeed is available to the aggrieved party.
[608 A] 587 2.02.
The citizen complaining of the infringement of the indefeasable right under Article 21 of the Constitution cannot be told that for the established violation of the fundamental right to life, he cannot get any relief under the public law by the courts exercising writ jurisdiction.
[608 B] 2.03.
The primary source of the public law proceedings stems from the prerogative writs and the courts have, therefore, to evolve 'new tools ' to give relief in public law by moulding it according to the situation with a view to preserve and protect the Rule of Law.
[608 C] 2.04.
The old doctrine of only relegating the aggrieved to the remedies available in civil law limits the role of the courts too much as protector and guarantor of the indefeasable rights of the citizens.
The courts have the obligation to satisfy the social aspirations of the citizens because the courts and the law are for the people and expected to respond to their aspirations.
[608 H, 609 A] 2.05.
The public law proceedings serve a different purpose than the private law proceedings.
The relief of monetary compensation, as exemplary damages, in proceedings under Article 32 by this Court or under Article 226 by the High Courts, for established infringement of the indefeasable right guaranteed under Article 21 of the Constitution is a remedy available in public law and is based on the strict liability for contravention of the guaranteed basic and indefeasable rights of the citizen.
[609 B] 2.06.
The purpose of public law is not only to civilize public power but also to assure the citizen that they live under a legal system which aims to protect their interests and preserve their rights.
Therefore, which the court moulds the relief by granting" compensation in proceedings under Article 32 or 226 of the Constitution seeking enforcement or protection of fundamental rights, it does so under the public law by way of penalising the wrongdoer and fixing the liability for the public wrong on the State which has failed in its public duty to protect the fundamental rights of the citizen.
1609 C] 2.07.
The payment of compensation in such cases is not to be understood, as it is generally understood in a civil action for damages under the private law but in the broader sense of providing relief by an order of making 'monetary amends ' under the public law for the wrong done due to breach of public duty, of not protecting the fundamental rights 588 of the citizen.
[609 D] 2.08.The compensation is in the nature of the exemplary damages ' awarded against the wrong doer for the breach of its public law duty and is independent of the rights available to the aggrieved party to claim compensation under the private law in an action based on tort, through a suit instituted in a court of competent jurisdiction or/and prosecute the offender under the penal law.
[609 E] 2.09.
This Court and the High Courts, being the protectors of the civil liberties of the citizen, have not only the power and jurisdiction but also an obligation to grant relief in exercise of its jurisdiction under Articles 32 and 226 of the Constitution to the victim or the heir of the victim whose fundamental rights under Article 21 of the Constitution of India are established to have been flagrantly infringed by calling upon the State to repair the damage done by its officers to the fundamental rights of the citizen, notwithstanding the right of the citizen to the remedy by way of a civil suit or criminal proceedings.
[609 F G] 2.10.
The State, of course, has the right to be indemnified by and take such action as may be available to it against the wrongdoer in accordance with law through appropriate proceeding.
Of course, relief in exercise of the power under Article 32 or 226 would be granted only once it is established that there has been an infringement of the fundamental rights of the citizen and no other form of appropriate redressal by the court in the facts and circumstances of the case, is possible.
[609 H, 610 A] 2.11.
Law is in the process of development and the process necessitates developing separate public law procedures as also public law principles.
It may be necessary to identify the situations to which separate proceedings and principles 'apply and the courts have to act firmly but with certain amount of circumspection and self restraint, lest proceedings under Article 32 or 226 are misused as a disguised substitute for civil action in private law.
[610 D E] "Freedom under the Law.
By Lord Denning First Hamlan Lecture, 1949, referred to.
Rudul Sah vs State of Bihar and Anr., ; , referred to.
In the facts of the present case the mode of redress which 589 commends appropriate is to make an order of monetary amend, in favour of the petitioner for the custodial death of her son by ordering payment of compensation by way of exemplary damages.
The State of Orissa should pay a sum of Rs.1,50,000 to the petitioner and a sum of Rs.10,000 by way of costs to the Supreme Court Legal Aid Committee.
[610 G] </s> |
<s>[INST] Summarize the following judgement: (C) No. 655 of 1991.
(Under Article 32 of the Constitution of India).
Santosh Kumar Rungta and R.P. Gupta for the Petitioner.
V.C. Mahajan, Ms. Niranjana Singh and Ms. A. Subhashini for the Respondents.
The Judgment of he Court was delivered by KULDIP SINGH, J. National Federation of Blind a representative body of visually handicapped persons in India has filed this petition under Article 32 of the Constitution of India seeking a writ in the nature of mandamus directing the Union of India and the Union Public Service Commission to permit the blind candidates to compete for the Indian Administrative Service and the Allied Services and further to provide them the facility of writing and civil services examination either in Braille script or with the help of a Scribe.
Braille is a system of writing for the blind in which the characters consist of raised dots to be read by the fingers.
Further relief sought in the petition is that Group A and B posts in Government and public sector undertakings which have already been identified for the visually handicapped persons be offered to them on preferential basis.
The visually handicapped constitute a significant section of our society and as such it is necessary to encourage their participation in every walk of life.
The Ministry of Welfare, Government of India has been undertaking various measures to utilise the potentialities of the visually handicapped persons.
The Central as well as the State Governments have launched several schemes to educate, train and provide useful employment to the handicapped.
The Central Government has provided reservations to the extent of 3% vacancies in Group C and D posts for the physically handicapped including blind and partially blind.
There has been a growing demand from the visually handicapped persons to provide reservations for them in Group A and B posts under the Central Government.
The Ministry of Welfare, Government of India has a standing Committee or identification of jobs in various Mini stries/Departments and public sector undertakings for the physically hand 559 icapped.
By an order dated December 30, 1985 the Government of India directed the Standing Committee to undertake the identification of jobs for the handicapped in Group A and B Services under the Government and public sector undertakings.
The Committee submitted its report which was published on October 31, 1986.
Copy of the report has been placed on the record of this petition.
In the introduction to the report given by Mr. M.C. Narsimhan, Joint Secretary to Government of India and Chairman, Stating committee on identification of jobs for handicapped, it has been stated as under: "A Sub Committee, which was set up to assist the Standing Committee visited a large number of Public Sector Undertakings and observed people actually working in a variety of jobs and the working conditions in which these jobs are performed.
The Sub Committee had detailed discussions with the Chiefs and Senior Officers of the Public Sector Undertakings as also with officers of the Central Government Departments.
A fist of the public sector undertakings and the list of the officers of the Undertakings with whom the Sub Committee had discussions is annexed to the report.
The Committee after detailed discussions and on the spot study has prepared a comprehensive list of 416 categories in Group A and B posts in Government Offices and Public Sector Undertakings, with their jobs descriptions, the physical requirement of each group of job and matched them with various categories of disabilities.
" The Committee devoted special attention to the visually handicapped.
Para 8 of the report which relates to the blind is as under: "However, in the case of the blind the position is somewhat different.
Seeing, reading, writing and movement are essential ingredients of most Government jobs.
Therefore, a similar approach in respect of blind persons may be difficult.
It would not be possible to generalise that blind person can do most jobs as we have found for those with locomotor and hearing disabilities.
The Committee found 560 that in higher posts is Government the help of a personal assistant or a stenographer is generally available.
But this facility is.
not available even in higher posts in public sector undertakings.
Wherever this facility is available a blind person may not find it difficult, in certain groups of posts, to handle the job.
It is also possible, in relation to other posts where stenographic assistance is not available that some other facilities can be provided to a blind employee.
To compensate 'reading deficiency, readers ' allowance can be provided to blind employees to enable them to engage a reader.
Similarly, to compensate for "writing deficiency", the blind employee should be required to know typing.
Adequate knowledge of typing should be prescribed as an essential qualification for blind employees for public employment.
Where mobility may also be one of the main ingredients of a job it is difficult to compensate blind employees for this "deficiency.
The Committee would also emphasise that the blind employee should be fully responsible for the duties assigned to them, despite the provision of reader 's allowance and typing skill.
The Committee would also suggest that the maximum reader 's allowance should be limited to Rs.200 p.m. to blind employees recruited to Group A and B post. ' The Committee has identified about 416 categories of Group A and B posts which are suitable for the handicapped.
The Committee has further specified that the visually handicapped (blind and partially blind) are suitable for appointment to the following categories of Group A and B post: No. in the List Category of Group Annexed to the Post Report 178 to 187 Hindi officers A & B 191 to 192 Job Analyst A & B 193 to 199 Labour Welfare Officers A & B 200 to 209 Law Officers A & B 561 237 to 242 Personal Assistants B 243 to 256 Personnel Officers A & B 279 to 291 Public Relations Officers A & B 295 to 317 Research Officers A & B 354 to 363 Training Officers A & B 364 to 376 Administrative Officer (Non Secretarial) A 377 to 384 Administrative Officers (Secretarial Sr.) A 385 to 401 Administrative Officers (Secretarial Junior) A & B 409 Asstt.
Admin.
Officer We have only quoted the list of categories from the report to illustrate the point that the Committee appointed by the Government has in its report identified certain categories of posts to which the blind and the partially blind can be appointed.
Government of India Through Ministry of Personnel issued office memorandum dated November 25, 1986 wherein it accepted the report of the Committee and took a policy decision that in respect of the posts identified by the Committee the handicapped persons shall be given preference in the matter of recruitment to those posts.
The office memorandum is re produced hereunder: "No.
F.36034/4/86 Estt.(SCT) Government of India Ministry of Personnel, Public Grievances & Pensions Department of Personnel & Training . . .
New Delhi, the 25th November, 1986 OFFICE MEMORANDUM Subject: Identification of jobs for the physically handicapped persons in Groups 'A ' and 'B ' posts filled by direct recruitment in the Central Government services and Public Sector Undertakings.
562 The undersigned is directed to say that with a view to effecting optimum utilisation of potentialities of physically handicapped which constitutes a significant section of the population in the country, the Ministry of Welfare constituted a Standing Committee for identification of jobs for the physically handicapped in the Central Government services and Public Sector Undertakings.
The Standing Committee on identification of jobs set up a sub Committee for on the spot identification of jobs for the physically handicapped persons in Group 'A and 'B ' posts after making an in depth study of Undertakings as well as in consultation with the concerned authorities.
This subCommittee in its Report (submitted to the parent Committee) identified 420 jobs in Group 'A ' and Group posts/services alongwith the physical requirements and functional classifications of disabilities indicating what jobs can be held by each category of disabled people and with what disability.
It has been decided that in respect of identified posts which can be held by physically handicapped persons preferences to physically handicapped persons will be ,given in the matter of recruitment to those posts.
A copy of the report of the Committee referred to in para 1 is enclosed for information guidance and necessary action.
The list of jobs identified by the Committee on suitable for being held by physically handicapped persons is not exhaustive.
The Ministries/Departments can further supplement the list based on their knowledge for jobs requirements, essential qualifications etc.
The Ministries/Departments after identifying all the posts which can be held by physically handicapped persons may inform the UPSC at the time of sending their requisitions for filling vacancies in respect of those posts, that preference is to be given to physically handicapped persons in the matter of recruitment.
The UPSC have agreed in principle to give preference to physically handicapped persons in filling the identified posts.
The Depart 563 ment of Personnel and Training will be issuing general instructions to enable preference being given to the physically handicapped persons in such cases.
The Ministry of Finance etc.
are requested to bring these instructions to the notice of all concerned.
Sd/ (BATA K, DEY) DIRECTOR (JCA) ' From the office memorandum quoted above it is obvious that the Government of India has taken the following policy decisions to implement the Committee report: 1.
The Government of India has taken cognizance of the fact that the Standing Committee on identification of jobs through its Sub Committee has identified 420 jobs in Group A and Group B posts/services along with the physical requirements and functional Classifications of disabilities indicating what jobs can be held by each category of disabled people and with what disability.
The decision has been taken that in respect of identified posts which can be held by physically handicapped persons preference to physically handicapped persons will be given in the matter of recruitment to those posts.
The list of jobs identified by the Committee is not exhaustive, the Ministries/Departments can further supplement the list based on their knowledge of job requirements, essential qualifications etc.
The Ministries/Departments after identifying all the posts which can be held by physically handicapped persons may inform the Union Public Service Commission at the time of sending their requisitions for filling vacancies in respect of those posts, that preference is to be given to physically handicapped persons in the matter of recruitment.
The Union Public Service Commission has agreed in principle to give preference to physically handicapped persons in filling identified posts.
564 6.
The Department of Personnel and Training will be issuing general instructions to enable preference being given to the physically handicapped persons in such cases.
Mr. S.K Rungta, learned counsel for the petitioner has contended that the memorandum dated November 25, 1986 was issued more than seven years back but so far the decisions taken therein have not been implemented.
Mr. Rungta (himself visually handicapped) has argued his case with utmost clarity.
Mr. Rungta was fully conversant with all the relevant annexures to the petition.
He referred to the relevant pages in the bulky paper book with perfect ease.
We did not feel even for a moment that the case was being argued by a visually handicapped lawyer.
Mr. Rungta 's performance before us amply.
proves the point that the visually handicapped persons can perform the jobs entrusted to them with equal efficiency.
The question of giving preference to the handicapped in the matter of recruitment to the identified posts is a matter for the Government of India to decide.
The matter is pending for decision with the Government of India for the last several years.
While appreciating various measures undertaken by the Government to provide useful employment to the handicapped persons we commend the Government of India to decide the question of providing preference/reservation to the handicapped in Group A and B posts as expeditiously as possible.
So far as the claim of visually handicapped for writing the civil services examinations, in Braille script or with the help of Scribe, is concerned, we are of the view that their demand is legally justified.
The fist of category A and B posts, identified as suitable for the visually handicapped by the Committee, includes number of posts which are filled as a result of the civil services examinations.
When there are posts to which blind and partially blind can be appointed, we see no ground to deprive them of their right to compete for those posts along with other candidates belonging to general category.
Mr. V.K. Cherian, Under Secretary to Government of India, Ministry of Personnel in his affidavit dated March 10, 1992 filed before this Court has stated as under: 565 "If there were Group 'A ' and 'B ' jobs, which could be filled up by the blind, the same should also be identified.
Once the jobs were identified, they could be filled up from among the blind and also other handicapped persons such as deaf and orthopaedically handicapped.
Going by the Report of the Committee and the posts identified by it, the Union Public Service Commission made the observation that the posts identified as suitable to be held by the physically handicapped persons, particularly those iden tified for the blind are not such which are required to be filled on the basis of competitive examination conducted by the Commission '.
The observations of the Union Public Service Commission as projected by Mr. V.K. Cherian in his above quoted affidavit do not seem to be correct.
After going through the list of the posts identified as suitable for visually handicapped (blind and partially blind) it is obvious that there are number of posts which are required to be filled through the civil services examination and other competitive examinations conducted by the Commission.
Group A and B posts in the category of Administrative Officers (Secretarial Senior) and Administrative Officer (Secretarial Junior) are necessarily to be filled as a result of civil services examination by the Union Public Service Commission.
If some of the posts in the Indian Administrative Service and other Allied Services, as identified by the Committee, can be filled from amongst the visually handicapped persons then we see no reason why they should not be permitted to sit and write the civil services examination.
We make it clear that once recruited to the lowest level of the service the visually handicapped persons shall not be entitled to claim promotion to the higher posts in the service irrespective of the physical requirements of the jobs.
If in the hierarchy of promotional posts it is found by the Government that a particular post is not suitable for the visually handicapped person he shall not have any right to claim the said post.
In the light of the above discussion we partly allow the writ petition and direct the Government of India and the Union Public Service Commission to permit the visually handicapped (blind and partially blind) eligible candidates to compete and write the civil services examination which is ordinarily held yearly by the Union Public Service Commission.
566 We further direct that they shall be permitted to write the examination in Braille script or with the help of a Scribe.
There shall be no orders as to costs.
S.P.S. Petition allowed partly. [/INST] The visually handicapped constitute a significant section of our society.
As it is necessary to encourage their participation in every walk of life.
The Central Ministry of Welfare has been undertaking various measures to utilise their potentialities.
The Governments have launched schemes to educate, train and provide them with useful employment.
The Central Government has provided 3% reservation in Group C and D posts for physically handicapped including blind and partially blind, while demand is growing for reservations in Group A and B posts.
The Standing Committee of the Ministry of Welfare undertook identification of jobs in these categories and submitted its report on October 31, 1986.
Para 8 thereof related to the blind.
It took note of reading and writing deficiency and suggested the provision of allowance.
And found that the specified 416 posts in Group A and B are suitable for blind and partially blind.
So, the Ministry of Personnel issued office memorandum dated November 25, 1986 a accepting the report and took policy decision regarding identification of jobs for the physically handicapped persons in Group A and B posts filled to be by direct recruitment in Central Govern ment Services and Public Sector Undertakings.
This court examined the memorandum and found that the Government had taken cognizance of the identified jobs; that the Government had 557 decided about the recruitment of handicapped lessons to these posts; that the departments would supplement the list further; that the Ministries/Departments would inform the UPSC about preferential treatment to handicapped candidates; that the UPSC had agreed in principle to give preference; and that the Department of Personnel and Training would be issuing general instructions for the purpose.
However, the decisions were not implemented for seven years.
So the petitioner approached this Court seeking a writ in the nature of mandamus directing the Union of India and the UPSC to permit the blind candidates to compete for the IA.S. and Allied Services and to provide them facility of writing the civil services examination either in Braille Script or with the help of a scribe.
On hearing the counsel for the petitioner, himself visually handicapped, this Court, HELD: The performance of the counsel for the petitioner before us has amply proved the point that the visually handicapped persons can perform the jobs entrusted to them with equal efficiency.
However the question of giving preference to the handicapped in the matter of recruitment to the identified posts is a matter for the Government of India to decide.
The Government of India is commended to decide the question of providing preference/reservation to the handicapped in Group A and B Posts.
[564 C D E] This Court further held that there are number of post which are required to be filled through the civil services examinations and other competitive examinations conducted by the Commission, so the observations of the UPSC that the posts identified as suitable to be held by the physically handicapped persons, particularly those identified for the blind were not required to be filled on the basis of competitive examination conducted by the Commission, appeared to be incorrect.
[565 D] Group A and B posts in the category of Administrative Officers are necessarily to be filled as a result of civil services examination held by the UPSC.
If some of the identified posts in the Indian Administrative Service and other Allied Services can be filled from amongst the visually handicapped persons, there was no reason why they should not be permitted to sit and write the civil services examination.
[565 E] 558 </s> |
<s>[INST] Summarize the following judgement: Appeal Nos.
507375/1985 From the Judgment and Order dated 9.9.1985 of the Kerala High Court in T.R.C. Nos. 29, 30 and 31 of 1985.
A.S. Nambiar, Mrs. Shanta Vasudevan, P.K. Manohar and C.N. Sreekumar for the Appellants.
B.P. JEEVAN REDDY, J. Civil Appeal Nos.
5073 75185.
These appeals arise from a common judgment of the Kerala High Court in a batch of three tax revision cases.
The question relates to the interpretation of Section 8(2A) of the . 658 In exercise of the power conferred upon it by Section 10 of the Kerala Sales Tax Act, the State of Kerala issued a notification RS0415 of 1971 providing for "an exemption in respect of the tax payable under the said Act in regard to the turn over of the sales of newsprint by the newsprint plant in the State for the period of two years from the date of starting production of the newsprint by the said plant. ' The appellant Hindustan Paper Corporation Limited entered into an agreement with the Government of Kerala in the year, 1974 reiterating the said exemption.
The relevant portion of the agreement reads thus: "The Government of Kerala, with a view to help the project to tide over the difficulties in the initial stages and to establish itself, agree to exempt the turnover relating to the sale, of the products by the corporation from the payment of sales tax for a period of two years from the date of starting of production of the newsprint.
" A major portion of the newsprint manufactured at the factory located within Kerala is sold in the course of inter state trade and commerce.
During the assessment years relevant to the period of the two years from the date of commencement of production at the Kerala Factory, the appellant claimed exemption not only from the State sales tax by virtue of the aforesaid notification and agreement but also from Central Sales Tax under and by virtue of sub section (2A) of Section 8 of the .
The Sales Tax Officer accepted the claim under the State Sales Tax Act but rejected the claim under the .
The appeals preferred by the appellant to the Appellate Assistant Commissioner and the Sales Tax Appellate Tribunal were dismissed whereupon it approached the High Court by way of revisions under Section 41 of the State Sales Tax Act.
The High Court too disagreed with the contentions urged by the appellant and dismissed the tax revision cases.
Hence, these appeals.
The dispute between the parties, in brief, is thus: the appellant says that exemption granted to it by the aforesaid notification issued under the Kerala Sales Tax is a general exemption within the meaning of Section 8(2A) and, therefore, the inter state sales effected by it are equally exempt from Central Sales Tax by virtue of Section 8(2A).
On the other hand, the 659 case of the Government of Kerala is that the exemption granted to the appellant under the State Sales Tax Act is not a general exemption but a conditional one; further the exemption operates only in certain specified circumstances.
Accordingly, they say, the provision contained in Section 8(2A) does not go to exempt the inter state sales of the appellant.
The inter state sales effected by the appellant are those failing under Section 3(A) of the .
The liability to pay Central Sales Tax on inter state sales arises by virtue of sub section (1) of Section 6.
Sub section (1A) of Sec. 6 says that a dealer shall be liable to pay tax under the Central Act on sale of goods effected by him in the course of inter state trade or commerce notwithstanding that no tax would have been leviable under the Sales Tax law of the appropriate State if such sale had taken place inside the State.
Sub section (1) of Section 8 prescribes the rate at which the Central Sales Tax is chargeable where the goods are sold to persons and authorities mentioned therein while sub section (2) prescribes the rate in cases other than those falling under sub section (1).
Sub section (2A) of Section 8, which is material for our purpose reads thus: "(2A) Notwithstanding anything contained in sub section (lA) of Section 6 or sub section (1) or clause (b) of sub section (2) of this section, the tax payable under this Act by a dealer on his turnover in so far as the turnover or any part thereof relates to the sale of any goods, the sale or, as the case may be, the purchase of which is under the sales tax law of the appropriate State, exempt from tax generally or subject to tax generally at a rate which is lower than four per cent.
(Whether called a tax or fee or by any other name), shall be nill or, as the case may be, shall be calculated at the lower rate.
Explanation: For the purpose of this sub section a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the sales tax law of the appropriate State if under that law the sale or purchase of such goods is exempt only in special circumstances or under specified conditions or the tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods.
" 660.
What does sub section (2A) says? It opens with a non obstante clause which gives it an overriding effect over the provisions contained in Sections (lA) and over sub section (1) as well as clause (b) of sub section (2) of section 8.
b section seeks to provide exemption to a dealer with expect to his turnover in so far as his turnover or any part thereof relates (a) sale of any goods, the sale or, as the case may be, the purchase of which is under the sales tax law of the appropriate State, exempt from tax generally or (b) where his turnover or any part thereof relates to the sale of any goods the sale or purchase of which is subject to tax generally at a rate which is lower than four per cent.
In a case covered by (a) the Central Sales Tax will be nil while in a case falling under (b), Central Sales Tax shall he chargeable at the same lower rate at which the State sales tax is charge able.
The explanation appended to sub section seeks to define the words "exempt from tax generally.
" The explanation is couched in negative terms.
It says that for the purposes of the said sub section, a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the State Sales Tax law if (i) under the State law the sale or purchase of such goods is exempt only in specified circumstances or (ii) if under the ' State law the sale or purchase of such goods is exempt only under specified conditions or (iii) if under the State law the tax is levied on the sale or purchase of such goods at specified stages or (iv) where under the State law the tax is levied otherwise than with reference to the turnover of the goods.
The sole question in this case is whether the exemption granted under the aforesaid notification exempting the produce of a factory manufacturing newsprint from the State sales tax for a period of two years from the date of commencement of production in the factory can be called an exemption from tax generally.
To put it differently, the question is whether the said exemption is one operative only in specified circumstances or whether the exemption is one which is operative only under specified conditions in which case it cannot be said to be an exemption "generally.
The learned counsel for the appellant relies upon the decision of this Court in Pine Chemicals Limited vs Assessing Authority; , , a decision rendered by section Ranganathan, V. Ramaswami and N.D. Ojha, )J.
According to him, the said decision is conclusive on the question.
661 The counsel for the State of Kerala, on the other hand, seeks to distinguish the said decision.
According to him, the said decision does not consider the precise question and aspect which really, arises in these .appeals.
The learned counsel for the State of Kerala, Sri G. Vishwanath lyer, puts his case thus: if one is asked whether the exemption granted under the aforesaid notification is a general exemption, his obvious answer would be, No. It is not an exemption which operates generally but an exemption limited to two years from the date of commencement of the production of newsprint in the factory.
Similarly, if a person is asked whether newsprint is exempt generally from the State sales tax in Kerala, none would answer in the affirmative.
He would say that the sale of newsprint in Kerala is exempt only in certain circumstances or subject only to a condition viz., that newsprint is produced within two years of the commencement of the production in the factory located in Kerala.
It is, therefore, idle to contend, says Sri lyer, that the sale of newsprint within Kerala is exempt generally from the State sales tax.
In such a case, says the counsel, the provision contained in sub section (2A) does not come into operation and the inter state sales of such newsprint cannot be said to be exempt from the Central Sales Tax.
Mr. lyer further says that the exemption notification issued by the Government of Kerala under Section 10 of the State Act does not exempt newsprint from the State sales tax al together.
It grants exemption only in a specified situation viz., in respect of the newsprint produced within the period of two years from the date of commencement of production by a factory manufacturing newsprint in the State of Kerala.
The exemption would thus operate for different periods in the case of different assessees inasmuch as the date of commencement of production by all the manufacturers of newsprint may not be the same.
Moreover, the benefit of the said notification is available only where a factory goes into production after the commencement of the said notifica tion, says Sri lyer, He elaborates his submission saying that the exemption granted by the said notification is only in favour of certain dealers or a class of dealers, in certain circumstances and is not in the nature of a general exemption.
An exemption given under Section 10 of the State Act with reference to dealers or a class of dealers i.e., referable to clause (ii) of sub section (1), says the counsel, can never be called a general exemption nor can it be characterised as an exemption operating 'generally '.
A general exemption, according to the learned counsel, means a general, unqualified/unconditional exemption.
Counsel says that the decisions of 662 this Court in Indian Aluminum Cables vs State of Haryana 38 S.T.C. 108 and in Industrial Cables Corporation V. Commercial Tax Officer 35 S.T.C. 1 support his contention.
The learned counsel places strong reliance upon the object and reasons appended to the bill proposing the substitution of sub section (2A) in the year 1972.
The objects and reasons relied upon by the learned counsel read thus: "Clause 5 Sub Clause (a) of this clause seeks to substitute a new sub section for the existing sub section (2A) of Section 8 of the Principal Act.
The new sub section seeks to bring out more clearly that an exemption or lower rate of levy under the local sales tax law of the appropriate State would be available in respect of an inter state sale of goods only if such exemption or lower levy is available generally with reference.
to such goods or such class of goods under the local sales tax law.
" According to Sri Iyer the said statement of objects and reasons puts the meaning, purpose and object of the sub section beyond any doubt.
On the other hand, Sri A.S. Nambiar, learned counsel for the appellant corporation submits, adopting the reasoning in Pine Chemicals that the circumstances or conditions contemplated by the explanation to sub section must be the circumstances and conditions attaching to the sale and not to the dealer.
The exemption notification merely serves to identify the dealer and the goods entitled to exemption but it does not lay down any circumstances or conditions attaching to the sale of goods (Newsprint).
Sri Nambiar says that once the goods are identified viz., that it is a newsprint manufactured by a factory within two years of its commencing production, there is no further condition attaching to the exemption; the goods are exempt generally.
It is not a case where the exemption is hedged in by certain conditions nor is it a case where the exemption operates only in certain circumstances.
The learned counsel submits that the decisions of this court in Indian Aluminum and Industrial Cables have been considered and explained by this Court in Pine Chemicals and, therefore, the principle of those decisions cannot be read as supporting the State 's submissions.
While we see the force in the submissions of Sri Iyer, learned counsel for the State of Kerala, we cannot give effect to the same in the light of 663 the binding decision in Pine Chemicals which deals with an almost similar exemption notification.
The Government of Jammu & Kashmir had issued orders providing for exemption "from the State sales tax both on raw materials and finished products for a period of five years from the date the unit goes into production." Question had arisen whether the said exemption attracts the exemption contained in Section 8(2A) of the Central Act? The said question was answered in the affirmative by V., Ramaswami, J. speaking for the Bench.
The learned Judge examined the scheme of sub section (1) and (lA) of Section 6 as well as of sub sections (1), (2) and (2A) of Section 8 and then observed: "On a plain reading of Section 8(2 A) of the Central Sales tax Act it deals with the liability of a dealer to pay tax under the Act on his interstate sales turnover relating to any goods on the turnover relating to such goods if the sale had taken place inside the State is exempt from payment of sales tax under the sales tax law of the appropriate State.
It provides that if an intrastate sale or purchase of a commodity by the dealer is exempt from tax generally or subject to tax generally at a rate which is lower than 4 per cent than his liability to tax under the when such commodity is sold on inter state trade would be either nil or as the case may be shall be calculated at a lower rate.
Explanation states as to when the sale or purchase shall not be deemed as to be exempt from tax generally under the sales tax law.
That is to say an intrastate sale or purchase shall not be deemed as to be exempt from tax generally under the sales tax law.
That is to say an intrastate sale or purchase of a commodity shall not be deemed as exempt from State tax generally if the exemption is given only (1) in specified circumstances or under specified conditions or (2) the tax is leviable on the sale or purchase of such goods at specified stages or (3) otherwise than with reference to the turnover of the goods.
These conditions or limitations are therefore with reference to the transaction of sale or purchase.
The main clause deals with the turnover of 'a dealer ' which term would include 'any dealer ' or 'any class of dealers ' The existence or otherwise of the three Limitations under the 664 explanation above referred to on claiming exemption under Section 8(2 A) of the will therefore have to be tested with reference to the transaction of sale or purchase as the case may be of the dealer who claims the exemption in respect of his intrastate sale or purchase of the same goods.
Thus the specified circumstances and the specified conditions referred to in the explanation should be with reference to the local turnover of the same dealer who claims exemption under Section 8(2 A) of the .
The learned Advocate General for the State contended that the conditions that the industr y should have been set up and commissioned subsequent to the Government Orders 159 and 414 above referred to and the commodity sold by him in order to claim the exemption under the said government order, shall be those manufactured by that industry are conditions or specified circumstances within the meaning of the explanation and, therefore, the dealer (Pine Chemicals) is not entitled to any exemption under Section 8(2 A) of the .
We are unable to agree with this submission of the learned counsel for the State.
The facts which the dealer has 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 to be exempted from payment of tax within the meaning of those provision.
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 the exemption is claimed.
These 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.
We have already held that not only sale by the manufacturer to dealer that is exempt under the government orders but since the General Sales Tax Act had adopted only a single point levy, even the sub 665 sequent sales would be covered by the exemption order.
Therefore, the question whether the tax is leviable on the sale or purchase at 'specified stage" does not arise for consideration.
This is not also a case where the exemption is with reference to something other than the turnover of the goods." (emphasis added) The learned Judge then dealt with the decisions of this Court in Indian Aluminum and Industrial Cables and distinguished them pointing out that the exemption concerned in those cases was clearly a conditional one.
The learned Judge pointed out that the exemption concerned therein was with respect to "sales of an undertaking supplying electrical energy to the public under a licence or sanction granted or deemed to have been granted under the (9 of 1910), of goods for use by it in generation or distribution of such energy." The learned Judge pointed out that the two conditions mentioned in the said notification related to purchaser company being a licensed undertaking supplying electrical energy to the public and further that the goods sold to it are for use by the said undertaking in generation or distribution of such energy.
Following the decision in Pine Chemicals, we must and accordingly we do allow these appeals.
No orders as to costs.
N.V.K. Appeals allowed. [/INST] The State of Kerala issued Notification RSO 415 of 1971 under Section 10 of the Kerala General Sales Tax Act providing for an exemption in respect of tax in regard to the turn over of the sales of newsprint for a period of two years from the date of starting production of the newsprint plant.
The appellant entered into an agreement with the State Government in 1974 giving the said exemption.
A major portion of the newsprint manufactured at the factory located within the State was sold in the course of inter state trade and commerce, and during the assessment years relevant to the period of the two years from the date of the commencement of the production, the appellant claimed exemption not only from the State Sales Tax, by virtue of the 1971 Notification and the 1974 agreement but also from the Central Sales Tax under and by virtue of sub section (2A) of Section 8 of the .
The Sales Tax Officer accepted the claim under the State Sales Tax Act but rejected the claim under the .
Appeals preferred by the appellant to the Appellant Assistant Commissioner and the Sales Tax Appellant Tribunal were dismissed, and when the appellant approached the High Court by way of revision under Section 41 of the State Sales Tax Act the High Court also dismissed the revisions petitions.
656 In the appeals to this Court it was contended on behalf of the appellant relying on Pine Chemicals Limited vs Assessing Authority, [199] 2 S.C.C. 683 that the exemption granted to It by the 1971 State Government notification Issued under the Kerala Sales Tax Act Is a general exemption within the meaning of Section 8(2A) and, therefore, the inter state sales effected by it are equally exempt from Central Sales Tax by virtue of Section 8(2A).
The State contested the appeals by contending that the exemption granted to the appellant under the State Sales Tax is not a general exemption but a conditional one, and that the exemption operates only in certain specified circumstances, and that the provision contained in Section 8(2A) does not go to exempt the inter state sales of the appellant.
On the question whether the exemption granted under the 1971 State notification exempting the produce of the appellant factory manufacturing newsprint from the State Sales Tax for a period of two years from the date of commencement of production in the factory can be called An exemption from tax 'generally '.
Allowing the appeals, this Court, HELD:1.
The inter state sales effected by the appellant are those failing under Section 3(a) of the Central Sales Tax Act.
The liability to pay Central Sales Tax on inter state sales arises by virtue of sub section (1) of Section 6.
Sub section (2A) of section 8 seeks to provide exemption to a dealer with respect to his turnover.
The explanation appended to the sub section is couched in negative terms and seeks to define the words 'exempt from tax generally", and indicates when a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the State Sales Tax Law.
[659 B, 660 B C] 2.An inter state sale or purchase of a commodity shall not be deemed as exempt from State Tax generally if the exemption is given only (1) in specified circumstances or under specified conditions or (2) the tax is leviable on the sale or purchase of such goods at specified stages or (3) otherwise than with reference to the turnover of the goods.
These conditions or limitations are with reference to the transaction of sale or purchase.
[663 F G] 657 3.The existence or otherwise of the aforesaid three limitations on claiming exemption the explanation under Section S(2 A) of the will have to be tested with reference to the transaction of sale or purchase as the case may be of the dealer who claims the exemption in respect of his intrastate sale or purchase of the same goods.
[663 H, 664 A] 4.The facts which the dealer has 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 to be exempted from payment of tax within the meaning of Section 8(2 A).
[664 E] 5.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.
[664 G] Pine Chemicals Limited vs Assessing Authority, ; , explained and followed.
[660 H] Indian Aluminum Cables vs State of Haryana, 38 S.T.C. 108, Industrial Cables Corporation vs Commercial Tax Officer 35 S.T.C. 1, distinguished.
[662 A] </s> |
<s>[INST] Summarize the following judgement: minal Appeal No. 629 of 1985.
From the Judgment and Order dated 25.6.1985 of the Andhra Pradesh High Court in Criminal Appeal No. 637 of 1983.
K.Madhava Reddy, A. Subba Rao and A.D.N. Rao for the Appellants.
G. Prabhakar for the Respondent.
The Judgment of the Court was delivered by DR.ANAND, J.
The curse of dowry has claimed yet another victim.
Kundula Bala Subrahmanyam, the husband of the deceased Kundula Koti Nagbani and his mother Kundula Annapurna (mother in law of the deceased) have filed this appeal under Section 2(a) of the against the judgment of the High Court of Andhra Pradesh, Hyderabad, dated 25.6.1985, setting aside the judgment of acquittal passed by the Sessions Judge, East Godavari Division and convicting both the appellants for an offence under Section 302/34 IPC and sentencing each of them to suffer imprisonment for life.
On 23rd of August, 1981, between 12.30.1.00 p.m. on hearing screams and cry of deceased Kundula Koti Nagbani, at that time aged about 18 years, Pulapa Lakshmi PW2, Vempati Paparao PW3 and Vempati Radha PW4, rushed to the house of the appellant and found both the appellants along with the father of appellant No. 1 (father in law of the deceased) hurriedly coming out of the kitchen while the deceased was lying on the floor engulfed in flames.
Since, the appellants or the father in law of the deceased were making no attempts to put off the flames, PW2 asked appellant No. 1 to give her something so that she could extinguish the fire.
He, however, did not respond.
She then requested first appellant 's father to give something to her so that the fire could be put off.
The father of appellant No. 1 enquired if he should get a bucket of water.
PW2, thereupon, requested him to give either a bed sheet or a blanket.
The father of appellant No. 1 then brought out a bed sheet (Bontha) from the cot and 675 as he was passing it on, to PW2, the mother in law of the deceased, appellant No. 2, told her husband not to give the bontha to PW2.
PW2, in the meanwhile, took the bontha from the father of the first appellant and tried to extinguish the fire.
The deceased turned her side.
She was alive.
The deceased asked PW2 for some water.
Since, the petticoat of the deceased was burning, PW3, the father of PW2, who had also rushed along with her to the house of the appellant broke the thread of the petticoat to save her from further burning and threw away the burning garments In the process, he also received some burn injuries.
PW2 poured water into the mouth of the deceased and enquired from her as to what had happened.
The deceased told her that "her mother in law had poured kerosene over her and her husband had set fire to her".
The deceased again felt thirsty and asked for more water which was again given to her by PW2.
The above statement made by the deceased to PW2 was overheard by PW3 and some others, who had also reached on hearing the cries.
Vempati Nagabhushanam PW5, another immediate neighbor of the appellants living only about 2 yards away also heard the cries of the deceased and rushed to the house of the appellant.
He noticed PW3 was pulling out the petticoat of the deceased while PW2 was attempting to extinguish fire.
He saw PW2 pouring water into the mouth of the deceased.
He also heard the statement made by the deceased to PW2 about the manner in which she had been set on fire.
PW5 thereupon went away to inform the maternal uncle of the deceased at Malakapalli.
On the way, he met one Ramakrishna coming on a motor cycle and at his request Ramakrishna gave him a ride to Malakapalli.
On reaching the house of the maternal uncle of the deceased, they found the brother of the deceased Vempati Sreerama Krishna Sreeram PWl was also present there.
He conveyed to them the information regarding the burning of the deceased and also what he had heard the deceased telling PW2.
Ramarao and PWl then went on the same motorcycle to Dharmavaram.
PWl reached the house of the appellant and saw a number of persons including PWs 2 and 3 gathered there.
The deceased was lying on the floor and at that time she had no clothes on her.
He noticed that she had received burn injuries from her breasts downwards to her legs.
On seeing her plight, PW1 started crying and hitting his head against a pillar.
When the deceased noticed that PW1 had come, she asked PW2 to call her brother PWl inside.
PW2 thereupon went out and brought PW1 to the kitchen where the deceased took the palm of PWl into her own palms and told him in Hindi "please tell mother and father as I am 676 telling you.
My mother in law poured kerosene on me and my husband set fire.
You tell father and mother about this.
Don 't fight.
Anyhow I am dying.
" She also told her brother PW1 to take back the cash given to her and divide it amongst the sisters in equal share and get them married off to nice persons.
At this juncture, the first appellant, husband of the deceased came inside the kitchen and with folded hands begged the deceased for forgiveness saying that he would not repeat what he had done and therefore he may be pardoned.
PWl got wild and caught hold of the neck of the first appellant.
PW2 and PW3 rushed towards them and released the first appellant from the hold of PW1 and sent PWl to another uncle 's house and told the uncle that since PWl was in an agitated mood he should take care of him.
Within an hour, however, PWl went back to the house of the deceased and by that time, a local Doctor PW6, Dr. R. Radha krishnamurthy had arrived at the house and was giving first aid to her and she was lying on a cot in the verandah.
PW6 at about 3.30 p.m. advised the removal of the deceased to the Government Hospital at Kovvur.
A matador van was secured and at about 4.30 p.m. PW1, Ramarao, his maternal uncle, the wife of Ramarao and some other neighbors took the deceased to the Government Hospital at Kovvur in the matador van reaching there at about 5 p.m.
At about 5.30 p.m., Dr. K. Parameswaradas PW9 examined the deceased and declared her dead.
PWl thereupon went to the police station which is adjacent to the hospital alongwith his uncle and lodged the report exhibit
P4 with the Head Constable Md. Navabjani PW12.
A case under section 302 IPC was registered and information was sent to Inspector of Police G. Scendavce Rao PW14 on telephone.
After collecting a copy of the FIR, PW14 proceeded to the Government Hospital and from there went to the scene of occurrence.
He seized M.0 's 1 to 3, drew the site plan of the scene of occurrence and examined PWs 1 to 5 and PW9 at Dharmavaram.
He also held the inquest proceedings from 6.30 a.m. to 8.30 a.m. on August 24 1981 and after getting the postmortem conducted handed over the dead body to the family of the deceased.
PW9 Dr. K. Parameswaradas who conducted the postmortem examination in his report Ex.Pl8 noted extensive burns to the extent of 90% on the body of the deceased and opined that the deceased had died due to the extensive burns all over the body and that the injuries were sufficient in the ordinary course of nature to cause death.
During the investigation, the investigating officer made a request for the preservation of viscera of the deceased so that it could be sent for chemical examination, as according to the state 677 ment of PW6, the deceased had allegedly told him that she had consumed dettol to commit suicide and since she could not bear the pain she had set herself on fire.
The report of the chemical examiner exhibit
Pl6, however, revealed that no poison was detected and that the death had been caused due to extensive burns.
Further investigation into the case was, carried out by Md. Baduruddin PW15, Inspector of the Crime Branch.
During the investigation, the father of the deceased Venkataramana handed over letters Exs.
Pl P3 to the investigating officer.
Both the appellants had made themselves scarce and were not found in the village when search for them was made by the investigating officer.
The first appellant surrendered in the court on 10.11.1981 while the second appellant surrendered in the court on 7th of December, 1981.
After the investigation was over, challan was filed and both the appellants were sent up for trial in the Court of Sessions Judge East Godavari Division at Rajahmundry.
At the trial, the prosecution inter alia relied upon the following circumstances with a view to connect the appellant with the crime: (1) Motive; (2) Two dying declarations made to PW2 and to PW1; (3) Medical Evidence; (4) Conduct of the appellant immediately and after the occurrence; (5) Absconding of the appellants.
The appellants when examined under Section 313 of the Criminal Procedure Code denied their involvement and stated the case to be a false one.
They, however, produced no defence.
The learned Trial Court did not accept the prosecution version and held that there was no motive for the appellant to commit the crime; that the evidence of PWs 2 to 4 could not be relied upon; that PWI had made improvements in his statements recorded at the trial and, therefore, the oral dying declaration made to him could not be relied upon.
The Trial court also held that there had been unexplained delay in lodging report with the police.
The Trial Court placed reliance on the testimony of hostile 678 witness PW6 and held that the case was one of suicide and not of murder.
On those findings, the learned Sessions Judge acquitted both the appellants.
On an appeal, filed by the State, a Division Bench of the High Court of Andhra Pradesh set aside the judgment of the learned Sessions Judge and convicted both the appellants for an offence under Section 302/34 IPC.
Speaking for the Division Bench, K. Ramaswamy J. (as His Lordship then was) found no hesitation to hold PWl as a witness of truth and a wholly reliable witness and also opined that the evidence of 'PWs 2 and 3 was trustworthy and reliable.
The dying declarations made by the deceased to PW2 and subsequently to PWl were believed and relied upon.
It was held that report exhibit
P4 had been given by PWl immediately after the deceased was declared dead by the Doctor and therefore there was no delay much less unexplained delay in lodging the report.
While dealing with the conduct of the appellant, it was opined that their conduct was inconsistent with their innocence and consistent only with the hypothesis that appellant No. 2 had committed the act of pouring kerosene on the deceased and appellant No. 1 had lit fire.
With regard to the existence of motive, it was held that the appellants were actuated with a motive to do away with the life of the deceased for not getting the land registered in the name of the first appellant.
Finally, the High Court found that the chain of the established circumstances was complete and the circumstances were sufficient to conclusive establish that the appellants and the appellants alone had committed the crime of murder of the deceased.
The High Court held that the consideration of evidence on record and the reasoning of the Trial Court was most unsatisfactory and could not be sustained and therefore set aside the order of acquittal and convicted both the appellants for the offence under Section 302/34 IPC and sentenced each one of them to imprisonment for life.
Appearing for the appellants before us, Mr. Madhav Reddy, the learned Senior Counsel urged that since the Trial Court had acquitted the appellants, the High Court was not justified in recording an order of conviction as the findings recorded by the Trial Court could not be said to be perverse.
It was argued that the dying declarations were not worthy of reliance and the motive was feeble and not established.
Learned counsel submitted that the surrendering of the appellants themselves in the court on 10.11.1981 and 7.12.1981 itself was enough to show that they had no 679 guilty conscious and the prosecution was not justified in relying upon the conduct as an adverse conduct against the appellants.
While explaining the conduct of the appellants at the time of and after the occurrence, he submitted that since all neighbors had become hostile, out of fear the appellants did not act either to put off the fire or remove the deceased to the hospital.
In reply, learned counsel for the State argued that the findings of the Trial Court were not only conjectural but also perverse and the evidence of the witnesses was disbelieved on mere surmises.
It was submitted that the Trial Court did not property discuss the two dying declarations mad by the deceased and since the dying declarations have been proved by reliable evidence, those by themselves could form the basis of conviction of the appellants.
It was then submitted that the High Court after a careful appraisal of the evidence had rightly set aside the judgment of the Trial Court which suffered from illegality as well as manifest error and perversity.
Learned counsel submitted that the prosecution had established the case against the appellants beyond every reasonable doubt and their appeals deserve to be dismissed.
Admittedly, there is no eye witness in the case.
The case is sought to be established by the prosecution from circumstantial evidence.
In a case based on circumstantial, evidence, the settled law is that the circumstance from which the conclusion of guilt is drawn should be fully proved an these circumstances must be conclusive in nature.
Moreover, all the established circumstances should be complete and there should be no gap in the chain of evidence.
The proved circumstances must be consistent only wit the hypothesis of the guilt of the accused alone and totally inconsistent wit his innocence.
The courts have, therefore, the duty to carefully scrutinize the evidence and deal with each circumstance carefully and thereafter fin whether the chain of the established circumstances is complete or no before passing an order of conviction.
It is in the light of the above principles that we shall deal with various circumstances relied upon by the prosecution.
(1)Motive: In a case based on circumstantial evidence, motive as sums great significance as its existence is an enlightening factor in process of presumptive reasoning.
The motive in this case is alleged to be the greed of dowry.
680 On 18.5.1979, marriage between the appellant and the deceased was solemnised.
The deceased aged about 18 years was prosecuting her Intermediate course of study at that time.
She was the eldest of the five children of one Vempati Venkataramana, who at the relevant time was working as an Assistant Engineer with the Railways at Gorakhpur.
At the time of the marriage, the parents of the deceased had agreed to give Rs. 50,000 in cash, 50 sovereigns of gold and two acres of land as dowry.
The cash was paid at the time of the marriage itself alongwith 15 sovereigns of gold.
The parents of the deceased had promised to give the remaining 35 gold sovereigns and get the land also registered subsequently, though the possession of the land measuring about 3.70 acres was given to the appellant No. 1.
The mother in law of the deceased and her husband had been pressurising the deceased all along to bring the remaining sovereigns and also to get the land registered in the name of the first appellant.
She conveyed it to her mother PW7.
While the parents of the deceased agreed to get the land registered in the name of the deceased, the first appellant and his parents were insisting that the land should be got registered in his name and not in the name of the deceased.
Since that desire was not fulfilled, the deceased was being continuously harassed and ill treated.
A strick vigil was kept on her at the house of her in laws and she was not even allowed to meet anybody nor were the neighbors permitted to come and meet or talk to her.
She was being prevented from writing letters to her family also, but stealthy, she wrote letters Exs.
Pl 3 and got them posted through a neighbor.
The contents of those letters are rather revealing and expose the extent of the harassment to which the deceased was being subjected to by her mother in law and her husband.
After seeing the contents of the letters and with a view to find out the cause of her distress, PW1, her brother went to Dharmavaram on August 22, 1981, to the house of the deceased.
The deceased, however, was so terrorised that she could not speak to him freely.
She was surrounded by her husband and her mother in law, who did not talk to PWl at all to show their indifference.
From the evidence of the prosecution witnesses and particularly that of the mother of the deceased PW7, the immediate provocation was the insistence of the appellants that the land be got registered in the name of the husband and the reluctance ' of the parents of the deceased to do so and instead their desire to get it registered in the name of the deceased.
The oral evidence led by the prosecution in this behalf is wholly consistent.
In her letter exhibit
P2, the 681 deceased had clearly mentioned that she was getting her letters posted through PW4.
She requested her sisters to write letters to her in Hindi so that her in laws, who did not know Hindi, could not know what was being written.
In one of her letters, a part of which was addressed to her sister, she wrote: ". .I am not going to anybody 's house.
One day I went to the house of sister in law Radha to deliver the letter secretly.
Their mood was changed on account of going to their house.
That is why I stopped going.
" Do not mention even a single word in your letter that I have been writing to you.
Ask mother not to worry.
On hearing about your results write a letter without fail.
If I get an opportunity I will definitely write a letter. " In her letter exhibit
P1 to her father, she wrote: Father I am feeling much bore here because no one come to our house nor I am allowed to go their house Please always write letters.
So that I may be satisfied in seeing your letters.
If I may not give reply to your letter then you please don 't mind it.
You know here 's conditions.
Rest is O.K. Father you also take care of your health.
" In the same letter while addressing her sisters, she wrote: The lock is opened.
I am writing this letter secretly.
In reply do not write that you have received the letter.
If you write like that these people will become more angry She also wrote to her sister: not at house and there is no watch over me.
I am getting the letters posted through sister in law Radha secretly.
You write letters mostly in Hindi only so that even if they chanced to fall in the hands of any one, they cannot understand The tenor of her letters disclose the distressing state of affairs at the house 682 of her in laws.
These letters coupled with the evidence of her mother go to show how the deceased was being tormented and harassed.
It is indeed a shame and pity that within just two years of her marriage, her dream of a happy married life was shattered and she found herself almost as a prisoner and 'a frightened chicken ' who had to write letters to her parents and sisters 'secretly ' for the fear that if her in laws came to know they would "become more angry '.
She had to request her sisters to reply to her letters in Hindi so that "even if they chanced to fall in the hands of anyone, they cannot understand".
One can only imagine the plight of this young bride and the sadistic behavior born out of greed for dowry of her husband and mother in law.
Not having been able to get the land registered in the name of the first appellant appears to have frustrated them to the extent of murdering the young wife.
The evidence led by the prosecution to establish the existence of motive is wholly reliable and is also consistent.
The prosecution has successfully established that the appellants had strong and compelling motive to commit the crime because of her parents not agreeing to get the land registered in the name of the first appellant and their insistence to have the land registered in the name of their own daughter instead.
The motive, has, been conclusively established by the prosecution and we have no hesitation to hold that the prosecution has succeeded in establishing the existence of the motive for both the appellants to commit the crime conclusively and positively and we agree with the finding of the High Court in that behalf.
2.Dying Declarations: The next piece of circumstantial evidence relied upon by the prosecution are two dying declarations made by the deceased.
According to the prosecution case, the deceased made the first dying declara tion before PW2 when she after hearing her cries came to the house and found both the appellants and the father of appellant No. 1 coming out of the kitchen and the deceased lying on the floor engulfed in flames.
According to PW2, the deceased told her that her mother in law had poured kerosene on her and her husband had set her on fire.
This statement was also heard by PW3 & PW5.
The second dying declaration was made by the deceased to her brother PW1, after he was called by her to the kitchen.
The deceased, according to the prosecution case, on meeting her brother, took the palm of PWl into her own palms and inter alia told to him that "her mother in law poured kerosene on her and her husband set fire to her".
The statement made by the deceased to 683 PW1 was in Hindi.
Both the statements, as noticed above, relate to the circumstances leading to the cause of her death, as according to the medical evidence, the deceased died of 90% burn injuries.
Both the dying declarations are oral.
They have been made to friends and to the brother of the deceased respectively.
In view of the close relationship of the witnesses to whom the oral dying declarations were made, it becomes necessary for us to carefully scrutinize and appreciate the evidence of the witnesses to the dying declaration.
We have already adverted to the evidence of these witnesses (PW1, PW2, PW3) while narrating the prosecution case.
Indeed, PWl is the brother of the deceased and therefore a very close relation, but mere relationship cannot be a ground to discard his testimony, if it is otherwise found to be reliable and trustworthy.
In the natural course of events, the deceased who was on the verge of her death would have conveyed to her near and dear ones the circumstances leading to her receiving the burn injuries.
PW1 has given a very consistent statement and has reproduced the words of the deceased clearly and truthfully.
Nothing has been brought out in the cross examination to discredit his testimony at all.
He had at the earliest point of time disclosed as to what the deceased had told to him.
The discrepancy pointed out by learned counsel for the appellants as to whether the dying declaration was made to him by his sister when she was lying on the cot in the verandah, as stated in FIR Ex.P4, or while she was lying on the floor of the kitchen, is of an insignificant nature and could be either out of confusion or the gap of time between the making of the two statements.
Moreover, PW1 was not at all cross examined on the alleged discrepancy when he gave evidence in Court.
No explanation whatsoever was sought from him about the so called discrepancy.
PW1, the brother of the deceased appears to us to be a truthful witness and his testimony has impressed us.
He did not implicate the father of the appellant and gave evidence only about what he was actually told by his sister.
From our appreciation of the evidence of PW1, we agree with the view expressed by the High Court that "considering the case from all perspectives we have no hesitation to hold that P.W.1 is a witness of truth worthy of acceptance and so he is wholly a reliable witness.
exhibit
P4 is a voluntary statement given by P.W.1 and it lends corroboration to the evidence of P.W.1.
" Coming now to the evidence of PWs2 and 3.
The substratum of their evidence with regard to the dying declaration is that while that they were 684 in the kitchen of their own house, taking tea, they heard the cry of a lady and rushed to the house of the deceased, being her close neighbors.
They saw the deceased engulfed in flames sprawled on the floor of the kitchen.
They also saw both the appellants as well as the father of appellant No. 1 coming out of the kitchen to the verandah.
The distance between the house of PWs2 and 3 from the house of appellant is only 2 yards.
After PW2 took a bontha from the father in law of the deceased, to the annoyance of appellant No. 2, with a view to extinguish the fire, the deceased, on enquiry by the witness as to what had happened told her that 'my mother in law poured kerosene on me and my husband set me on fire".
The deceased had not implicated her father in law, though he was also present there ' PW3, father of PW2, had assisted PW2 to extinguish the flames and it was he who broke the string of the petticoat of the deceased and threw it away.
In the process PW3 himself suffered burn injuries.
His injuries were examined by the Doctor and found to be caused by fire.
The Trial Court doubted the testimony of PW3 on the ground that he had made some improvement in his evidence in court when he stated that he had heard the deceased screaming and saying that she was "being killed".
He had not stated so in his statement recorded during the investigation.
This, in our opinion, is hardly an improvement of any consequence because both in his statement in court as well as the one recorded under Section 161 Cr.
PC he has deposed that it was on hearing the 'screams ' of the deceased that he and his daughter rushed to the house of the decased.
In any event the so called improvement was not sufficient to discard his testimony.
Despite searching cross examination of both these witnesses, nothing has been brought out in their cross examination to discredit them or doubt their veracity at all.
After carefully analysing their evidence, we find PWs 2 and 3 as witnesses worthy of credence and trustworthy.
From the evidence of PWs 1, 2 and 3, both the dying declarations are proved to have been made by the deceased.
They are the statements made by the deceased and relate to the circumstances leading to her death.
Both the dying declarations are consistent with each other and appear to have been made by the deceased voluntarily and in the natural course of events.
They have a ring of truth about them.
Section 32(1) of the Evidence Act is an exception to the general rule that hearsay evidence is not admissible evidence and unless evidence is tested by cross examination, it is not credit worthy.
Under Section 32, when 685 a statement is made by a person, as to the cause of death or as to any of the circumstances which result in his death, in cases in which the cause of that person 's death comes into question, such a statement, oral or in writing, made by the deceased to the witness is a relevant fact and is admissible in evidence.
The statement made by the deceased, called the dying declaration, falls in that category provided it has been made by the deceased while in a fit mental condition.
A dying declaration made by person on the verge of his death has a special sanctity as at that solemn moment, a person is most unlikely to make any untrue statement.
The shadow of impending death is by itself the guarantee of the truth of the statement made by the deceased regarding the causes or circumstances leading to his death.
A dying declaration, therefore, enjoys almost a sacrosanct status, as a piece of evidence, coming as it does from the mouth of the deceased victim.
Once the statement of the dying person and the evidence of the witnesses testifying to the same passes the test of careful scrutiny of the courts, it becomes a very important and a reliable piece of evidence and if the court is satisfied that the dying declaration is true and free from any embellishment such a dying declaration, by itself, can be sufficient for recording conviction even without looking for any corroboration.
If there are more than one dying declarations, then the court has also to scrutinise all the dying declarations to find out if each one of these passes the test of being trustworthy.
The Court must further find out whether the different dying declarations are consistent with each other in material particulars before accepting and relying upon the same.
Having read the evidence of PWs 1 3 with great care and attention, we are of the view that their testimony is based on intrinsic truth.
Both the dying declarations are consistent with each other in all material facts and particulars.
That the deceased was in a proper mental condition to make the dying declaration or that they were voluntary has neither been doubted by the defence in the course of cross examination of the witnesses nor even in the course of arguments both in the High Court and before us.
Both the dying declarations have passed the test of creditworthiness and they suffer from no infirmity whatsoever.
We have therefore no hesitation to hold that the prosecution has successfully established a very crucial piece of circumstantial evidence in the case that the deceased had voluntarily made the dying declarations implicating both the appellants and disclosing the manner in which she had been put on fire shortly before her death.
This circumstance, therefore, has been established by the prosecution beyond every reasonable 686 doubt by clear and cogent evidence.
3.Medical Evidence: The next circumstance relied upon by the prosecution is the medical evidence which has been provided by the testimony of Dr. Parameswaradas PW9.
He deposed that the deceased had died of 90% burns and that kerosene smell was emitting from the deadbody.
According to the report of the chemical examiner, no poison was found in the viscera.
The chemical examiner 's report, coupled with the other evidence on record belies the suggestion made by the defence during the cross examination of some witnesses that with a view to commit suicide, the deceased had drunk dettol and when she could not bear the pain on account of consumption of dettol, she herself poured kerosene oil on herself and set herself on fire.
Rightly, this defence case was not pursued before us with any amount of seriousness by the learned counsel for the appellants.
The medical evidence, therefore fully corroborates the prosecution case and lends support to the dying declaration and more particularly the manner in which the deceased had been set on fire.
Conduct of the appellant immediately and after the evidence: The conduct of the appellants, son and mother, both at the time when the deceased lay burning on the floor of the kitchen and afterwards till she succumbed to the burn injuries is the next circumstance relied upon by the prosecution to connect the appellants with the crime.
From the testimony of PWs 2, 3 and 4, who are the immediate neighbors of the appellant and the deceased, they had heard the cry of the deceased and rushed to her house.
PWs 2 and 3 found the deceased lying on the floor of the kitchen engulfed in flames while both the appellants and father in law of the deceased were coming out of the kitchen in the verandah.
None of the two appellants or the father in law made any attempt whatsoever to extinguish the fire and save the deceased.
The raised no alarm.
They stood there as if waiting for her death, rather than make any effort to save her.
Their conduct, thus, runs consistent with the hypothesis of their guilt and betrays that of an innocent persons.
In their statements under Section 313 of Cr. PC they did not deny their presence in the house at the time of the occurrence, but denied their involvement in the crime.
The normal human conduct of any person finding someone engulfed in flames would be to make all efforts to put off the flames and save the life of the person.
Though, the appellants were the closest relations 687 of the deceased, they did not do anything of the kind.
Let alone making any effort to extinguish the fire, according to PW2 when the father in law of the deceased, at her request, was giving her the bontha to extinguish the flames, appellant No. 2, the mother in law of the deceased, objected to the same.
This conduct speaks volumes about the extent of hatred which the mother in law exhibited towards her daughter in law.
They rendered no first aid to the deceased.
Their conduct at the time of the occurrence, therefore, clearly points towards their guilt and is inconsistent with their ingnocence the appellants did not even accompany the deceased to the hospital in the matador van.
Had the husband not been a party to the crime, one would have expected that he would be the first person to take steps to remove the deceased to the hospital and leave no stone unturned to save her life.
An innocent mother in law would have also done the same, even if she had no love or emotional feelings for her daughter in law.
Neither the husband nor the mother in law of the deceased took any steps to remove the deceased to the hospital, let alone accompany her to the hospital.
This conduct also is inconsistent with their innocence and consistent only with the hypothesis, as stated by the deceased in her dying declarations, that the mother in law had poured kerosene on her while her husband had lit fire and put her on flames.
Mr. Reddy, the learned senior counsel appearing for the appellants submitted that since the neighbors and other relations of the deceased had almost taken over the house and the person of the daughter in law, the appellants were afraid of being beaten and as such they rendered no aid to the deceased needs a notice only to be rejected.
No suggestion whatsoever on these lines was made to any of the witnesses and in any event such an explanation betrays common sense.
Since, the deceased had admittedly suffered burn injuries in the kitchen of her house, there was an obligation on the part of the appellants and the father in law of the deceased, who have admitted their presence in the house at the time of occurrence, to explain the circumstances leading to the deceased dying of 90% burn injuries.
None has been offered.
The theory of suicide was put up only as an argument of despair.
While discussing the motive and the dying declarations, we have come to the conclusion that the deceased died as a result of the designed move on the part of both the appellants to put an end to her life and she did not commit suicide as was sought to be suggested during cross examination by the defence to some witnesses.
The theory of suicide has no legs to stand upon.
The conduct of the appellants who did not try to extinguish the fire or 688 render any first aid to her, also totally betrays the theory of suicide and we agree with the High Court that the theory as set up by the appellants is highly unbelievable or acceptable.
The prosecution has, thus, successfully established that the conduct of both the appellants both at the time of the occurrence and immediately thereafter is consistent only with the hypothesis of the guilt of the appellants and inconsistent with their innoncence.
5) Absconding.
Prosecution has also relied upon the circumstances of the absconding of the appellants to prove its case.
A closer link with the conduct of the appellants both at the time of the occurrence and immediately thereafter is also the circumstance relating to their absconding.
Md. Badruddin PW15, the investigating officer, deposed that he had taken up the investigation of the case and having examined PWsl 4 had caused search to be made for the accused but they were not found in the village and despite search, they could not be traced.
Appellant No. 1 surrendered before the court on 10.11.1981 while appellant No. 2 surrundered in the court on 7.12.1981.
No explanation, worth the name, much less a satisfactory explanation has been furnished by the appellants about their absence from the village till they surrendered in the court in the face of such a gruesome 'tragedy '.
Indeed, absconding by itself may not be a positive circumstance consistent only with the hypothesis of guilt of the accused because it is not unknown that even innocent persons may run away for fear of being falsely involved in a criminal case and arrested by the police, but coupled with the other circumstances which we have discussed above, the absconding of the appellants assumes importance and significance.
The prosecution has successfully established this circumstance also to connect the appellants with the crime In view of the above discussion and our appraisal and analysis of the evidence on record, we have no hesitation to hold that the.prosecution has successfully established all the circumstances appearing in the, evidence against the appellants by clear, cogent and reliable evidence and the chain of the established circumstances is complete and has no gaps whatsoever and the same conclusively establishes that the appellants and appellants alone committed the crime of murdering the deceased on the fateful day in the manner suggested by the prosecution.
All the established circumstances are consistent only with the hypothesis that it was the appellants alone 689 who committed.the crime And the circumstances are inconsistent with any hypothesis other than their guilt.
It is most unfortunate that the husband of the deceased not only failed to perform his duties and obligations as husband to protect and take care of his wife as per the marriage vows and instead joined his mother in the most degrading and cold blooded murder of the young innocent bride.
Of late there has been an alarming increase in cases relating to harassment, torture, abetted suicides and dowry deaths of young innocent brides.
This growing cult of violence and exploitation of the young brides, though keeps on sending shock waves to the civilised society whenever it happens, continues unabated.
There is a constant erosion of the basic human values of tolerance and the spirit of "live and let live '.
Lack of education and economic dependence of women have encouraged the greedy perpetrators of the crime.
It is more disturbing and sad that in most of such reported cases it is the woman who plays a pivotal role in this crime against the younger woman, as in this case, with the husband either acting as a mute spectator or even an active participant in the crime, in utter disregard of his matrimonial obligations.
In many cases, it has been noticed that the husband, even after marriage, continues to be 'Mamma 's baby and the umbilical cord appears not to have been cut even at that stage.
We are here tempted to recall the observations of R.N. Mishra, J. (as His Lordship then was) in State (Delhi Administration) vs Laxman & Ors.
Appeals 93 and 94 of 1984 decided on 23.9.1985, while dealing with a bride burning case.
It was observed: "Marriage, according to the community to which parties belong, is sacramental and is believed to have been ordained in heaven.
The religious rites performed at the marriage altar clearly indicate that the man accepts the woman as his better half by assuring her protection as guardian, ensuring food and necessaries of life as the provider, guaranteeing companionship as the mate and by resolving that the pleasures and sorrows in the pursuit of life shall be shared with her and Dharma shall be observed.
If this be the concept marriage, there would be no scope to look for worldly considerations, particularly dowry.
When a girl is transplanted from her natural setting into 690 an alien family, the care expected is bound to be more than in the case of a plant.
Plant has fife but the girl has a more developed one.
Human emotions are unknown to the plant life.
In the growing years in the natural setting the girl now a bride has formed her own habits, gathered her own impressions, developed her own aptitudes and got used to a way of life.
In the new setting some of these have to be accepted and some she has to surrender.
This process of adaptation is not and cannot be one sided.
Give and take, live and let live, are the ways of life and when the bride is received in the new family she must have a feeling of welcome and by the fond bonds of love and affection, grace and generosity, attachment and consideration that she may receive in the family of the husband, she will get into a new mould; the mould which would last for her life.
She has to get used to a new set of relationships one type with the husband, another with the parents in law, a different one with the other superiors and yet a different one with the younger ones in the family.
For this she would require loving guidance.
The elders in the family, including the mother in law, are expected to show her the way.
The husband has to stand as a mountain of support ready to protect her and espouse her cause where she is on the right and equally ready to cover her either by pulling her up or protecting her willingly taking the responsibility on to himself when she is At fault.
The process has to be a natural one and there has to be exhibition of cooperation and willingness from every side.
Otherwise how would the transplant succeed?" Awakening of the collective consciousness is the need of the day.
Change of heart and, attittide is what is needed.
If man were to regain his harmony with others and replace hatred, greed, selfishness and anger by mutual love, trust and understanding and if woman were to receive education and become economically independent, the possibility of this pernicious social evit dying a natural death may not remain a dream only.
The legislature, realising the gravity of the situation has amended the laws and provided for stringent punishments in such cases and even permitted the raising of presumptions against an accused in cases of unnatural deaths of 691 the brides within the first seven years of their marriage.
, The was enacted in 1961 and has been amended from time to time, but this piece of soicial legislation, keeping in view the growing menance of the social evil also does not appear to have served much purpose as dowry seekers are hardly brought to book and convictions recorded are rather few.
Laws are not enough to combat the evil.
A wider social movement of educating women of their rights, to conquer the menance, is what is needed more particularly in rural areas where women are still largely uneducated and less aware of their rights and fall an easy prey to their exploitation.
The role of courts, under the circumstances assumes greater importance and it is expected that the courts would deal with such cases in a more realistic manner and not allow the criminals to escape on account of procedural technicalities or insignificant lacunas in the evidence as otherwise the criminals would receive encouragement and the victims of crime would be totally discouraged by the crime going unpunished.
The courts are expected to be sensitive in cases involving crime against women.
The verdict of acquittal made by the Trial Court in this cast is an apt illustration of the lack of sensitivity on the part of the Trial Court.
It recorded the verdict of acquittal on mere surmises and conjectures and disregarded the evidence of the witnesses for wholly insufficient and insignificant reasons.
It ignored the vital factors of the case without even properly discussing the same.
The High Court was, therefore, perfectly justified in convicting the appellants for the offence of murder punishable under Section 302 readwith Section 34 IPC and sentencing each one of them to suffer imprisonment for life.
We uphold the conviction and sentence of the appellants for the offence under Section 302/34 IPC and dismiss their appeal.
The appellants were directed to be released on bail by this Court on 30.3.1989.
Their bail bonds are cancelled and they are directed to be taken in to custody to suffer the remaining period of their sentence.
V.P.R. Appeal dismissed. [/INST] The prosecution case was that on 23.8.1981 between 12 30 1.00 p.m., on hearing screams and cry of the deceased, aged about 18 years, P.W.2 alongwith her father PW3, and PW4 rushed to the house of the appellant They saw the father of appellant No. 1 (father in law of the deceased) alongwith the husband and mother in law of the deceased hurriedly com ing out of the kitchen while the deceased was lying on the floor engulfed in flames.
As the appellant No. 1, did not respond to the request of PW2 to give her something to extinguish the fire, PW2 requested the father of the appellant No. 1 to give a bed sheet or blanket while the father of the appellant No. 1 was passing on a bed sheet to PW2, the appellant No. 2 (mother in law of the deceased) objected.
In the meanwhile PW2 took the bed sheet from the father of the appellant No. 1 and tried to extinguish the fire.
The deceased asked PW2 for some water.
PW3 removed the burning petticoat from the body of the deceased to save her from further burning.
While doing so he also received some burn injuries.
PW2 poured water into the deceased 's mouth and enquired from her as to what had happened.
667 The deceased told PW2 that her mother in law had poured kerosene over her and her husband had set fire to her.
The deceased asked for more water, which was again given to her by PW2.
The deceased 's statement made to PW2 was overheard by PW3 PW5 and some others who also reached the spot on hearing her cries.
PW5 went away to inform the matenal uncle of the deceased with one Ramakrishna on his motor cycle.
There PW5 found PW1, the brother of the deceased and informed about the burning of the deceased and also what he had heard the deceased telling PW2.
PW1 reached the house of the appellant with Ramakrishna on his motor cycle.
He saw a number of persons including PWs 2 and 3 gathered there.
The deceased was lying on the floor and she had no clothes on her.
PWl noticed that she had received burn injuries from her breasts downwards to her legs.
On seeing her plight, PWl started crying and hitting his head against a piller.
When the deceased noticed PW1 had come, she asked PW2 to bring her brother inside.
PW2 went out and brought PWI to the kitchen.
The deceased took the palm of her brother, PWl into her own palms and told him to tell mother and father that her mother in law poured kerosene on her and her husband set her or fire.
She requested him that he should not fight, "anyhow she was dying." She also told PWl to take back the cash given to her and to divide it amongst her sisters in equal share and to get them married to nice persons.
The appellant No. 1, the husband of the deceased came inside the kitchen with folded hands and begged her for forgiveness saying that he would not repeat what he had done.
PWI got wild and caught hold of the neck of the appellant No. 1.
FIW2 and PW3 rushed towards them and released the appellant No. 1 from the hold of PW1.
They sent PWI to another uncle 's house and told the uncle to take care of PW1.
When PWI returned to the house of the deceased after one hour he saw that PW6, a local Doctor, was giving first aid to the deceased and she was lying on a cot in the verandah.
PW6 advised at about 3.30 p.m. to remove the deceased to the Government Hospital.
The deceased was brought to the hospital at about 5 p.m.
At about 5.30 p.m., PW9, a doctor examined the deceased and declared her dead.
PWl along with his uncle went to the Police Station, adjacent to the hospital and lodged the FIR.
A case under section 302 IPC was registered 668 and police investigation was started.
Both the appellants were not found in the village when search for them was made by the investigating officer.
The appellant No. 1 surrendered in the Court on 10.11.1981 while the appellant No. 2 surrendered in the Court on 7.12.1981.
The Trial Court held that there was no motive for the appellant to commit the crime; that the evidence of PWs 2 to 4 could not be relied upon; that PW1 had made improvements in his statements recorded at the trial and, therefore the oral dying declaration made to him could not be relied upon.
The Trial Court also held that there was unexplained delay in lodging report with the policy.
It acquitted the appellants, holding that the case was one of suicide and not of murder.
The State filed appeal in the High Court.
The High Court held that the chain of the established circumstances was complete and the circumstances were sufficient to establish that the appellants alone had committed the crime of murder of the deceased.
The High Court convicted both the appellants for the offence under section 302/34 IPC and sentenced each one of them to imprisonment for life.
Hence this appeal before this Court under section 2(a) of the .
The appellants contended that since the Trial Court had acquitted the appellants, the High Court was not justified in recording an order or conviction, as the findings recorded by the Trial Court could not be said to be perverse; that the dying declarations were not worthy of reliance and the motive was feeble and not established; that the surrendering of the appellants themselves in the court on 10.11.1981 and 7.12.1981 itself was enough to show that they had no guilty conscious and the prosecution was not justified in relying upon this conduct as an adverse conduct against the appellants; and that since all neighbors had become hostile, out of fear the appellants did not act either to put off the fire or remove the deceased to the hospital.
The respondent State submitted that the findings of the Trial Court were not only conjectural but also perverse and the evidence of the wit 669 nesses was disbelieved on mere surmises; that the Trial Court did,not properly discuss the two dying declarations made by the deceased and since the dying declarations have been proved by reliable evidence, these by themselves could form the basis of conviction of the appellants; that the High Court after a careful appraisal of the evidence had rightly set aside the judgment of the Trial Court which suffered from illegality as well as manifest error and perversity,, and that the prosecution had established the case against the appellants beyond every reasonable doubt and their appeal deserved to be dismissed.
Dismissing the appeal, this Court, HELD:1.01.
In a case based on circumstantial evidence, the settled law is that the circumstances from which the conclusion of guilt is drawn should be fully proved and these circumstances must be conclusive in nature.
Moreover, all the established circumstances should be complete and there should be no gap in the chain of evidence.
The proved circumstances must be consistent only with the hypothesis of the guilt of the accused alone and totally inconsistent with his innocence.
The courts have, therefore, the duty to carefully scrutinize the evidence and deal with each circumstance carefully and thereafter find whether the chain of the established circumstances is complete or not before passing an order of conviction.
[679 E F] 1.02.In a case based on circumstantial evidence, motive assumes great significance as its existence is an enlightening factor in a process of presumptive reasoning.
The motive in this case is alleged to be the greed of dowry.
[679 H] 1.03.The evidence led by the prosecution to establish, the existence of motive is wholly reliable and is also consistent.
The prosecution has successfully established that the appellants had strong and compelling motive to commit the crime because of her parents not agreeing to get the land registered in the name of the first appellant and their insistence to have the land registered in the name of their own daughter instead.
The motive, has, been conclusively established by the prosecution.
[682 D] 1.04.Both the dying declarations are oral.
They have been made to friends and to the brother of the deceased respectively.
In view of the close relationship of the witnesses to whom the oral dying declarations were 670 made, it becomes necessary for the court to carefully scruitinize and appreciate the evidence of the witnesses to the dying declarations [683.
B] 1.05.PW1 is the brother of the deceased and therefore a very close relation, but mere relationship cannot be a ground to discard his testimony, if it is otherwise found to be reliable and trustworthy.
In the natural course of events, the deceased who was on the verge of her death would have conveyed to her near and dear ones the circumstances leading to her receiving the burn injuries.
PW1 has given a very consistent statement and has reproduced the words of the deceased clearly and truthfully.
Nothing has been brought out in the cross examination to discredit his testimony at all.
[683 C D] 1.6.Despite searching cross examination of both PW2 and PW3, nothing has been brought out in their cross examination to discredit them or doubt their veracity at all.
After carefully analysing their evidence, it is found that PWs 2 and 3 as witnesses worthy of credence and trustworthy.[684 F] 1.07.From the evidence of PWs 1,2 and 3, both the dying declarations are provedto have been made by the deceased.
They are the statements made by thedeceased and relate to the circumstances leading to her death.
Both the dying declarations are consistent with each other and appear to have been made by the deceased voluntarily and in the natural course of events.
They have a ring of truth about them.
[684 G] 1.08The medical evidence, fully corroborates the prosecution case and lendssupport to the dying declaration and more particularly the manner inwhich the deceased had been set on fire.[686 D] 1.09.The normal human conduct of any person finding someone engulfed in flames would be to make all efforts to put off the flames and.
save the life of the person.
Though, the appellants were the closest relations of the deceased, they did not do anything of the kind.
They rendered no first aid to the deceased.
Their conduct at the time of the occurrence, therefore, clearly points towards their guilt and is inconsistent with their innocence.
The appellants did not even accompany the deceased to the hospital in the matador van.
Had the husband not been a party to the crime, one would have expected that he would be the first person to take steps to remove the deceased to the hospital and leave no stone unturned 671 to save her life.
An innocent mother in law would have also done the same, even if she had no love or emotional feelings for her daughter in law.
Neither the husband nor the mother in law of the deceased took any steps to remove the deceased to the hospital let alone accompany her to the hospital.
This conduct also is inconsistent with their innocence and consistent only with the hypothesis, as stated by the deceased in her dying declarations, that the mother in law had poured kerosene on her while her husband had lit fire and put her on flames.
[686 H, 687 A D] 1.10.The prosecution has, thus, successfully established that the conduct ofboth the appellants both at the time of the occurrence and immediatelythereafter is consistent only with the hypothesis of the guilt of the appellants and inconsistent with their innocence.
[688 B] 1.11.Absconding by itself may not be a positive circumstance consistent only with the hypothesis of guilt of the accused because it is not unknown that even innocent persons may run away for fear of being falsely involved in a criminal case and arrested by the police, but coupled with the other circumstances, the absconding of the appellants assumes Importance and significance.
The prosecution has successfully established this circumstance also to connect the appellants with the crime.
[688 E F] 1.12.The prosecution has successfully established all the circumstances appearing in the evidence against the appellants by clear, cogent and reliable evidence and the chain of the established circumstances is complete and has no gaps whatsoever and the same conclusively establishes that the appellants and appellants alone committed the crime of murdering the deceased on the fateful day in the manner suggested by the prosecution.
All the established circumstances are consistent only with the hypothesis that it was the appellants alone who committed the crime and the circumstances are inconsistent with any hypothesis other than their guilt.
[688 G H, 687 A] 2.01.Under Section 32, when a statement Is made by a person, as to the cause of death or as to any of the circumstances which result In his death, in cases in which the cause of that person 's death comes into question, such a statement, oral or in writing, made by the deceased to the witness is a relevant fact and is admissible in evidence.
The statement made by the deceased, called the dying declaration, falls in that category provided it has been made by the deceased while in a lit mental condition.
[684 H, 685 A B] 672 2.02.A dying declaration made by person on the verge of his death has a special sanctity as at that solemn moment, a person is most unlikely to make any untrue statement The shadow of impending death is by itself the guarantee of the truth of the statement made by the deceased regarding the causes or circumstances leading to his death.
A dying declaration, therefore, enjoys almost a sacrosanct status, as a piece of evidence, coming as it does from the mouth of the deceased victim.
Once the statement of the dying person and the evidence of the witnesses testifying to the same passes the test of careful scrutiny of the courts, it becomes a very important and a reliable piece of evidence and if the court is satisfied that the dying declaration is true and free from any embelishment such a dying declaration, by itself, can be sufficient for recording conviction even without looking for any coroboration.
If there are more than one dying declarations, then the court has also to scrutinise all the dying declarations to find out if each one of these passes the test of being trustworthy.
The Court must further find out whether the different dying declarations are consistent with each other in material particulars before accepting and relying upon the same.
[685 C E] 2.03.Both the dying declarations are consistent with each other in all material facts and particulars.
That the deceased was in a proper mental condition to make the dying declaration or that they were voluntary has neither been doubted by the defence in the course of cross examination of the witnesses nor even in the course of arguments both in the High Court and before this Court.
Both the dying declarations have passed the test of credit worthiness and they suffer from no infirmity whatsoever.
[685 F G] 2.04.The prosecution has successfully established a very crucial piece of circumstantial evidence in the case that the deceased had voluntarily made the dying declarations implicating both, the appellants and disclosing the manner in which she had been put on fire shortly before her death.
This circumstance, therefore, has been established by the prosecution beyond every reasonable doubt by clear and cogent evidence.
[685 G H] 3.01.There has been an alarming increase in cases relating to harassment, torture, abetted suicides and dowry deaths of young innocent brides.
This growing cult of violence and exploitation of the young brides, though keeps on sending shock waves to the civilised society whenever it happens, continues unabated.
There is a constant erosion of the basic 673 human values of tolerance and the spirit of "live and let live '.
Lack of education and economic dependence of women have encouraged the greedy perpetrators of the crime.
It is the woman who plays a pivotal role in this crime against the younger woman, as in this case, with the husband either acting as a mute spectator or even an active participant in the crime, in utter disregard of his matrimonial obligations.
[689 C D] 3.02.Awakening of the collective consciousness is the need of the day.
Change of heart and attitude is what is needed.
If man were to regain his harmony with others and replace hatred, greed, selfishness and anger by mutual love, trust and understanding and if woman were to receive education and become economically independent, the possibility of this pernicious social evil dying a natural death may not remain a dream only.
[690 D] 3.03.The legislature, realising the gravity of the situation has amended the laws and provided for stringent punishments in such case and even permitted the raising of presumptions against the accused in cases of unnatural deaths of the brides within the first seven years of their marriage.
[690 H] 3.04.The was enacted in 1961 and has been amended from time to time, but this piece of social legislation, keeping in view the growing menance of the social evil, also does not appear to have served much purpose as dowry seekers are hardly brought to book and convictions recorded are rather few.
[691 A] 3.05.Laws are not enough to combat the evil.
A wider social movement of educating women of their rights, to conquer the menace, is what is needed more particularly in rural areas where women are still largely uneducated and less aware of their rights and fall an easy prey to their exploitation.
[691 B] 3.06.The role of courts, under the circumstances assumes greater importance and it is expected that the courts would deal with such cases in a more realistic manner and not allow the criminals to escape on account of procedural technicalities or insignificant lacune in the evidence as otherwise the criminals would receive encouragement and the victims of crime would be totally discouraged by the crime going unpunished.
The courts are expected to be sensitive in cases involving crime against women.
[691 C] 674 State (Delhi Administration) vs Lavnan & Ors., Crl.
Appeals 93 and 94 of 1984 decided on 23.9.1985, referred to. </s> |
<s>[INST] Summarize the following judgement: Appeal No. 1359 of 1993.
From the Judgment and Order dated 16.1.192 of the Patna High Court in C.W.J.C. No. 446 of 1992.
K.N. Chaubey, K. Pandeya and Mohan Pandey for the Appellant.
523 Gobinda Mukhoty, N.N. Goswami, S.K. Bhattacharya, C.V.S. Rao Ms. K.K. Manglam, L. R. Singh, Vikas Singh, Yunus Malik, B.B. Singh Ms. Vimal Sinha and Ms Kumud L. Das for the Respondents.
The Judgment of the Court was delivered by SAWANT, J.
Leave granted.
The appellant is a member of the Bar.
He had field a petition in the nature of a public interest litigation under Article 226 of the Constitution of India before the High Court of Patna praying for a writ of quo warranto challenging the appointment of respondent No. 6, Dr. Shiva Jatan Thakur as a Member of the Bihar, State Public Service Commission.
The High Court dismissed the writ petition.
Hence the present appeal.
The attack against the appointment of respondent No. 6 is based on, two grounds: [a] on the date of his appointment i.e., 4th March, 1991 respond No. 6 was the seventh non service member.
The total strength of the Public Service Commission being eleven [uncluding the Chairman] the appointment of the seventh member from the ' non service category, was violative of the proviso to article 316[1] of the Constitution which requires that as nearly as may be one half of the members shall be persons who have held office for at least ten years either under the Government of India or under a Government of the State.
[b] respondent no.6 was totally blind even from a date prior to his appointment and was unfit to be appointed by reason of the said physical infirmity.
We are, accordingly, required to consider whether these two grounds were sufficient to disqualify respondent No. 6 from being appointed as a member of the, commission.
In his counter affidavit, respondent No. 6 has stated among other or things, that he happens to be the son of a peon retired form the Railway We are informed by Shri Mukhoty, the learned counsel appearing for him 524 that he belongs to the backward community of barbers.
He has been blind since the age of eight years.
In spite of his blindness, he was able to pursue his educational career successfully, and he earned degrees and diplomas.
He is a Ph.D. in English of the Patna University.
He has been a University college teacher in English and he was promoted to the post of Reader in English on the completion of bare eight years of service.
He was the first teacher of the Patna University who was unanimously recommended for the award of D. Litt.
on account of the excellence of his thesis written for Ph.D. As a scholar in English, he has submitted papers to national and international conferences.
He is a life member of the organisations who sponsor these conferences.
The Government of Bihar vide its D.O. letter No. 2740 dated 22nd October, 1991 sent to the Union Ministry of Home Affairs, had recommended him for the prestigious national award of 'Padmashree ' for his services as a Member of the Public Service Commission.
The President of India on 15th March, 1992 conferred on him National Award which reads: "this national award is given to Dr. Shiva Jatan Thakur in public recognition of his outstanding performance as the most efficient employee".
He has also referred to the circumstances under which his present appointment came to be challenged nearly 9 1/2 months after it was made.
While he was appointed on 4th March, 1991, the writ petition was filed in the High Court on 14th January, 1992.
According to him, he had made a representation to the President of India, the Governor of Bihar and others, against the serious misconduct, gross malpractice and wilful violation of the constitutional mandate by the Chairman of the Commission.
The present writ petition was filed in the High Court 18 days after a copy of the representation was received by the Chairman, among others.
It is his dispute with the Chairman who according to him is backed by the Chief Minister of the State which has led to the present writ petition.
He has also stated that the Chief Minister in his press interview given to the local Urdu daily, viz., Qaumi Tanzeem and published on 27th March, 1992, had made his intentions public to move this Court against his ap pointment.
Those averments are not controverted.
According to him further, it was on account of his academic distinctions, and with the full knowledge that he was totally blind from childhood, that he was appointed as a Member of the Public Service Commission.
He has also stated that his blindness never came in his way either in the pursuit of his studies or in his service as a teacher.
His experience in the public Commission also showed that the said defect did not come in his way of 525 discharging his duties effectively.
In this connection, he points out that the only thing he cannot do is to assess the individual 's external personality on the basis of the candidates external appearance which is not a material requirement for the candidates for many posts.
He has further added that the Commission sits in Committees or interview boards and every Committee usually consists of four or five persons including members of the Commission and experts from the respective departments.
The marks awarded to the candidates are agreed upon after due discussions and deliberations in the interview board.
The advice of the experts is a determinative factor in such decisions.
When the members of the interview board with non technical and non professional qualifications interview candidates for technical and professional posts, they do so with the aid and advice of the experts from the concerned departments.
Hence, if he is required to depend upon the opinion of the other members of the interview board for the external appearance of the candidates, that is not a dependence of a kind which vitiates the assessment of the interview board as a whole.
In any case, the dependence is not worse than the dependence of the members of the board on the opinion of the experts when they are not qualified to adjudge the candidates for posts requiring the relevant expertise.
The State Government has lent a tragicomic touch to the controversy by filing its affidavit, the relevant contents of which deserve reproduction here for reasons more than one.
The pathos is made poignant by the fact that the affiant Shri R.C. Vaish, Resident Commissioner of the State at New Delhi in his letter, which is placed on record, has stated that the draft affidavit was approved by Hon 'ble the Chief Minister of the State.
He has also stated that he has been authorised by the Secretary of the concerned department to swear the affidavit.
The relevant portion of the affidavit reads as follows: "That the respondent State upon reconsideration of the entire matter under controversy feels that the words of the Constitution have to be interpreted in letter and spirit and any departure from the express words of the Constitution wherever such departure seems to be permissible under the Constitution should be done only for sound and good reasons.
In the instant case, the departure with regard to appointment of members of the Bihar Public 526 Service Commission was made only because the proviso to Article 316 (1) of the Constitution is not mandatory.
Accordingly, while appointment the respondent No. 6 as the seventh non government member of the B.P.S.C. the mandate of proviso to Article '316 (1) was not followed.
it is felt that the fact that proviso to Article 316(1) not being mandatory is by itself not a good ground for departing from the suggestion of the Constitution and accordingly, the appointment of respondent No. 6 as member of the State Public Service Commission cannot be justified.
, At the time of appointment of respondent No. 6 as 'a member of the Bihar Public Service Commission he was the seventh nongovernment member when ' at that time there were only four government members in a 'total strength of eleven members in the B.P.S.C. That with ragard to the infirmity of the respondent No. 6, it is submitted that at the time of appointment of respondent No. 6,the aspect about his blindness was not specifically considered the same was stated in the Bio data of the respondent No. 6 in a very casual way and in such a manner that in had escaped the attention of the Constitutional authorities at the time of recommending the respondent No.6 for appointment to the post of member the B.P.S.C.
In this regard, it is submitted that the respondent No. 6 in his Bio data while praising his achievements had only stated that he is the first blind person to have been awarded Ph.D. ' There was no mention whether such blindness was subsequent to birth or whether such blindness was congenial There was also no details in the Bio data stating whether such blindness was complete or the some was partial, temporary, curable or not curable.
In these,facts, the aspect about the blindness of.
the respondent No. 6 was not specifically considered by any of the Constitutional Authorities who are involved in the appointment of a member to the State Public Service Commission.
That in this regard it is further submitted that the nature of duty of a member of a Public Service Commis 527 sion is primarily to make selections for appointments the various Govt.
jobs of the State and accordinly while making such recommendations the member of the State Public Service Commission has to interview the eligible candidates.
While conducting such interview, the member of the State Public Commission is to visually interview each candidate to determine his suitable.
After the appointment of the respondent of the respondent No. 6 it has come to the notice of the respondent No. 6, it has come to the respondent No. 6 is clearly hampering the effective discharge of official duties by the respondent No. 6".
[Emphasis supplied] To appreciate the first attack against the appointment it is necessary to reproduce the provisions of Article 316[1] and [2] of the Constitution which relate to the appointment and the term of office of the members of the Public Service Commissions, "316.
Appointment and term of office of members.
[1] The Chairman 'and other members.
of a Public Service Commission shall be appointed in the case of the Union Commission or a Joint Commission, by the President and in the case of a State Commission by the Government of the State: Provided that as nearly as may be one half of the members of every Public Service Commission shall be persons who at the dates, of their respective appointments have held, office for at least ten years, either under the igovernnient of India or under the Government of a State, and in, computing the said period of ten years any period before the commencement of this Constitution during which a person has held office under the Crown in India or under the Government of an Indian State shall be included.
[1 A] x x x x x [2] A member of a Public Service Commission shall hold 528 office for a term of six years from the date on which he enters upon his office or until he attains, in the case of the Union Commission, the age of sixty five years, and in the case of State Commission or a Joint Commission, the age of sixty two years, whichever is earlier: Provided that [a] a member of a Public Service Commission may, by writing under his hand addressed, in 'he case of the Union Commission or a Joint Commission, to the President, and in the case of a State Commission, to the Governor of the State, resign his office; [b] a member of a Public Service Commission may, be removed from his office in the manner provided in clause (1) or clause (3) of Article 317.
[3] x x x x XI It is apparent from these provisions that the Chairman and other members of the State Public Service Commission are appointed by the Governor of the State.
The appointments are obviously made on the advice of the Council of Ministers of the State.
The proviso to Clause 11 of the Article requires that "as nearly as may be", one half of the members of the Commission shall be persons who on the dates of their respective appointments have held office for at least ten years either under the Government of India or under the Government of a State.
For brevity 's sake we may refer to this category of members as service members.
The expression "as nearly as may be" itself suggest that the proportion of 50% of the service members is not exact but approximate and is meant not to be mandatory but directory.
The said proviso does not, in terms, say that in no case and at no point of time, the said proportion should either go above, or fall below 50%.
In the very nature of things, a strict adherence to the said direction is not practicable at any particular point of time.
In the first instance, the superannauation age of the member of the Commission is 62 years and his total tenure as a member cannot exceed six years.
He has to vacate his office either when his tenure comes to an end or when he attains the age of 62 years whichever is earlier.
When the members are appointed, they are bound to differ in age, whether they belong to the service category 529 or the non service category.
In the normal course, they would retire at different points of time.
If it is insisted, as is done on behalf of the appellant, that the said requirement must be followed strictly at all times, it would be well nigh impossible to do so.
Every time a member, whether belonging to the service or the non service category, retires, there should be available a suitable person from the same category to be appointed in his place.
It is not always possible to make an advance list of persons of either category who are suitable for such appointments.
Hence, the total strength of the Commission as well as the number from each of the categories, are bound to vary from time to time.
At any given point of time, therefore, it may not be possible to maintain the proportion between the two categories strictly in accordance with the direction given in the Constitution.
It appears that it is for this reason that the words "at least half ' used in the proviso to Section 265 [1] of the Government of India Act, 1935, corresponding to the present proviso to Article 316 [11, have been substituted by the words "as nearly as may be one half '.
The learned counsel appearing for the appellant, however, submitted that the expression "as nearly as may be one half ' has been used to convey that a fraction may be ignored if the total number of members cannot be exactly halved between service and non service categories.
We are afraid that this argument is too simplistic.
The fraction is and ran be taken care of without the aid of such expression and a document like the Constitution does not have to incorporate the normal rules of interpretation.
It is clear that the framers of the Constitution realised that to make the provision rigid was both inadvisable and unnecessary.
We have already demonstrated its impracticability.
It can further hardly be suggested that the need to have 50% from the service category is of such paramount importance to the composition of the Commission that the breach of it at any particular point of time would defeat the very object of constituting the Commission.
The purpose for which the said provision is made is obvious.
It was realised by the framers of the Constitution that the democratic system can be maintain only if civil servants are appointed solely on the basis of their merit adjudged by open competition, and only if they can carry of the administration according to law independently, instead of under pressure of their political superiors.
Hence they provided for Public Service Commissions as both the Union and the State level as autonomous bodies to enable then to carry on their functions independently, fairly and impartially.
Since the Commission 's main task was to recruit administrative personnel it was 530 necessary to have on the Commission members with sufficient administrative experience.
To induct persons of experience, it was imperative to provide that a certain proportion of the members of the Commission should have had an actual experience of running the administration so that the Commission is better able to adjudge the fairness of firness of persons to be recruited in the administration.
However the very fact that the Service Commission was not proposed to be constituted of the members from the service category exclusively also shows that the framers of the Constitution did not desire that the outlook of the service members alone should prevail while recruiting the personnel.
The view of the persons from outside the administration was also considered to be equally imperative in selecting the personnel.
A balance was therefore sought to be struck by providing the e, in Detecting the proportion between the two categories of members.
It would, however, be naive to suggest on that account that the framers of the Constitution presumed to ensure that on all occasions there shall be an exact balance of views.
It is unrealistic to believe that individuals with different backgrounds always insist on the acceptance of the outlook dictated by their background alone and refuse to share the view point of others.
It is certainly not expected of the members of such high ranking Constitutional body as the Public Service Commission.
We cannot also lose sight of the fact that the Service Commissions mostly sit in Committees and are aided and assisted by the experts from the concerned faculties, disciplines and departments.
The Committees take their decision collectively after due deliberations and discussions.
It is, therefore, the composition of these Committees and not so much the composition of the Commission at any particular point of time that matters.
Hence, we are unable to subscribe to the view that the proviso to Article 316 [1] requiring that as nearly as may be one half of the members of the Public Service Commission shall be from service category leaves no option to the Appointing Authority under any circumstance whatever, to allow reduction of representation from that category and a breach of the said requirement by reason of appointment of a member from non service category vitiates such appointment or the duties performed by such appointee as a member of the Public Service Commission.
The learned counsel for the appellant went so far as to contend that the said requirement constituted a qualification of the member to be appointed every time a vacancy is to be filled.
According to him depending 531 upon the shortfall in the representation of the respective category the member to be appointed has to be either form the service or non service category as the case may be and that is an essential qualification for his appointment.
The argument was that is an essential as in the present case, the representation of the service members of the Commission fell short of 50% then all persons to the appointed on the Commission till the said proposition was made up had to be from the service ctegory that being their necessary qualification.
It is not possible to accept this contention for the simple reason that as pointed out earlier, it may be possible to get a suitable person either from service or non service category over a period of time and for want of suitable candidates from the concerned category, the vacancies on the Commission may remain unfilled during that period.
The persons from the other category are available during that period.
The reasonable interpretation of the said proviso therefore is to treat it not as a strict rule to be enforced but as a binding gudeline to be followed in practice in spirit as far as possible and without deliberately flouting it, Hence it is not possible to hold that merely because at the time of appointment of respondent No. 6 there were four service members and six non service members he was disqualified for being appointed as the 7th member from the non service category.
The, second attack which is based upon the blindness of respondent No.6 is equally myopic.
As has been pointed out earlier respondent no.6 been blind from his childhood.
In spite of his blindness he acquired high educational qualifications and in fact at the time of his appointment he was an Associate Professor in the Patna University.
He is an acknowledged scholar of English Although the Government has now come forward to disown any knowledge about his complete blindness from the childhood, with which we will deal instantly they must be presumed to have known the said infirmity and should be deemed to have formed the opinion that in spite of his blindness, he was fit to be a member of thel Commission.
We see no reason to hold otherwise in the circimstances pointed out by respondent No. 6 in his affidavit to which we have already referred.
Nothing concrete has also been brought on record to show that he has failed ot perform his duties as a member of the Commission efficiently because of his blindness.
On the other hand as has been pointed out earlier the State Government itself had recommended him for 'Padmashree ' for his efficient discharge of the work as a member of the Commission and that too over a short span of few months.
We are also in agreement with the contentin advanced on his behalf that 532 except the external appearance of the candidates appearing before him, he is able to ascertain the required merits or demerits of the Candidates, as do the other members of the Commission.
The Commission, as it normally should, operates through Committees, and as regards the external appearance, the other members of the Committees give him the required information on the basis of which he is able to assess the overall merit of the candidates.
The external appearance of the candidates is also not of importance in all ap pointments.
What is futher necessary to note is that for selecting the candidates for almost all disciplines and departments, the experts from the concerned departments do sit in the Committees and the opinion of the experts ordinarily prevails in such appointments since the members of the Committees, who are the members of the Commission, do not have the expertise.
in the relevant fields.
This shows that all members of the Commission sitting on the interview Committees have also to be guided in their opinion by the experts.
If respondent No. 6 has to take guidance only in the matter of external appearance of the candidates, all members of the Commission have to be guided by the experts with regard to the most vital equipment of the candidates, viz., the intellectual calibre and the proficiency of the candidates in the relevant subjects.
There is, therefore, nothing wrong if only for external appearance, for which only a small percentage of the total marks is reserved, respondent No. 6 has to depend on the advice, opinion or guidance of the other members of the Committees and the Commission.
The decision of the interview board is always a collective one and is taken after deliberation on the merits and demerits of the candidates which are evaluated on the basis of various factors.
We are, therefore, unable to see as to how, in the circumstances, respondent No. 6 is unfit to carry on his duties as a member of the Commission because of his blindness.
The attack, however, was sought to be strengthened by relying on the provisions of sub clause [c] of Clause [3] of Article 317 of the Constitution which provides for removal of a member of the Public Service Commission on the ground that he is, in the opinion of the President, unfit to continue in office by reason of infirmity of mind or body.
The argument was that the blindness was infirmity of body and if it is a ground for removal from office, it is much more a disqualification for appointment and hence respondent No. 6 should be prevented from continuing in his office.
We are afraid that the first premise on which this limb of the argument is based misses the obvious fact, viz., that by "infirmity of body" 533 what is spoken of in the sub clause in question, is an infirmity which disables the Member from discharging his functions as such member effectively.
It is not every infirmity of body or every loss of use of any limb of the body.
The defect or deficiency must be such as would disable the Member from carrying out his duties satisfactorily and consistent with the trust reposed in him.
We have already pointed out that not only the blandness of respondent No. 6 does not prevent him from discharging his duties expected of him, but in fact the services rendered by him as such member have been eulogised and commended for a National Award by no other than the State Government itself and the Chairman of the Commission who had the first hand knowledge of his functioning.
This is apart from the fact that the Governor who appointed him on the advice of the Council of Ministers is presumed to have done so after satisfying himself that the loss of eye sight was not an infirmity which would impede him in the discharge of his duties.
The infirmity of body or mind which is referred to in the sub clause, further must necessarily be such as has arisen after the appointment and not the one which existed at the time of the appointment unless of course, the Government was unaware of the same at the time of the appointment.
We may now turn to the affidavit filed on behalf of the State Government.
A reading of the said affidavit leaves no doubt in our mind that it has been filed only to prejudice the case of respondent No. 6 before us because, for some reasons, he has fallen foul some persons in power.
As is evident from the portions of the affidavit reproduced above, firstly, a case is sought to be made out there that respondent No.6 was appointed as the 'non Government member ' of the Commission only because the proviso of Article 316 11 is not mandatory.
That may be so.
But the affidavit then proceeds to state almost in relenting terms that although the said proviso is not mandatory, that by itself is not a good ground for departing from the "suggestion of the Constitution" and hence the appointment of respondent No. 6 "as the 7th non Government member" was not justified.
It is not clear as to when this wisdom dawned on the Government for the first time.
The record further does not show as to who had suggested his name to the Governor and whether the decision was taken by the Council of Ministers as a whole or by the Chief Minister or any of his colleagues alone and what advice was received or obtained by them, if at all, while making the appointment.
We are however, happy to know that 534 the State Government "upon reconsideration of the entire matter under controversy feels that the words of the Constitution have to be interpreted in letter and spirit and any departure from the express words of Constitu tion. . should be done only for sound and good reasons".
We only hope that the State Government keeps that solemn declaration in mind for all purpose and for all times to come and does not forget it the moment the ink in the present proceedings dries.
But more breast beating of the Government is on the second issue viz, the blindness of respondent no.6 The affidavit states that at the time of the appointment "the aspect about his blindness was not specifically considered as the same was stated in the Bio data of the respondent No. 6 in a very casual way and in such a manner that it had escaped the attention of the Constitutional authorities at the time of recommending the respondent no.6 for appointment . . ".
not to be outdone by this ludicrous averment, the affidavit proceeds to state "that respondent No. 6 in his bio data while praising his achievements, had only stated that he is the first blind person to have been awarded Ph.D.
There was no mention whether such blindness was subsequent to birth or whether such blindness was congenital. .
There was [sic] also no details in the Bio data stating whether such blindness was complete, or the same was partial, temporary, curable or not curable.
It is then the case of the State Government that in the view of these facts the aspect above the blindness of the respondent No. 6 was not specifically considered by any of the Constituitonal authorities who are involved in the appointment of a member to state Public Service Commission".
Since the affiant himself has brought into picture the "Constitutional Authorities who are involved in the appointment the aspect of the blindness of respondent no.6 was not specifically of a member to the State Public Service Commission and has Stated that considered by them, we cannot help observing that the affiant by making such statement as made the Constitution authorities look ridiculous and their functioning a mockery in the eyes of the public.
We are anguished more on account of the that state Government should have considered it compulsive to allow such blatantly rabid statement s to be made on the oath with impunity.
No responsible public authority could have aware the that respondent No.6 was totally blindly from his childhood, when that made the client that none of the constitutional functionaries concerned was fact must have been widely known in the State and in all probability the extra ordinary abilities exhibited by him despite his blindness must have 535 been the main reason for his appointment as a member of the Public Service Commission.
Any statement seems to be good enough, whether true or untrue, so long as it is considered serviceable for thee immediate purpose in hand.
We refrain from making more comments which certainly such affidavits deserve, in ample measure, and let the affidavit speak for itself.
The affidavit further states that while conducting the interviews, members of the Commission have to visually interview each of the candidates to determine his suitability and after the appointment of respondent No. 6 "it has come to the notice of the respondent State that the blindness of the respondent No. 6 is clearly hampering the effective discharge of official duties by him.
It is necessary to remember in this ' connection that this affidavit has been filled on 23rd January 1993.
Respondent No.6 had filed his affidavit on 7th October, 1992.In that affidavit, respondent No. 6 has, among other things referred to,the certificate given by respondent No.5, Dr. Ram Ashray, Yadav, Chairma of the Public Service Commission on 11th September 1991 where he has stated that respondent No. 6 "has been performing his duties with exceptional excel lence without letting his blindness hinder his work.
I strongly recommend that Dr. Thakur be awarded National Award in recognition of his excellence despite his blindness." He has also referred in his affidavit to the letter of 22nd October, 1991 of the State Government to the Union Home Ministry recommending him for,the award of "Padmashree" for his services as a Member of the Public Service Commission.
Neither the certificate nor the letter has been controverted by the Chairman and.
the Government.
In the face of the certificate and the Said recommendatory letter, it is difficult to understand the basis on which it is now stated in the affidavit that the blindness of respondent No.6 is hampering his work.
There is, therefore, no doubt in our mind that the affidavit has been filed for the only purpose of seeking somehow the removal of respondent no.6 .Respondent No. 6 in his affidavit has alleged that he has since fallen 'but the respondent No. 5, the Chairman of the Commission and the Chairman is bent upon ousting him from the Commission.
To shows the animosity of the Chairman towards him he has given a list of events alongwith his affidavit.
These events have not been in controverted.
The High Court has referred to some of these events in paragraph 6 of its judgment.
Since they have a bearing On the Governments comments on his performance, we may reproduce the events catalogued by the High Court.
536 "1.
His P.A. has been replaced; 2.
His chamber, which contains two almirahs containing documents, has been locked up; 3.
The service of the reader, who is to read to him documents and journals and other papers is not being provided to him and his services have been terminated; 4.
The use of staff car by him has been stopped; 5.
His orderly has been transferred; 6.
The Chairman of the Commission has issued instructions not to receive any document from him or to obey his orders; 7.
His telephone bill for the month of Oct. 1991, for Rs. 598 only has not been paid though a sum of Rs. 18,154 on account of telephone bill of the Chairman 's residence has been paid.
The newspaper allowance payable to him is not being paid; 9.
He has not been allowed to attend the meetings of the Commission held on 11th December.
20th December and 31st December, 1991 and he is not aware when any other meeting has been held thereafter or not in as much as he has not been provided with any notice in respect of the same; 10.
He has been physically prevented from going to inside [sic.] the campus of the Commission since 28th of November, 1991.
" In the list of events accompanying his counter affidavit he has also referred to other incidents such as the attempted physical assault on him by the Chairman during a meeting of the Commission, the threats of physical liquidation administered from the telephonic line of the Chairman, the complaints made by him to the police, to the Chief Minister and to the 537 Governor etc.
We do not desire to burden this judgement, with the said details.
it is also not necessary to make any comment upon the aforesaid events since they speak for themselves.
They only reinforce the conclusion that the belated claim of the State Government that the appointment of respondent No.6 is invalid and that his blindness hampers the discharge of his duties has its obvious roots in the strained relations between him on the one hand and the Chairman and the State Government on the other.
While, therefore, dismissing appeal in the special facts of the case,, we also direct both the appellant and the respondent State of pay the costs of this appeal to respondent No.6, in the amounts of Rs. 5,000 and Rs., 10,000 respectively.
P.S.S. Anneal dismissed. [/INST] The proviso to clause (1) of Article 316 of the Constitution requires that 'as nearly as may be ', one half of the members of the Public Service Commission shall be from service category.
Clause (2) of the Article entities a member of a Public Service Commission to hold office for a term of six years from the date on which he enters upon his office or he attains the age of superannuation provided therein whichever is earlier.
Subclause (c) of clause (3) of Article 317 provides for removal of a member of the Public Service Commission by reason of infirmity of mind or body.
Respondent No. 6, a blind, acknowledged scholar of English and Associate Professor in the Patna University, was appointed the seventh non service member of the Bihar State Public Service Commission on 4th March 1991.
The total strength of the Public Service Commission was eleven.
The other four members belonged to the services category.
On 11th September 1991, respondent No.5, the Chairman of the said Commission, gave a certificate stating that the respondent has been performing his duties with exceptional excellence without letting his blindness hinder his work and strongly recommended conferment of a national award in recognition of his excellence despite his blindness.
On 22nd October 1991 the State Government addressed a letter to the Union Ministry of Home Affairs recommending him for the prestigious national award of 518 'Padamshree ' for his services as a member of the Public Service Commission.
On 15th March 1992 the President of India conferred on him the National Award.
On 14th January 1992 the appellant, in a public interest ligigation, challenged the appointment of respondent No. 6 as a member of the Bihar Public Service Commission.
The High Court dismissed the writ petition.
In the appeal by special leave it was contended that the appointment of the seventh member from the non service category was violative of the proviso to Article 316(1) of the Constitution.
It was submitted that the expression 'as nearly as may be one half ' occurring in the said proviso has been used to convey that a fraction may be ignored if the total number of members cannot be exactly halved between service and non service categories.
The argument was that if the representation of the service members of the Commission fell short of 50% then all persons to be appointed on the Commission till the said proportion was made up, had to be from the service category, that being their necessary qualification.
It was further contended that respondent No. 6 was totally blind even from a date prior to his appointment and was unfit to be appointed by reason of the said physical infirmity.
The argument was that the blindness was an infirmity of body and if it was a ground for removal from office under Article 317(3) (c), it was much more a disqualification for appointment and hence respondent No. 6 should be prevented from continuing in his office.
In the affidavit riled on behalf of the State Government on 23rd January 1993 it was stated that although the proviso to Article 316(1) was not mandatory, that by itself was not a good ground for departing from the suggestion of the Constitution and hence the appointment of respondent No. 6 as the 7th non Government member was not justified.
It was further stated that at the time of the appointment, the aspect about his blindness was not specifically considered as the same was stated in the bio data of respondent No. 6 in very causal way and in such a manner that it had escaped the attention of the constitutional authorities at the time of recommending respondent No. 6 for appointment.
The affidavit further stated that while conducting the interviews, members of the Commission had to visually interview each of the candidates to determine his suitability and after the appointment of respondent No. 6 it had come to 519 the notice of the respondent State that the blindness of respondent No. 6 was clearly hampering the effective discharge of official duties by him.
It was contended for respondent No. 6 that it was on account of his academic distinctions, and with the full knowledge that he was totally blind from childhood that he was appointed as a member of the Public Service Commission; that his blindness did not come in his way of discharging his duties effectively , that the only thing he could not do was to assess the individuals external personality on the basis of the candidate 's external appearance, which was not a material requirement for the candidates for many posts; that his dependence upon the opinion of the other members of the interview board for this aspect was not of a kind which vitiated the assessment of the interview board as a whole; that he had made a representation to the President of India, the Governor of Bihar and others, against the serious misconduct, gross malpractices and wilful violation of the constitutional mandate by the Chairman of the Commission, and that it was this dispute with the Chairman, who was backed by the Chief Minister of the State, which had led to the writ petition.
Dismissing the appeal, the Court, HELD: 1.1.
Merely because at the time of appointment of respondent No. 6, there were four service members and six non service members, it cannot be said that he was disqualified for being appointed as the 7th member from the non service category.
[531D] 1.2.
The reasonable interpretation of the proviso to Article 316(1) of the Constitution requiring that as nearly as may be one half of the members of the Public Service Commission shall be from service category, is to treat it not as a strict rule to be enforced but as a binding guideline to be followed in practice in spirit as far as possible and without deliberately flouting it.
[531D] 1.3.
The expression "as nearly as may be" used in the proviso itself suggests that the proportion of 50% of the service members is not exact but approximate and is meant not to, be mandatory but directory.
The said proviso does not, in terms, say that In no case and at no point of time, the said proportion should either go above or fall below 50%.
The fraction is and can be taken care of without the aid of the expression "as nearly as may bell, and a document like Constitution does not have to Incorporate 520 normal rules of interpretation.
The need to have 50% members from the service category also cannot be said to be of such paramount importance to the composition of the Commission that the breach of it at any particular point of time would defeat the very object of constituting the Commission.
[528F G, 529F] 1.4.
Furthermore, when the members are appointed, they are bound to differ in age, whether they belong to the service category, or the non service category.
In the normal course, they would retire at different points of time.
At that time, a suitable person from the same category may not be available to be appointed in their place.
It is not always possible to make an advance list of persons of either category who are suitable for such appointment.
Hence the total strength of the Commission as well as the number from each of the categories, are bound to vary from time to time.
At any given point of time, therefore, it may not be possible to maintain the proportion between the two categories strictly in accordance with the direction given in the Constitution.
[529B C] 1.5.
By providing the proportion between the service and non service members of the Commission, the framers of the Constitution sought to strike a balance amongst the two categories.
However, on that account, the framers of the Constitution cannot be presumed to ensure that on all occasions there shall be an exact balance of views between these two categories of members.
It is unrealistic to believe that individuals with different backgrounds always insist on the acceptance of the outlook dictated by their background alone and refuse to share the viewpoint of others.
It is certainly not expected of the members of such high ranking constitutional body as the Public Service Commission.
Furthermore, the Service Commissions mostly sit in Committees and are aided and assisted by experts from the concerned faculties, disciplines and departments.
The Committees take their decision collectively after due deliberations and discussion.
It is, therefore, the composition of these Committees and not so much the composition of the Commission at any particular point of time that matters.
[530C E] 1.6.
The appointing authority, therefore, cannot be said to have no option, under any circumstance whatever, to allow reduction of representation from the service category and a breach of the requirement contained in the proviso to Article 316(1) by reasons of appointment of a 521 member from non service category would vitiate such appointment or the duties performed by such appointee as a member of the Public Service Commission.
[530G] 2.
Respondent No. 6 cannot be said to be unfit to carry on his duties as a member of the Commission because of his blindness.
Nothing concrete has been brought on record to show that he had failed to perform his duties as a member of the Commission efficiently.
Except the external appearance of the candidates appearing before him, he is able to ascertain the required merits or demerits of the candidates, as to the other members of the Commission.
The Commission operates through Committees.
For selecting the candidates for almost all disciplines and departments, the experts from the concerned departments sit in these Committees and the opinion of the experts ordinarily prevails in such appointments since the members of the Committees, who are the members of the Commission do not have the expertise in the relevant fields.
This shows that all members of the Commission sitting on the interview Committees have also to be guided in their opinion by the experts.
If respondent No. 6 has to take guidance only in the matter of external appearance of the candidates, all members of the Commission have to be guided by the experts with regard to the most vital equipment of the candidates, viz., the intellectual caliber and the proficiency of the candidates in the relevant subjects.
There is,, therefore, nothing wrong if only for external appearance, for which only a small percentage of the total marks is reserved, respondent No. 6 has to depend on the advice, opinion or guidance of other members of the Committees and the Commission.
[532B E] 3.1.
By 'infirmity of body ' what is spoken of in sub clause (c) of clause (3) of Article 317 of the Constitution is an infirmity which disables the member from discharging his functions as such member effectively.
It is not every infirmity of body or every loss of use of every limb of the body.
The defect or deficiency must be such as would disable the member from carrying out his duties satisfactorily and consistent with the trust reposed in him.
The said infirmity further must necessarily be such as has arisen after the appointment and not the one which existed at the time of the appointment, unless of course, the Government was unaware of the same at the time of appointment.
[533A B, D] 3.2.
In the instant case, not only the blindness of respondent No. 6 522 does not prevent him from discharging his duties expected of him, but in fact the services rendered by him as such member have been eulogised and commended for a national award by no other than the State Government itself and the Chairman of the Commission, who had first hand knowledge of his functioning.
This is apart from the fact that the Governor who appointed him on the advice of the Council of Ministers is presumed to have done so after satisfying himself that the loss of eyesight was not an infirmity which would impede him in the discharge of his duties.
[533C] 4.1.
No responsible public authority could have made the claim that none of the constitutional functionaries concerned was aware that respondent No. 6 was totally blind from his childhood, when that fact must have been widely known in the State and in all probability the extra ordinary Abilities exhibited by him despite his blindness must have been the main reason for his appointment as a member of the Public Service Commission.
The State Government should not have considered it compulsive to allow such blatantly rabid statements to be made on oath with impunity.
The affiant by making such statement has made the constitutional authorities look ridiculous and their functioning a mockery.
[534H G] 4.2.
Neither the certificate given by respondent No. 5, the Chairman of the Public Service Commission, on 11th September, 1991 nor the letter of the State Government to the Union Home Ministry dated 22nd October 1991, has been controverted by the Chairman and the State Government.
The averment in the affidavit that the blindness of respondent No. 6 is hampering his work, therefore, has no basis.
The belated claim of the State Government against respondent No. 6 has its obvious roots in the strained relations between him on the one hand and the Chairman and the State Government on the other.
[535E F] 5.
The appellant and the respondent State is directed to pay the costs of the appeal to respondent No. 6.
[537C] </s> |
<s>[INST] Summarize the following judgement: ON: Civil Appeal No. 340 of 1957.
Appeal from the judgment and order dated November 29, 1954, of the Hyderabad High Court in Reference No. 234/5 of 1953 54.
K. N. Rajagopala Sastri, B. H. Dhebar and D. Gupta, for the appellant.
48 378 A. V. Viswanatha Sastri, P. Rama Reddy and R. Mahalinga Iyer, for the respondents.
March 20.
The Judgment of Bhagwati and Sinha, JJ., was delivered by Bbagwati, J. Kapur, J., delivered a separate Judgment.
BHAGWATI, J.
This appeal with a certificate from the High Court of Judicature at Hyderabad raises the question whether the sum of Rs. 2,19,343 received by the assessee in the year of account relevant for the assessment year 1951 52 was a revenue receipt or a capital receipt.
The facts leading up to this appeal may be shortly stated : The assessee is a registered firm consisting of five brothers and the wife of a deceased brother having equal shares in the profit and loss of the partnership.
The firm was appointed the sole selling agents and sole distributors for the Hyderabad State for the cigarettes manufactured by M/s. Vazir Sultan Tobacco Co., Ltd., under the terms of a resolution of the Board of Directors dated January 6, 1931.
" Mr. Baker reported that an arrangement had been, come to for the time being whereby the firm of Vazir Sultan & Sons, were given the distributorship of " Charminar " Cigarettes within the H. E. H. the Nizam 's Dominions and that they were allowed a discount of 2% on the gross selling price." No written agreement was entered into between the Company and the assessee in respect of the above mentioned arrangement nor was there any correspondence exchanged between them in this behalf.
In 1939 another arrangement was arrived at between the assessee and the company whereby the assessee was given a discount of 2% not only on the goods sold in the Hyderabad State but on all the goods sold in the Hyderabad State and outside Hyderabad State.
It does not appear that the Board of Directors passed any resolution in support of this new arrangement nor was any agreement drawn up between the parties incorporating the said new ar rangement.
379 On June 16, 1950, the Board of Directors passed the following resolution reverting to the old arrangement embodied in the resolution dated January 6,1931: " The Chairman, having referred to resolution No. 24 passed at the board meeting held on 6 1 31 and having reported that Vazir Sultan & Sons had agreed to revert to the arrangement outlined in that resolution with effect from 1 6 50, it was on the proposition of Mr. section N. Bilgrami, seconded by Mr. N. B. Chenoy resolved that payment of the sum of O. section Rs. 2,26,263 be made to Vazir Sultan & Sons by way of compensa tion, Vazir Sultan & Sons, to pay D. B. Akki & Co., out of that amount the sum of O. section Rs. 6,920 also by way of compensation.
Mr. Mohd. Sultan & Mr. Hameed Sultan stated that, as partners in the firm of Vazir Sultan & Sons, they did not take part in this resolution, although they had accepted on behalf of Vazir Sultan & Sons, the terms thereof.
" The sum of Rs. 2,19,343 was accordingly received by the assessee in the year of account 1359 F.
The Income tax Officer included this sum in the assessee 's total income and taxed it as a revenue receipt.
On appeal the Appellate Assistant Commissioner held that the sum of Rs. 2,19,343 was not a revenue receipt but a capital receipt being compensation for the loss of the agency and as such not liable to tax.
The Income tax Officer (C Ward) Hyderabad thereupon preferred an appeal to the Income tax Appellate Tribunal, Bombay, which held that the said sum received by the assessee was a revenue receipt and liable to tax.
The assessee then applied to the Appellate Tribunal for a reference to the High Court under sec.
66(1) of the Income tax Act and the Tribunal accordingly referred the following question of law to the High Court: " Whether the sum of O. section Rs. 2,19,343 received by the assessee Firm from Vazir Sultan Tobacco Co., Ltd., is a revenue receipt or a capital receipt ?" The High Court answered the question in favour of the assessee stating the question in a different form, viz., 380 " Whether the sum of O. section Rs. 2,19,343 received by the assessee firm from Vazir Sultan Tobacco Co., Ltd., is liable to be taxed under the Indian Incometax Act?" The appellant thereafter applied to the High Court for a certificate of fitness which was granted by the High Court on February 21, 1955, and hence this appeal.
The question that falls to be determined is whether the sum which was in express terms of the resolution mentioned by way of " compensation " for the loss of the agency was a revenue receipt (trading receipt or an income receipt) as contended by the Revenue or a capital receipt as contended by the assessee.
It was urged on behalf of the appellant that the sole selling agency which was granted by the Company to the assessee in the year 1931 was merely expanded as regards territory in 1939 and what was done in 1951 was to revert to the old arrangement, and the structure or the profit making, apparatus of the assessee 's business was not affected thereby.
The expansion as well as the restriction of the assessee 's territory were in the ordinary course of the assessee 's business and were mere accidents of the business which the assessee carried on and the sum of Rs. 2,19,343 received by the assessee as and by way of compensation for the restriction of the territory was a trading or an income receipt and was therefore liable to tax.
It was, on the other hand, contended on behalf of the assessee that it did not carry on business of acquiring and working agencies, that the agency acquired in 1931 was a capital asset of the assessee 's business of distributing Charminar cigarettes in the Hyderabad State, that the expansion of territory outside the Hyderabad State in 1939 was an accretion to the capital asset already acquired by the assessee, that the resolution of 1950 was in substance a termination or cancellation of the agency qua territory outside the Hyderabad State and resulted in the sterilisation of the capital asset qua that territory, that the sum of 381 Rs. 2,19,343 received by the assessee in the year of account was by way of compensation for the termination or cancellation of the agency outside Hyderabad State and being therefore compensation for the sterilisation pro tanto of a capital asset of the assessee 's business was a capital receipt and was therefore not liable to tax.
The question whether a particular receipt is a revenue receipt or a capital receipt or a particular expenditure is a capital expenditure or a revenue expenditure is beset with considerable difficulty and one finds the Revenue and the assessee ranged on different sides taking up alternate contentions as it suits their purposes.
As was observed by Lord Macmillan in Van Den Berghs, Limited vs Clark(1) : " The reported cases fall into two categories, those in which the subject is found claiming that an item of receipt ought not to be included in computing his profits and those in which the subject is found claiming that an item of disbursement ought to be included among the admissible deductions in computing his profits.
In the former case the Crown is found maintaining that the item is an item of income; in the latter, that it is a capital item.
Consequently the argumentative position alternates according as it is an item of receipt or an item of disbursement that is in question, and the taxpayer and the Crown are found alternately arguing for the restriction or the expansion of the conception of income.
" The question has therefore to be dealt with irrespective of the one stand or the other which is taken by the Revenue or the assessee and the Court has got to determine what is the true character of the receipt or the expenditure.
In the case of the Commissioner of Income tax and Excess Profits Tax, Madras vs The South India Pictures Ltd., Karaikudi (2) this Court endorsed the following statement of Lord Macmillan in Ven Den Berghs, Ltd. vs Clark (1): " That though in general the distinction between an income and a capital receipt was well recognised (1) ; , 429.
(2) ; , 228.
382 and easily applied, cases did arise where the item lay on the border line and the problem had to be solved on the particular facts of each case.
No infallible criterion or test can be or has been laid down and the decided cases are only helpful in that they indicate the kind of consideration which may relevantly be borne in mind in approaching the problem.
The character of the payment received may vary according to the circumstances.
Thus the amount received as consideration for the sale of a plot of land may ordinarily be a capital receipt but if the business of the recipient is to buy and sell lands, it may well be his income.
" While considering the case law it is necessary to bear in mind that the Indian Income tax Act is not in pari materia with the British Income Tax statutes, it is less elaborate in many ways, subject to fewer refinements and in arrangement and language it differs greatly from the provisions with which the courts in England have had to deal.
Little help can therefore be gained by attempting to construe the Indian Income tax Act in the light of decisions bearing upon the meaning of the Income tax legislation in England.
But on analogous provisions, fundamental concepts and general principles unaffected by the specialities of the English Income tax statutes, English authorities may be useful guides.
(Vide the observations of the Privy Council in the Commissioner of Income tax vs Shaw Wallace & Co. (1); Gopal Saran Narain Singh vs Commissioner of Income tax (2); Commissioner of Income tax, Bombay Presideney and Aden vs Chunnilal B. Mehta (3 ) and Raja Bahadur Kamakshya Narain Singh of Ramgarh vs C. I. T., Bihar & Orissa (4).
Before embarking upon a discussion of the principles emerging from the various decisions bearing upon this question, it is necessary to advert to an argument which was addressed to us by the learned counsel for the appellant in connection with the Privy Council decision in the Commissioner of Income tax vs Shaw Wallace & Co. (1).
That case was relied upon by the (1) (1932) L.R. 59 I.A. 206, 212.
(2) (1935) L.R. 62 I.A. 207, 214.
(3) (1938) L.R. 65 I A. 332, 349.
(4) (1943) L.R. 70 I.A. 180, 188.
383 Appellate Assistant Commissioner and the High Court as determinative of the question in favour of the assessee and it was strenuously urged before us on behalf of the Revenue that the authority of that decision was considerably shaken not only by the later privy Council decision in Raja Bahadur Kamakshya Narain Singh vs C. I. T., Bihar and Orissa (1) but also by a decision of this Court in Raghuvansi Mills Ltd. vs Commissioner of Income tax, Bombay City (2).
It may be remembered that the term " income was understood by their Lordships of the Privy Council in Shaw Wallace 's Case(3) to connote a periodical monetary return coming in with some sort of regularity or expected regularity from definite sources.
The source may not necessarily be one which is expected to be continuously productive, but it must be one whose object is the production of a definite return excluding anything in the nature of a mere windfall.
Income was thus likened pictorially to the fruit of a tree or the crop of a field (lbid p. 212).
This concept of " income " was adopted and in substance repeated by the Privy Council in Gopal Saran Narain Singh 's Case (4) at p. 213, though Lord Russell of Killowen pronouncing the opinion of the Privy Council pithily remarked that anything which can properly be described as income is taxable under the Act unless properly exempted.
The case of Raja Bahadur Kama kshya Narain Singh (1)struck a discordant note and Lord Wright delivering the opinion of the Board observed at p. 192 that it was not in their Lordships ' opinion correct to regard as an essential element in any of these or like definitions a reference to the analogy of fruit or increase or sowing or reaping or periodical harvests and that such picturesque similes cannot be used to limit the true character of income in general.
Lord Wright further observed at p. 194: " Its applicability may in particular cases differ because the circumstances, though similar in some respects, may be different in others.
Thus the profit realised on a sale of shares may be capital if the seller (1) (1943) L.R. 70 I.A. 180, 188.
(2) [1953] S.C.R. 177.
(3) (1932) L.R. 59 I. A. 206, 212.
(4) (1935) L.R. 62 I.A. 207, 2I4.
384 is an ordinary investor changing his securities, but in some instances, at any rate, it may be income if the seller of the shares is an investment or an insurance company.
Income is not necessarily the recurrent return from a definite source, though it is generally of that character.
Income, again may consist of a series of separate receipts, as it generally does in the case of professional earnings.
The multiplicity of forms which " income " may assume is beyond enumeration.
Generally, however, the mere fact that the income flows from some capital assets, of which the simplest illustration is the purchase of an annuity for a lump sum, does not prevent it from being income, though in some analogous cases the true view may be that the payments, though spread over a period, are not income, but instalments payable at specified future dates of a purchase price.
(Vide Secretary of State for India vs Scoble) (1).
This Court in Raghuvansi Mill 's Case (2) also observed that the definition of " income " in Shaw Wallaces Case (3) as a periodical monetary return coming in with some sort of regularity or expected regularity from definite sources must be read with reference to the particular facts of that case.
It was therefore urged on behalf of the Revenue that periodicity or recurring nature of the receipt was not a necessary ingredient of " income " nor was the existence of a material external source capable of producing a recurrent return necessary before a receipt could be treated as income chargeable to tax.
We are not unmindful of this criticism of the definition of " income " adopted by the Privy Council in Shaw Wallace & Co. 's Case (3) and the concept of " income " may have to be thus revised.
But even granting the proposition that is contended for by the Revenue the result is no different in the present case because the head of income under which the assessee before us has been assessed to Income tax is " business " a definite source from which the income in question sought to be assessed is alleged to have been (1) ; (2) ; (3) (1932) L.R. 59 I.A. 206, 212.
385 derived and whether it is of a recurring or non recurring nature therefore does not enter into the picture.
The exemption from liability in regard to that income is claimed by the assessee, not on the ground of the applicability of section 4(3)(vii) of the Income tax Act but on the ground that it is not a revenue receipt but a capital receipt, being compensation paid by the Company to the assessee for the termination or cancellation of the agency qua territory outside Hyderabad State, a capital asset of the assessee 's business.
What then are the considerations which have to be borne in mind in determining these vexed questions ? The distinction between a capital expenditure and a revenue expenditure came up for consideration before this Court in Assam Bengal Cement Co., Ltd. vs The Commissioner of Income tax, West Bengal (1) and this Court laid down certain criteria for the determination as to whether a particular expenditure incurred by the assessee was a capital expenditure or a revenue expenditure.
We need not therefore discuss that problem any further.
As to whether a particular receipt in the hands of an assessee is a capital receipt, or a revenue receipt, we had occasion to consider the same in the Commissioner of Income tax and Excess Profits Tax, Madras vs The South India Pictures Ltd., Karaikudi (2).
The assessee there carried on the business of distribution of films.
In some instances the assessee used to produce or purchase films and then distribute the same for exhibition in different cinema halls and in other cases used to advance monies to producers of films produced with the help of monies so advanced.
In the course of such business it advanced monies to the Jupiter Pictures for the production of these films and acquired the rights of distribution of the three films under three agreements in writing dated September, 1941, July 1942 and May 1943.
In the accounting year ending March 31, 1946, and in the previous years the assessee had exploited its rights of distribution of the three pictures.
On October 31, 1945, the (1) (2) ; , 228. 49 386 assessee and the Jupiter Pictures entered into an agreement cancelling the three agreements relating to the distribution rights in respect of the three films and in consideration of such cancellation the assessee was paid Rs. 26,000 in all by the Jupiter Pictures as compensation.
It was held by the Majority of this Court that the sum received by the assessee was a revenue receipt (and not a capital receipt) assessable under the Indian Income tax Act inasmuch as: (1) the sum paid to the assessee was not truly compensation for not carrying on its business but was a sum paid in the ordinary course of business.
to adjust the relation between the assessee and the producers of the films; (2)the agreements which were cancelled were by no means agreements on which the whole trade of the assessee had for all practical purposes been built and the payment received by the assessee was not for the loss of such a fundamental asset as was the ship managership of the assessee in Barr Crombie & Co., Ltd. vs Commissioners of Inland Revenue (1) and (3)one could not say that the cancelled agreements constituted the framework or whole structure of the assessee 's profit making apparatus in the same sense as the agreement between the two margarine dealers in Van Den Berghs Ltd. vs Clark (2) was.
The criteria laid down by the majority judgment for determining whether the particular payment received by the assessee was income or was to be regarded as a capital receipt were: (i)whether the agreements in question were entered into by the assessee in the course of carrying on its business of distribution of films, and (ii) whether the termination of the agreements in question could be said to have been brought about in the ordinary course of business; so that money received by the assessee as a result of or in connection with such termination of agreements could be regarded as having been received in the ordinary course of its business and therefore a trading receipt.
(1) (2) ; , 429.
387 A similar question arose in Commissioner of Incometax, Nagpur vs Rai Bahadur Jairam Valji(1) where this Court followed the same line of reasoning.
The question there related to a sum of Rs. 2,50,000 received by the assessee as damages or compensation for the premature termination of a contract dated May 9, 1940.
The High Court on a reference under section 66(1) of the Income tax Act had held that the sum was a capital receipt in the hands of the assessee, and as such not liable to be taxed.
It was contended on behalf of the Revenue that the contract dated May 9, 1940, was one entered into by the assessee in the ordinary course of his business, that the sum of Rs. 2,50,000 was paid admittedly as solatium for the cancellation of that contract, and that it was therefore a revenue receipt.
The assessee on the other hand contended that the contract dated May 9, 1940, was for a period of 25 years of which more than 23 years had still to run at the time of the settlement, and it was therefore capital in character.
Moreover, the true character of the agreement was that it brought into existence an arrangement which would enable him to carry on a business and was not itself any business and any payment made for the termination of such an agreement was a capital receipt.
This Court on the facts and circumstances of the case came to the conclusion that the contract in question was entered into by the assessee in the ordinary course of business and was one entered into in the carrying on of that business.
The arrangement ultimately entered into between the parties in regard to the payment of the said sum of Rs. 2,50,000 was accordingly treated as an adjustment made in the ordinary course of business and the receipt was therefore held to be an amount paid as solatium for the cancellation of a contract entered into by a person in the ordinary course of business.
In the course of the discussion reference was made to agency agreements and this Court observed:" In an agency contract, the actual business consists in the dealings between the principal and his (1) [1959] Supp. 1 S.C.R. 110; , 163.
388 customers, and the work of the agent is only to bring about that business.
In other words, what he does is not the business itself but something which is intimately and directly linked up with it.
It is therefore possible to view the agency as the apparatus which leads to business rather than as the business itself on the analogy of the agreements in Van Den Berghs Ltd. vs Clark (1).
Considered in this light, the agency right can be held to be of the nature of a capital asset invested in business.
But this cannot be said of a contract entered into in the ordinary course of business.
Such a contract is part of the business itself, not anything outside it as is the agency, and any receipt on account of such a contract can only be a trading receipt.
" This Court further emphasised the distinction between an agency agreement and a contract made in the usual course of business and pointed out that the agreement could in any event be regarded as a capital asset of the agent which would be saleable.
Such a concept would certainly be out of place with reference to a contract entered into in the course of business and any payment made for the non performance or cancellation of such a contract could only be damages or Compensation and could not, in law or fact, be regarded as an assignment of the rights under the contract.
Once it was found that the contract was entered into in the ordinary course of business, any compensation received for its termination would be a revenue receipt, irrespective of whether its performance was to consist of a single act or a series of acts spread over a period.
While thus indicating that an agency could be treated as a capital asset of the business this Court guarded itself against its being understood as deciding that the compensation paid for cancellation of an agency contract must always and as a matter of law be held to be a capital receipt and it made the following pertinent observations : " Such a conclusion will be directly opposed to the decision in Kelsall 's case (2) and the Commissioner (1) ; ,429.
(2) ; 389 of Income tax and Excess Profits Tax, Madras vs The South India Pictures Ltd., Karaikudi (1).
The fact is that an agency contract which has the character of a capital asset in the hands of one person may assume the character of a trading receipt in the hands of another, as for example, when the agent is found to make a trade of acquiring agencies and dealing with them.
The principle was thus stated by Romer, L. J., in Golden Horse Shoe (New) Ltd. vs Thurgood (2) : The determining factor must be the nature of the trade in which the asset is employed.
The land upon which a manufacturer carries on his business is part of his fixed capital.
The land with which a dealer in real estate carries on his business is part of his circulating capital.
The machinery with which a manufacturer makes the articles that he sells is part of his fixed capital.
The machinery that a dealer in machinery buys and sells is part of his circulating capital, as is the coal that a coal merchant buys and sells in the course of his trade.
So, too, is the coal that a manufacturer of gas buys and from which he extracts his gas.
Therefore when a question arises whether a payment of compensation for termination of an agency is a capital or a revenue receipt, it would have to be considered whether the agency was in the nature of capital asset in the hands of the assessee, or whether it was only part of his stock in trade.
Thus in Barr Crombie & Sons Ltd. vs Commissioners of Inland Revenue (3), the agency was found to be practically the sole business of the assessee, and the receipt of compensation on account of it was accordingly held to be a capital receipt, while in Kelsall 's case the agency which was terminated was one of several agencies held by the assessee and the compensation amount received therefor was held to be a revenue receipt, and that was also the case in the Commissioner of Income tax and Excess Profits Tax, Madras vs The South India Pictures Ltd., Karaikudi (1).
" We may in this context also note the further observations made by this Court: (1) ; 228, (2) , 300.
(3) 390 But apart from these and similar instances, it might, in general, be stated that payments made in settlement of rights under a trading contract are trading receipts and are assessable to revenue.
But where a person who is carrying on business is prevented from doing so by an external authority in the exercise of a paramount power and is awarded compensation therefor, whether that receipt is a capital receipt or a revenue receipt will depend upon whether it is compensation for injury inflicted on a capital asset or on a stock in trade.
The decision in the Glenboig Union Fireclay Co., Ltd. vs The Commissioners of Inland Revenue (1) applies to this category of cases.
There, the assessee was carrying on business in the manufacture of fire clay goods and had, for the performance of that business, acquired a fire clay field on lease.
The Caledonian Railway which passed over the field prohibited the assessee from excavating the field within a certain distance of the rails, and paid compensation therefor in accordance with the provisions of a statute.
It was held by the House of Lords that this was a capital receipt and was not taxable on the ground that the compensation was really the price paid " for sterilising the asset from which otherwise profit might have been obtained.
" That is to say, the fire clay field was a capital asset which was to be utilised for the carrying on of the business of manufacturing fire clay goods and when the assessee was prohibited from exploiting the field, it was an injury inflicted on his capital asset.
Where, however, the compensation is referable to injury inflicted on the stock in trade, it would be a revenue receipt.
(Vide the Commissioners of Inland Revenue vs Newcastle Breweries Ltd. (2).
" It is no doubt true that this Court was not concerned with any agency agreement in the last mentioned case and the observations made by this Court there were by way of obiter dicta.
The obiter dicta of this Court, however, are entitled to considerable weight and we on our part fully endorse the same.
The earlier case of Commissioner of Income tax and Excess Profits Tax, (1) (2) 391 Madras vs The South India Pictures Ltd. (1) was indeed a case where the assessee had entered into agency agreements for the exploitation of the three films in question, but in that case the conclusion was reached that entering into such agency agreements for acquiring the films was a part of the assessee 's business and the agreements in question having been entered into by the assessee in the ordinary course of business the cancellation of those agreements was also a part of the assessee 's business and was resorted to in order to adjust the relation between the assessee and the producer of those films.
It would not be profitable to review the various English decisions bearing on this question as they have been exhaustively reviewed in the above decisions of this Court.
The position as it emerges on a consideration of these authorities may now be summarised.
The first question to consider would be whether the agency agreement in question for cancellation of which the payment was received by the assessee was a capital asset of the assessee 's business, constituted its profit making apparatus and was in the nature of its fixed capital or was a trading asset or circulating capital or stock in trade of his business.
If it was the former the payment received would be undoubtedly a capital receipt; if, however, the same was entered into by the assessee in the ordinary course of business and for the purpose of carrying on that business, it would fall into the latter category and the compensation or payment received for its cancellation would merely be an adjustment made in the ordinary course of business of the relation between the parties and would constitute a trading or a revenue receipt and not a capital receipt.
We may perhaps appropriately refer at this stage to an aspect of this question which was canvassed before us with some force and it was that there was no enforceable agreement as between the assessee and the Company which could be made the subject matter of a legal claim for damages or compensation at his instance in the event of its termination or cancellation by the Company.
The agency agreement was (1) ; , 228.
392 terminable at the will of the Company and if the Company chose to do so the assessee had no remedy at law in regard to the same.
It is, however, to be remembered that in all these cases one has really got to look to the nature of the receipt in the hands of the assessee irrespective of any consideration as to what was actuating the mind of the other party.
As Rowlatt, J., observed in the case of Chibbett vs Joseph Robinson & Sons (1): "As Sir Richard Henn Collins said, you must not look at the point of view of the person who pays and see whether he is compellable to pay or not; you have to look at the point of view of the person who receives, to see whether he receives it in respect of his services, if it is a question of an office and in respect of his trade, if it is a question of trade and so on.
You have to look at his point of view to see whether he receives it in respect of those considerations.
This is perfectly true.
But when you look at that question from what is described as the point of view of the recipient, that sends you back again, looking, for that purpose, to the point of view of the payer; not from the point of view of compellability or liability, but from the point of view of a person inquiring what is this payment for; and you have to see whether the maker of the payment makes it for the services and the receiver receives it for the services.
" The learned Judge further observed at p. 61 " But at any rate it does seem to me that compensation for loss of an employment which need not continue, but which was likely to continue, is not an annual profit within the scope of the Income tax at all." (See also W. A. Guff vs Commissioner of Incometax, Bombay City) (2) where the question whether the amount paid was compensation for which the employer was liable or was a payment made ex gratia was considered immaterial for the purpose of the decision in that case).
It was also urged that the agency in question before us was not an enduring asset of the assessee 's business as in its very nature it was terminable at will, (1) , 60.
(2) 393 there being no agreement or arrangement for a fixed term between the assessee and the Company.
On the analogy of the test laid down by this Court in Assam Bengal Cement Co., Ltd. vs The Commissioner of Income tax, West Bengal (1) while considering the distinction between a capital expenditure and a revenue expenditure, it was argued that the agency agreement in question could not be a capital asset of the assessee 's business in so far as it was not of an enduring character and the compensation paid for its termination could not therefore be a capital receipt in the hands of the assessee.
Whatever be the position, however, in the case of the acquisition of an asset by the assessee by making a disbursement for the purchase of the same, similar considerations would not necessarily operate when the amount is received by the assessee for the termination or cancellation of an asset of his business.
The character of such a receipt would indeed have to be determined having regard to the fact whether the asset in question was a capital asset of the business or a trading asset thereof.
For this purpose it will be immaterial whether that asset was of an enduring character or was one which was terminable at will.
We have therefore got to determine whether the agency in question before us was a capital asset of the assessee 's business.
One of the relevant considerations in the matter of such determination has been whether the asset was in the nature of fixed capital or constituted the circulating capital or stock in trade of the assessee 's business.
This question was thus dealt with by Viscount Haldane in John Smith & Sons vs Moore (2) : " But what was the nature of what the Appellant here had to deal with ? He had bought as part of the capital of the business his father 's contracts.
These enabled him to purchase coal from the colliery owners at what we were told was a very advantageous price, about fourteen shillings per ton.
He was able to buy at this price because the right to do so was part of the (1) (2) , 282.
50 394 assets of the business.
Was it circulating capital ? My Lords, it is not necessary to draw an exact line of demarcation between fixed and circulating capital.
Since Adam Smith drew the distinction in the Second Book of his " Wealth of Nations ", which appears in the chapter on the Division of Stock, a distinction which has since become classical, economists have never been able to define much more precisely what the line of demarcation is.
Adam Smith described fixed capital as what the owner turns to profit by keeping it in his own possession, circulating capital as what he makes profit of by parting with it and letting it change masters.
The latter capital circulates in this sense.
My Lords, in the case before us the Appellant, of course, made profit with circulating capital, by buying coal under the contracts he had acquired from his father 's estate at the stipulated price of fourteen shillings and reselling it for more, but he was able to do this simply because he had acquired, among other assets of his business, including the goodwill, the contracts in question.
It was not by selling these contracts, of limited duration though they were, it was not by parting with them to other masters, but by retaining them, that he was able to employ his cir culating capital in buying under them.
I am accordingly of opinion that though they may have been of short duration, they were none the less part of his fixed capital ".
In the case before us the agency agreement in respect of territory outside the Hyderabad State was as much an asset of the assessee 's business as the agency agreement within the Hyderabad State and though expansion of the territory of the agency in 1939 and the restriction thereof in 1950 could very well be treated as grant of additional territory in 1939 and the withdrawal thereof in 1950, both these agency agreements constituted but one employment of the assessee as the sole selling agents of the Company.
There is nothing on the record to show that the acquisition of such agencies constituted the assessee 's business or that these agency agreements were entered into by the assessee in the carrying on of any such business.
395 The agency agreements in fact formed a capital asset of the assessee 's business worked or exploited by the assessee by entering into contracts for the sale of the " charminar " cigarettes manufactured by the Company to the various customers and dealers in the respective territories.
This asset really formed part of the fixed capital of the assessee 's business It did not constitute the business of the assessee but was the means by which the assessee entered into the business transactions by way of distributing those cigarettes within the respective territories.
It really formed the profit making apparatus of the assessee 's business of distribution of the cigarettes manufactured by the Company.
If it was thus neither circulating capital nor stock in trade of the business carried on by the assessee it could certainly not be anything but a capital asset of its business and any payment made by the Company as and by way of compensation for terminating or cancelling the same would only be a capital receipt in the hands of the assessee.
It would not make the slightest difference for this purpose whether either one or both of the agency agreements were terminated or cancelled by the Company.
The position would be the same in (either event.
As was observed by Lord Wrenbury in the Glenboig Union Fire Clay Co., Ltd. vs The Commissioners of Inland Revenne (1) at p. 465: " The matter may be regarded from another point Of view ; the right to work the area in which the working was to be abandoned was part of the capital asset consisting of the right to work the whole area demised.
Had the abandonment extended to the whole area all subsequent profit by working would, of course have been impossible but it would be impossible to contend that the compensation would be other than capital.
It was the price paid for sterilising the asset from which otherwise profit might have been obtained.
What is true of the whole must be equally true of part.
" If both the agency agreements, viz., one for the territory within the Hyderabad State and the other for the territory outside Hyderabad State had been (1) 396 terminated or cancelled on payment of compensation, the whole profit making structure of the assessee 's business would have been destroyed.
Even if one of these agency agreements was thus terminated, it would result in the destruction of the profit making apparatus or sterilisation of the capital asset pro tanto and if in the former case the receipt in the hands of the assessee would only be a capital receipt, equally would it be a capital receipt if compensation was obtained by the assessee for the termination or cancellation of one of these agency agreements which formed a capital asset of the assessee 's business.
The facts of the present case are closely similar to those which obtained in the Commissioner of Incometax vs Shaw Wallace & Co. (1).
In that case also the assessees had for a number of years prior to 1928 acted as distributing agents in India of the Burma Oil Company, and the Anglo Persian Oil Company, but had no formal agreement with either Company.
In or about the year 1927 the two companies combined and decided to make other arrangements for the distribution of their products.
The assessee 's agency of the Burma Company was accordingly terminated on December 31, 1927, and that of the AngloPersian Company on June 30, following.
Some time in the early part of 1928 the Burma Company paid to the assessee a sum of Rs. 12,00,000 " as full compensation for cessation of the agency " and in August of the same year the Anglo Persian Company paid them another sum of Rs. 3,25,000 as " compensation for the loss of your office as agents to the company " On the facts and circumstances of the case the Privy Council came to the conclusion that the sums could only be taxable if they were the produce, or the result of, carrying on the agencies of the oil companies in the year in which they were received by the assessees.
But when once it was admitted that they were sums received; not for carrying on that business, but as some 'Sort of solatium for its compulsory cessation, the answer seemed fairly plain.
Whatever be the criticism in regard to the concept of income adopted in this case noted (1) (1932) L.R. 59 I. A. 206,212.
397 earlier in this judgment, the decision could just as well be supported on the grounds which we have hereinbefore discussed and was quite correct, the payments having been received by the assessees as and by way of compensation for the termination Or cancellation of the agency agreements in question which were in fact the capital assets of the assessee 's business.
The Appellate Assistant Commissioner as well as the High Court were thus justified in the conclusion to which they came, viz., that the sum of Rs. 2,19,343 received by the assessee from the Company was a capital receipt.
The result, therefore, is that the appeal fails and will stand dismissed with costs throughout.
KAPUR, J. I have had the advantage of perusing the judgment prepared by my learned brother Bhagwati, J., but with great respect I am unable to agree and my reasons are these.
The sole question for determination in this case is as to whether a sum of Rs. 2,26,263 received by the assessees from.
Vazir Sultan Tobacoo Co. Ltd. as compensation for the termination of their agency for the distribution of 'charminar ' cigarettes in areas of India other than Hyderabad State is or is not taxable in the hands of the assessees.
The answer to this question depends on whether the amount has been received by the assessees as a capital or a revenue receipts.
In 1931 the assessees were appointed distributing agents for Hyderabad State only and for the rest of India in 1939, the agency commission in each case being a discount of 2% on the gross selling price.
The agency of 1939 was terminated by a resolution dated June 16, 1950, on payment of the compensation amount already mentioned but the assessees continued to be distributors for Hyderabad State.
It must here be mentioned that the agency in question was terminable at will, and that any compensation paid for it would prima facie be revenue.
During the accounting year the amount of income, profits and gains of the assessees from the cigarette distribution business and from another source, i. e., 398 Acid Factory within the State of Hyderabad was Rs. 4,53,159.
The order of the Income tax Officer or the Appellate Tribunal does not show bow much of this sum was attributable to the Cigarette distribution business and how much to the other source.
There is no finding as to how and to what extent, if any, the business of the assessees was affected by the cesser of distribution business outside that State.
The question now arises did the assessees receive the compensation in lieu of the commission they otherwise might or would have earned if the agreement had continued or did they receive it as compensation for the destruction of a profit making asset.
The answer to this question would again be dependent upon whether the receipt in question is attributable to a fixed capital asset or to circulating capital.
These two terms have been used in a number of cases but as applied to agencies compensation will be a capital receipt if it is received as the value of the agency, i.e., it is a price of the business as if it is brought to sale.
On the other band it is revenue receipt if it is paid in lieu of profits or commission.
In Van Den Berghs Ltd. vs Clark (1) Lord Macmillan described circulating capital as " capital which is turned over and in the process of being turned over yields profit or loss.
Fixed capital is not involved directly in that process and remains unaffected by it ".
As was said by Lord Macmillan in the same case, it is not possible to lay down any single test as infallible or any single criterion as decisive in the determination of the question.
Ultimately it, must depend upon the facts of a particular case.
The assessees rested then case on the decision of the Privy Council in Commissioner of Income tax vs Shaw Wallace & Co. (2) on which the High Court has mainly relied.
In that case the assessees carried on business in India as merchants and agents for various companies.
They were distributing agents for two on companies.
These two agencies were terminated and a sum of Rs. 12,00,000 was paid as compensation for the loss of these agency rights and the question was (1) ; (2) (1932) L.R. 59 I.A. 206. 399 whether this was a capital payment.
It was held to be a capital and not a revenue receipt because the, sum received was not the result of carrying on the ' agencies of the oil companies, in other words, it could 1 not be regarded as profits or gains from carrying on the business but was received in the nature of a solatium for cessation.
The case was decided on the interpretation of the word 'business ' as defined in section 2(4) of the Income tax Act, under which it " includes any trade, commerce or manufacture, or any adventure or concern in the nature of trade, commerce or manufacture ".
These words, it was held, were wide " but underlying each of them is the fundamental idea of the continuous exercise of an activity which was also the idea underlying the relevant words of section 10(1) of the Act, " in respect of the profits or gains of any business carried on by him ", i. e., it is to be the profit earned by a process of production.
The test of income was its periodicity because it connotes a periodical monetary return.
This test of periodicity was not accepted by the Privy Council itself in Raja Bahadur Kamakshya Narain Singh 's case (1).
Lord Wright there said " income is not necessarily the recurrent return from a definite source, though it is generally so ".
The test of periodicity was rejected by this Court in Raghuvanshi Mills Ltd. vs Commissioner of Income tax (2) where Bose, J., said that the remarks of periodical monetary return must be confined to the facts of that case and it was held that money received from an insurance company for insurance against losses was income representing loss of profits as opposed to loss of capital.
In a later case The Commissioner of Income tax vs The South India Pictures Ltd. (3) it was said that if Shaw Wallace & Co. had other agencies similar to those of the two oil companies it would be difficult to reconcile the decision in that case with the later decisions in Kelsall Parsons & Co. vs Commissioners of Inland Revenue (4) and other cases (Per Das, C. J.).
In view of the decision in the South India Pictures ' case and the observations of Bose, J., in the (1) (1943) L.R. 70 I.A. 180.
(2) ; , 183.
(3) ; , 232.
(4) ; 400 case of Raghuvanshi Mills Ltd. (1) the authority of Shaw Wallace & Co. 's case (2) must be taken to be considerably shaken.
We have then to see how the question has to be determined.
Various tests have been laid down in decided cases.
According to Lord Cave, L. C., an expenditure 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 has been treated as properly attributable to capital and not to revenue.
(British Insulated Cables (3) ).
According to Lord Atkinson the word " asset " need not be confined to " something material" and Romer, L. J., has added that the advantage paid for need not be ,of a positive character " and may consist in the getting rid of an item of fixed capital that is of an onerous character (Anglo Persian Oil Co. vs Dale (4) ).
If the receipt represents the aggregate of profits which an assesee would otherwise have received over a series of years the lump sum might be regarded as of the same nature as the ingredients of which it was composed ; at p. 431) (5) but it is not necessarily in itself an item of income (per Lord Buckmaster in Glenboig Union Fireclay Co. (6) ).
In Van Den Berghs ' case (7) there were three agreements between a British and a Dutch company operative till 1940 making it possible for them to carry on their business 'in friendly alliance ' and providing for the sharing of profits in certain proportions.
The agreements were terminated in 1927 and the Dutch company paid the English company a sum of pound 450,000 as compensation.
The question was the charac ter of the receipt whether capital or revenue.
It was held by the House of Lords that it was the former because the agreements were not " ordinary commercial contracts in the course of carrying on their trade ; they were not contracts for the disposal of their employees or for the engagement of agents or other employees (1) ; , 183 (2) (1932) L.R. 59 I.A. 206 (3) , 213, 222.
(4) , 146 (5) Van Den Berghs Ltd. v Clark (6) (1922) 12 Tax Cas.
427, 464.
(7) ; 401 for the conduct of their business nor were they merely agreements as to how their trading profits when earned should be distributed as between the contracting parties.
On the contrary the agreements related to the whole structure of the recipient 's profit making apparatus.
They regulated its activities, defined what it might or it might not do and affected the whole conduct of its business ".
According to Lord Macmillan if the agreements formed the fixed framework within which the circulating capital operated, then they are not incidental to the working of its profit making machine but were essential parts of the mechanism itself and therefore they would result in a capital receipt and not revenue receipt.
Thus the agreements were designed to ensure that the business was carried on to the best advantage but they did not themselves form part of the business.
They were not agreements which must be regarded as pertinent to trading activities which yielded profits.
As such the totality of payments on account of those agreements were held to be a capital receipt.
The various decided cases demarcate the areas on the two sides of the line in which a receipt may lie and in every case it has to be determined as to whether it falls on one side or the other.
The simplest case is of income from property or business as distinct from something received in lieu of property or business itself.
One illustration of this is insurance against fire, destruction or damage and insurance against loss of profit, the former would bring in compensation in the nature of a capital.
Another instance is where the whole business is bought over and the receipt is the price of the business itself as opposed to a lump sum payment for the loss of profit calculated on a proper basis.
The test of income, i. e., periodicity or recurrence at fixed intervals has been doubted in this Court.
Raghuvanshi Mills (1).
Another test is afforded by cases of tangible immoveable property.
If an owner of such property is paid compensation for not working a part of his property, (1) ; , 183.
51 402 e. g. a part of the demised premises the compensation is not profit because it is payment for sterilising that part of the asset from which otherwise profit might have been obtained.
(Glenboig Union Fireclay case (1) at p. 464).
There is no difference in cases of this kind whether the abandonment extends to the whole area or is circumscribed to a part because in either case it is sterilising an asset from which otherwise profit might have been obtained.
" It makes no difference whether it may be regarded as a sale of the asset out and out or it be treated merely as a means of preventing the acquisition of profit that would otherwise be gained.
In either case the asset of the company to that extent has been sterilised or destroyed ".
Another test is whether the agreement related to the whole structure of recipient 's profit making apparatus and affected the whole conduct of his business or was the loss of a part of the fixed framework of the business.
If it is, it is capital (Van Den Bergh 's case (2) ).
But compensation for temporary and variable elements of the recipient 's profit making apparatus would be revenue (MacDonald 's case (3) ).
If the agreement affects the whole structure and character of the recipient 's business then it is capital but not if the structure of the business is so designed as to absorb the shocks as by the cancellation of one agency (Kelsall Parson 's case(4)).
In Bush Beach and Gent Ltd. vs Road(5) again the test of how the cancellation of the agreement affected the recipient 's business was applied.
Barr Crombie 's case (6) is a case of capital asset as there the recipient lost his entire business which resulted in reduction of staff, salaries and even in office accom modation.
The result was the cesser of its trading existence.
The transaction took the form of a transfer for a price from one party to another of something that formed part of the enduring asset of one of them.
Compensation for the loss of an agency would be for the loss of a capital asset if the termination of the (1) , 464.
(2) ; (3) (4) (1938) 21 Tax Cas.
(5) (6) (1945) 26 Tax Cas.
406. 403 agency was a damage to the recipient 's business structure such as to destroy or materially cripple the whole structure involving serious dislocation of the normal commercial organisation but if it was merely compensation for the loss of trading profit, i. e., in respect of commissions or it took the place of commission that would have been earned if the engagement had continued then it is revenue (Wiseburg vs Domville) (1).
So that the decision as to whether compensation was capital or revenue would depend upon whether the cessation of the agency destroys or materially cripples the whole structure of the recipient 's profit making apparatus or whether the loss is of the whole or part of the framework of business.
If we apply these tests to the agreement which has been terminated in the present case, it does not fall in any of the class of cases of destruction of a capital asset.
For the appellant reliance was placed on the observations of Venkatarama Aiyar, J., in Commissioner of Income tax vs Rai Bahadur Jairam Valji (2) where it was pointed out that in an agency contract the actual business consists in the dealings between the principal and his customers and the work of the agent is only to bring about that business.
In other words what the agent does is not business itself but something which is intimately and directly linked with it.
But an examination of the context shows that that is not what these observations mean.
The point that was to be decided in that case was whether a payment of compensation for the cancellation of a trading contract was a capital or revenue receipt, and dealing with decisions relating to the cancellation of agency contracts which were quoted in support of the contention that they were capital, the learned Judge_ observed that considerations applicable to agency contracts were inapplicable to trading contracts, because the two classes of contracts, were essentially different, and these differences were there pointed out.
The purpose of these observations was to show that receipts from (1) (2) [1959] SUPP.
1 S.C.R. 110 , 161, 163.
404 trading contracts were revenue and not that receipts from agency contracts are capital.
That that is the true scope of these observations is clear from the following passage: "In holding that compensation paid on the cancellation of a trading contract differs in character from compensation paid for cancellation of an agency contract, we should not be understood as deciding that the latter must always, and as a matter of law be held to be a capital receipt.
Such a conclusion will be directly opposed to the decisions in Kelsall 's case (1) and Commissioner of Income tax vs South India Pictures Ltd (2).
The fact is that an agency contract which has the character of a capital asset in the hands of one person may assume the character of a trading receipt in the hands of another, as, for example, when the agent is found to make a trade of acquiring agencies and dealing with them ".
The Court there observed that when the assessee holds a number of agencies, the compensation paid for cancellation of any of them could be regarded as revenue receipt.
This is inconsistent with the conclusion that an agency contract must always be regarded as a capital asset.
The learned Judges further observed that they were not elaborating this part as they were there concerned with a trading contract and therefore the statement as to when receipts from agency contracts could be regarded as revenue receipts cannot be read as exhausting the circumstances under which they could be held to be revenue.
As a matter of fact there are three kinds of cases of agencies shown by the decided cases: (1) Kelsall Parsons case (1) where the recipient was carrying on several agencies and the test laid down was whether the business structure could absorb a shock of the terminate on of one.
(2) The other is where the compensation is for a temporary and variable element of assessee 's profit making apparatus; MacDonald 's case (3).
(3) The third class of cases is represented by (1) ; (2) ; , 232.
(3) 405 Fleming & Co. 's case(1) where the rights and advantages surrendered were such as to destroy or materially cripple the whole structure of the profit making apparatus.
The agencies themselves are of different kinds:(1) where the agent himself carries on the business and sells the product of the principal and gets commission for it; (2) where the agent 's function is confined to bringing the principal and the customer together and be gets agency commission for the performance of only that service; (3) where the agent is a distributor and distributes the products of the principal through his sub agents and charges commission for the distribution work.
Cases (1) and (3) would not strictly fall within the scope of the ' observations in Commissioner of Income tax vs R. B. Jairam Valji (2) and case (2) would fall within the second class of agreements mentioned in Van Den Bergh 's case (3).
The agreement which is now before us and which was surrendered was terminable at will.
The amount of profit which the assessee made from working the agency contract in Hyderabad State alone was much more than the amount which the assees received for the termination of the whole of their agency outside the State.
Thus it is clear that the termination did not affect the trading activities of the assessees and therefore the termination of the contract viewed against the background of the assessee 's business Organisation and profit making structure appears to be no more than compensation for the loss of future profit and commission.
The true effect of the facts of this case appears to be this that in 1939 the assessee 's area of distribution was increased from the State of Hyderabad to the whole of India and in 1950 it was again reduced to the original area of 1931.
The assessees never lost their agency.
As a result of this contraction of area they at the most have lost some agency commission.
The compensation therefore was in the nature of surrogatum and in this view of the matter it is revenue and not capital.
(1) (2) [1959] Supp. 1 S.C.R. 110 , 161, 163.
(3) ; 406 I would therefore allow this appeal with costs throughout.
By COURT: In accordance with the majority judgment of the Court, the appeal is dismissed with costs throughout.
Appeal dismissed. [/INST] In 1931 the respondent, a registered firm, was appointed the sole selling agents and distributors for the Hyderabad State of 376 cigarettes manufactured by V (a limited company)/ under the terms of a resolution of the Board of Directors, the agency commission being a discount of 2% on the gross selling price.
In 1939 another arrangement was made whereby the respondent 's agency was extended to the rest of India.
By a resolution dated June 16, 1950, the agency of 1939 was terminated on payment of Rs. 2,26,263 to the respondent by way of compensation, but the respondent continued to be distributors for the Hyderabad State.
For the assessment year 1951 52 the Income tax Officer included the aforesaid sum in the respondent 's total income and taxed it as a revenue receipt under the head of " business ".
The respondent claimed that it did not carry on business of acquiring and working agencies, that the agency acquired in 1931 was a capital asset of its business of distributing cigarettes in the Hyderabad State, that the expansion of territory outside the Hyderabad State in 1939 was an accretion to the capital asset already acquired by it, that the resolution Of 1950 was in substance a termination of the agency qua territory outside the Hyderabad State which resulted in the sterilisation of the capital asset qua that territory, that the sum of Rs. 2,19,343 received by it in the year of account was by way of compensation for the termination of the agency outside Hyderabad State and being therefore compensation for the sterilisation Pro tanto of a capital asset of its business was a capital receipt and therefore was not liable to tax.
It was contended on behalf of the Incometax Authorities that the sole selling agency which was granted by the company to the assessee in the year 1931 was merely expanded as regards territory in 1939 and what was done in 1950 was to revert to the old arrangement, that the structure or the profit making apparatus of assessee 's business was not affected thereby, that the expansion as well as the restriction of the assessee 's territory were in the ordinary course of the assessee 's business and were mere accidents of the business which the assessee carried on and that the sum of Rs. 2,19,343 received by the assessee as and by way of compensation for the restriction of the territory was a trading or an income receipt and was therefore liable to tax.
It was also urged that the agency agreement between the respondent and the company was terminable at the will of the latter and so it could not be considered as an enduring asset.
Held (per Bhagwati and Sinha, JJ., Kapur, J., dissenting) that the agency agreements in question did not constitute the business of the respondent, but formed a capital asset, being the profit making apparatus of its business of distribution of the cigarettes manufactured by the company within the respective territories, and, consequently, any payment made by the company as compensation for terminating the agency would only be a capital receipt in the hands of the respondent.
Commissioner of Income tax vs Shaw Wallace & Co., (1932) L.R. 59 I. A. 206, relied on.
377 Commissioner of Income Tax and Excess Profits Tax, Madras vs The South India Pictures Ltd., Karaikudi; , and Commissioner of Income tax, Nagpur vs Rai Bahadur jairam Valji, [1959] Supp. 1 S.C.R. 110, distinguished.
Case law reviewed.
Held, further, that the fact that the agency agreements were terminable at will, or that only one of them was terminated, would not make any difference because in either case, when the agency was terminated and the amount was paid as compensation for such termination it resulted in the sterilisation of the capital asset Pro tanto and it was received as a capital receipt in the hands of the respondent.
Glenboig Union Fire Clay Co., Ltd. vs The Commissioners of Inland Revenne, , relied on.
Per Kapur, J. The true effect of the facts of the present case was that in 1939 the respondent 's area of distribution was increased from the State of Hyderabad to the whole of India and in 1950 it was again reduced to the original area of 1931, so that the respondent did not lose its agency.
Consequently, the termination of the agency in 1950 did not affect the trading activities of the respondent and, therefore, viewed against the background of the respondent 's business Organisation and profitmaking structure the compensation for the termination of the agency was no more than that for the loss of future profit and commission.
The compensation therefore was in the nature of surrogatum and in this view of the matter it was revenue and not capital.
The answer to the question, as applied to agencies, whether the compensation is capital or revenue, is that it will be a capital receipt if it is received as the value of the agency, i. e., it is a price of the business as if it is brought to sale.
On the other hand it is revenue receipt if it is paid in lieu of profits or commission.
In view of the decision The Commissioner of Income tax vs The South India Pictures Ltd., Karaikudi; , , and the observations of Bose, J., in the case of Raghuvanshi Mills Ltd. vs Commissioner of Income tax, ; , the authority of Commissioner of Income tax vs Shaw Wallace considerably shaken. </s> |
<s>[INST] Summarize the following judgement: minal Appeal No. 781 of 1985.
From the Judgment and Order dated 8.8.1984 of the Kerala High Court in Crl.
R.P.No.
459 of 1981.
T.S.K. Iyer, Ms. Prasanthi Prasad and N. Sudhakaran for the Appellant.
M.T. George for the Respondents.
ANAND, J.
The appellant was convicted for an offence under Section 7(1) read with Section 16 (1 A) (i) of the (hereinafter the Act) by the Additional Judicial Magistrate, 1st Class, Trivandrum on 17.7.1981 and sentenced to suffer one year R.I. and to pay a fine of Rs. 2000 and in default to undergo imprisonment for three months.
The conviction and sentence were upheld by the Additional Sessions Judge, Trivandrum who dismissed his appeal on 28.10.1981.
Criminal Revision Petition No. 459 of 1981 filed in the High Court of Kerala also failed on 8th August, 1984.
It is, thereafter, that he has come up to this court by appeal on special leave being granted.
On 12.2.1980, the Food Inspector of the Corporation of Trivandrum after disclosing his identity purchased from the appellant 600 gms.
of 'ice stick ' and paid Rs. 1.25.
One of the samples was sent to the Public Analyst at Trivandrum, who vide report dated 6.3.1980 opined that the "said sample contains artificial sweeteners saccharin and dulcin and is therefore adulterated".
The Public Analyst also stated in his report that the use of dulcin in food articles is not permitted on account of the fact that "its consumption is injurious to health".
According to the report of the Public Analyst, dulcin to the extent of 100.0 parts per million and saccharin to the extent of 90.0 parts per million was found present in the sample sent for analysis.
A complaint was accordingly filed before the Additional Judicial 1st Class Magistrate, Trivandrum.
The appellant pleaded not guilty and also exercised his right to have the sample analysed from the Central 710 Food Laboratory.
The sample was then set to the Central Food Laboratory and after analysis of the sample, it opined that "the sample does not conform to the standards laid down for ice candy under the provisions of PFA Act 1954 and the Rules thereunder '.
It was found by the Central Food Laboratory that the sample contained "an artificial sweetener" identified as saccharin to the extent of 190 parts per million.
The sample had also tested positive for presence of cane sugar.
Before the trial court, it was urged that the 'ice stick ' sold by the appellant to the Food Inspector PWl could not be treated as ice candy and since no standard for 'ice stick ' had been prescribed in the Act, the conviction of the appellant was not warranted.
It was also argued that for the offence committed by the appellant the sentence imposed was not justified.
The trial court, negatived both the contentions and recorded a finding of fact to the effect that the appellant had sold an article of food ice stick to PWl for purposes of analysis and that the ingredients of the ice candy and the ice :;tick were the same and the standards prescribed for ice candy etc.
were applicable to the article sold by the appellant also.
It was further held that since the sample did not conform to the standards laid down for ice candy under the provisions of the Act and the Rules framed thereunder, as per the certificate of the Public Analyst, the sample was adulterated and in view of presence of dulcin, "the adulterant was injurious to health".
The trial court held that the offence of the appellant squarely fell under Section 7 read with Section 16 (I A) (i) of the Act.
The sentence imposed is the minimum prescribed for the said offence.
Similar arguments were raised in the appeal before the Sessions Court also.
It was once again found, on facts, that the ice stick sold by the appellant was an article of food and that the ingredients of the ice candy and the ice stick were the same.
It was also found that since the sample contained the prohibited artificial sweetener, saccharin it was adulterated and the conviction and sentence were justified.
Similar grounds were once again raised before the High Court which also found: "In this case, therefore, from the evidence available especially Ext.
P9 report, it is clear that the petitioner sold ice candy which is described as ice stick for, it was frozen ice containing sugar.
In this view, it did not conform to the standard prescribed under the Rules . . . . . 711 Undeterred by the finding of fact recorded by all the three courts below to the effect that the 'ice stick ' sold by the appellant was covered by the articles mentioned in Item A.07.04 of Appendix B and was required to conform to the standards laid therein, a strenuous argument was once again raised before us to the effect that the 'ice stick ' sold by the appellant could not be treated to be 'ice candy ' and, therefore, the standards prescribed in Item A.07.04 of Appendix B were not applicable to it.
We are afraid, we cannot agree with this submission.
All the three courts hive carefully gone into the matter and found that the article sold by the appellant was an article of food covered by the Item A.07.04 of Appendix B.
Their finding is supported by the entry itself.
Item A.07.04 of Appendix B, as it stood at the relevant time, reads thus: "A.07.04 'Ice candy or Ice Lollies or Edible Ice ' by whatever name it is sold, means the frozen ice produce which may contained the permitted flavors and colors, sugar, syrup, fruit, fruit juice, nuts, cocoa, citric acid, stabilizers or emulsifiers not exceeding 0.5 per cent.
It shall not contain any artificia l sweetener.
" Considering the nature of the article sold, we have no doubt in our mind that the 'ice stick ' was edible ice and sold as frozen ice in the shape of a stick.
It admittedly contained sugar and coloring as is evident from the report of the Central Food Laboratory.
It was, therefore, required to conform to the standards prescribed in Item A.07.04 of Appendix B and since according to the report of the Public Analyst as also the Central Food Laboratory the article contained an artificial sweetener, saccharin, it did not conform to the standard laid down in the entry which specifically prohibits the use of any artificial sweetener.
Faced with this situation, learned counsel for the appellant then submitted that since the report of the Public Analyst, Trivandrum, which had found the presence of dulcin in the sample stood superseded by the report of the Central Food Laboratory, which had not found the presence of dulcin, an article the consumption of which is "injurious to health", under the Rules, the conviction of the appellant for an offence under Section 16 (1 A) was not justified.
Learned counsel submitted that the mere presence of artificial sweetener like saccharin in the sample, which has not been declared as "injurious to health", could not attract the provisions of Section 712 16 (1 A) of the Act.
We find force in this submission.
The report of the Central Food Laboratory definitely excluded the presence of dulcin in the sample.
It only found presence of the prohibited artificial sweetener, saccharin.
Section 16 (1 A) provides: "(1A) If any person whether by himself or by any other person on his behalf imports into India or manufactures for sale, or stores, sells or distributes (i)any article of food which is adulterated within the meaning of any of the sub clauses (e) to (1) (both inclusive) of clause (ia) of section 2; or (ii) any adulterant which is injurious to health, he shall, in addition to the penalty to which he may be liable under the provisions of section 6, be punishable with imprisonment for a term which shall not be less than one year but which may extend to six years and with fine which shall not be less than two thousand rupees.
" It would be seen from the above provision that in order to maintain a conviction under the said provision, the article of food which is adulterated should fall either in one of the sub clauses (e) to (1) of clause (ia) of Section 2 or should contain an adulterant which is injurious to health.
The adulterated article of food sold in this case admittedly does not fall in any of the sub clauses (e) to (1) of Section 2 (ia).
According to the report of Central Food Laboratory, it also does not contain any adulterant declared as "injurious to health".
Thus, on the face of it is not possible to hold that the appellant had committed an offence punishable under Section 16(1 A) of the Act and the conviction of the appellant for an offence under Section 16(1 A) of the Act cannot be sustained.
The article of food sold by the appellant, however, has been found by the Central Food Laboratory to contain an artificial sweetener, the use whereof in such article of food is prohibited.
It, therefore, does not conform to the standards prescribed in Item A.07.04 of Appendix B. Section 16(1)(a)(i) of the Act makes a person liable to punishment if whether by himself or by any other person on his behalf, he inter alia, manufactures for sale, or stores or sells any article of food which is 713 adulterated within the meaning of sub clause (m) of clause (ia) of Section 2 of the Act.
Section 2 (ia) (m) reads thus: "2(ia) "adulterated ' an article of food shall be deemed to be adulterated "(m) if the quality or purity of the article falls below the prescribed standard or its constituents are.
present in quantities not within the prescribed limits of variability but which does not render it injurious to health:" Keeping in view the fact that the article of food, 'ice stick ' sold by the appellant did not conform to the standard prescribed for it in Appendix B and contained an artificial sweetener saccharin, it is obvious that the article of food sold by the appellant was adulterated within the Meaning of Section 2(ia)(m) of the Act and the same would, therefore, be punishable under Section 16 (1)(a)(i) of the Act.
We are unable to accept the argument of the learned counsel for the appellant that since the appellant had been charged for an offence under Section 16 (I A) of the Act, he could not be convicted for an offence under Section 16(1)(ai) of the Act.
There is no basis for such an argument.
The penalty for an offense under Section 16(1)(ai) is admittedly less than the penalty prescribed for the offence under Section 16(1 A), which is a graver offence and therefore, there is no impediment in the way of the court, on the findings of the fact recorded by it, to convert the conviction of the appellant from the one under Section 16(1 A) to the one under Section 16(1)(ai) of the Act, notwithstanding the fact that the appellant had been charge sheeted for an offence under Section 16(1 A) of the Act.
In view of our findings recorded above, we alter the conviction of the appellant from the one under Section 7(1) read with Section 16(1 A) of the Act to the one under Section 7(1) read with Section 16(1)(a)(i) of the Act.
The argument of the learned counsel for the appellant that since the appellant has been on bail in this court and the occurrence took place more than a decade ago, a sympathetic view be taken and his appeal be accepted and he be acquitted, is to say the least, a rather ambitious submission and we cannot agree.
Indeed, there has been some lapse of time since the offence was committed in 1981 but that lapse of time alone cannot come to the aid of the appellant because having found the appellant guilty of an 714 offence under Section 16(i)(a)(i) read with Section 7(1) of the Act, this Court is obliged 'to convict the appellant and not let the crime go unpunished.
The appellant has been prosecuting the case in appeal and revision and the High Court dismissed his revision petition in 1985.
The appeal has remained pending in this Court ever since and as the appellant had obtained an order of bail, he, obviously was not interested in an early disposal of the appeal and took no steps in that behalf.
The pendency of the appeal in this Court for about six years does not by itself render the conviction bad or raise any other equity in his favour.
We can take even a judicial notice of the fact that the type of adulterated article sold by the appellant is the one generally consumed by children and it is not only illegal but even immoral to serve them with articles containing artificial sweeteners use whereof has been prohibited by the statute.
Just because the appeal has remained pending here since 1985 the society cannot be made to suffer for this delay by letting the criminal go unpunished as a crime of this nature, being a crime against the society at large, cannot be ignored.
Sympathy in such cases is totally misplaced.
As a result of the above discussion, the conviction of the appellant is altered from the one under Section 16(1 A) read with Section 7(1) of the Act to the one under Section 16(1)(a)(i) read with Section 7(1) of the Act and the sentence is reduced from one year R.I. and a fine of Rs. 2000 to the minimum prescribed for the said offence i.e. to six months R.I. and a fine of Rs. 1000.
In default of payment of fine the appellant shall further suffer imprisonment for one month more.
The appeal succeeds and is partly allowed to the extent indicated above.
The appellant is on bail.
His bail bonds shall stand cancelled.
He shall be taken into custody to suffer the remaining period of the sentence.
G.N. Appeal partly allowed. [/INST] The appellant was selling ice sticks.
The Food inspector took samples and sent one sample to the Public Analyst, who opined that it contained artificial sweeteners viz. saccharin and dulcin and was therefore adulterated.
A complaint was filed before the Judicial Magistrate.
Appellant pleaded not guilty and exercised his right to have the sample analysed by the Central Food Laboratory.
According to the report of the Central Food Laboratory the sample contained artificial sweetener identified as saccharin.
The Magistrate convicted the appellant for an offence under sec.
16(1) (a) read with see.
7(1) of the Act, sentenced him to suffer one year rigorous imprisonment and to pay a fine of Rs. 2,000 and in default to undergo imprisonment for three months.
The appeal preferred by the appellant was dismissed by the Sessions Judge.
The Criminal Revision petition riled before the High Court was also dismissed.
Hence the present appeal.
On behalf of the appellant it was contended that since the report of the Public Analyst which had found the presence of dulcin in the sample stood superseded by the report of the Central Food Laboratory which had not found the presence of dulcin, the consumption of which was injurious to health under the Rules, the conviction of the appellant for an offence under Section 16(1 A) of the was not justified; and that the presence of artificial sweetener like saccharin, which has not been declared as injurious to health could not attract the provisions of S.16(1A) of the Act.
Partly allowing the appeal, this Court 708 HELD:1.
It would be seen from Section 16(1 A) of the that in order to maintain a conviction under the said provision, the article of food which is adulterated should fall either in one of the sub clauses(e) to (1) of clause (ia) of Section 2 or should contain an adulterant which is injurious to health.
The adulterated article of food sold in this case admittedly does not fall in any of the sub clauses (e) to (1) of Section 2(ia).
According to the report of Central Food Laboratory, it also does not contain any adulterant declared as 'injurious to health '.
[712 E, F] 2.However, keeping in view the fact that the Article of food, 'ice stick ' sold by the appellant did not conform to the standard as prescribed in Item A.07.04 of Appendix B and contained an artificial sweetener saccharin it is obvious that the article of food sold by the appellant was adulterated within the meaning of Section 2(ia)(m) of the Act and the same would, therefore, be punishable under Section 16(1) (a) (i) of the Act.
[713 C] 3.It cannot be said that since the appellant had been charged for an offence under Section 16(1 A) of the Act, he could not be convicted for an offence under Section 16(1) (a) (i) of the Act.
The penalty for an offence under Section 16(1) (a) (i) admittedly is less than the penalty prescribed for the offence under Section 16(1 A), which is a graver offence and therefore, there is no impediment in the way of the court, on the findings of the fact recorded by it, to convert the conviction of the appellant from the one under Section 16(1 A) to one under Section 16(1) (a) (i) of the Act, notwithstanding the fact that the appellant had been charge sheeted for an offence under Section 16(1 A) of the Act.
[713 E, F] 4.Judicial notice is taken of the fact that the type of adulterated article sold by the appellant is the one generally consumed by children and it is not only illegal but even immoral to serve them with articles containing artificial sweeteners use whereof has been prohibited by the statute.
Just because the appeal has remained pending here since 1985 the society cannot be made to suffer for this delay by letting the criminal go unpunished as a crime of this nature, being a crime against the society at large, cannot be ignored.
Sympathy in such cases is totally misplaced.
[714 B D] 5.The conviction of the appellant is altered from the one under Section 16(1 A) read with Section 7(1) of the Act to the one under Section 16(1) (a) (i) read with Section 7(1) of the Act and the sentence is reduced from one year 709 R.I. and a fine of Rs. 2,000 to the minimum prescribed for the said offence ie.
six months R.I. and a fine of Rs. 1,000 in default of which the appellant shall suffer imprisonment for one month more.
[714 E] </s> |
<s>[INST] Summarize the following judgement: l Appeal Nos. 1840 and 1841 of 1979.
From the Judgment and Order dated 24.1.1979 of the Madras High Court in Appeal Nos 67 and 68 of 1975.
J.Ramamurthy, K. Ram Kumar, N. Sridhar and Ms. Anjani for the Appellant.
891 A.T.M. Sampath, Ms. Pushpa Rajan, section Balakrishnan, Srinivasan and Ms. Revathy Raghavan for the Respondents.
The Judgment of the Court was delivered by KASLIWAL, J.
These appeals by grant of special leave are directed against the judgment of the Madras High Court dated 24.1.1979.
Abdul Salam and his mother Razia Begum sold their agricultural lands measuring 3 acres and 25 acres respectively by executing two sale deeds Exhibits A.2 and A.1 dated 17.4.1962 in favour of Satyanarayana Rao and his father Mahadeva Rao.
The consideration of the respective sale deeds was Rs.10,000 and Rs.75,000.
On the same day, both the vendees took Rs.500 back and executed two separate agreements in favour of the respective vendors under Exhibits A.3 and A.4 giving a right of repurchase to the vendors at any time after 17.4.1969 but before 16.4.1972.
Thereafter, Razia Begum and Abdul Salam executed agreements of sale in favour of the appellant T.M. Balakrishna Mudaliar on 4.1.1963, for a consideration of Rs.1,30,000 in all.
The appellant also paid an amount of Rs.30,000 from time to time till April 1963 to Razia Begum and Abdul Salam towards the said agreements.
For the balance of Rs.1,00,000 which was to be apportioned between Razia Begum and Abdul Salam, Exhibits A.10 dated 15.4.1963 and A.11 dated 15.3.1963 registered deeds of agreement of sale were executed by Razia Begum and Abdul Salam respectively for Rs.87,500 and Rs.12,500.
The appellant paid further sums of Rs.4,000 under Exhibit A.10 to Razia Begum and Rs.1,000 under Exhibit A.11 to Abdul Salam and Exhibits A.3 And A.4 were handed over to the appellant.
Mahadeva Rao died leaving behind his widow Pushpavathi Ammal and Satyanarayana Rao his son as his legal representatives.
In view of the fact that Satyanarayana Rao and his mother Pushpavathi Ammal refused to execute the reconveyance deed, the appellant T.M Balakrishna Mudaliar filed two suits for specific performance of the agreements of reconveyance, delivery of possession and mesne profits in the Court of Subordinate Judge, Tirupattur.
O.S. No.67 of 1969 was filed against Satyanarayana Rao, Pushpavathi Ammal and Abdul Salam and O.S.No.73 of 1969 was filed against Satyanarayana Rao, Pushpavathi Ammal and Razia Begum.
In O.S. No.67 of 1969, the appellant deposited the amount of Rs.9,900 in the Court for payment to Satyanarayana Rao and Pushpavathi Ammal and Rs. 1600 for payment to Abdul Salam.
In O.S. No.73 of 1969, the appellant deposited 892 Rs.74,500 for payment to Satyanarayana Rao and Pushpavathi Ammal and Rs.9,000 to Razia Begum.
Both the above suits were decreed ex parte on 7.1.1974.
Razia Begum and Abdul Salam did not file any application for setting aside the ex parte decree and as such the decrees passed against them became final.
On an application filed by Satyanarayana Rao and Pushpavathi Ammal, the ex parte decrees passed against them were set aside and they were allowed to contest the Suit.
The trial court after recording the evidence decreed the suit against Satyanarayana Rao and Pushpavathi Ammal also.
Satyanarayana Rao and Pushpavathi Ammal aggrieved against the judgment of the trial court filed appeal Nos.67 and 68 of 1975 in the High Court.
The High Court by its judgment dated 24.1.1979 allowed the appeals and set aside the judgments of the trial court and dismissed both the suits.
T.M. Balakrishna Mudaliar, the plaintiff aggrieved against the judgments of the High Court has filed the aforesaid two appeals.
The facts are almost admitted and there is no controversy as regards the execution of Exhibits A.4 and A.3 the deeds of reconveyance by Satyanarayana Rao and Mahadeva Rao in favour of Razia Begum and Abdul Salam respectively and Exhibits A.10 and A.11, registered deeds of agreement of sale by Razia Begum and Abdul Salam in favour of the appellant.
The High Court however, took the view that under the terms and conditions set out in Exhibit A.10 and A.11 Razia Begum and Abdul Salam had not assigned the rights of reconveyance of the properties which 'they had got under Exhibits A.4 and A.3.
According to the High Court, Exhibits A.10 and A.11 contemplated the performance of agreements of sale within a period of two years namely, 17.4.1969 to 16.4.1971, while under the terms and conditions of Exhibits A.3 and A.4 such period for reconveyance in favour of Abdul Salam and Razia Begum was three years i.e. from 17.4.1969 to 16.4.1972.
According to the High Court this difference relating to the period was important from the point of view of considering the question whether the plaintiff could stand in the shoes of Razia Begum and Abdul Salam to enforce the agreement entered into between Razia Begum and Abdul Salam on the one hand and Satyanarayana Rao and Mahadeva Rao on the other.
The High Court took the view that on account of such curtailment of the period in Exhibits A.10 and A.11 it was reasonable to infer that if the plaintiff did not enforce his rights under Exhibits A.10 and A.11 within the period of two years me 893 tioned therein, still Razia Begum and Abdul Salam in their own right would be in a position to enforce their right under Exhibits A.3 and A.4 because there was still one more year available to them to enforce the obligations undertaken by Satyanarayana Rao and Mahadeva Rao under Exhibits A.3 and A.4.
The High Court further took the view that from the terms of the documents Exhibits A.10 and A.11, it was clear that no privity was intended between the plaintiff on the one hand and Satyanarayana Rao and Mahadeva Rao directly and it was only Razia Begum and Abdul Salam who could have enforced the terms of the contract of reconveyance under Exhibits A.4 and A.3.
The High Court also took the view that the plaintiff did not fall within the expression 'representative in interest ' as contemplated under Section 15 clause (b) of the (hereinafter referred to as 'the Act ') and as such was not entitled to bring a suit for specific performance of the contract on the basis of the deeds of reconveyance Exhibits A.3 and A.4.
It was also held that having regard to the language of Exhibits A.10 and A.11, no question of assignment of any right in favour of the plaintiff can arise.
We have heard learned counsel for the parties and have thoroughly perused the record as well as the contents of Exhibits A.3, A.4 and A.10 and A.11 on which the entire case hinges.
Exhibits A.3 and A.4 are agreements of resale executed on 17.4.1962 by Mahadeva Rao and Satyanarayana Rao in favour of Abdul Salam and Razia Begum respectively.
Both the documents contained the terms of the resale at any time after 7 years, but within 10 years of the date of execution of the documents.
It was clearly stipulated that after 17.4.1969 but before 17.4.1972, Mahadeva Rao and Satyanarayana Rao shall sign the sale deed on receiving the sum of Rs.74,500 in favour of Razia Begum and on receiving Rs.9,900 in favour of Abdul Salam.
Both these documents Exhibits A.3 and A.4 do not contain any condition that such right was personal and was in favour of Abdul Salam and Razia Begum and such right could not be exercised by a stranger.
The documents also do not contain any condition that such right could be exercised by the heirs of such persons or any other named persons and that such right could not be assigned by Abdul Salam and Razia Begum in favour of any other person.
The High Court was wrong in taking the view that the plaintiff Balakrishna Mudaliar was not a representative in interest of Abdul Salam and Razia Begum even after such right being assigned in his favour by agreements Exhibits A.10 and A.11.
Exhibits A.10 is a sale agreement for Rs.87,500 executed on 15.4.1963 by Razia Begum 894 in favour of the plaintiff Balakrishna Mudaliar.
It has been clearly stated in the aforesaid deed that in order to raise funds for expenses required for the family and also for repayment of the amount of Rs.75,000 and recover back the properties from M/s Mahadeva Rao and Satyanarayana Rao and that Razia Begum (party No.1) had a right to have it reconveyed as per reconveyance agreement she agreed to assign such right in favour of Balakrishna Mudaliar (the second party).
It further provided that Razia Begum had received Rs.4,000 and out of the balance amount of Rs.83,500, an amount of Rs.74,500 shall be paid to Mahadeva Rao and Satyanarayana Rao and the balance amount of Rs.9,000 shall be paid to Razia Begum.
It was also mentioned that in case Mahadeva Rao and Satyanarayana Rao who had already executed the agreement of resale refuse to receive the sum of Rs.74,500 as per the said resale agreement, Razia Begum at her own expense shall get the sale deed executed by the said Mahadeva Rao and Satyanarayana Rao in her favour and then shall execute the sale deed in favour of the plaintiff.
At the time of executing Exhibit A.10, a copy of the sale deed made in favour of Mahadeva Rao and Satyanarayana Rao and the agreement for resale executed by them in favour of Razia Begum was also handed over to the plaintiff.
Exhibit A.11 has been executed by Abdul Salam in favour of the plaintiff and contains identical terms and conditions as in Exhibit A.10 except the difference of amount.
Thus, a combined reading of the documents Exhibits A.3, A.4, A.10 and A.11, there remains no manner of doubt that Razia Begum and Abdul Salam 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 Mahadeva Rao and Satyanarayana Rao which they were entitled under the terms and conditions of Exhibits A.3 and A.4, the agreements of resale made in favour of Abdul Salam and Razia Begum respectively.
The plaintiff had filed a suit for specific performance of the agreement for sale impleading Razia Begum and Mahadeva Rao and Satyanarayana Rao as defendants in the one case and Abdul Salam and Mahadeva Rao and Satyanarayana Rao in another care and had also deposited the amount of consideration in Court which clearly proved that the plaintiff was always ready and willing to perform his part of the contract.
In our view, there was no ground or justification for the High Court to dismiss the suits filed by the plaintiff.
The High Court was wrong in taking the view that it was only Razia Begum and Abdul Salam who were entitled to get reconveyance from Mahadeva Rao and Satyanarayana Rao and the plaintiff was not entitled 895 to enforce such right by a suit for specific performance against Mahadev Rao and Satyanarayana Rao.
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 Razia Begum and Abdul Salam under Exhibits A.3 and A.4 could have exercised such right 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.
Admittedly the plaintiff was exercising the right of specific performance of agreement of sale within the stipulated period of two years and we are unable to accept the reasoning of the High Court as to how the period of three years granted in favour of Razia Begum and Abdul Salam in any manner affected of took away the right of the plaintiff to bring a suit for specific performance.
It may also be noted that an ex parte decree for specific performance of sale had become final against Razia Begum and Abdul Salam and so far as Mahadeva Rao and Satyanarayana Rao are concerned, they were bound to make a resale or reconveyance of the property in favour of Abdul Salam and Razia Begum as well as their assignee under Exhibits A.3 and A.4.
So far as Mahadeva Rao and Satyanarayana Rao are concerned, they have not pleaded that they had not executed Exhibit A.3 and Exhibit A.4 or that Razia Begum and Abdul Salam had lost the right of repurchase or reconveyance of the property in question in their favour.
The Privy Council in Sakalaguna vs Munnuswami, AIR 1928 PC 174 has held that the benefit of a contract of repurchase which did not show that it was intended only for the benefit of the parties contracting, could be assigned and such contract is enforceable.
Beaumount C.J. in Vishweshwar vs Durgappa, AIR 1946 Bombay 339 held that the both under the common law as well as under Section 23 (b) of the , an option given to repurchase the property sold would prima facie be assignable, though it might also be so worded as to show that it was to be personal to the grantee and not assignable.
On the particular facts of that case, it was held that the contract was assignable.
In Sinnakaruppa vs Karuppuswami AIR 1965 Madras 506 it was held: "In our view, generally speaking, the benefits of a contract of repurchase must be assignable, unless the terms of the contract are such as to show that the right of repurchase 896 is personal to the vendor.
In the latter case it will be for the person who pleads that the contract is not enforceable, to show that the intention of the parties thereto was that it was to be enforced only by the persons named therein and not by the assignee. ' In our view, the above statement of law appears to be correct.
We have already held above that under the terms and conditions laid down in Exhibits A.3 and A.4, the right of repurchase was not given as personal to Razia Begum and Abdul Salam 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 filing 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 Act.
On such assignment, the plaintiff appellant acquired a valid titled to claim specific performance.
In the result, we allow these appeals with costs and set aside the Judgment of the High Court and restore and Judgments and decrees passed by the trial court.
V.P.R. Appeal allowed. [/INST] 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] </s> |
<s>[INST] Summarize the following judgement: ON: Civil Appeal Nos.
1454 56 of 1993 etc.
From the Judgment and Order dated 15.2.1991 of the Karnataka High Court in Writ Appeal Nos. 2083, 2084 and 2085 of 1989.
K.Madhava Reddy, P.P. Rao, N.D.B. Raju, Guntur Prabhakar, Dr. Sumand Bhardwaj, Yatish Mohan Verma and Ranjit Kumar for the Appellants.
Soli J. Sorabjee, N.B. Shetye, R.N. Narasimha murthy, S.Ganesh, Vineet Kumar, M. Veerappa, Nobin Singh, P.R. Ramasesh, P. Mahale (NP), S.K. Kulkarni and Surya Kant for the Respondents.
The Judgment of the Court was delivered by SAWANT, J.
Leave granted.
2.These appeals arise out of the same facts and judgments of the Karnataka High Court and are being disposed of by this common judgment.
For the sake of the narration of events Civil Appeal Nos. 1461 72/ 1993 arising out of SLP (Civil) Nos.
7230 41 of 1991 may be referred to.
The 2nd respondent M/s Naryanaswamy & Sons is a partnership firm.
While it was carrying on the business of manufacturing and selling of polished granites, it acquired on 30.9.1953, 6 acres and 4 gunthas of land in Survey Nos. 6/1 and 6/2 of Dasarahalli in the heart of Jayanagar Exten sion of the city of Bangalore.
Out of the said land, 1 acre and 2 gunthas had already been acquired by the 1st respondent State Government under notification dated 1.4.1948.
The acquisition proceedings had culminated in an award, granting compensation to the land owner on 3.3.1955.
In a small portion of the said land, the 2nd respondent firm (hereinafter referred to as the 'firm '), established a granite factory and the rest of the land was vacant when the Urban Land (Ceiling and Regulation) Act, 1976 (the 'Act ') was made applicable to the Bangalore Agglomeration consisting of the area within the jurisdiction of the Bangalore City Municipal Corporation and the Trust Board, and the peripheral area of 5 kms.
3.On 9.6.1983, the firm preferred an application to the State Government for exemption of the vacant land from the provisions of Chapter III of the Act.
By an order of 17.7.1985, the State Government granted 725 exemption under Section 20 of the Act for industrial use of a granite factory.
The exemption related to 16194 sq. mtrs.
of land and was granted on the following conditions: [i] The entire land utilisation shall be completed within a period of two years from the date of the order.
[ii] The exempted land shall be exclusively used for the purpose for which the exemption was granted and for the purposes related thereto.
[iii] The land shall not be transferred by way of sale, mortgage, gift, lease or otherwise without prior permission of the Government and that such permission, when given, shall be subject to such conditions as the Government may deem fit to impose.
4.The 3rd respondent partnership firm M/s. Reevajethu, Builders and Developers [the 'builders '] was constituted on 6.1.1987 with Smt.
Shobha Makhija as the major partner with 50% share and other 18 partners, mainly "to develop the immovable property to be acquired by the firm of an extent of 5 acres and 24 gunthas situated at Survey Nos. 6/1 and 6/2 of Dasarahalli of Bangalore City and to carry on the business as builders and developers of flats, shops, commercial complexes and other types of buildings, dealers in real estate and all other allied business and activities" and to "carry on any other business as may be mutually agreed upon by all the partners".
It is not in dispute that Smt.
Shobha Makhija is the sister of the son in law of the 4th respondent who was then the Chief Minister of the State of Karnataka. 5.On 9.1.1987, the competent authority under the Act came to the conclusion that the excess vacant land out of the said Survey Nos. 6/1 and 6/2 after the grant of exemption by the Government Order dated 17.7.1985, was 3444 sq. mtrs.
The competent authority accordingly directed the publication of a notification under Section 10 [1] of the Act for the acquisition of the said excess vacant land.
6.On the same day, i.e., 9.1.1987, the firm made an application to the State Government for permission to sell land to the extent of 5 acres and 24 gunthas comprised in the said Survey Nos. 6/1 and 6/2 to the 726 builders.
The grounds made out in the application were that due to stiff competition, and nationalisation of black and pink granite by the southern States including Karnataka, the firm was running under losses; that its Woodlands Hotel at Madras was also not making profits since the hotel building had become very old and there were no funds for modernising it; that its theaters in Madras were also not yielding profits due to unhealthy competition by the video piracy and the advent of the television; that the partners of the firm individually and jointly were indebted to Andhra Bank, of India, State Bank of Mysore and Dena Bank; that the said debts were of more than Rs. 1 crore 65 lakhs; that suits had been filed in the High Court of Madras against the partners; that the business of the partners had been suffering huge losses specially due to continuing heavy interest burden; that the families of the seven partners of the firm had no other source of income and had been over drawing from the firms for their maintenance; and that one of the partners was seriously ill in a hospital at Bangalore and he had to borrow money for taking medical treatment.
7.On 6.3.1987, the State Government under Section 20 [1] of the Act permitted the firm to sell land to the extent of 16194 sq. mtrs.
to the builders subject to certain conditions.
8.On 23.3.1987, the firm filed another application before the State Government seeking permission to transfer the remaining 3444 sq. mtrs.
of vacant land from Survey Nos. 6/1 and 6/2 to the builders on the ground of undue hardship since the firm had incurred debts.
On 18.4.1987 the State Government under Section 20 [1](a) of the Act granted exemption for the said land from the purview of Chapter Ill of the Act and also permitted the firm to sell the said 3444 sq.
of vacant land from Survey Nos. 6/1 and 6/2 subject to certain conditions.
9.By a sale deed of 30.9.1987, i.e., a day before the extension of Chapter XXC of the Income tax Act providing for preemptive purchase by the Central Government of immovable property in certain cases on transfer, the firm entered into a deed of absolute sale for the sale of the property consisting of land to the extent of 5 acres and 24 gunthas situated in the said Survey Nos. 6/1 and 6/2.
10.On this undisputed factual matrix, writ petitions were filed by way of public interest litigation, under Article 226 and 227 of the Constitution before the High Court for issue of a writ of mandamus [a] directing the respondent Government to take action for forfeiture of the land for con 727 travention of Section 79 of the Karnataka Land Reforms Act; [b] for acquiring the land for the purpose of weaker sections under the provisions of the Act; [c] for quashing the orders dated 63.1987.
and 18.4.1987 granting exemption to the land in question from the purview of the Act under Section 20 111(a) & (b) of the Act and for declaring the sale deeds dated 30.9.1987 executed by the firm in favour of the builders as void and inoperative; (d).
for directing the State Government to take action under Section 6 of the Karnataka Parks, Play fields, and Open Space [Reservation and Regulation] Act, 1985 and for other reliefs.
The learned Single Judge by his judgment and order dated 8.9.1989allowed the writ petition, and among others, [1] quashed the Group Housing Policy of the State Government as embodied in the decision of the Committee held on 22.10.1986 and communicated under letter dated 24.11.1986 insofar as it encouraged the Group Housing Scheme through individuals and partnership of individuals by transferring vacant land to such persons; [ii] restrained the State Government from enforcing the said Policy through individuals and partnership of individuals against the vacant land; [iii] declared as null and void and quashed the orders dated 6.3.1987 and 18.4.1987 granting exemption; [iv] declared the sale deed dated 30.9.1987 executed by the firm in favour of the builders as nun and void so far as it related to the extent of land admeasuring 19368 Sq.
covered by the exemption orders of 6.3.1987 and 18.4.1987.
The validity of the sale deed so far as it related to the remaining land mentioned therein was, however, saved by the said declaration; [v] directed the State Government, the Special Deputy Commissioner under the Act, the Bangalore Development Authority and the Municipal Corporation of Ban galore to identify the extent of 1 acre, 2 gunthas and 58 square yards which was acquired in 1948 out of the said Survey No. 6/1 and to set them apart for the purpose of road and Boulevard and use it only for said purpose; [vi] remitted the applications dated 9.1.1987 and 24.3.1987 made by the firm to the State Government with the direction to consider them in accordance with law under Section 20 [1](b) of the Act and to exempt them in the light of the extent of the debt owed by the firm to the creditors prior to the coming into force of the Act; [vii] directed that even if after examining the, application in the aforesaid light the State Government granted permission, to the firm to sell the vacant land on the ground of hardship, the Government should see that, in the vacant land, sites are formed of various dimensions not exceeding 60 ' x 90 ' keeping in view the sites already formed 728 in the locality.
The learned Judge further directed that each such site should be sold by public auction by the competent authority with the condition that no person is entitled to purchase in public auction more than one site, and to credit the sale proceeds in the office of the competent authority under the Act who would pay the amount to the creditors of the firm.
The learned Judge also further directed that only such number of sites should be sold which are necessary to discharge the debts and the remaining portion of the vacant land should be acquired under the Act.
It may be noted here that the learned Judge held that the allegations of mala fides in granting exemptions by the orders of 6.3.1987 and 18.4.1987 against respondents 4 and 8, were not proved.
12.Against the said decision of the learned Single Judge, appeals were preferred before the Division Bench of the High Court, among others, by writ petitioners as well as the firm and the builders.
All the appeals were heard together and the learned Judges of the Division Bench gave separate but concurring judgments and set aside the findings as well as the directions given by the learned Single Judge and dismissed the writ petitions.
13.The precise questions which arise for our consideration in these appeals are: [i] Were the permissions granted by the State Government to sell land admeasuring 16194 sq. mtrs.
and 3444 sq. mtrs.
by its orders of 6.3.1987 and 18.4.1987 respectively valid under the Act? [ii] Were the said orders motivated by mala fides ? and [iii] Is the sale deed executed by the firm in favour of the builders on 30.9.1987 void and inoperative? 14.In order to appreciate the answer to the first and the third question, it is necessary to understand the scheme of the Act which came into force on 17.2.1976.
As the preamble of the Act states, it has been placed on the statute book [i] to provide for the imposition of a ceiling on vacant land in urban agglomerations;, [ii] to provide for the acquisition of which vacant land in excess of the ceiling limit; and [iii] to regulate the construction of buildings on such land and for matters connected therewith with a view to [a] preventing the concentration of urban land in the hands 729 of a few persons and speculation and profiteering therein and [b] bringing, about an equitable distribution of land in urban agglomerations to subserve the common good.
These objects which are otherwise clear from the preamble of the Act have been explained in the statement of objects and reasons accompanying the Bill which, among other things, states as follows: "There has been a demand for imposing a ceiling on urban property also, especially after the imposition of a ceiling on agricultural lands by the State Governments .
With the growth of population and increasing urbanisation, a need for orderly development of urban areas has also been felt.
It is, therefore, considered necessary to take measures for exercising social control over the scarce resource of urban land with a view to ensuring its equitable distribution amongst the various sections of society and also avoiding speculative transactions relating to land in urban agglomerations.
xx xx xx The Bill is intended to achieve the following objectives: [i] to prevent concentration of urban property in the hands of a few persons and speculation and profiteering therein; [ii]to bring about socialisation of urban land in urban agglomerations to subserve the common good by ensuring its equitable distribution; [iii] to discourage construction of luxury housing leading to conspicuous consumption of scarce building materials and to ensure the equitable utilisation of such materials; and [iv] to secure orderly urbanisation.
The Bill mainly provides for the following: [i] imposition of a ceiling on both ownership and posses 730 sion of vacant land in urban agglomerations, the ceiling being on a graded basis according to the classification of the urban agglomeration; [ii] acquisition of the excess vacant land by the State Government with powers to dispose of the vacant land to subserve the common good; [iii] payment of an amount for the acquisition of the excess vacant land, in cash and in bonds; [iv] granting exemptions in respect of certain specific categories of vacant land; [v] regulating the transfer of vacant land within the ceiling limit; [vi] regulating the transfer of urban or urbanisable land with any building [whether constructed before or after the commencement of the proposed legislation], for a period o f 10 years from the commencement of the legislation or the construction of the building whichever is later; [vii] restricting the plinth area for the construction of future residential buildings; and [viii] other procedural and miscellaneous matters.
" It is needless to emphasise that while interpreting the various provisions of the Act the said objects will have to be kept in view, constantly.
However, only those provisions of the Act which have a bearing on the controversy before us may be referred to.
The 'vacant land" has been defined in Section 2 (q) as follows: "vacant land ' means land, not being land mainly used for the purpose of agriculture,, in an urban agglomeration, but does not include [i] land on which construction of a building is not permissible under the building regulations in force in the area in which such land is situated, 731 [ii]in an area where there are building regulations, the land occupied by any building which has been constructed before or is being constructed on, the appointed day with the approval of the appropriate authority and the land appurtenant to such building; and [iii] in an area where there are no building regulations, the land occupied by any building which has been constructed before, or is being constructed on, the appointed day and the land appurtenant to such building; Provided. . . . " The "land appurtenant ', in relation to any building, has been defined in Section 2(g) 'as follows: " land appurtenant", in relation to any building, means [i] in an area where there are building regulations, the minimum extent of land required under such regulations to be kept as open space for the enjoyment of such building, which in no case shall exceed ' five hundred square metres; or [ii] in an area where there are no building regulations, an extent of five hundred square metres contiguous to the land occupied by such building, and includes, in the case of any budding constructed before the appointed day with a dwelling unit therein, an additional extent not exceeding five hundred square metres of land, if any, contiguous to the minimum extent referred to in sub clause [i] or the extent referred to in sub clause [ii], as the case may be".
Section 3 states that except as provided in the Act, on and from the commencement of the Act, no person shall be entitled to hold any vacant land in excess of the ceiling limit.
The "ceiling limit" is prescribed in Section 4.
The provisions of Section 4, so far as they are relevant for our purpose, 732 may be reproduced verbatim: "4.
Ceeling Limit.
[1] Subject to the other provisions of this section, in the case of every person, the ceiling limit shall be, [a] x x x x x x [b] where such land is situated in an urban agglomeration falling within category B specified in Schedule 1, one thousand square metres; [c] x x x x x x x [d] x x x x x x x 2.
x x x x x x x 3.Notwithstanding anything contained in sub section [1], where in respect of any vacant land any scheme for group housing has been sanctioned by any authority competent in this behalf immediately before the commencement of this Act, then, the person holding such vacant land at such commencement shall be entitled to continue to hold such land for the,purpose of group housing: Provided that no more than one dwelling unit in the group housing shall be owned by one single person; Provided further, that the extent of vacant land which such person shall be entitled to hold shall, in no case, exceed [a] the extent required under any building regulations governing such group housing; or [b] the extent calculated by multiplying the number of dwelling units in the group housin g and the appropriate ceiling limit referred to in sub section [1], whichever is less." 733 Section 5(3) prohibits transfer of the vacant land in excess of the ceiling limit or any part thereof by way of sale, mortgage, gift, lease or otherwise until the land holder has furnished a statement under Section 6 of the Act and a notification regarding the excess vacant land held by him, has been published under sub section [1] of Section 10.
Any such transfer is deemed to be null and void.
Section 6(1) requires every person holding vacant land in excess of the ceiling limit at the commencement of the Act, to file a statement before the competent authority under the Act.
Read with Section 7, it is clear that the statement to be filed under Section 6(1) has to include vacant land not only situate in the same State but also in other States to which the Act applies.
In the present case, admittedly, the firm held land also in Madras in addition to the land in dispute in the city of Bangalore.
It is not known whether the firm had vacant land in its possession in Madras in addition to the land in dispute and whether it had shown such land in its return.
However, that is not the subject matter of dispute before us.
Section 8 provides for a draft statement to be prepared by the competent authority, as regards the vacant land held by the person concerned and calculated on the basis of the statement filed by him under Section 6 after holding an inquiry into the matter.
The draft statement is to be served on the person concerned with the notice requiring him to prefer his objections, if any.
Section 9 provides for the final statement with regard to the vacant land in excess of the ceiling limit to be prepared by the competent authority and to be served on the person concerned.
After the service of the final statement under Section 9, on the person concerned, the competent authority is required by Section 10(1) to cause a notification to be published in Official Gazette giving the particulars of such vacant land and stating therein [i] that such land is to be acquired by the concerned State Government and [ii] the claims of all the persons interested in such vacant land be made by them giving particulars of the nature of their interest in the land.
Under Section 10(2), the competent authority is required to determine the nature and extent of such claims and pass such orders as it deems fit.
Section 10(3) provides that at any time after the publication of the notification under Section 10(1), the competent authority may by another notification published in the Official 734 Gazette of the State concerned, declare that the excess vacant land referred to in the notification published under Section 10(1) shall with effect from such date as may be specified in the declaration, be deemed to have been acquired by the State Government.
Upon the publication of such declaration, the vacant land is deemed to have been vested absolutely in the State Government free from all encumbrances with effect from the date so specified.
Section 10 (4) then prohibits transfer of the excess vacant land and also the alteration of the use of such land between the date of notification published under Section 10(1) and that of the notification published under Section 10(3).
Section 10(5) enables the competent authority to pass an order requiring the person in possession of the excess vacant land to surrender the same to the State Government.
Section 11 requires the State Government to pay compensation to the person or persons having interest in the vacant land acquired under Section 10(3), at the rates mentioned therein.
Section 19 exempts certain lands from the provisions of Chapter III of the Act which comprises Sections 3 to 24.
Then come the provisions of Section 20 to 24 of Chapter 111.
We are directly concerned in the present appeals with the said sections along with the provisions of chapter IV of the Act.
Section 20 permits the State Government to give exemption to any vacant land in excess of the ceiling limit, from the provisions of Chapter III, for two distinct purposes.
It is necessary to reproduce here the said section: 20.Power to exempt.
(1) Notwithstanding anything contained in any of the foregoing provisions of this Chapter, (a) where any person holds vacant land in excess of the ceiling limit and the State Government is satisfied, either on its own motion or otherwise, that, having regard to the location of such land, the purpose for which such land is being or is proposed to be used and such other relevant factors as the circumstances of the case may require, it is necessary or expedient in the public interest so to do, that Government may, by order, exempt, subject to such con 735 ditions, if any as may be specified in the order, such vacant land from the provisions of this Chapter; (b) where any person holds vacant land in excess of the ceiling limit and the State Government, either on its own motion or otherwise, is satisfied that the application of the provisions of this Chapter would cause undue hardship to such person, that Government may by order, exempt subject to such conditions, if any, as may be specified in the order, such vacant land from the provisions of this Chapter: Provided that no order under this clause shall be made unless the reasons for doing so are recorded in writing.
[2] If at any time the State Government is satisfied that any of the conditions subject to which any exemption under clause (a) or clause (b) of sub section (1) is granted is not complied with by any person, it shall be competent for the State Government to withdraw, by order, such exemption after giving a reasonable opportunity to such person for making a representation against the proposed withdrawal and thereupon the provisions of this Chapter shall apply accordingly.
It would be apparent from clause (a) of sub section [1] of the section that under it, the State Government is given power to exempt the excess vacant land from the operation of Chapter III only if the State Government is satisfied that having regard to [i] the location of the land and [ii] the purpose for which it is being or is proposed to be used, it is necessary or expedient in the public interest to exempt it.
The paramount consideration is the public interest.
The exemption granted under this provision may be subject to certain conditions.
But, it does not appear that it is obligatory to impose such conditions.
Nor is it necessary to record reasons when exemption is granted under this clause.
The power to exempt such land under clause (b) of sub section [1] can be exercised by the State Government, if it is satisfied that the application of Chapter III would cause undue hardship to the landholder.
The exemption may be granted under this clause subject to such conditions, if 736 any, as may be specified in the order.
But, unlike under clause (a), there is no obligation to prescribe the conditions.
The 'permission given under this clause, however, has to be supported by reasons to be recorded in writing.
Sub section [2] of the section enables the government to withdraw the exemption granted either under clause (a) or (b), if is satisfied that any of the conditions subject to which the exemption is given, is not complied ' with.
Clauses (a) and (b) of sub section [1] read with subsection [2] make it clear that the exemption may either be conditional or absolute.
Where it is conditional, it may be withdrawn, if any of the conditions are not complied with.
The very fact, however, that the legislature has con templated imposition of conditions on exemptions granted under both the clauses, shows that the purpose of the exemption under either of the clauses cannot be the transfer of the land.
The exemption under clause (a) is obviously for the land being put to a particular use which use is also necessary or expedient in the public interest, while exemption under clause (b) is for relieving the person concerned from any undue hardship which may be caused to him personally, by the withdrawal of the excess land from his possession probably such as when the person may require the land for the expansion of the use to which he has already put it, such as his growing business or activities or to accommodate his growing family.
The clause unfortunately is completely silent on what it intends to convey by the expression "undue hardship".
Section 21 also contemplates exemption of the excess vacant land from the operation of the said Chapter but for a purpose other than for the use of the holder of the land.
The purpose contemplated there is the construction of dwelling units of the plinth area of not more than 80 sq. mtrs.
for accommodation of the weaker sections of the society and in accordance with a scheme approved by such authority as the State Government may specify in that behalf.
The person desiring exemption under this Section has further to declare his intention for construction of such dwelling units for weaker sections within such time, in such form and in such manner as may be prescribed.
Such declaration is to be made before the competent authority.
The competent authority, after receiving such declaration may, after making such inquiry as it deems fit, declare such land not to be excess land for the purposes of the said Chapter and permit such person to continue to hold such land for the aforesaid purpose subject to 737 such terms and conditions as may be prescribed.
Where any such condition is contravened, the competent authority has been given power to declare the land to be excess land and on such declaration, the, provisions of Chapter III of the Act are to apply.
The distinction between Sections 20 and 21 may be noticed at this stage.
In the first instance, the power given under Section 20 is to the State Government and not to the competent authority.
The power given is to exempt the land, and the exemption is to be granted to a person.
The purpose of exemption is either public interest or relief from personal undue hardship.
It does not appear to be obligatory on the State Government to prescribe any conditions while granting the exemption.
However, if any conditions are specified and if the State Government later satisfied that there is non compliance of any of the conditions, the State Government is given power to withdraw the exemption.
As far as Section 21 is concerned, the power conferred by it is not to exempt the land but to declare it not to be excess for the purposes of Chapter III.
The power is given to the competent authority itself.
It is to be exercised by it only under one circumstance.
That circumstance is that the holder of the vacant land should declare before it within a specified time and in the prescribed form and manner, that he desires to utilise the land for the construction of the dwelling units of not more than the particular size mentioned therein for accommodating the weaker sections and in accordance with any scheme approved by the specified authority.
it is the competent authority which is required to make inquiry as it deems fit into such a declaration, and if it is satisfied, to declare that such land shall not be excess within the meaning of the said Chapter.
However, it appears that the competent authority is required to prescribe certain terms and conditions while declaring the land not to be an excess land, including a condition with regard to the time limit within which such buildings are to be constructed, and on the breach of any of the conditions, the competent authority is also given power to declare the land to be an excess land.
Section 22 enables a person to hold the vacant land on which there stood a building which he demolished or destroyed or which was demolished or destroyed on account of natural causes.
The holder of such land is required to file a statement in that behalf within the specified time 738 and if the competent authority is satisfied that such land is required by the holder for the purpose of redevelopment in accordance with the master plan, the authority may, subject to such conditions and restrictions, permit the holder to retain such land for such purpose.
However, if the competent authority is not so.
satisfied and does not therefore, give permission for redevelopment, the provisions of Sections 6 to 14 of the Act become applicable even to such land.
Section 23 provides for the disposal by the State Government of the vacant land acquired under the Act or acquired under any other law.
The State Government may allot such land to any person for any purpose relating to or in connection with any industry or for providing residential accommodation, of such type as may be approved by the State Government, to the employees of any industry.
The 'industry ' is defined for the purpose to mean any business, profession, trade, undertaking or manufacture.
While making such allotment, the State Government may impose such conditions as may be specified in the order of allotment.
A breach of any of the conditions imposed enables the State Government to cancel the allotment, and on such cancellation the land revests in the State Government free from all encumbrances.
Sub section [4] thereof also enjoins the State Government to dispose of the vacant lands to subserve the common good on such terms and conditions as the State Government may deem fit to impose.
Sub section 15] thereof gives the State Government an overriding power and enables it to retain or reserve any vacant land acquired under the Act for the benefit of the public, notwithstanding anything contained in sub sections [1] to [4].
Section 24 enables the State Government to assign a part or whole of the acquired land to those persons who had leased out or mortgaged with possession, of the said land or had given such land under a hire purchase agreement and as a consequence of which they are left with no vacant land or.
are left with vacant land which is less in extent than the ceiling limit.
Chapter IV of the Act deals with the regulation of transfer and use of urban property.
Section 26 prohibits the sale of vacant land within the ceiling limit except after giving notice in writing to the competent authority, of the intended transfer.
Where the notice is given, the competent authority shall have the first option to purchase the land on behalf of the State 739 Government at a price calculated in accordance with the provisions of the Land Acquisition Act, 1894 or of any other corresponding law for the time being in force.
The option has, however, to be exercised within a period of sixty days from the date of the receipt of the notice and if no such option is exercised, it will be presumed that the competent authority has no intention to purchase the land, and it shall then be lawful for such person to transfer the land to whomsoever, he may like.
Section 27 prohibits transfer of any urban or urbanisable land by way of sale, mortgage, gift, lease for a period exceeding ten years, or otherwise, if such land is with a building, whether constructed before or after the commencement of the Act.
It also prohibits a similar transfer of the land with a portion only of such building.
The restriction on the transfer of Such land is for a period of ten years of the commencement of the Act or from the date on which the building is constructed whichever is later, except with the previous permission of the competent authority.
The competent authority is given power to grant or refuse permission to transfer, after holding an inquiry.
If the permission is not refused within sixty days of the receipt of the application, the permission is deemed to have been granted.
If the permission applied for is for the transfer of such land by way of sale, the competent authority is given the first option to purchase such land with the building or a portion of the building, as the case may be, and if the option is not exercised within sixty days, the applicant is free to sell the land to any person he may like.
For the purpose of calculating the price, where the purchase is made by the authority, the provisions of the Land Acquisition Act, 1894 or of the corresponding law are made applicable.
This Section has since been, struck down by this Court in Maharao Sahib Shri Bhim Singhji etc.
vs Union of India & Ors.
, to the extent it operates on the vacant lands within the ceiling limit.
In other words, as the law stands today, the section applies only to transfer of the urban and urbanisable lands in excess of the ceiling limit and which have a building or a portion of building constructed thereon.
Section 29 prohibit s construction of buildings with dwelling units with a plinth area exceeding particular dimensions, depending upon the category to which the urban agglomerations belong.
Section 30 gives power to the competent authority to stop or demolish construction which is being made or made in contravention of 740 Section 29.
Section 35 gives power to the State Government to issue orders and directions of a general character as it may consider necessary in respect of any matter relating to the powers and duties of the competent authority and the competent authority has to give effect to such orders and directions.
Section 36 gives power to the Central Government to.
give such directions to any State as may appear to it to be necessary for carrying into execution in the State concerned, any of the provisions of the Act or of any rules made thereunder.
The Central Government may also under this Section require any State Government to furnish such returns, statistics, accounts and other information as may be deemed necessary.
15.The examination of the aforesaid relevant provisions of the Act shows a clear intention of the legislature and reveals a definite scheme.
It has to be admitted that the provisions of the Act as are drafted have not succeeded in translating into, words the clear intention of the legislature and to that extent the Act is an inelegant and confused piece of drafting.
However, since the intention is clear, a harmonious reading of all the provisions consistent with that intention is necessary to interpret and understand each of the said provisions.
The intention of the legislature is to acquire all vacant land in excess of the ceiling limit prescribed by the Act and the main purpose of the Act, as stated earlier, is three fold, viz., [i] to prevent concentration of the urban land in the hands of a few persons and to prevent speculation and profiteering therein; [ii] to distribute the urban land equitably and [iii] to regulate the construction of buildings on the urban lands.
Consistent with these objectives, the Act provides for acquisition of all urban vacant land in excess of the ceiling limit and prohibits its transfer in any form absolutely.
All that the Act permits in the case of such excess vacant land is either express exemption from the operation of Sections 3 to 19 of Chapter III of the Act by the State Government under Section 20 or non declaration of such land as an excess vacant land by the competent authority under Section 21 or the retention of such land with the land holder to be permitted by the competent authority under Section 22 of the Act.
The effect of exemption of the land from the provisions of Sections 3 to 19 or of the non declaration of the land as excess land or of the 741 retention of the land with the land holder under Sections 20, 21 and 22 respectively, is not to permit the land holder to deal with it as he likes including to transfer it.
In fact, the exemption, the non declaration an the retention permitted, is on certain conditions which are required to be prescribed by the State Government or the competent authority as the case may be.
If those conditions are not complied with or are contravened, the State Government or the competent authority is given power to withdraw the exemption or to declare the land as excess.
This power given to the State Government and the competent authority itself negatives either power to permit the transfer or the right to transfer.
What is more, Chapter IV which alone makes provisions for transfer and use of urban property, makes provision for transfer of vacant land within the ceiling limit subject to certain conditions.
It also makes provisions for the transfer of land in excess of the ceiling limit with a building thereon or with a portion of such building.
It makes, however, no provision for transfer of land in excess of the ceiling limit without a building or a portion of a building thereon.
That is consistent with the object of the Act since the Act does not contemplate transfer of the vacant land in excess of the ceiling limit.
It only provides for exemption of such land from being acquired and vested in the State` Government or for non declaration of it as an excess land or for the retention of the same with the holder and that too subject to certain conditions which may be prescribed, as stated earlier.
16.It is against the background of the aforesaid provisions of the Act that we have to consider whether the two permissions given by the State Government to the firm on 6.3.1987 and 18.4.1987 to sell land admeasuring 16194 sq.mtrs.
and 3444 Sq. mtrs.
respectively under Section 20 (1), are legal.
17.Taking, first, the order dated 6.3.1987, it does not mention under which provision of Section 20 (1) the exemption is granted, viz., whether under clause (a) or (b) thereof It is, however, conceded before us on behalf of the respondents that the exemption is not under clause (a) but.
is under clause (b).
We have, therefore, to examine the said exemption with reference to the provisions of clause (b).
Section 20 (1)(b), as stated earlier, permits the State Government to exempt the vacant land from the provisions of Chapter III of the Act, if either on its own motion or otherwise, it is satisfied that the application of the said Chapter "would cause undue hardship to such person".
The order of exemption may further 742 be subject to such conditions, if any, as in any be specified in it.
The reasons for passing the order have further to be recorded in writing.
The preamble of the present order states that by the earlier order dated 17.7.1985, the firm was granted exemption of the very same land for locating industry on conditions contained in it.
One of the conditions was that the declarant shall not transfer the land in question without prior permission of the Government.
The order then proceeds to refer to a letter dated 20.1.1987 of the Special Deputy Commissioner, Bangalore recommending the grant if permission to sell the said land on certain conditions.
The order states that the Government has considered the undue hardship of the applicants and agrees to grant permission to sell the said land.
The order does not discuss the undue hardship of the applicants.
It is possible that the Government for that purpose relied upon the report of the Special Deputy Commissioner.
It appears from the record that the report of the Special Deputy Commissioner is of 29.1.1987 and not of 20.1.1987.
It is possible that there is a typographical error either in the record or in the order.
Be that as it may.
The said report of the Special Deputy Commissioner refers to the application made by the firm for grant of permission for the sale of the land "for their undue hardship '.
The report then mentions the properties declared by the firm.
All the properties, which are four in number and one of which is the land in dispute, are situate in Bangalore.
There is no mention of the properties which admittedly the appellants had in Madras.
What is necessary to note here is that it is also stated in the report that the land in dispute has a building of dwelling units and non dwelling units over a plinth area of 1618.80 sq. mtrs.
constructed prior to the commencement of the Act.
It also states that there is a factory on.
the land running since 50 years which manufactures the polished stones.
exported to foreign countries.
The report then refers to what the firm had stated in its application for permission to sell the land.
The application had mentioned among other things, as follows "[a] due to lot of competition and nationalisation of the black and pink granites by southern States including Karnataka, the firm had been suffering losses in the abovesaid business; [b] the partners of this firm are the partners of a firm known as "Woodlands" which has been carrying business in hoteliers and the said hotel is not making profits due 743 to the fact that the buildings are very old and due to paucity of funds; [el that firm has constructed twin theatres on the front side of the hotel just to diversify the business.
[d] that they have incurred heavy loans from banks and private parties for the purpose of construction of theaters and the partners who are the partners of the applicant firm are responsible to liquidate the loans; [e] the Madras firm has suffered heavy loss to a tune, of Rs. 22,23,016.26 as on 31.3.1986." [The firm has under this head shown term loan (if Rs. 57.57 lakhs from the Andhra Bank and Rs. 19.03 lakhs from the Bank of India and Rs. 17.29 lakhs from the State Bank of Mysore.
They have also mentioned Rs. 51.80 lakhs from private parties but their names are not disclosed.
They have also mentioned other liabilities to the tune of Rs. 3.87 lakhs but their details are not given.] "[f] that the net capital and current accounts show a debit balance of Rs. 47.94 lakhs".
[They also further state that if the loan from 1.4J986 to 31.12.1986 is taken into account, the debit balance of the partners would b e about Rs. 68 lakhs.] "[g] that the bank authorities have filed suits in the High Court of Madras to attach their properties both in Bangalore and Madras; [h] that a private party by the name of Sri P.L. Narayanaswamy Reddivar has also filed a suit in the Karnataka High Court to recover the loan due to them from, the Madras firm;" The application had further stated that the Madras firm is not able even to pay the interest as it is running at a huge loss.
It had also been stated that it had become a mental torture to clear the liabilities and to 744 face the court cases pending for attachment.
It had then gone on to state that there was no other way to dispose of the property in Bangalore, i.e., the disputed property to clear the above debts and that even the amount derived from the sale of the land in question would not be sufficient to liquidate the liabilities.
The report further states that the firm had produced the statement of profit and loss account and balance sheet as on 31.3.1986 and copies of suits filed by the Bank of India in Madras and by the said Sri P.D. Narayanaswamy Reddiyar in the High Court of Karnataka.
After only reciting the above facts but without mentioning even the price at which the land in dispute was proposed to be sold, the Special Deputy Commissioner has proceeded to recommend the permission to sell the land to the builders under Section 20 of the Act.
The application for permission itself had not mentioned the price.
The recommendation is in respect of not only 16194 sq. mtrs.
but also in respect of 3444 sq. mtrs.
It may be mentioned here that the firm had not made any application for exemption or permission to sell the said 3444 sq. mtrs.
till at least 24th March, 1987.
Yet, the Special Deputy Commissioner recommended in his report of 20/29.1.87 that the earlier exempted land of 16194 sq. mtrs.
may be permitted to be sold along with the said 3444 sq. mtrs.
He has of course recommended conditions to be imposed while granting the permission to sell.
The State Government has also not independently enquired into the genuineness of the debts, the value of all the assets of the firm held by it in Bangalore, Madras or elsewhere, and whether the debts were as on the date of the commencement of the Act and whether any of the debts were incurred subsequent to the said date, what was the price at which the land was proposed to be sold, whether the assets other than the land in question could not have been sold to meet the debts and if at all it was necessary to sell the land in question, whether the sale only of a part of the land would not have relieved the firm of its obligations.
Without such inquiry, the Government by its order in question granted permission to sell 16194 sq.
of land.
Close on the heels, however, followed another order dated 18.4.1987 by which the balance of 3444 sq. mtrs.
was permitted to be sold relying upon another report of the Special Deputy Commissioner.
The record before us shows that the said report is of 27.3.1989.
We may, however, presume a typographical error and construe it as a report of 27.3.1987.However, what is worth nothing is that the application for 745 permission to sell the said 3444 sq.
was filed by the firm allegedly on 24.3.87.
It seems that with commendable alacrity the Special Deputy Commissioner made his report on the said application, on 27.3.1987 [if we are to read the year as 1987 instead of 1989 as the document shows].
What he has stated in his report may be summarised as under: That the Government by its order dated 6.3.1987 had already accorded permission to sell excess vacant land admeasuring 16194 sq. mtrs.
The remaining excess vacant land held by the firm is 3444 sq.
Orders had been passed as required under Section 8(4) of the Act on 9.1.1987 confirming the said excess vacant land.
In the meanwhile, the firm presented another application on 24.3.1987 to the Government requesting for grant of exemption under Section 20 with permission to sell the said excess land admeasuring 3444 sq. mtrs.
and another land admeasuring 5,648 sq.
which consisted of land with building as per Section 4 (1)(b) of the Act, to the builders.
That the firm stated that they had got the liabilities to the private parties [who were for the first time named there].
They are 13 in number.
The liabilities were shown as having arisen between 20.1.1975 and 7.12.1977 with a specific mention that the liabilities were from a date prior to the coming into force of the Act.
These liabilities to the private parties amounted to Rs. 4,11,279.56.
In addition to 13 private creditors, Dena Bank is the 14th and the last editor shown there to whom Rs. 65,420.44 were owed from 15.4.1969.
The firm had produced certificates from the creditors and a certificate from the auditors in support of the said liabilities.
The report ends by stating that "in the cir cumstances explained above, the requests of the firm to grant exemption under Section 20 with permission to sell the said balance vacant land of 3444 sq. mtrs.
to the builders may be considered.
" It is not known when the reference of the said application was made to the Special Deputy Commissioner for giving his report.
All that is known is that on 18.4.1987, the Government passed an order permitting the firm to sell the land admeasuring 3444 sq. mtrs.
on the conditions mentioned therein.
This order also does not discuss, like the earlier order of 6.3.1987, the various factors which need to be considered while granting permission to sell.
It is, however, not necessary to discuss this aspect of the matter since we are allowing the appeals on the primary ground that the State Government had no power to grant permission to the firm to sell the land in question.
If, however, it was necessary to go into the said question, it must be stated that there is much force in the contention of the appellants that the State Government had 746 not applied its mind to the relevant factors relating to the alleged indebtedness of the firm and hence the permission granted to the firm to sell the land was liable to be struck down on that ground also.
18.The first question that arises is whether the provisions of Section 20111 (b) permit the State Government to permit the sale of the excess vacant land to a third party.
According to us, the answer has to be in the negative for reasons more than one.
In the first instance, the central object of the Act, as is evident both from the preamble as well as the statement of objects and reasons, is to acquire vacant land in excess of the ceiling area and to prevent speculation and profiteering in the same and also to distribute the land equitably to subserve the common good.
It is, therefore, per se against the said object to permit the sale of the excess vacant land for whatever reasons, including the undue hardship of the ' land holder.
To construe the provisions of Section 20 [1] (b) so as to read in them the conferment of such power on the State Government for whatever reasons, is to distort and defeat the whole purpose of the legislation.
Further, neither the plain language of the clause nor its context and intendment merit such construction.
Section 20 itself is titled "Power to exempt".
The power given to the State Governments under the Section is only to exempt certain excess vacant lands from the operation of the provisions of Sections 3 to 19 of Chapter III, none of which refers to the subject of transfer or restrictions on transfer.
Those provisions relate to the calculation, declaration, acquisition and vesting of the excess vacant land.
It is Chapter IV which relates to the transfers of vacant lands and the restrictions thereon.
Further, from the scheme of the Act, it is evident that the transfers of the vacant land were to be regulated by the specific provisions made in it.
They were not to be left to be governed by the unguided discretion of any authority including the State Government.
The specific provisions for regulating the transfer have been incorporated in Sections 20 to 28 of the Act.
Those provisions permit transfer of only vacant lands within the ceiling limit but without buildings, and of vacant lands in excess of the ceiling limit but with buildings thereon and subject to the conditions laid down there.
It cannot be suggested that in defiance of the said provisions, Section 20 [1](b) vests power in the State Government to sanction sales of excess vacant lands with or without building thereon.
Under Section 20 [1](b), the State Government can only exempt such excess vacant land from being acquired by it.
The Government 747 cannot permit its transfer when the Act does not even by implication authorises it to do so but permits the transfer subject only to the conditions prescribed by Section 27.
The legislature cannot be presumed to have prescribed different conditions for transfer of the same or similar lands.
Secondly, Section 20 begins with the non obstante clause "notwithstanding anything contained in any of the foregoing provisions of this Chapter", meaning thereby Chapter III of the Act.
The foregoing provisions of Chapter III viz. , Sections 3 to 19, as stated earlier, do not contain any provision permitting or restricting the transfer of the vacant land in excess of the ceiling limit.
The provisions relating to the transfer of the vacant land are contained in Sections 26 to 28 of Chapter IV.
Section 26 lays down restrictions on the transfer of the vacant land even if it is within the ceiling limit, while Section 27 places restriction on the transfer of any urban or urbanisable land with a building or portion of such building thereon for a period of ten years from the commencement of the Act or from the date on which the building is constructed, whichever is later, except with the previous permission of the competent authority.
Section 27 as couched is wide in its implication and hence this Court by its decision in Bhuimsinghji 's case Supral restricted its operation to lands with buildings which are above the ceiling limit.
However, the court has upheld the validity of the rest of the Act including that of Section 26.
The result is, the restriction on transfer even of vacant land within the ceiling limit but without building is deemed to be valid.
Thus the transfer of the vacant land without building even if it is within the ceiling limit and of the vacant land in excess of the ceiling limit with a building or a portion of the building are subject to the restrictions placed by the Act.
Section 20, as pointed out earlier, is subject to the provisions of sections which follow it including Sections 26 to 28.
Hence no construction can be placed on clause (b) of sub section [1] thereof which will be in conflict with the provisions of Sections 26 to 28.
Thirdly, the provisions of clauses (a) and (b) of sub section [1] of Section 20 make it clear that what the legislature has in mind is an exemption for the purposes of the use of the land and not for the purposes of selling it.
Sub section Ill (a) speaks of exemption of such land having regard to its location, the purposes for which the land is being or is proposed to be used and such other relevant factors as the circumstances of the case may require.
The said provisions further require that even after taking into consideration the said circumstances, the State Government has to examine, before giving ex 748 emption, whether it is necessary or expedient in the public interest to do so.
The Government is also empowered under the said provisions to grant such exemption conditionally.
Sub section [1] (b) similarly, speaks of the undue hardship caused on account of the application of the provisions of Chapter III.
Since as per the definition of "person" in Section 2 [i], the said provision is applicable not only to individuals, but also to a family, a firm, a company or an association or body of individuals whether incorporated or not, the hardship spoken of there is obviously one related to the user of the land.
In fact, it is difficult to understand the precise purpose for which clause (b) has been enacted and the meaning of the expression "undue hardship" there.
We are left only to speculate on the subject.
The speculation itself may not be valid.
The lands are held by companies, trusts and associations for industrial and commercial use, for the use of medical and educational institutes, sports, clubs, cultural activities, gardens, exhibitions etc.
There is no special provision made in the Act to protect or take care of such users.
The only provision under which a relief can be given to preserve and safeguard such user is Section 20 [1] (a).
But that provision can be pressed into service only on the basis of the location of the land and its present or prospective user and only if it passes the test of public interest.
However, all lands in excess of the ceiling limit may not strictly be necessary for such user, even if the user is in the public interest.
Nevertheless, the withdrawal of a part of the land found to be in excess may cause an avoidable hardship to the land holder which may be disproportionate to the benefit that is to accrue to the public on account of such withdrawal.
The excess of land may be meager or the severance of such excess land itself may result in unnecessary hardship.
The hardship further has to be undue and not merely an ordinary hardship which is bound to be caused on account of the application of the Act to every holder of the excess vacant land.
The undue hardship must be one which cannot be avoided except by granting a relief of exemption as contemplated by the said provision.
The relief from financial hardship or from indebtedness to the land holder of such land is alien both to the object and the scheme of the Act.
Even the debates in the Parliament do not refer to financial hardship or to the power of the State Government to exempt the land to permit its transfer on that account.
To hold that indebtedness and financial hardship would entitle the landholder to get exemption for sale of the excess vacant land in his possession is to place the holders of land with debts in an advantageous position as against those who were unwise enough to manage their affairs with financial discipline.
The classification of the owners of land for this purpose between debtors and 749 non debtors is itself irrational and has no plausible nexus with the object of the Act.
Such a classification is, therefore, discriminatory and violative of Article 14 of the Constitution.
It is not, therefore, possible to agree with the view taken by the Gujarat High Court in Thakorbhai Dajibhai Desai vs State of Gujarat, AIR 1980 Guj. 189 that the indebtedness of the land holder on the date of the commencement of the Act can be a ground for exemption under Section 20 [1] (b).
Much less can such a ground vest the State Government with the power to permit the sale of the land.
As has been explained earlier, under the Act no transfer of vacant land in excess of the ceiling limit is permitted whether with or without condition, if it is not encumbered with a building or a portion of a building.
It can either be acquired by the State Government under Section 10 [3] of the Act or exempted from being acquired or permitted to be retained under Sections 20, 21 and 22 respectively.
It can in no case be transferred.
However, if it is so encumbered, the provisions of Section 27 become ap plicable to the transfer of the land and no transfer of such land can be effected in contravention of the provisions of the said section.
There is nothing either in Section 20 or Section 27 which exempts the transfer of such land from the operation of the provisions of Section 27, assuming that Section 20 (1) (b) gives power to the State Government to permit the sale of such land.
Fourthly, the exemption which is granted under Section 20 [1] (b) has to be supported by reasons to be recorded in writing.
This requirement also contemplates an exemption which is related to and prompted by the use or better use of the land.
If it is the financial hardship which was under the contemplation of the legislature, there was nothing easier than to make a reference to the same in clause (b) itself and to lay down guidelines for the inquiry into such hardship.
Fifthly, the provisions of sub section [2] of Section 20, directly negative either exemption on account of financial hardship or for the purpose of the transfer of the land, since that sub section empowers the State Government to withdraw the exemption already granted if the State Government is satisfied that any of the conditions subject to which the exemption is granted either under clause (a) or clause (b) of sub section [1] is not complied with.
It is inconceivable that the legislature had in mind the cancellation of the transfer including sale, which cannot be done when it has already taken place.
Sixthly, as pointed out earlier, when the legislature wanted to provide 750 for sale or transfer of the vacant land, it has done so specifically in Chapter IV which exclusively deals with the "Regulation of transfer and use of urban property '.
Sections 26,27 and 28 of the said Chapter together provide for sales of vacant land and for the registration of such sales.
Section 26 restricts the sale of land even if it is within the ceiling limit except after giving notice in writing of the intended transfer to the competent authority.
When such notice is given, the competent authority has the first option to purchase the land on behalf of the State Government and at a price calculated in accordance with the provisions of the Land Acquisition Act, 1894 or of any other corresponding law for the time being in force.
It is only when the competent authority does not exercise its option to purchase the land within sixty days from the date of receipt of the notice, that it is lawful for the holder of the land to transfer the same to whomsoever he may like.
The provisions of Section 26 further show that the price to be calculated for the purchase of the land when the competent authority exercises its option is on the basis that the notification under sub section [1] of Section 4 of the Land Acquisition Act or under the relevant provision of any other corresponding law had been issued on the date on which the notice was given of the intended transfer by the holder of the land, to the competent authority.
This provision makes it abundantly clear that the exemption to be granted under Section 20 1 11 (b) is not for the sale of the excess vacant land.
It is difficult to hold that the legislature which places restrictions on the transfer of the land within the ceiling limit would at the same time give a carte blanch for the sale of the land in excess of the ceiling limit.
For it would mean, firstly, that the State Government cannot have an option to purchase such land and secondly the sale can be made by the holder of the excess land at any price that he chooses.
In the first instance, such a reading of Section 20 Ill (b) would militate against one of the objects of the Act, viz., to prevent speculation and profiteering in the sale and purchase of land.
Secondly, it would be patently discriminatory.
Whereas the holder of vacant land within the ceiling limit would have to suffer the restrictions placed by Section 26, the holder of the vacant land in excess of the ceiling limit has not to do so.
He would in fact be in a better position.
The provisions with regard to granting such exemption subject to certain conditions contained in Section 20 [1] (b) do not in any way mitigate the discrimination.
Firstly, when the statute itself places specific restrictions under Section 26 on the sale of land within the ceiling limit, it is not possible to hold that the conditions on which the State Government is empowered to permit the sale can be left to the discretion of the State Government.
In fact, such discretion given to the State Government 751 would itself be violative of Article 14 of the Constitution the same being unguided and untrammeled.
This also shows that the legislature has not given power to the State Government under Section 20 ill (b) to permit exemption for sale of the land.
Otherwise it would have provided in the section itself for the conditions on which the permission to sell can be given and such conditions could not be less onerous than those provided under Section 26 of the Act.
Secondly, if the power to permit sale of the land was intended to be given only for relieving the land holder of his financial hardship, the section could very well have provided for sale of such land under Section 26 of the Act or made provision in Section 20 ill (b) itself for the first option of the State Government to purchase it.
It is not suggested that by not making such provision either in Section 20 111 (b) or Section 26, the legislature intended to permit the sale of such land at a price above the fair market price payable under the Land Acquisition Act, 1894 or the corresponding law and thereby encourage speculation and profiteering, the very evils which the Act intended to curb.
Seventhly, section 27 in Chapter IV is another provision which prohibits the transfer of any urban or urbanisable land with a building whether constructed before or after the commencement of the Act or a portion only of such building, for a period of ten years from the commencement of the Act or from the date on which the building is constructed, whichever is later, except with the previous permission of the competent authority.
Sub section 151 thereof again gives the first option to the competent authority to purchase such land and at a price either as agreed upon between the competent authority and the land holder or where there is no such agreement at a price to be calculated in accordance with the provisions of the Land Acquisition Act, 1894 or any other corresponding law for the time being in force.
It is only if the option is not exercised within sixty days or the competent authority has not refused permission to sell the land that the holder of the land can legally transfer the same to whomsoever he may like.
These provisions of Section 27 also militate against the conferment of the power on the State Government to permit exemption of land for the purpose of its transfer for the same 'reasons as are based on the provisions of Section 26 discussed above.
The provisions of Section 27 refer to any urban or urbanisable land with a building.
The vacant land in excess of the ceiling limit may be with or without a building.
In fact, the provisions of Section 27 directly negative the conferment of such power, for the said provisions show, firstly, that the legislature did not want the 752 sale of any urban or urbanisable land with a building whether it is within or without the ceiling limit except in accordance with the provisions of Section 27.
For Section 27 speaks of transfer of any urban or urbanisable land with a building or a portion only of such building, only with the permission of the competent authority and on the terms mentioned therein.
This Court, as stated earlier, has invalidated the provisions of the said section to the extent they apply to the vacant land with a building when the land is within the ceiling limit.
But it does apply to land in excess of the ceiling limit and with a building or a portion of it thereon.
It is not possible to hold that there are two provisions, viz. Section 20 ill (b) and Section 27 operating at the same time in the same area.
For the land permitted to be transferred under Section 20 [1] (b) may also be a land with a building or a portion of a building thereon.
In one case the restriction imposed by Section 27 on the transfer would not apply and the State Government will be deemed to have been given power to permit the sale even in contravention of the provisions of Section 27.
In another case, the holder of similar land will have to suffer the restrictions placed by Section 27.
There is nothing either in Section 20 [1] (b) or Section 27 to exclude the operation of the section, as pointed out earlier.
Eighthly, the provisions of Section 28 require a special procedure to be followed by the registering officer under the while registering documents under Section 17 [1] (a) to (e) of that Act when the transfer of the land is either under Section 26 or Section 27.
Section 28 does not make any reference to the transfer permitted by the State Government under Section 20 [1] (b).
In other words, the holder of the vacant land in excess of the ceiling limit has not to face the restriction on the registration of the document of transfer of his land provided under Section 28 when such transfer is permitted by the State Government under Section 20 [1] (b), whereas the holder of similar lend who does not approach the State Government has to suffer the same when he transfers the land held by him.
The discrimination between the transfers under the different provisions is irrational and has no nexus with the object ought to be achieved by the classification.
Lastly, if the power to exempt the land for sale is read in Section 20 [1] (b) with such conditions as the State Government may choose to place and if either the State Government chooses not to place any conditions or to place such conditions as are inconsistent with the provisions of Sections 29 and 30, it would create two sets of lands one where no restriction are applicable to the 753 construction thereon or only such restrictions as the State Government may choose to impose, and the other where the restrictions on constructions as provided by Sections 29 and 30 would be applicable.
It is, therefore, more than clear that the provisions of Section 20 (11 (b) do not permit the State Government to exempt vacant land in excess of the ceiling limit for the purposes of transfer.
N.P. SINGH, J.
I agree with brother Sawant, J. that it is not possible to hold that State Government can grant exemption under Section 20 [1] (b) of the Act, to the holder of the excess vacant land, so that he may transfer the same in the manner he desires.
The object of the Act being imposition of ceiling on vacant land in urban agglomerations and for acquisition of such land in excess of ceiling limit, with a view to prevent the concentration of urban land in the hands of a few persons, speculations and profiteering therein, will that object be not defeated if it is held that power under Section 20(1) of the Act can be exercised by the State Government to exempt the excess vacant lands, from the application of Chapter III of the Act, so that the holder thereof can transfer such lands? Sub section (1) of section 20 is in two parts.
The exemption under clause (a) of the said sub section is to be granted in the public interest whereas under clause (b) the exemption is to be granted taking into consideration the "undue hardship" of the holder of the land in excess of the ceiling limit.
Both the expressions "public interest" and "undue hardship" are com prehensive in nature.
But at the same time, it is not easy even for courts to say as to whether under different circumstances the exemption was in the "public interest" or was necessary in the interest of the holder of the .land because of his "undue hardship".
Under Indian conditions expression "undue hardship" is normally related to economic hardship.
That is why from time to time many holders of lands in excess of the ceiling limit, while claiming exemption under clause (b) put forth their bad economic condition and indebtedness to claim exemption along with permission to sell such excess lands.
In the modern set up many holders of such excess lands having undertaken commercial or industrial ventures with the help of the loans from the Banks and other financial institutions, put the plea of repayment of such loans as undue hardship for claiming exemption under clause (b) of section 20(1) aforesaid.
How the holders of excess lands having incurred losses or having failed to discharge their debts can 754 claim exemption on the ground of "undue hardship" in such a situation? Section 4 while fixing the ceiling limit, under subsection (3) takes note of the fact that "where in respect of any vacant land any scheme for group housing has been sanctioned by an authority competent in this behalf immediately before the commencement of this Act, then, the person holding such vacant land at such commencement shall be entitled to continue to hold such land for the purpose of group housing".
But at the same time under sub section (4) of section 4 it has been specified that "if on or after the 17th day of February, 1975, but before the appointed day, any person has made any transfer by way of sale, mortgage, gift, lease or otherwise (other than a bona fide sale under a registered deed for valuable consideration) of any vacant land held by him and situated in such State to any other person, whether or not for consideration, then, for the purposes of calculating the extent of vacant land held by such person the land so transferred shall be taken into account, without prejudice to the rights or interests of the transferee in the land so transferred".
Similarly in section 5 it has been provided that "where any person who had held vacant land in excess of the ceiling limit at any time during the period commencing on the appointed day and ending with the commencement of this Act, has transferred such land or part thereof by way of sale, mortgage, gift, lease or otherwise, the extent of the land so transferred shall also be taken into account in calculating the extent of vacant land held by such person".
When different provisions take into consideration the lands already transferred by the holder, (i) between the period 17th February, 1975 and the appointed day; (ii) as well as between the period commencing from the appointed day and ending with the commencement of the Act, it should not be easily inferred that the framers of the Act desired that after the commencement of the Act while exercising the power of exemption under section 20(1)(b) permission should be granted to holders of such excess lands to transfer such lands to third parties in order to meet their financial liabilities.
Section 21 is yet another provision in the Act under which excess vacant land is not to be treated as excess.
Under the said Section exemption is to be granted in respect of such excess vacant land, if the holder undertakes to utilise the same for the constructions of dwelling units for accommodation of the weaker sections of the society in accordance with the scheme approved by the competent authority or the State Government subject to such terms and conditions as may be prescribed.
If Section 21 provides for granting exemption in respect of excess land held by the holder only on a specific condition that the holder shall utilise the same 755 for the construction of dwelling units for weaker section, to serve a public cause, how the framers of the Act could have conceived the grant of exemption under Section 20(1) (b) to the holder of the excess land, only to serve his interest, by selling such excess lands.
If it is held that the State Government can exempt the vacant land held by the land holder in excess of the ceiling limit, from the applicability of the provisions of Chapter III of the Act, in order that the said holder sells such land to liquidate his debts which amounts to an "undue hardship", then there will be an apparent conflict between the interest of the land holder and the public interest.
In the interest of the land holder the maximum price fetched by sale of such land will be the solution of his hardship, whereas that will run counter to the object of the Act to prevent " speculations and profiteering".
It is futile to urge that even in such transfers the dominant purpose of the legislation to prevent "the concentration of urban land in hands of few persons" is none the less served.
The concentration of urban land in hands of few persons has to be prevented with a view to bring about "an equitable distribution of land in urban agglomerations to subserve the common good".
Section 23 prescribes the priorities for disposal or distribution of excess vacant lands after such lands vest in the State under the provisions of the Act.
In the case of Bhim Singhji vs Union of India, , it has been said: "The definition of the word 'industry ' in clause (b) of the Explanation to that section is undoubtedly unduly wide since it includes "any business, profession, trade, undertaking or manufacture".
If sub section (1) of Section 23 were to stand alone, no doubt could have arisen that the Urban Land Ceiling Act is a facade of a social welfare legislation and that its true, though concealed, purpose Is to benefit favored private individuals or associations of individuals.
But the preponderating provision governing the disposal of excess vacant land acquired under the Act is the one contained in sub section (4) of Section 23 whereby all vacant lands deemed to have been acquired by the State Government under the Act "shall be disposed of . to subserve the common good".
The provisions of sub section (4) are "subject to the provisions of sub sections (1), (2) and (3)" but the provisions of sub section (1) 756 are enabling and not compulsive and those of sub sections (2) and (3) are incidental to the provisions of sub section (1).
The disposal of excess vacant lands must therefore be made strictly in accordance with the mandate of sub section (4) of Section 23, subject to this, that in a given case such land may be allotted to any person, for any purpose relating to, or in connection with, any 'industry ' or for the other purposes mentioned in sub section (1), provided that by such allotment, common good will be subserved.
The governing test of disposal of excess land being 'social good ', any disposal in any particular case or cases which does not subserve that purpose will be liable to be struck down as being contrary to the scheme and intendment of the Act.
" If the vacant lands which have vested in the State are also to be disposed of strictly keeping in view the spirit and object of the Act, how under section 20(1)(b) exemption can be granted to holders of such lands to dispose of such lands in the manner they like, the persons they prefer, the price they dictate, for clearing their debts? If it is conceded that indebtedness amounts to an undue hardship, then it may cover the debts incurred even after the commencement of the Act.
The ceiling limit has been fixed by section 3 with reference to the date of the commencement of the Act, but exception can be granted till such excess lands vest in the State Government under sub section (3) of section 10, after publication of the notification, in terms of the said sub section.
Although it was not possible even for the framers of the Act to exhaustively indicate as to what shall be deemed to be "undue hardship" within the meaning of section 20(1)(b) but it would have been better, if it had been illustratively indicated, leaving the rest for the courts to decide.
20.1 have made no reference to Section 26 or Section 27 of the Act, while considering the question whether on the ground of "undue hardship" the holder of the excess vacant land can be granted exemption and then permission to sell such excess land, because he is financially crippled or burdened with liabilities.
In the case of Blim Singhji vs Union of India (supra) this court held that Section 27(1) in so far as it imposes restriction on transfer of any urban or urbanisable land with a building or of a portion of such building which is within ceiling area, was invalid.
The said sub section (1) of Section 27 757 was struck down being unconstitutional.
Section 26 of the Act also imposes certain restrictions on transfer of vacant land even within ceding limit.
It can be urged that Section 26(1) suffers from the same vice which was pointed out in respect of sub section (1) of Section 27 of Act, in the aforesaid case of bhim Singhji vs Union of India (supra) by this Court.
But neither in the aforesaid case nor in this case this court was or is concerned with Section 26 and as such, according to me, it is not necessary to express any opinion in respect of Section 26 of the Act, while considering the issue involved in the present appeals.
ORDER 21.For the reasons given by us above, we are of view that the provisions of Section 20 [1] (b) of the Act do not permit the State Government to give exemption to the vacant in excess of the ceiling limit for the purposes of transferring the same.
22.In view of our conclusion as above, it is not necessary to go into the further question, viz., if the State Government has such power, in which circumstances it can be exercised and whether financial hardship such as the indebtedness of the land holder is sufficient to warrant such exemption or not and with respect to which date such indebtedness is to be assessed and in what manner, and whether in the present case, the said aspects of the indebtedness were investigated or properly investigated or not.
For this very reason, we also do not propose to go into the other question regarding the mala fides on the part of the authorities while granting permission to the firm to sell the land to the builders in question.
23, Since we have come to the conclusion that the State Government has no power to grant permission to sell the land under Section 20 [1] (b), the orders dated 6.3.87 and 18.4.87 granting exemption and permission to the firm for sale of the land are void ab initio having been passed without jurisdiction.
Accordingly, the sale deed dated 30.9.1987 executed by the 2nd respondent firm in favour of the 3rd respondent builders is held invalid and inoperative, as the respondent firm had no legal right to transfer the land in favour of the builders.
We accordiigly allow the appeals and set aside the impugned order of the High Court.
The respondents State of Karnataka, M/s. Narayanaswamy & Sons and M/s. Reevajethu, Builders & Developers will pay the costs to the appellants in one set.
G.N. Appeals allowed. [/INST] The second respondent, a partnership firm was carrying on the business of manufacturing and selling polished granites.
It was running its factory in a small portion of the land owned by it and the rest of the land was vacant when the Urban Land (Ceiling & Regulation) Act, 1976 was made applicable to that area.
The firm made an application to.
the State Government for exemption of the vacant land from the provisions of 715 716 the said Act, and the exemption was granted subject to certain conditions.
The Competent Authority under the Act came to the conclusion that there was some excess vacant land and directed the publication of a notification u/s 10(1) of the Act for acquisition of the same.
Later, the firm made an application to the State Government for permission to sell the vacant land to the third respondent (builders) mainly on the ground that the firm had been incurring huge losses in its business.
On 6.3.1987 the State Government permitted the firm to sell the land to the builders, only to the extent of 16194 sq. mtrs.
Again the firm riled another application to transfer the remaining 3444 sq. mtrs.
of land to the builders, and on 18.4.1987 the State Government permitted the same subject to certain conditions.
Consequently, by a sale deed dated 30.9.1987 the firm entered into a deed of absolute sale with the builders for sale of the entire vacant land.
Writ Petitions by way of Public Interest Litigation were riled in the High Court challenging the exemptions granted by the State Government, for declaring the sale deed void and inoperative and for acquiring the land for the weaker sections.
A Single Judge allowed the Writ Petitions and gave certain directions including sale of plots to be carved out from the land and only such number of plots as would be necessary to discharge the debts of the firm were to be sold and the remaining portion of the vacant land was to be acquired under the Act.
He also held that there were no mala fides in the State Government granting exemptions by its orders date 63.1987and 18.4.1987.
Against the decision of the Single Judge, appeals were preferred before the Division Bench of the High Court and the Division Bench set aside the findings as well as the direction given by the Single Judge.
Aggrieved by the Judgment of the Division Bench, the appellants preferred the present appeals.
Allowing the appeals, this Court, HELD: BY THE COURT.
I.I.The provisions of Section 20(1)(b) of the Urban Land (Ceiling and Regulation) Act, 1976 do not permit the State Government to give exemption to the vacant land in excess of the ceiling limit for the purposes 717 of transferring the same.
[757 C] 1.2.The orders dated 63.1987 and 18.4.1987 granting exemption and permission to the firm for sale of the land are void ab initio having been passed without jurisdiction.
Accordingly, the sale deed dated 30.9.1987 executed by the 2nd respondent firm in favour of the 3rd respondent.
builders is invalid and inoperative, as the respondent firm had no legal right to transfer the land in favour of the builders.
[757 F, G] 13.In view of the above conclusions, it is not necessary to go into the questionsas to whether the State Government has the power to grant exemption; thecircumstances in which it can be exercised; and whether financial hardship such as the indebtedness of the land holder is sufficient to warrant such exemption or not; and the date on which such indebtedness is to be assessed and in what manner; and whether in the present case, the said aspects of the indebtedness were properly investigated or not for this very reason, there is no need to go into the other question regarding the mala fide on the part of the authorities while granting permission to the firm to sell the land to the builders in question.
[757 D, E] Per Sawant, J. 1.The provisions of Section 20(1)(b) of the Urban Land (Ceiling & Regulation) Act, 1976 do not permit the State Government to exempt vacant land in excess of the ceiling limit for the purposes of transfer.
[753 B] 2.The central object of the Act, as is evident both from the preamble as well as the statement of objects and reasons, is to acquire vacant land in excess of the ceiling area and to prevent speculation and profiteering in the same and also to distribute the land equitably to subserve the common good.
It is, therefore, per se against the said object to permit the sale of the excess vacant land for whatever reasons, including the undue hardship of the land holder.
To construe the provisions of Section 20 (1) (b) so as to read in them the conferment of such power on the State Government for whatever reasons, is to distort and defeat the whole purpose of the legislation.
Further, neither the plain language of the clause nor its context and intendment merit such construction.
Section 20 itself is titled "Power to exempt".
The power given to the State Government under the Section is only to exempt certain excess vacant lands from the operation of the provisions of Sections 3 to 19 of Chapter 111, none of which refers to the subject of transfer or 718 restrictions on transfer.
Those provisions relate to the calculation.
declaration, acquisition and vesting of the excess vacant land.
It is Chapter IV which relates to the transfers of vacant lands and the restrictions thereon.
Further, from the scheme of the Act.
it is evident that the transfers of the vacant land were to be regulated by the specific provisions made in it.
They were not to be left to be governed by the unguided discretion of any authority including the State Government.
The specific provisions for regulating the transfer have been incorporated in Sections 26 to 28 of the Act.
Those provisions permit transfer of only vacant lands within the ceiling limit but without buildings, and of vacant lands in excess of the ceiling limit but with buildings thereon and subject to the condition s laid down there.
It cannot be suggested that in defiance of the said provisions, Section 20(1)(b) vests power in the State Government to sanction sales of excess vacant lands with or without building thereon.
Under Section 20(1) (b), the State Government can only exempt such excess vacant land from being acquired by it.
The Government cannot permit its transfer when the Act, does not even by implication, authorise it to do so but permits the transfer subject only to the conditions prescribed by Section 27.
The legislature cannot be presumed to have prescribed different conditions for transfer of the same or similar lands.
[746 C H; 747 A] 3.
The restriction on transfer even of vacant land within the ceiling limit but without building is deemed to be valid.
Thus the transfer of the vacant land without building even if it is within the ceiling limit and of the vacant land in excess of the ceiling limit with a building or a portion of the building are subject to the restrictions placed by the Act.
Section 20 is subject to the provisions of sections which follow it including Sections 26 to 28.
Hence no construction can be placed on clause (b) of sub section (1) thereof which will be in conflict with the provisions of sections 26 to 28.
[747 E, F] Maharao Sahib Shri Bhim? Singhji vs Union of India, , referred to.
Since as per the definition of "person" in Section 2(i), the said provision viz. S.20(1) (a) is applicable not only to individuals, but also to a family, a firm, a company or an association or body of individuals whether incorporated or not, the hardship spoken of there, is obviously one related to the user of the land.
In fact, it is difficult to understand the precise purpose for which clause (b) has been enacted and the meaning of the expression "undue hardship" there.
One is left only to speculate on the subject.
The 719 speculation itself may not be valid.
The lands are held by companies, trusts and associations for industrial and commercial use, for the use of medical and educational institutes, sports, clubs, cultural activities, gardens, exhibitions etc.
There is no special provision made in the Act to protect or take care of such users.
The only provision under which a relief can be given to preserve and safeguard such user is Section 20(1) (a).
But that provision can be pressed into service only on the basis of the location of the land and its present or prospective user and only if it passes the test of public interest However, all lands in excess of the ceiling limit may not strictly be necessary for such user, even if the user is in the public interest.
Nevertheless, the withdrawal of a part of the land found to be in excess may cause an avoidable hardship to the land holder which may be disproportionate.to the benefit that is to accrue to the public on account of such withdrawal.
The excess of land may be meager or the severance of such excess land itself may result in unnecessary hardship.
The hardship further has to be undue and not merely an ordinary hardship which is bound to be caused on account of the application of the Act to every holder of the excess vacant land.
The undue hardship must be one which cannot be avoided except by granting a relief of exemption as contemplated by the said provision.
The relief from financial hardship or from indebtedness to the land holder of such land is alien both to the object and the scheme of the Act.
The classification of the owners of land for this purpose between debtors and non debtors is itself irrational and has no plausible nexus with the object of the Act.
Such a classification is, therefore, discriminatory and violative of Article 14 of the Constitution.
(748 B H; 749 Al Thakorbhai Dajibhai Desai vs State of Gujarat, AIR 1980 Guj.
1891, overruled.
5.The exemption which is granted under Section 20(1)(b) has to be supported by reasons to be recorded in writing.
This requirement also contemplates an exemption which is related to and promoted by the use or better use of the land.
If it is the financial hardship which was under the contemplation of the legislature, them was nothing easier than to make a reference to the same in clause (b) itself and to lay down guidelines for the inquiry into such hardship.
The provisions of sub section (2) of Section 20, directly negative either exemption on account of financial hardship or for the purpose of the transfer of the land, since that sub section empowers the State Government to withdraw the exemption already granted If the 720 State Government is satisfied that any of the conditions subject to which the exemption is granted either under clause (a) or clause (b) of sub section (1) is not complied with.
It is inconceivable that the legislature had in mind the cancellation of the transfer including sale, which cannot be done when it has already taken place.
[749 E G] 6.It cannot be said that the legislature which places restrictions on the transfer of the land within the ceiling limit would at the same time give a carte blanche for the sale of the land in excess of the ceiling limit.
For it would mean, that the State Government cannot have an option to purchase such land and that the sale can be made by the holder of the excess land at any price that he chooses.
Such a reading of Section 20(i)(b) would militate against one of the objects of the Act, viz., to prevent speculation and profiteering in the sale and purchase of land.
Moreover, it would be patently discriminatory.
Whereas the holder of vacant land within the ceiling limit would have to suffer the restrictions placed by Section 26, the holder of the vacant land in excess of the ceiling limit has not to do so.
He would in fact be in a better position.
The provisions with regard to granting such exemption subject to certain conditions contained in Section 20(1)(b) do not in any way mitigate the discrimination.
When the statute itself places specific restrictions under Section 26 on the sale of land within the ceiling limit, it is not possible to reach a conclusion that the conditions on which the State Government is empowered to permit the sale can be left to the discretion of the State Government.
In fact, such discretion given to the State Government would itself be violative of Article 14 of the Constitution, the same being unguided and untrammeled This also shows that the legislature has not given power to the State Government under Section 20(1)(b) to permit exemption for sale of the land.
Otherwise it would have provided in the section itself for the conditions on which the permission to sell can be given and such conditions could not be less onerous than those provided under Section 26 of the Act.
If the power, to permit sale of the land was intended to be given only for relieving the land holder of his financial hardship, the section could very well have provided for sale of such land under Section 26 of the Act or made provision in Section 20(1)(b) itself for the first option of the State Government to purchase it.
It cannot be said that by not making such provision either in Section 20(1)(b) or Section 26, the legislature intended to permit the sale of such land at a price above the fair market price payable under the Land Acquisition Act, 1894 or the corresponding law and thereby encourage 721 speculation and profiteering, the very evils which the Act intended to curb A [750 E H; 751 A C] 7.The provisions of Section 27 also militate against the conferment of the power on the State Government to permit exemption of land for the purpose of its transfer.
The provisions of Section 27 refer to any urban or urbanisable land with a building.
The vacant land in excess of the ceiling limit may be with or without a building.
In fact, the provisions of Section 27 directly negative the conferment of such power, for the said provisions show that the legislature did not want the sale of any urban or urbanisable land with a building whether it is within or without the ceiling limit except in accordance with the provisions of Section 27.
For Section 27 speaks of transfer of any urban or urbanisable land with a building or a portion only of such building, only with the permission of the competent authority and on the terms mentioned therein.
This Court has invalidated the provisions of the said section to the extent they apply to the vacant land with a building when the land is within the ceiling limit.
But it does apply to land in excess of the ceiling limit and with a building or a portion of it thereon.
It is not possible to accept that there are two provisions, viz. Section 20(1)(b) and Section 27 operating at the same time in the same area.
Also there is nothing either in Section 20(1)(b) or Section 27 to exclude the operation of Section 27.
[751 G, H; 752 A] Maharao Sahib Shri Bhim Singhji etc.
vs Union of India 8.Section 28 does not make any reference to the transfer permitted by the State Government under Section 20(1) (b).
The holder of the vacant land in excess of the ceiling limit has not to face the restriction on the registration of the document of transfer of his land provided under Section 28 when such transfer is permitted by the State Government under Section 20(1)(b), whereas the holder of similar land who does not approach the State Government has to suffer the same when he transfers the land held by him.
The discrimination between the transfers under the different provisions is irrational and, has no nexus with the object ought to be achieved by the classification.
[752 E G] 9.If the power to exempt the land for sale is read in Section 20 (1) (b) with such conditions as the State Government may choose to place and if either the State Government chooses not to place any conditions or to 722 place such conditions as are inconsistent with the provisions of Sections 29 and 30, it would create two sets of lands one where no restrictions are applicable to the construction thereon or only such restrictions as the State Government may choose to impose, and the other where the restrictions on constructions as provided by Section 29 and 30 would be applicable.
[752 G H; 753 A] Per N.P. Singh, J. (Concurring): 1.The object of the Act being imposition of ceiling on vacant land in urban agglomerations and for acquisition of such land in excess of ceiling limit, with a view to prevent the concentration of urban land in the hands of a few persons, speculations and profiteering therein, that object will be defeated if the power under Section 20(1) of the Act is exercised by the State Government to exempt the excess vacant lands, from the application of Chapter III of the Act, so that the holder thereof can transfer such lands.
[753 C, D] 2.Under Indian conditions the expression "undue hardship" is normally related to economic hardship.
That is why from time to time many holders of lands in excess of the ceiling limit, while claiming exemption under clause (b) put forth their bad economic condition and indebtedness to claim exemption along with permission to sell such excess lands.
In the modern set up many holders of such excess lands having undertaken commercial or industrial ventures with the help of the loans from the Banks and other financial institutions, put the plea of repayment of such loans as undue hardship for claiming exemption under clause (b) of section 20(1) aforesaid.
When different provisions take into consideration the lands already transferred by the holder, between the period 17th February, 1975 (as specified in sub.
(4) of S.4; and the appointed day as well as between the period commencing from the appointed day and ending with the commencement of the Act, it should not be easily inferred that the framers of the Act desired that after the commencement of the Act while exercising the power of exemption under section 20(1) (b) permission should be granted to holders of such excess lands to transfer such lands to third parties in order to meet their financial liabilities.
[753 G, H; 754 A F] 3.If Section 21 provides for granting exemption in respect of excess land held by the holder only on a specific condition that the holder shall utilise the same for the construction of dwelling units for weaker section, to 723 serve a public cause, the framers of the Act could not have conceived the grant of exemption under Section 20(1)(b) to the holder of the excess land, only to serve his interest, by selling such excess lands.
[754 H; 755 A F] 4.If the State Government can exempt the vacant land held by the land holder in excess of the ceiling limit, from the applicability of the provisions of Chapter III of the Act, in order that the said holder sells such land to liquidate his debts which amounts to an "undue hardship", then there will be an apparent conflict between the interest of the land holder and the public interest.
In the interest of the land holder the maximum price fetched by sale of such land will be the solution of his hardship, whereas that will run counter, to the object of the Act to prevent speculations and profiteering".
It cannot be said that even in such transfers the dominant purpose of the legislation, to prevent "the concentration of urban land in hands of few persons" is nonetheless served.
The concentration of urban land in hands of few persons has to be prevented with a view to bring about "an equitable distribution of land in urban agglomerations to subserve the common good".
[755 B D] 5.If the vacant lands which have vested in the State are also to be disposed of as stipulated under S.23 strictly keeping in view the spirit and object or the Act, exemption u/s20(1)(b) cannot be granted to holders of such lands to dispose of the lands in the manner they like, to the persons they prefer, at the price they dictate, for clearing their debts.
If it is conceded that indebtedness amounts to an undue hardship, then it may cover the debts incurred even after the commencement of the Act.
[756 D, E] 6.This Court has already held that Section 27(1) in so far as it imposes restriction on transfer of any urban or urbanisable land with a building or of a portion of such building which is within ceiling area, was invalid.
The said sub section (1) of Section 27 was struck down being unconstitutional.
Section 26 of the Act also imposes certain restrictions on transfer of vacant land even within ceiling limit.
It can therefore be stated that Section 26(1) suffers from the same vice.
But neither in that case nor in this case, this court was or is concerned with Section 26.
As such, it is not necessary to express any opinion in respect of Section 26 of the Act, while considering the issue involved in the present appeals.
[756 G, H; 757 A, B] Maharao Sahib Shri Bhim Singhji etc.
vs Union of India & Ors., , referred to. </s> |
<s>[INST] Summarize the following judgement: Appeal No. 5897 of 1983.
From the Judgment and Order dated 25.7.1979 of the Madras High Court in Tax Case No. 54/76 (Reference No. 35/76.) T.A. Ramachandran and Janki Ramachandran for the Appellant.
J. Ramamurthy, P. Parmeswaran (NP), Ranbir Chandra (NP), T.V. Ratnam and Ms. A. Subhashini (NP) for the Respondent.
The Judgment of the Court was delivered by R.M. SAHAI, J.
Legal issues that arise for consideration in this appeal, directed against the decision of the High Court in Commissioner of Income Tax, Tamil Nadu vs Universal Radiators, on questions of law referred to it in a reference under the Income Tax Act (in brief 'the Act ') are, if the excess amount paid to the assessee due to fluctuation in exchange rate was taxable either because the payment being related to trading activity it could not be excluded under Section 10(3) of the Act even if it was casual and non recurring in nature or it was stock in trade, therefore, taxable as revenue receipt or in any case the compensation for the loss of goods could not be deemed anything but profit.
Shorn of details the assessee, a manufacturer of radiators for automobiles booked copper ingots from a corporation in the United States of America for being brought to Bombay where it was to be rolled into strips and sheets and then despatched to assessee for being used for manufacture.
While the ingots were at sea, hostilities broke out between India and Pakistan and, the vessel carrving the goods was seized by the authorities in Pakistan.
The claim of the assessee for the price paid by it for the goods was ultimately settled in its favour by the insurer in America.
Meanwhile the Indian Rupee had been devalued and, therefore, in terms of rupees the appellant firm got Rs. 3,43,556 as against their payment 780 of Rs. 2,00,164 at the old rate.
The difference was credited to profit on devaluation in the Profit and Loss Account.
The claim of the appellant that the difference being a casual receipt and non recurring in nature, it was not liable to tax, was not accepted by the Income Tax Officer.
In appeal the Appellate Assistant Commissioner was of opinion that the receipt was one which did not arise directly from carrying on business by the assessee but was incidental to it.
But he did not find any merit in the submission that the ultimate realisation was in nature of capital gains and not revenue receipt.
In further appeal the Tribunal held that when the goods were seized by the Pakistan authorities the character of the goods changed and it became sterlised and, therefore, it ceased to be stock in trade of the assessee.
The Tribunal held that the devaluation surplus was in nature of.
capital receipt and not a profit made by the assessee in course of business.
It further found that the money which came to the assessee was as a result of the settlement of the insurance claim and, therefore, the profit that resulted from it could not be considered to have arisen in normal course of business.
When the matter came to the High Court, in its advisory jurisdiction, at the instance of the department, on the following questions of law, (i) Wether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law, in holding that the devaluation surplus earned by the assessee consequent to the settlement of the claim by the insurance company is not assessable as revenue receipt for the assessment year 1967 68 ? (ii)Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the profit earned by the assessee on account of devaluation of Indian Currency was not in the course of carrying on of the business or incidental to the business ? It did not agree with the Tribunal as according to it if the assessee had got the goods imported into India and sold them it would have got higher amount as a result of devaluation.
Therefore, it held that there could be no dispute that the assessee was liable to pay tax on difference of the sale price and the cost.
The High Court further held that the nature of the amount which came in the hands of the assessee was revenue receipt.
It 781 did not agree that the payment made to the assessee was otherwise than for business, as the whole transaction was part and parcel of the business carried on by the assessee and could not be described as extraneous to it.
The High Court thus negatived the claim of assessee for two reasons, one, the difference in the cost price and the sale price, and the other, that it was revenue receipt.
In observing that, 'If the assessee had got the goods imported into India and had sold them at a higher rate, which would have increased as a result of devaluation, then there can be no dispute that the assessee would be liable to tax on the difference between the sale price and the cost ', the High Court oversimplified the issue.
May be any profit or gain accruing to an assessee as a result of difference between the sale price and the cost price in a year is income.
And by that yardstick the devaluation surplus, irrespective of any other consideration, may be receipt which in common parlance may be income.
But liability to pay tax under the Act arises on the income accruing to an assessee in a year.
The word 'income ', ordinarily in normal sense, connotes any earning or profit or pin periodically, regularly or even daily in whatever manner and from whatever source.
Thus it is a word of very wide import.
Clause (24) of Section 2 of the Act is legislative recognition of its elasticity.
Its scope has been widened from time to time by extending it to varied nature of income.
Even before it was defined as including profits, gains, dividends and contributions received by a trust it was held to be a word, 'of broadest connotation ' which could not be 'understood in restricted or technical sense '.
The wide meaning of the word was explained by this Court in Raghuvanshi Mills Ltd., Bombay vs Commissioner of Income Tax, Bombay city, and it was emphasised that the expression, 'from whatever source derived ' widened the net.
But exigibility to tax is not the same as liability to pay tax.
The former depends on charge created by the Act and latter on computation in accordance with the provisions in the Act and the rules.
Surplus in consequence of devaluation of the currency was undoubtedly receipt, but the liability to pay tax on it could arise only if it was income for purposes of the Act and was not liable to be excluded from computation under any of the provisions of the Act or the rules framed thereunder.
Section 10 of the Act provided for exclusion of certain income from computation.
One of its subsection, which is relevant for this appeal, during the period under dispute, stood as under, In computing the total income of a previous year of any 782 person, any income failing within any of the following clauses shall not be included (3) any receipts which are of a casual and non recurring nature, unless they are (i) (ii)receipts arising from business or the exercise of a profession or occupation; or (iii) In substantive clause, an income which was casual and non recurring in nature was excluded from being charged as income of the assessee.
Due to use of word, 'and ', existence of both the conditions was mandatory.
Absence of any disentitled the assessee from claiming any benefit under the clause.
C Casual ' according to dictionary means 'accidental or irregular '.
this meaning was approved by this Court in Ramanathan Cheuiar vs Commissioner of Income Tax, Madras, Non recurring is one which is not likely to occur again in a year.
But an income even after satisfying the two conditions may still not have been liable to be excluded if it fell in one of the exceptions carved out by the proviso.
In other words, the receipt should not only have been casual and non recurring only but it should not have been 'receipts arising from business '.
To put it the other way, if an income arose in the usual course of business, then it would not have been liable for exclusion even if it was casual or non recurring in nature. 'Casual ', as explained earlier, means accidental or irregular.
But if the irregular or the accidental income arose as a result of business activity, then even if it was non recurring, it may not have fallen outside the revenue net.
The real test, therefore, was the nature and character of income which accrued to the assessee.
The casual nature of it or non recurring nature were only aids to decide if the nature of income was in the course of business or otherwise.
In Raghuvanshi Mills Ltd. (Supra) it was held by this Court that a receipt even if it was casual and non recurring in nature would be liable to tax if it arose from business. 'Business ' has been defined in Clause ' 13 of Section 2 of the Act as including 'any trade, commerce or manfacture or any adventure or concern in the nature of trade, commerce or manufacture '.
In Barendra Prasad Ray and Ors.
vs Income Tax Officer, it has been held, by this Court, that the expression, 783 'business ' is of very wide import and it means an activity carried on continuously and systematically by a person by the application of his labour and skill with a view to earning the income.
The width of the definition has been recognised, by this Court, even in S.G. Mercantile Corporation Pvt. Ltd. vs Commissioner of Income Tax and Commissioner of Income Tax vs Calcutta National Bank, And even a single venture has been held to amount to business and the profit arising out of such a venture has been held to be taxable as income arising from business.
In Commissioner of Income Tax, Mysore vs Canara Bank Ltd., (1967) LXIII ITR 328 it was held, by this Court, that where money was lying idle and the blocked balance was not employed for internal operation or for business by the bank the profit accruing to the assessee on the blocked capital due to fluctuation in exchange rate could not be held to be income arising out of business activity or trading operation.
The ratio reflects the rationale implicit in sub section (3) of Section 10 of the Act.
An income which was casual in nature could be brought in the revenue net only if it arose from business.
In other words the receipt or profit of the nature covered by Section 10(3) could be brought to tax if it was result of any business activity carried on by the assessee.
The assessee carried on business of manufacturing radiators and not ingots.
They were imported to be converted into strips and sheets at Bombay.
The link which could create direct relationship between the finished goods and raw material was snapped even before it reached Bombay.
Payment made for loss of such goods did not bear any nexus with the assessee 's business.
May be that if it would have reached, it could have been after conversion into strips and sheets used as raw material.
But so long it did not reach Bombay and was not converted into raw material, the connection it bore with the assessee 's business was remote.
And any payment made in respect of it could not be said to accrue from business.
In Strong and Company of Romsay, Limited vs Woodifield (Surveyor of Taxes), 5 Tax Cases p.215, a converse case where the assessee claimed deduction of certain payments made to a customer, for the injury caused to him by falling off a chimney due to the assessee 's servant 's negligence, it was held, "it does not follow that if a loss is in any sense connected with the trade, it must always be allowed as a deduction; for it may be only remotely connected with the trade or 784 it may be connected with something else quite as much as or even more than with the trade.
I think only such losses can be deducted as are connected with it in the sense that they are really incidental to the trade itself.
" The word 'from ' according to dictionary means 'out of.
The income thus should have accrued out of the business carried on by the assessee.
An income directly or ancillary to the business may be an income from business, but any income to an assessee carrying on business does not become an income from business unless the necessary relationship between the two is established.
What was lost on the seas was not raw material, but something which was capable of being converted into raw material.
The necessary nexus between ingots and radiators which could have resulted in income from ingots never came into being.
Thus any devaluation surplus arising out of payment paid for loss of ingots could not be treated as income from business of the.
assessee.
For deciding the next aspect, namely, if the excess payment due to devaluation could be treated as revenue receipt, two questions arise, one, if the ingots were stock in trade and other the effect in law of its being blocked or sterlised.
Stock in trade is goods or commodity in which the assessee deals in course of business activity.
Good or commodity may be capital or revenue depending on.
if it is bought or sold or is used or exploited by the assessee.
Since the ingots by itself were not raw material and were not usable by the assessee for the business of manufacturing radiators, unless they were converted into strips and sheets, they could not be treated as stock in trade.
The buying of the ingots by the assessee was not a part of its trading activity.
Income from goods purchased for business is not an income from business.
Ratio in State Bank of India vs Commissioner of Income Tar, Emakultam, relied on behalf of department is not helpful ' as the Bank of Cochin, as part of its banking business, had been purchasing cheque payment orders, mail transfers, demand drafts etc.
drawn in foreign currencies which were sold or en cashed through assessee correspondent banks in foreign currencies concerned and proceeds credited to the current account of the assessee and therefore the foreign exchange was held to be stock in trade of the assessee, and any increase in value of foreign currency resulting in excess credited to the a 'ssessee 's account as a result of devaluation was held to be in consequence of assessee 's business activity.
785 Even assuming it was stock in trade, it was held by this Court in Commissioner of Income Tax vs Canara Bank Lid, (supra) that stock intrade, if it gets blocked and sterlised and no trading activity could be carried with it, then it ceased to be stock in trade, and any devaluation surplus arising on such capital due to exchange rate would be capital and not revenue.
Applying the ratio of this case, the copper ingots, which even if assumed to be stock in trade, were blocked and sterlised due to hostilities between India and Pakistan, and, therefore, it ceased to be stockin trade and any surplus arising due to exchange ratio in the circumstances was capital receipt only.
Coming to the issue whether devaluation surplus earned by the assessee consequent on the settlement of the claim by the insurance company could be treated as revenue receipt, it may be stated that taxability on profit or deduction for loss depends on whether profit or loss arises in course of business.
The courts have maintained a distinction between insurance against loss of goods and insurance against loss of profits.
The latter is undoubtedly taxable as is clear from the decision in Raghuvanshi Mills (supra) where any amount paid by the insurance company 'on account of loss of profit ' was held taxable.
But what happens where the insurance company pays any amount against loss of goods.
Does it by virtue of compensation become profit and is taxable as such.
Taxability of the amount paid on settlement of claim by the insurance company depends both on the nature of payment and purpose of insurance.
Raghuvanshi Mills ' decision is an authority for the proposition where the very purpose of insurance itself is profit or gain.
Result may be the same where the payment is made for goods in which the assessee carried on business.
Any payment being accretion from business, the excess or surplus accruing for any reason may be nothing but profit.
(see the King vs B. C Fir and Cedar Lumber Company, Ltd. , Green (HM Inspector of Taxes) vs J. Gliksten & Son, Ltd Reports of Tax Gases Vol.14 p.365, Commissioner of Income Tax, Bombay City III vs Popular Metal Works & Rolling Mills (1983) ITR Vol.
142 p.361.
But where payment is made to compensate for loss of use of any goods in which the assessee does not carry on any business or the payment is a just equivalent of the cost incurred by the assessee, but excess accrues due to fortuitous circumstances or is a windfall, then the accrual may be a receipt, but it would not be income arising from business, and, therefore, not taxable under the Act.
In Commissioner of Inland Revenue vs William 's Executors, 26 Tax Cases p.23, 786 the distinction was explained thus, "A manufacturer can, of course, insure his factory against fire.
The receipts from that insurance will obviously be capital receipts.
But supposing he goes further, as the manufacturer did in that case, and insures himself against the loss of profits which he will suffer while his factory is out of action; it seems to me it is beyond question that sums received in respect of that insurance against loss of profits must be of a revenue nature.
" The assessee did not carry on business of buying and selling ingots.
The compensation paid to the assessee was not for any trading or business activity, but just equivalent in money of the goods lost by the assessee which it was prevented from using.
The excess arose onsuch payment in respect of goods in which the assessee did not carry on any business.
Due to fortuitous circumstances of devaluation of currency, but not due to any business or trading activity the amount could not be brought to tax.
The Appellate Tribunal in the instant case had found, "the profit on account of devaluation is not business profit or income as it has nothing to do with the business or trading activity of the assessee.
The profit arose since the clai m was settled by the Insurance Company and the Indian rupee was devalued.
Even without paying for the goods contracted for, the assessee by an extraordinary set of fortuitous circumstances earned a profit which by its very nature is causal and non recurring.
In this view of the matter the profit cannot be charged to tax." The High Court of Kerala in Commissioner of Income Tax vs Union Engineering Works, held : "In the instant case, the excess profit, as found by the Tribunal, was not a receipt arising from business; nor was it, as admitted on both sides, capital gains.
This was part of the compensation received by the assessee from the insurer for damage caused to its goods.
The claim for the compensation for damage caused to the goods had. been 787 settled with the insurer, and the sum, so settled did am include any excess profit.
The excess profit arose entirely due to the , devaluation.
This excess amount was in the nature of a windfall, being the unexpected fruit of devaluation, and it can not, therefore, be regarded as a receipt arising from business though it may be said in a sense to be a receipt in the course, of business.
We hold that the Tribunal had correctly held that the sum of Rs.13,455.75 received by the assessee was not a recipt arising from its business within the meaning of section 10(3)(ii) 'of the Income Tax Act, 1961.
" We are of the view that on the facts of that case, the High Court of Kerala was right in law in upholding the findings of the Tribunal while on the facts found in the instant case, the High Court, of Madras was wrong in law in reversing the well considered order of the Tribunal.
For reasons stated by us this appeal suceeds and is allowed.
Both the questions referred by the Tribunal to the High Court are answered in the affirmative, i,e, in favour of assessee and against the department.
The assessee shall be entitled to its costs.
N. V. K. Appeal allowed. [/INST] The appellant assessee a manufacturers of radiators for automobiles booked copper ingots from a corporation In the United States of America for being brought to Bombay where it was to be rolled Into strips and sheets and then despatched to the assessee for being used for manufacture.
While the ingots were at sea, hostilities broke out between India and Pakistan and, the vessel carrying the goods was seized by the authorities in Pakistan.
The claim of the assessee for the price paid by it for the goods was ultimately settled in its favour by the Insurer in America.
The Indian Rupee In the meanwhile had been devalued and, therefore, in terms of rupees the appellant firm got Rs. 3,43,556/ as against their payment of Rs. 2,00,164/ at the old rates.
The differnece was credited to profit on devaluation in the Profit and Loss Account.
The claim of the appellant that the difference being a causal receipt and non recurring In nature, and as such was not liable to tax, was not accepted by the IncomeTax Officer.
The Appellate Assistant Commissioner rejected the appeal of the assessee, being of the opinion that the receipt was one which did not arise directly from carrying on business by the assessee but was the incidental 776 to it, and not finding any merit in the submission that the ultimate realisation was in the nature of capital gains and not revenue recipt.
In further appeal by the assessee, the Tribunal held that when the goods were seized by the Pakistan authorities the character of the goods changed and it became sterilized and, therefore, it ceased to be stock intrade of the assessee, that the devaluation surplus was in nature of capital receipt and not a profit made by the assessee in the course of business, that the money which came to the assessee was as a result of the settlement of the insurance claim and, therefore, the profit that resulted from it could not be considered in the normal course of business.
The High Court in its advisory jurisdiction at the instance of the ' Department negatived the claim of the assessee for two reasons, one the difference in the cost price and the sale price, and the other that it was revenue receipt, and did not agree with the Tribunal as according to it if the assessee had got the goods imported into India and sold them it would have got higher amount as a result of devaluation, and held that there could be no dispute that the assessee was liable to pay tax on the difference of the sale price and the cost.
It further held that the nature of the amount which came in the hands of the assessee was a revenue receipt, and did not agree that the payment made to the assessee was otherwise than for business, as the whole transaction was part and parcel of the business carried on by the assessee and could not be described as extraneous to it.
In the assesses appeal to this Court, on the question whether the excess amount paid to the assessee due to fluctuation in exchange rate was taxable or not.
Allowing the appeal, this Court, HELD : 1.
The word 'income ', ordinarily in normal sense, connotes any earning or profit or gain periodically, regularly or even daily in whatever manner and from whatever source.
It is thus a word of very wide import.
Section 2(24) of the Income Tax Act is legislative, recognition of its elasticity.
Its scope has even widened from time to time by extending it to varied nature of income.
Even before it was defined as including profits, gains, dividends and contributions received by a trust it was held to be a word, 'of broadest connotation ' which could not be understood in restricted or technical sense. ' [781 D E] 777 Raghuvanshi Mills Ltd., Bombay vs Commissioner of Income Tax, Bombay City, , referred to.
[781 E] 2. 'Casual ' means accidental or irregular.
If the irregular or the accidental income arose as a result of business activity, them even if it was non recurring, it may not have fallen outside the revenue net.
The real test, is therefore, what was the nature and character of the income which accrued to the assessee.
The causal nature of it or non recurring nature were only aids to decide if the nature of income was in the course of business or otherwise.
[782 F] Barendra Prasad Ray and Ors.
vs Income Tax Officer, ; section G. Mercantile Corporation Pvt. Ltd. vs Commissioner of Income Tax, ; Commissioner of Income Tax vs Calcutta National Bank, and Commissioner of Income Tax, Mysore vs Canara Bank Ltd. (1967) LXIII ITR 328, referred to.
[782 G, H, 783 B] 3.
An income which was casual in nature could be brought In the revenue net only if it arose from business.
In other words the receipt or profit of the nature covered by Section 10(3) could be brought to tax if it was the result of any business activity carried on by the assessee.
[783 D] In the instant case, the assessee carried on business of manufacturing radiators and not ingots.
The ingots were imported to be converted into strips and sheets at Bombay.
The link which could create direct relationship between the finished goods and the raw material was snapped even before it reached Bombay.
Payment made for loss of such goods did not bear any nexus with the assessee 's business.
May be that if it would have reached, it could have been 'after conversion into strips and sheets used as raw material.
But so long as it did not reach Bombay and was not converted into raw material, the connection it bore with the assessee 's business was remote.
And any payment made in respect of it could not be said to accrue from business.
[783 E] Strong and Company of Romsey, Limited vs Woodifieid (Survevor of Taves), 5 Tax Cases p.215, referred to.
[783 F] 4.
An income directly or ancillary to the business may be an income from business, but any income to an assessee carrying on business does not become an income from business unless the necessary relationship 778 between the two is established.
[784 B] In the Instant case, what was lost was not raw material, but something which was capable of being converted into raw material.
The necessary nexus between ingots and radiators which could have resulted in income from ingots never came into being.
Thus any devaluation surplus arising out of payment paid for loss of ingots could not be treated as income from business of the assessee.
[784 C] section Income from goods purchased for business is not an income from business.
In the instant case buying ingots by the assessee was not a part of its trading activity.
[784 F] State Bank of India vs Commissioner of Imcome Tax, Ernakulam, , distinguished.
[784 F] 6.
Taxability on profit or deduction for loss depends on whether profit or loss arises in the course of business.
The courts have maintained a distinction between insurance against loss of goods and insurance against loss of profits.
The latter is undoubtedly taxable.
Taxability of the amount paid on settlement of claim by the insurance company depends both on the nature of payment and purpose of insurance.
[785 D E] 7.
Any payment being accretion from business, the excess or surplus accruing for any reason may be nothing but profit.
But where payment is made to compensate for loss of use of any goods in which the assessee does not carry on any business or the payment is a just equivalent of the cost incurred by the assessee, but excess accrues due to fortuitous circumstances or is a windfall, then the accrual may be a receipt, but it would not be income arising from business, and, therefore, not taxable under the Act.
[785 F G] Commissioner of Inland Revenue vs William 's Executors, 26 Tax Cases p.23, referred to.
[785 H] In the instant case, the assessee did not carry on business of buying and selling of ingots.
The compensation paid to the assessee was not for any trading or business activity, but just equivalent in money of the goods lost by the assessee which it was prevented from using.
The excess arose on such payment in respect of goods in which the assessee did not carry on any business.
Due to fortuitous circumstances of devaluation of currency, but not due to any business or trading activity the amount could not 779 be brought to tax.
[786 C D] Commissioner of Income Tax vs Union Engineering Works, , approved.
[786 G] </s> |
<s>[INST] Summarize the following judgement: Appeal No. 1718 of 1984.
From the Order dated 17.11.83 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. ED (SB) (T) 338/78 D (Order No. 698/83 D).
A.K. Ganguli, B. Sen, A.K. Chitale, B.R.L. Iyengar J. Ramamurti, Mrs. Radha Rangaswami, P. Parmeswaran, C.V. Subba Rao, C. Ramesh, Virender Kaushal, Praveen Kumar, Vivek Gambhir, S.K. Gambhir, P.H. Parekh, B.N. Agarwal, A.V. Phadnis, Kh.
Nobin Singh, M. Veerappa, Ashok Sagar, Ravinder Narain, D.N. Misra (For JBD & Co.,) E.C. Vidyasagar for L.R. Singh, R. Vaigai and R.K. Maheshwari for the appearing parties.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
With a view to induce the Sugar Factories in the country to produce more and also to commence their operations early in the year, the Government of India have been issuing notifications, from time to time, providing for rebate in the Excise Duty in certain circumstances.
These notifications were issued by the Central Government 763 in exercise of the power conferred by Sub Rule (1) of Rule 8 of the Central Excise Rules, 1944.
We are concerned in these appeals with four such notifications namely (1) the Notification dated 28.9.72 (applicable to the Sugar Year 1972 73), (2) Notification dated 4.10.73 (applicable to the Sugar Year 1973 74), (3) Notification dated 12.10.74 (applicable to the Sugar Year 1974 75) and (4) the Notification dated 30.9.76 (applicable to the Sugar Year 1976 77). 'Sugar year ' means the year commencing on and with 1st October and ending with the 30th of September of the following year.
The interpretation of these notifications is involved in this batch of appeals.
In so far as it is material, the notification dated 28.9.72 and the notification dated 4.10.73 are similar.
So are the notifications dated 12.10.74 and 30.9.76.
It would be appropriate if we set out the notification dated 28.9.72 in its entirety "Notification No. 203172 dated 28.9.1972 In exercise of the powers conferred by sub rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts sugar, described in column(2) of the Table below and failing under sub item (1) of Item No.1 of the First Schedule to the (1 of 1944), from so much of the duty of excise leviable thereon as is specified in the corresponding entry in column (3) of the said Table.
TABLE section No. Description of Sugar Duty of Excise (1) (2) (3) 1.
Sugar produced in a factory during the Rupees period commencing from the 1st day of forty per October, 1972 and ending with the 30th quintal day of November, 1972 which is in excess of the quantity of sugar produced during the corresponding period in 1971.
764 2.Sugar produced in a factory during the period commencing from the 1st day of December, 1972 and ending with the 30th day of April, 1973 Rupees which is in excess of 115% of the quantity twenty of suggar produced during the period commencing per from the 1st day of Decmber, 1971 and ending with quintal the 30th day of April, 1972.
3.Sugar produced in a factory during the period commencing from the 1st day of May, 1973 and Rupees ending with 30th day of June, 1973 which is in twenty excess of the quantity of sugar produced per during the corresponding period in 1972.
quintal 4.Sugar produced in factory during the period commencing from the 1st day of July 1973 and ending with the 30th day of September, 1973 Rupees which is in excess of the quantity of sugar twenty produced during the corresponding period in 1972.
per quintal Provided that the exemption under this notification shall not be admissible to a factory (a) which did not work during the base period, or (b) which had only a trial run in the base period, or (c) which commences production for the first time on or after the 1st day of October, 1972 : Provided further that in computing the production of sugar during the periods mentioned in column (2) of the said Table, (a) the data, as furnished in Form R.G. 1 prescribed in Appendix I to the Central Excise Rules, 1944, or in such other record as the Collector may prescribed under rule 53 or rule 173G of the said rules, shall be adopted : 765 (b) any sugar obtained from reprocessing of sugarhouse products left over in process at that end of the base period or earlier shall b e taken into account ; and (c) any sugar obtained by refining gur or Khandasari sugar, or any sugar obtained by reprocessing of defective or damaged sugar or brown sugar, if the same has already been included in the quantity of sugar produced, shall not be taken into account.
Explanation I A factory shall be deemed to have had a trial run during the base period only if, on first going into production, the period during which actual crushing was done during the base period was less than 40 per cent of the average duration of the season in the State in which the factory is situated.
Explanation 11 In this notification, the expression, 'base period ', means the period commencing from the 1st day of October, 1971 and ending with the 30th day of September, 1972.
" Though the Sugar Year extends over a period of twelve months commencing from 1st of October, the period commencing with 1st December and ending with 30th April is said to be the peak production period.
Most of the sugar factories were commencing their operations only in the month of December.
Either with a view to induce these sugar factories to produce more or with a view to induce them to commence their operation early in the sugar year, the rebate provided for producing sugar in the months of October and November in excess of the corresponding period in the previous sugar year was kept relatively high.
The scheme of the notification dated 28.9.72 appears to be this (1) If during the months of October and November 1972 (in the Sugar Year 1972 73), a factory produced sugar in excess of the quantity of sugar produced by it during the months of October November 1971, such factory was granted rebate in the Excise Duty at the rate of rupees forty per quintal in so far as the excess production is concerned.
(2) Rebate for the period 1st December 1972 to 30th April, 1973 was 766 available at the rate of rupees twenty per quintal provided the production of sugar during the said period was in excess of 115% of the quantity of sugar produced by the said factory during the corresponding period in the previous Sugar Year, in so far as the excess production is concerned.
(3) For the months of May and June 1973 rebate at the rate of rupees twenty per quintal was available provided the factory produced more sugar than it produced during the corresponding months in the previous Sugar Year.
The said rebate was available again only with respect to the excess production.
(4) For the period commencing from 1st July, 1973 and ending with 30th of September, 1973, rebate was available at the rate of rupees twenty per quintal provided the factory produced sugar in excess of the quantity produced during the corresponding period in the previous Sugar Year.
This rebate too was confined to the excess production.
However, the benefit of the rebate mentioned in any of the clauses aforesaid was not available to a factory which inter alia did not work during the 'base period '.
The expression 'base period ' was defined in Explanation 11.
It meant the period commencing from the 1st day of october 1971 and ending with the 30th day of September, 1972 (Previous Sugar Year).
The sugar factories (concerned with the sugar year 1972 73) did not produce any sugar in one or the other of the four blocks (mentioned in the table contained in the Notification) in the base year (previous sugar year).
During the current sugar year, however, they produced certain quantity of sugar during that block period.
To be more precise, take factory A.
It produced 1000 quintals of sugar in the months of October November, 1972 (Block period (1) but had not produced any sugar whatsoever in the corresponding period (October November, ' 1971) in the base year.
The question arose whether in such a situation, Factory A was entitled to the benefit of rebate provided in Clause (1) of the Table contained in the aforesaid notification with respect to the said 1,000 quintals ? The contention of the factory was that it was so entitled, whereas according to the Revenue, it was not.
It is brought to our notice that even before the controversy actually arose between the parties, the Committee of the Sugar Mill Owners ' Association addressed a letter to the Ministry of Finance, Government of 767 India seeking a clarification as to the meaning and purport of the aforesaid notification.
The letter written by the Committee read as follows "I am to refer to the Notification No. G.S.R. dated 28th September, 1972, issued by the Union Ministry of Finance (Department of Revenue & Insurance), New Delhi, on the above subject (copy enclosed for ready reference).
In this connection, the Government had issued a similar Notification on 13th Oct. 1971, on the same subject.
On this Notification, in response to an enquiry made by the Committee of the Association, the Board had clarified as per their letter No. F. No.14/33 71/CX. 1 dated 26th November, 1971, that a factory which had worked during the base period i.e. during the period commencing from 1st day of October, 1970 and ending with 30th day of September, 1971, though it had not worked during the period from 1st October, 1970 to 30th November, 1970, and the production during this period was nil, would be entitled to the excise rebate at the notified rate on its entire production achieved during the month of October and November, 1971.
As th e Notification issued this year is also on similar lines, the Committee presume that the clarification given by the Board last year will apply to the Notification issued this year also, i.e., where a factory has worked in the base period (1st October, 1971 to 30th September, 1972) it will be entitled to the full rebate on its entire production during the various periods mentioned in the Notification, although during the corresponding periods in the last season, the production may be nil.
The Committee shall be glad if you kindly confirm whether their above presumption is correct.
Thanking you for a line in reply '.
In this letter dated 1st November, 1972 the Ministry of Finance intimated the Committee that the presumption made by the Committee is confirmed in respect of the established factories only.
Later on, however, the Government of India revised their opinion which has led to the present controversy.
768 It is brought to our notice that the sugar factories are governed by and follow the procedure prescribed by Rule 173 G of the Central Excise Rules, which rule occurs in Chapter VII A 'Removal of Excisable Goods on Determination of Duty by producers, Manufacturers or Private WareHouse Licencees.
" Rule 173 G requires every assessee to keep an accountcurrent with the Collector separately for each excisable goods, in the suc form and manner, as the Collector may require.
The rule requires the assessee to make credit periodically in such account current, by cash payment into the treasury, so as to keep the balance in such account cumrent sufrent to cover the duties due on the goods intended to be removed at any time.
Every such assessee has to pay the duty determined for each consignment by debit to such account current before removal of goods.
The Rules further require every assessee to furnish a monthly return in the prescribed form, on the basis of which, assessment is completed by the appropriate officer.
Coming back to the facts of these appeals, the claim for rebate made by these factories was allowed in the first instance but later proceedings were initiated to recover back, or re adjust, as the case may be, the benefit already allowed.
This was the phenomenon all over the country.
These disputes were carried to High Courts.
The main dispute was the same as indicated hereinabove.
The factory has produced a certain quantity of sugar in block period (i) (or, for, that matter, any other block period) in the sugar year 1972 73, but had not produced any sugar whatsoever in the corresponding period in the base year (previous sugar year) but has produced some quantity of sugar during the base year as such; whether such factory is entitled to the rebate prescribed in clause (i) (or such other clause, as may be applicable) of the said Notification ? Since the Notifications for 1972 73 and 1973 74 are more or less similar, disputes raised before High Courts pertained to both these years.
(Indeed, the said issue is common to the other two notifications concerned herein as well, with some difference, as we shall indicate at the proper stage).
It appears that almost all the High Courts except Karnataka have held in favour of the factories.
In Patna High Court, there appears to be a conflict of opinion.
Karnataka High Court has, however, held in favour of the Union of India.
The first of the reported decisions is of the Andhra Pradesh High Court (Chinnappa Reddy, J., as he then was) in Etikoppaka Co operative 769 Agricultural Society vs Union of Inida, The reasoning in the said Judgment has been followed by most of the other High Courts.
See ; 1982 (59) E.L.T. 409 (AHahabad) ; & Haryana); and Shri Ganguli, learned counsel for the Union of India contends as follows : Language of the Notifications (pertaining to the year 1972 73 and 1973 74) is quite clear and unambiguous.
The benefit of rebate is available only where the "sugar produced in a factory during the period commencing from the 1st day of October, 1972 and ending with the 30th day of November, 1972 which is in excess of the quantity of sugar produced during the corresponding period in 1971" to take clause (i) of the Notification relating to 1972 73.
The clause contemplates and is based on the premise that sugar is produced during October November, 1972 as well as October November, 1971.
If no sugar was produced during the corresponding period in the previous sugar year (October November, 1971), the very clause is inapplicable.
The contention of the factory owners, which has no doubt been accepted by a majority of High Court, does voilence to the plain language of the clause.
The interpretation placed by the factoryowners leads to certain absurd consequences.
Learned counsel gave more than one illustration to emphasise his submission.
Take a. case where a factory has produced one thousand quintals of sugars in October November 1971 and has also produced one thousand quintals in October November 1972.
In such a situation the factory would not get any rebate in terms of the notification dated 28.9.72, whereas another factory which may not have produced any sugar whatsoever in October November 1971 but has produced one thousand quintals of sugar in October November 1972, gets the rebate at the rate of rupees forty per quintal.
This would really amount to, says the counsel, punishing the first factory more efficient factory for producing the sugar in the previous year And to rewarding the second one the indolent factory which did not produce any sugar during OctoberNovember, 1971.
Another illustration given by the learned counsel is this; a factory had produced five thousand quintals of sugar during the period 1st December, 1971 to 30th April, 1972; it produces the very some quantity again during the period 1st December 1972 to 30th April, 1973; such a factory would not be entitled to any rebate under clause (2) of the said notification; but another factory which had produced, say, just 1000 quintals during the period December 1, 1971 to April 30, 1972 but produces 770 five thousand quintals during the period December 1, 1972 to April 30, 1973 would get the benefit of rebate on 4000 quintals.
This again amounts to, says the counsel, rewarding the inefficient and indolent and punishing the efficient.
The learned counsel seeks to reinforce his argument by referring to clause (2).
It relates to the period 1st December 1972 to 30th April 1973.
Rebate in the sugar produced during this period is available only if it is in excess of 115 per cent of the quantity of sugar produced during the period December 1, 1971 to April 30, 1972.
If the production is nil during the corresponding period in the previous sugar year, asks the counsel, how is one to work out 115% of it.
What is 115% of zero ? asks he.
For all these reasons counsel says, nil production cannot be equated to "the quantity of sugar produced. . in clause (1).
Counsel also says that Clause (1) of the first Proviso in the said notification should be harmonised with the several clauses mentioned in the Table and that no interpretation should be adopted which renders any part of the said notification superfluous.
We find ourselves unable to agree with the learned counsel for the Union of India.
While we agree that the several clauses in the Notification must be read together, harmonised and reasonably understood, we cannot also ignore the underlying object and purpose of the notification.
We Also agree that an interpretation which leads to absurd consequences should be avoided.
Even so, we are afraid, we cannot agree with the learned counsel.
The object behind the notification was evidently not only to induce the factories to produce more sugar but also to induce them to start their production early in the sugar year.
The object appears to be also to induce the factories to keep on producing the sugar all the year round, which they may perhaps not have done otherwise.
Running the factories during the off season (we are told, off season means October November period and then again the period from May June to September), may have its own problems which may increase the cost of production.
Be that as it may, the main issue is whether the words " the quantity of sugar produced during the corresponding period. . do not take in the case of a factory which has not produced any sugar whatsoever during the relevant corresponding period ? On a consideration of the rival points of view, we are of the opinion that it does take in.
Holding otherwise would have this absurd consequence : a factory which has produced, say, just one quintal of sugar during the relevant corresponding period and has produced 1000 quintals during October November, 1972 would qualify for the rebate on 999 quin 771 tals while another factory which has not produced any sugar nil production but has produced 1000 quintals during October November, 1972, would not qualify.
How does this interpretation advance the purpose of the notification, is difficult to appreciate.
Coming to the second illustration given by the learned counsel, we must say that the idea behind the said notification is to induce the manufacturers to produce more in the current sugar year than what they have produced in the previous sugar year or during the previous corresponding period in the previous sugar year, as the case may be.
If this is the object there is nothing absurd in saying that a factory which has produced five thousand tons during December 1, 1971 to April 30, 1972 and produces the.
very same quantity during the period December 1, 1972 to April 30, 1973, does not qualify for rebate under clause (2).
There is no reason or occasion for granting him any rebate.
But where a factory has not produced any sugar or has produced a particular quantity of sugar during the said period in the previous sugar year but produces a larger quantity during the said period in the current sugar year, it must be rewarded.
It may be remembered that no manufacturer produces sugar merely for the sake of rebate.
Rebate is an inducement, an additional attraction.
It is not as if without rebate provided by these notifications, no one would have produced sugar.
We are also unable to see any difficulty in operating clause (2) of the said notification.
There is no arithmetical difficulty in working out 115% of zero; it is zero.
What applies to clause (1) applies equally to clauses (2), (3) and (4).
Our understanding is reinforced and supported by clause (a) of the first proviso.
It says that the benefit of the said rebate would not be available to a factory 'which did not work during the base period.
" Why does it say so? What is its meaning and implication? It is only that the factory need not necessarily have worked during each of the corresponding periods in the base year; it is enough if it has worked in the base year.
We may point out that a majority of the High Courts in the country have adopted the very same interpretation as has been placed by us.
It is then argued by the learned counsel for the appellant that exemption notifications should be strictly concluded.
There is no quarrel with the proposition but there is another equally valid principle that such notifications should be given their due effect, keeping in view the purpose 772 underlying.
We must reiterate that no factory owner would keep his factory idle during a particular period only with a view to produce sugar during the same period in the next sugar year and earn rebate in the next year.
More particularly, it can not reasonably be expected that a factory owner would deliberately keep his factory idle during the peak production period (December to April) only with a view to produce sugar during that period next year and earn rebate in such next year.
It would be unrealistic to say so.
Actually these notifications were being issued every year confined to that year.
They were being issued just on the eve of the sugar year or a few days after the commencement of the sugar year and there were variations in the relevant clauses from year to year.
Construed realistically, we see no room for any absurdity resulting from our interpretation ' The case of October November appears to be rather an exception.
Normally, it appears, no factory owner commenced the production of sugar in these months because of several unfavorable factors.
Indeed, these unfavorable factors appear to be present to a large extent even during the months June to September.
These notifications were evidently meant to compensate the factory owners for producing during these months as well.
As stated already, one must proceed on the assumption that every industrialist and businessman would, ordinarily, like to produce as much more as possible, since, normally speaking, more production means more profits.
For the above reasons, we are of the opinion that the interpretation placed upon the said notifications by the majority of the High Courts is the correct one.
We do not agree with the view taken by the Karnataka High Court in its Judgment under appeal in Civil Appeal Nos. 3831 32 of 1988.
For the same reason, we do not also agree with the view taken by the Patna High Court in Civil Writ Jurisdiction Case No. 865 of 1966.
Now coming to the Notifications for the years 1974 75 and 1976 77, the concept of base year is not to be found here; otherwise they are similar to those relating to 1972 73 and 1973 74.
In the notification dated 12.10.74 (relating to the sugar year 1974 75) the sugar year is divided into two blocks/periods.
The first block comprises October and November 1974 whereas the second block takes in December 1974 to September 1975.
Here too, the question is identical to that arising in the years 1972 73 and 1973 74.
The answer too will naturally be the same.
773 In view of the aforesaid conclusion, it is not necessary for us to go into the other questions raised by the factory owners except the following: There is a minor controversy with respect to the working of Clause (2) in Notification No. 146/74 dated 12.10.74 relating to the sugar year 1974 75.
Clause (2) the table contained in the notification reads as follows: TABLE No. Description of Sugar Duty of excise 1 2 Free Sale Levy of Sugar Sugar 3 4 1. . . . . 2.
Sugar produced in a factory during the period commencing on the 1st day of December, 1974, and ending with the 30th day of September, 1975 which is in excess of the average production of the corresponding period of the preceding five sugar years, that is, (a) on excess production upto Rs. 20/ per Rs. 5/ per 7.5% quintal quintal (b) on excess production on the Rs. 40/ per Rs. 10/ per next 10% quintal quintal (c) on excess production on the Rs.501 per Rs. 14/ per next 10% quintal quintal (d) on excess production on the Rs.60/ per Rs. 18/ per next 10% quintal quintal (e) on excess production beyond Rs. 82/ per Rs. 22/ per 37.5% quintal quintal ============================================================ Mr. Ganguli, learned counsel for the Union of India says that some of the Courts have applied the percentages mentioned in sub clauses (a) to (e) to the excess production and not to the average production of the preceding five sugar years.
We may take an illustration to explain what the learned counsel says.
Take a case.
where the average production of a factory during the corresponding period (December 1 to September 30) of 774 the preceding five sugar years is 1000 quintals.
That factory produces 2,500 quintals during the period December 1, 1974 to September 30, 1975.
In such a case, the ascending percentages mentioned in sub clauses (a) to (e) of clause (2) have to be applied for working out the rebate.
According to us, it must be done in the following manner, keeping in mind that the basis for these percentages in the average production of the previous five years and not the excess production.
Out of 2,500 quintals produced during the said period in the current sugar year (December 1, 1974 to September 30, 1975), the average of the five previous sugar years i.e., 1000 quintals should be deducted first, which means the excess production during the current year is 1500 quintals.
7.5% of 1000 quintals is 75 quintals.
On this quantity of 75 quintals, the rate of rebate as per sub clause (a) will be Rs. 20 per quintal in the case of free sale sugar and Rs. 5 per quintal in the case of levy sugar.
Next 10% of excess production means 100 quintals which would be eligible for rebate under sub clause (b) at the rate of Rs. 40 per quintal in the case of free sale sugar and Rs. 10 per quintal in the case of levy sugar.
The next 100 quintals would be eligible for rebate under sub clause (c) at the rate of Rs.50 per quintal in the case of free sale sugar and Rs. 14 per quintal in the case of levy sugar.
Then again the next 100 quintals would be eligible for rebate under sub clause (d) at the rate of Rs. 60 per quintal in the case of free sale sugar and Rs. 18 per quintal in the case of levy sugar.
The balance of 1125 quintals would qualify for rebate under sub clause (e) at the rate of Rs. 82 per quintal in the case of free sale sugar and Rs. 22 per quintal in the case of levy sugar.
This is the interpretation and understanding contended for by Shri Ganguli and we must say that none of the counsel for the factory owners ' disputed the same.
It is accordingly directed that the above method shall be followed in working out clause (2) of the notification dated 12.10.74.
Accordingly all the civil appeals except Civil Appeal Nos.
3831 32 of 1988, fail and are dismissed.
Civil Appeals No. 3831 32 of 1988 are allowed.
The authorities will take action in accordance with this judgment.
There will be no order as to costs.
V.P.R. CA Nos. 3831 32/88 allowed.
Rest of the appeals dismissed. [/INST] In a Notification dated 28.9.1972, with a view to induce the sugar factories (respondents) to produce more and also to commence their operations early in the sugar year (the year commencing on and with 1st October and ending with the 30th of September of the following year) a rebate was provided.
The scheme of the Notification was (1)If during the months of October and November 1972 (in the Sugar Year 1972 73), a factory produced sugar in excess of the quantity of sugar produced by it during the months of October November 1971, suchfactory was granted rebate in the Excise Duty at the rate of rupees forty per quintal in so far as the excess production is concerned.
(2)Rebate for the period 1st December 1972 to 30th April, 1973 was available at the rate of rupees twenty per quintal provided the production of sugar during the said period was in excess of 115% of the quantity of sugar produced by the said factory during the corresponding period in the previous Sugar Year, in so far as the excess production is concerned.
(3)For the months of May and June 1973 rebate at the rate of rupees twenty per quintal was available provided the factory produced more sugar than it produced during the corresponding months in the previous Sugar Year.
The said rebate was available again only with respect to the excess production.
759 (4)For the period commencing from 1st July, 1973 and ending with 30th of September, 1973, rebate was available at the rate of rupees twently per quintal provided the factory produced sugar in excess of the quantity produced during the corresponding period in the previous Sugar Year.
This rebate too was confined to the excess production.
However, the benefit of the rebate mentioned in any of the clauses aforesaid was not available to a factory which inter alia did not work during the 'base pariod '.
The other three Notifications dated 4.10.73, 12.10.74 and 30.9.76 were similar.
All the four Notifications were applicable to the Sugar years 1972 73, 1973 74, 1974 75 and 1976 77, respectively.
The respondents sugar factories did not produce any sugar in one or the other of the four blocks (mentioned in the Table contained in the Notification) in the base year (previous sugar year).
During the current sugar year, they produced certain quantity of sugar during that block period.
The respondents contended that they were entitled to the benefit of rebate provided in clause (1) of the Table contained in the Notification, whereas the Revenue submitted that they were not entitled to the benefit of rebate.
The claim for rebate made by the respondnets was allowed in the first instance, but later proceedings were initiated to recover back, or re adjust, the benefit already allowed.
These disputes were carried to the High Courts.
Almost all the High Courts except Karnataka held in favour of the respondents.
In Patna High Court, there was a conflict of opinion.
Hence this batch of appeals by the Revenue contending that the benefit of rebate was available only where the "sugar produced in a factory during the period commencing from the 1st day of October, 1972 and ending with the 30th day of November, 1972 which is in excess of the quantity of sugarproduced during the corresponding "period in 1971"; that nil production could not be equated to "the quantity of sugarproduced" in clause (1); that clause (1) of the first proviso in the 1972 Notification has 760 to be harmonised with the several clauses in the table; and that no interpretation should be adopted which rendered any part of the Notification superfluous.
Dismissing all.
the civil appeals, except Civil Appeal Nos. 3831 32 of 1988, this Court, HELD : 1.01.
The several clauses in the Notification must be read together, harmonised and reasonably understood without ignoring the underlying object and purpose of the notification.
An interpretation which leads to absurd consequences should be avoided.
[770 E] 1.02.The object behind the notification was evidently not only to induce the factories to produce more sugar but also to induce them to start their production early in the sugar year.
The object appears to be also to induce the factories to keep on producing the sugar all the year round, which they may perhaps not have done otherwise.
Running the factories during the off season (off season means October November period and then again the period from May June to September), may have its own problems which may increase the cost of production.
main issue is whether the words "the quantity of sugar produced during the corresponding period. " do not take in the case of a factory which has not produced any sugar whatsoever during the relevant corresponding period? It does take in.
Holding otherwise would have this absurd consequence: a factory which has produced, say, just one quintal of sugar during the relevant corresponding period and has produced 1000 quintals during October November, 1972 would qualify for the rebate on 999 quintals while another factory which has not produced any sugar nil production but has produced 1000 quintals during October November, 1972, would not qualify.
[770 G H] 1.04.The Idea behind the notification is to induce the manufacturers to produce more in the current sugar year than what they have produced in the previous sugar year or during the previous corresponding period in the previous sugar year, as the case may be.
Where a factor; has not produced any sugar or has produced a particular quantity of sugar during the said period in the previous sugar year but produces a larger quantity during the said period in the current sugar year, it must be rewarded.
[771 B D] 761 1.05.The case of October November appears to be rather an exception.
Normally, it appears, no factory owner commenced the production of sugar in these months because of several unfavorable factors.
Indeed, these unfavorable factors appear to be present to a large extent even during the 'months June to September.
The notifications were evidently meant to compensate the factory owners for producing during these months as well.
1772 C D] 1.06.One must proceed on the assumption that every industrialist and businessman would, ordinarily, like to produce as much more as possible, since, normally speaking, more production means more profits.
[772 E] 1.07.No manufacturer produces sugar merely for the sake of rebate.
Rebate is an inducement, an additional attraction.
It is not as if without rebate provided by these notifications, no one would have produced sugar.
[771 D] 1.08.There is no arithmetical difficulty in working out 115% of zero; it is zero.
What applies to clause(1) applies equally to clauses (2), (3) and (4).
It is only that the factory need not necessarily have worked during each of the corresponding periods in the base year; it is enough if it has worked in the base year.
[771 E F] 1.09.The interpretation placed upon the said notifications by the majority of the High Courts is the correct one.
The view taken by the Karnataka High Court in its Judgment under appeal in Civil Appeal Nos. 3831 32 of 1988 and the view taken by the Patna High Court in ill Civil Writ Jurisdiction Case No. 865 of 1966 are not correct.
basis for the percentages prescribed in the Notification dated 12th October.
1974 the average production of the previous five years and not the excess production.
By way of illustrates, take a factory which produces 2500 tons during the period Dec.1, 1974 to Sept. 30, 1975 as against the average production of 1000 tons during the corresponding periods in the five previous sugar years.
Out of 2,500 quintals produced during the said period in the current sugar year (December 1, 1974 to September 30, 1975), the average of the corresponding periods of the five previous sugar years ie., 1000 quintals should be deducted first, which means the excess production during the said period during the current year is 1500 quintals.
7.5% of 1000 quintals is 75 quintals.
On this quantity 762 of 75 quintals, the rate of rebate as per sub clause (a) will be Rs. per quintal in the case of free sale sugar and Rs. 5 per quintal in the case of levy Sugar.
Next 10% of excess production means 100 quintals which would be eligible for rebate under sub clause (b) at the rate of Rs. 40 per quintal In the case of free sale sugar and Rs. 10 per quintal in the case of levy sugar.
The next 100 quintals would be eligible for rebate under sub clause (c) at the rate of Rs. 50 per quintal in the case of free sale sugar and Rs. 14 per quintal in the case of levy sugar.
Then again the next 100 quintals would be eligible for rebate under sub clause (d) at the rate of Rs. 60 per quintall in the case of free sale sugar and Rs. 18 per quintal in the case of levy sugr.
The balance of 1125 quintals would qualify for rebate under sub clause (e) at the rate of Rs. 82 per quintal in the case of free sale sugar and Rs. 22 per quintal in the case of levy sugar.
[774 B E] Etikoppaka Co operative Agricultural Society vs Union of India, ; ; 1982 (59) E.L.T. 409 (Allahabad); & Haryana); and 1987 (30) E.L.T. 260 (Orissa), approved.
[768 H, 769 A] </s> |
<s>[INST] Summarize the following judgement: Appeal No. 1496 of 1993.
From the Judgment and Order dated 20.2.1985 of the Orissa High Court in First Appeal No.139 of 1974 Raj Kumar Mehta for the Appellant.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
Heard the counsel for the appellant.
None appears for the respondent though served.
Leave granted.
This appeal by the Orissa State Electricity Board is preferred against the judgment of the Orissa High Court allowing partly an appeal preferred .by the respondent.
The dispute pertains to the liability of the consumer (respondent in this appeal) to pay the minimum charges during the period subsequent to the date of disconnection of supply of energy to him for the non payment of electricity dues.
The respondent is an industry.
It entered into an agreement with the appellant for supply of electricity on March 5, 1965.
The agreement was valid for a period of five years.
He started availing of the energy with effect from July 31, 1965.
The supply of his industry was disconnected on April 30, 1968 for non payment of electricity charges.
Since the consumer also failed to pay the minimum charges for the period subsequent to the date of disconnection, the Board filed a suit for the amount due on account of the electricity consumed between April 1, 1968 and April 30, 1968 and for the minimum charges for the period May 1, 1968 to March 5, 1970.
(It may be remembered that the agreement between parties was valid upto March 5, 1970).
The Trial Court decreed the suit as prayed for along with interest 862 of 6% per annum on the amount decreed from the date of suit till the date of decree and also future interest at the same rate till full satisfaction.
On appeal, the High Court sustained the decree of the Trial Court only for the period upto the date of disconnection (April 30, 1968) but disallowed the claim for the period subsequent to the date of disconnection.
The reasoning of the High Court is that inasmuch as the supply was disconnected and the respondent consumer did not avail of any energy whatsoever during the period subsequent to the disconnection, it is not liable to pay the minimum charges.
In this appeal, it is contended by the learned counsel for the appellant that the question arising herein is concluded in favour of the Board by the decision of this Court in Bihar State Electricity Board, Patna and Ors.
vs M/s Green Rubber Industries and Ors., [1990] 1 S.C.C. 731.
On a perusal of the judgment, we find that was also a case where the claim inter alia pertained to the period subsequent to the date of disconnection till the expiry of the agreement.
In that case too, minimum charges were claimed by the Board even for the period during which the supply remained disconnected and no energy whatsoever was availed of by the consumer.
We also find that clause (4) of the agreement considered ' in the said decision and clauses (6) and (13) of the agreement concerned herein are substantially same.
Clause (13) of the agreement between the parties hereto does oblige the consumer to pay a certain minimum charges in any event.
The clause reads as follows: "Clause 13.
The consumer shall (subject to the provisions hereinafter contained) pay to the Engineer for the power demand and electrical energy supplied under this Agreement, the charges to be ascertained as mentioned below viz. (Government resolution on tariff to be inserted here) LARGE INDUSTRIES: For demand of 125 K.V.A. and above for supply at 11 K.V. at (i) Rs.5.50 paise per K.V.A. per month plus (ii) Rs.0.08 paise per K.W.H. per month subject to an overall maximum rate of Rs.0.09 paise per K.W.H. and 863 without prejudice to payment of minimum charge of 75 per cent of the contract demand at the above rate of Rs.5.50 paise per K.V.A. per month and subject further to absolute minimum payment on 125 K.V.A. in the first part of the tariff.
For less than 250 K.V.A the demand may be metered in K.W. and charged for at Rs.6.00 per K.W. per month.
Besides the charges for K.W.H. consumed at the rate specified above.
For supply at M.T. less than 11 K.V.A and M.T. less that 11 K.V.A. and M.T. the above rate will be increased by 10%.
" The reasons for such a stipulation and its justifiability are duly and fully explained by this Court in the aforesaid decision.
It is not necessary for us to reiterate the same.
The appeal is accordingly allowed.
The Judgment of the High Court is set aside.
The judgment and decree of the Trial Court is restored.
No costs.
T.N.A. Appeal allowed. [/INST] The respondent industry entered into an agreement with the appellant Board for supply of electricity on 5th March, 1965.
Under the agreement, which was valid for five years i.e. upto 5th March 1970, consumer was obliged to pay certain minimum charges in any event.
However, on 30th April, 1968 supply of electricity to respondent was disconnected for non payment of electricity charges.
Since the respondent also failed to pay the minimum charges for the period subsequent to the date of disconnection, the Electricity Board riled a suit for the amount due on account of the electricity consumed upto April 30, 1968 and for the minimum charges from May 1, 1968 to March 5, 1970.
The Trial Court decreed the suit.
The respondent preferred an appeal before the High Court which sustained the Trial Court 's decree only for the period upto the date of disconnection but disallowed the claim for the period subsequent to the date of disconnection on the ground that since the respondent did not avail of any energy whatsoever during the period subsequent to the disconnection it was not liable to pay the minimum charges for that person.
In appeal to this Court it was contended on behalf of the Electricity Board that in view of the judgment of this Court in the case of Bihar State Electricity Board, Patna and Ors.
vs M/s Creen Rubber Industries and Ors., [1990] 1 S.C.C. 731 the respondent was liable to pay the minimum charges for the period subsequent to disconnection.
861 Allowing the appeal and setting aside the order of the High Court, this Court, HELD: Clause (13) of the agreement between the parties does oblige the consumer to pay a certain minimum charges in any event.
The judgment and decree of the Trial Court is restored.
[862 E, 863 D] Bihar State Electricity Board, Patna & Ors.
vs M/s Green Rubber Industries and Ors., [1990] 1 S.C.C. 731, relied on. </s> |
<s>[INST] Summarize the following judgement: Appeal No. 1094 of 1992.
WITH Civil Appeal No.1095 of 1992.
AND Civil Appeal No. 1096 of 1992.
From the Judgment and Order dated 4.2.92 & 24.2.92 of the Bombay High Court in W.P. Nos.11, 8 & 70 of 1992.
R.K. Garg, Ram Jethmalani, V.A. Bobde,Harish N. Salve, K.J. John, Ms. Deepa Dixit, Rakesh Gosain, Ms. Rani Jethmalani, P.K. Dev and Ms. Shanta Ramchand for the Appellants.
Ashok Desai, F.S. Nariman, R.F. Nariman, P.H. Parekh, Sunil Dogra, J.D. Dwarka Das and S.C. Sharma for the Respondents.
The Judgement of the Court was delivered by 827 VERMA, J.
These appeals, by special leave, arise from writ petition Nos.11 of 1992,8 of 1992 and 70 of 1992, all dismissed by the Bombay High Court at the Goa Bench merely on the ground of laches; and they involve for decision the common question relating to the power of review, if any, of the Speaker to review his decision on the question of disqualification of a Member of the House, rendered under the Tenth Schedule to the Constitution.
In those writ petitions, the orders passed by the Speaker, in purported exercise of the power of review, setting aside the earlier orders of disqualification of certain Members made on merits by the Speaker, were challenged on the ground that the Speaker has no such power of review.
The High Court took the view, that the writ petitions were filed after considerable delay, and, therefore, upholding the preliminary objection, had to be dismissed merely.
on the ground of laches; and, therefore, merits of the contention that the Speaker had no such power of review was not considered.
The main questions which arise for decision in these appeals are, therefore, two; namely (1)LACHES Are the impugned orders of the High Court dismissing the writ petitions merely on the ground of laches susceptible to interference under Article 136 of the Constitution in the present case; and (2)POWER OF REVIEW If so, does the Speaker, acting as the authority under the Tenth Schedule of the Constitution, have no power of review, so that any order made by him in purported exercise of the power of review is a nullity? The further question of the consequence and nature of relief to be granted, would arise only if these questions are answered in favour of the appellants.
Ravi section Naik, Ratnakar M. Chopdekar and Sanjay Bandekar were duly elected Members of the Goa Legislative Assembly in the elections held in November, 1989.
On 25.1.1991, Ravi section Naik assumed the office of the Chief Minister of the State of Goa and he formed his Council of Ministers, which included Chopdekar and Bandekar as Ministers.
On the same day, i.e. on 25.1.1991, Dr. Kashinath Jalmi, also a Member of the Legislative Assembly, presented a petition to the Speaker, Surendra V. Sirsat seeking disqualification of Ravi section Naik as a Member of the Legis 828 lative Assembly on the ground that he had voluntarily given up the Membership of his political party.
On 16.2.1991, the Speaker, Surendra V. Sirsat passed an order under para 6 of the Tenth Schedule to the Constitution, disqualifying Ravi Naik on the ground of defection.
On 16.2.1991, Ravi Naik filed writ petition No.48 of 1991 at the Goa Bench of the Bombay High Court challenging the order of his disqualification, made by the Speaker under the Tenth Schedule to the Constitution.
On 18.2. 1991, the High Court passed an interim order in that writ petition staying operation.
of the order of disqualification made by the Speaker.
During the pendency of this writ petition, on 27.2.1991, Simon Peter D 'Souza was elected Deputy Speaker of the Goa Legislative Assembly; on 4.3.1991 Surendra V. Sirsat was removed from the office of Speaker and the Deputy Speaker, Simon Peter D 'Souza began functioning as the Speaker in place of Surendra V. Sirsat.
The same day, i.e. on 4.3.1991, Ravi section Naik made an application to Simon Peter D 'Souza, the Deputy Speaker functioning as the Speaker of the Goa Legislative Assembly, for review of the order dated 15.2.1991 of his disqualification made by the Speaker, Surendra V. Sirsat under the Tenth Schedule.
On 8.3.1991, the Acting Speaker, Simon Peter D 'Souza made an order, in purported exercise of the power of the review under the Tenth Schedule, setting aside the order dated 15.2.1991 made by the Speaker, Surendra V. Sirsat disqualifying Ravi section Naik as a Member of the Goa Legislative Assembly.
Thereafter, Writ Petition No.48 1991 filed by Ravi Naik challenging the order of the his disqualification made by the Speaker on 15.2.1991 was dismissed as not pressed by him, on 22.4.1991.
On 8.1.1992, Writ Petition No.11 of 1992 was filed by Dr. Kashinath Jalmi and Ramakant Khalap challenging the order of review dated 8.3.1991 passed by the Acting Speaker, inter alia on the ground that the Speaker did not have any power to review the earlier order of disqualification made under the Tenth Schedule to the Constitution of India.
The High Court by the order dated 4.2.1992 upheld the preliminary objection of Ravi section Naik that the writ it petition filed ten months after the date of the impugned order, was liable to be dismissed at the admission stage on the ground of laches.
This order, dismissing the writ petition for this reason alone, is challenged in Civil Appeal No. 1094 of 1992.
After the dismissal of writ petition No.11 of 1992, another Member of the Goa Assembly, Churchill Alemao filed writ petition No.70 of 1992, also challenging the order of review dated 8.3.1991 made by the Acting 829 Speaker setting aside the earlier order dated 15.2.1991 made by the Speaker disqualifying Ravi Naik, on similar grounds.
The High Court dismissed writ petition No.70 of 1992 also at the admission stage, for the same reason, on the ground of laches.
Civil Appeal No.1096 of 1992 by Churchill Alemao is against the order dated 24.2.1992 dismissing writ petition No.70 of 1992.
On 10.12.1990, Ramakant D. Khalap applied to the Speaker, Surendra V. Sirsat seeking disqualification of Sanjay Bandekar and Ratnakar Chopdekar as Members of the Goa Legislative Assembly, for the defection under the Tenth Schedule.
On 11.12.1990, the Speaker served notices on these Member.
On 13.12.1990, Bandekar and Choopdekar filed writ petition No.321 of 1990 at the Goa Bench of the Bombay High Court challenging the show cause notices issued to them by the Speaker.
On the same day i.e. on 13.12.1990, the Speaker, Surendra V. Sirsat made the orders disqualifying Bandekar and Chopdekar as Members of the Assembly, under the Tenth Schedule.
On 14.12.1990.
Writ Petition No.321 of 1990 was amended to challenge the orders of disqualification dated 13.12.1990 made by the Speaker against Bandekar and Chopdekar.
The Writ Petition was admitted by the High Court, and an interim order made staying the orders of disqualification dated 13.12.1990 made by the Speaker.
Unlike the writ petition No.48 of 1991 by Ravi Naik which was dismissed as not pressed on 22.4.1991 after the order of review made by the Deputy Speaker, writ petition No.321 of 1990 by Bandekar and Chopdekar is still pending in the High Court with the interim order made therein subsisting.
In the meantime, in a manner similar to that in the case of Ravi Naik, the Deputy Speaker functioning as the Speaker, on applications made to him for the purpose, passed orders on 7.3.1991, purporting to exercise the power of review, whereby the orders dated 13.12.1990 made by the Speaker disqualifying Bandekar and Chopdekar under the Tenth Schedule have been set aside.
This led to the filing of writ petition No. 8 of 1992 by Ramakant D. Khalap on 7.1.1992 at the Goa Bench of the Bombay High Court, challenging the orders of the review dated 7.3.1991 passed by the Acting Speaker.
This writ petition also, has been similarly dismissed merely on the ground of laches on 4.2.1992.
Civil Appeal No.1095 of 1992 has, therefore, been filed against dismissal of writ petition No.8 of 1992.
830 This is how the same questions relating to laches justifying dismissal of these writ petitions, and the power of review, if any, of the Speaker under the Tenth Schedule, arise for decision in these appeals.
The rival contentions may now be mentioned.
Shri Ram Jethmalani for the appellant in C.A. No.1094 of 1992, Shri Harish Salve for the appellant in C.A. No.1095 of 1992 and Shri R.K. Garg for the appellant in C.A. No.1096 of 1992 advanced substantially similar arguments, to contend that dismissal of the writ petitions by the High Court on the ground of laches is insupportable, in the present context, where challenge to the order of review made by the Speaker under the Tenth Schedule is on the ground of nullity, since the Speaker has no power of review under Tenth Schedule, and that the order of review being a nullity, must be so declared.
In reply, Shri F.S. Nariman for respondent Ravi section Naik in Civil Appeal Nos. 1094 and 1096 of 1992, and Shri Ashok Desai for respondents Bandekar and Chopdekar in Civil Appeal No.1095 of 1992, strenuously urged that the exercise of power under Article 226 of the Constitution being discre tionary, the refusal to exercise that power at the instance of the writ petitioners was a proper exercise of the discretion, which does not call for any interference by this court in exercise of its power under Article 136 of the Constitution.
Both the learned counsel, in their reply, further submitted, that by the very nature of the high office of the Speaker and the finality attaching to the order made by the Speaker under para 6 of the Tenth Schedule, the power of the review inheres in the Speaker for preventing miscarriage of justice, in situations when the Speaker himself is of the view that continuance of his earlier order of disqualification would perpetuate injustice.
It was further submitted by them, in the alternative, that in view of the limited scope of judicial review of the Speaker 's order of disqualification made under para 6 of the Tenth Schedule, as held in the majority opinion in Kihoto Hollohan vs Zachillhu and Ors., [1992] Supp. 2 SCC 651, it is implicit that at least a limited power of review inheres in the Speaker, to correct palpable errors outside the scope of the limited judicial review available against the order of disqualification made by the speaker under the Tenth Schedule.
It was urged by them, that the alleged infirmities in the orders of disqualification made in the present case by the Speaker fell within, at least this limited power of review which inheres in the Speaker.
Shri Nariman, as well as Shri Desai, strongly relied on the majority opinion in Kihoto Hollohan to support these submissions.
831 The last alternative submission of Shri Nariman was, that in case there is no power of review in the Speaker under the Tenth Schedule, as a result of which the orders made by the Acting Speaker in purported exercise of that power have to be declared nullity and ignored, then writ petition No.48 of 1991 by Ravi section Naik being dismissed as not pressed on 22.4.1991 because the order of his disqualification had been set aside by the order of review, must be revived along with the interim stay granted therein to enable Ravi section Naik to pursue the remedy which he had invoked, to challenge the order of his disqualification which is open to judicial review.
This submission of last resort made by Shri Nariman, was strongly opposed by Shri.
R.K. Garg appearing for the appellant Church Alemao.
On the other hand, Shri Ram Jethmalani appearing for the appellants in C.A. No.1094, not only did not oppose such a direction being given, but in his opening address itself suggested this as the equitable course to adopt.
But for the stand taken on this aspect, there was no difference in the submissions of Shri Garg and Shri Jethmalani.
Both sides attempted to refer to the facts leading to the making of the orders of disqualification of the Members, and the merits thereof However, we do not propose to advert to them, as we had indicated to the learned counsel at the hearing, since those aspects will have to be gone into , in the first instance by the High Court, on the view we are taking in these appeals and, therefore, we would like to avoid the likelihood of any possible prejudice to either side resulting from any reference made by us to the same.
Accordingly, we are confining ourselves only to the facts and the arguments relating to the aforesaid two questions, which alone arise before us.
We may add, that for the purpose of these appeals, it has been assumed by both sides that the Deputy Speaker functioning as the Speaker would have the powers of the Speaker under the Tenth Schedule including that of review, if any.
The further question whether the Deputy Speaker, who discharging the functions of the Speaker, has all the powers of the Speaker under the Tenth Schedule is, therefore, undisputed for the present purpose.
We shall now consider the aforesaid two main questions which arise for decision in the present case.
Any further question arising for decision, in case both these questions are answered in favour of the appellants, will be considered thereafter.
832 LACHES The High Court has taken the view that the impugned orders of review having been made by the Acting Speaker on 7th and 8th March, 1991, the writ petitions challenging them filed on 7.1.1992, 8.1.1992 and 10.2.1992 were highly belated and, therefore, liable to be dismissed merely on the ground of laches.
It is for this reason that they were dismissed at the admission stage itself, sustaining the preliminary objection taken on this ground by Ravi section Naik, Chopdekar and Bandekar, in whose favour the orders of review had been made.
The High Court has referred to certain decisions of this Court for applying the doctrine of laches, and declined to consider the merits of the main point raised in the writ petitions, that the Speaker does not have any power of review acting under the Tenth Schedule.
The High Court has also held as untenable, the explanation given by the writ petitioners that uncertainty of the law settled only by the decision of this Court in Kihoto Hollohan (supra) rendered on 12th November, 1991 was the reason for not filing those writ petitions earlier.
Learned counsel for the appellants have assailed application of the doctrine of laches in the present situation, and also contended that if any explanation was needed for the intervening period, pendency of the question of constitutional validity of Tenth Schedule itself in this Court was sufficient to explain the period up to the date of the decision, and the writ petitions were filed soon thereafter.
It was also submitted by learned counsel for the appellants, that the continuance in office of disqualified persons, even now, provides recurring cause of action, since the continuance in office without lawful authority of these persons, one of whom is the Chief Minister of the State of Goa, is against public policy and good administration.
It was submitted, the Court cannot decline to examine the validity of the authority under which they continue to hold office.
On this basis it was urged that the mere delay, if any, in challenging the legality of the authority under which these three persons continue to hold office, after being disqualified as Members of the Assembly, could not be a valid justification for the High Court to refuse to examine the main question of existence of power of review in the Speaker acting under the Tenth Schedule, since the discretion of the High Court under Article 226 of the Constitution must be exercised judicially, so as not to permit perpetuation of an illegality.
Shri Jethmalani also submitted, that the doctrine of laches does not apply where declaration sought is of nullity, in order to prevent its continuing operation, and laches is not relevant in the domain of public 833 law relating to public office, where the purpose is to prevent an usurper from continuing to hold a public office.
Shri Harish Salve adopted these arguments and further submitted that Dr. Kashinath Jalmi and Ramakant Khalap had consistently taken the stand, that the Speaker 's order of disqualification is final and not open to review by anyone.
He submitted, that for this reason no prevarication in their stand can be attributed to either of them, as has been done against Churchill Alemao, by the learned counsel for the respondents, for his support to Ravi Naik during the intervening period.
It was further urged by the learned counsel for the appellants, that the motive and conduct of the writ petitioners in such matters is not decisive or fatal to the enquiry claimed in the writ petition, in as much as the relief claimed in the writ petition was not for personal benefit of the writ petitioner but for larger public interest and good governance of the State of Goa by persons holding public offices, including that of the Chief Minister, only by lawful authority.
Both Shri F.S. Nariman and Shri Ashok Desai supported the Judgment of the High Court, and strenuously urged that the High Court in exercise of its discretionary power under Article 226 of the Constitution was justified in refusing to exercise that power at the behest of the writ petitioners who were disentitled to grant of the relief on account of their conduct and motive for filing the writ petition.
It was submitted by them that the writ petitioners, namely, Churchill Alemao, Dr. Kashinath Jalmi and Ramakant Khalap are all persons who, at different times, were associated with Ravi S.Naik as Chief Minister and were also obtaining benefit from him, which conduct coupled with their motive of getting more political power to themselves, disentitled them from claiming the relief.
Shri Nariman submitted that the doctrine of laches applies equally to a writ of quo warranto, as it does to a writ of certiorari.
It was also submitted by learned counsel for the respondents that the explanation given for the delay in filing the writ petitions, challenging the orders of review made by the Acting Speaker, is facile and untenable It was submitted, that notwithstanding the pendency of the question of the validity of the Tenth Schedule in this Court, writ petitions were being filed challenging the orders made by the Speakers under the Tenth Schedule.
It was submitted that all the writ petitioners, in view of their status in life, were fully aware that the Speaker 's order of review could be challenged by a writ petition, even before the decision rendered by this Court on 12th November, 1991 834 in Kihota Hollohan.
The main thrust of the argument of the counsel for the respondents was, that in these circumstances the High Court was justified in dismissing the writ petitions at the threshold in exercise of its discretionary power under Article 226 of the Constitution, and, therefore, the power under Article 136 of the Constitution also being discretionary, this Court would be justified in refusing to interfere with the discretion so exercised by the High Court.
Having given our anxious consideration to the forceful submissions of learned counsel for the both sides, we find ourselves unable to sustain the judgment of the High Court that the writ petitions were liable to be dismissed, merely on the ground of laches.
One of the submissions of Shri Nariman was, that even though there is no period of limitation prescribed by statute for filing a writ petition, yet in a case like the present, the apt analogy is of an election petition calling in question an election, which is required to be filed within 45 days from the date of election of the returned candidate, as provided in Section 81(1) of the Representation of the People Act, 1951, to indicate that unless such a challenge is made promptly the courts would refuse to examine such a question after the lapse of a reasonable period.
On this basis, he argued that a writ petition filed after ten months of the date of the order of review made by the Speaker acting under the Tenth Schedule, must be treated as unduly delayed and is liable to rejection on the ground of laches, as has been done by the High Court in the present case.
We are unable to accept this part of the submission since it is not an apt analogy.
The remedy of an election petition is statutory, governed by the limitation prescribed therein, unlike the remedy under Article 226 of the Constitution.
That apart, the analogy which is more apposite, is the decision on questions as to the disqualification of Members in accordance with Article 103 in the case of a Member of Parliament or Article 192 in the case of a Member of a House of a Legislature of a State.
For raising a dispute, giving rise to any question whether a Member of a House has become subject to any of the disqualification mentioned in clause (1) of Article 102 or 191, as the case may be, there is no prescribed limitation, and so also for challenging the decision rendered under Article 103 or 192 by a writ petition.
The question of the disqualification of a Member on the ground of defection and the Speaker 's order thereon, rendered under the 835 Tenth Schedule, is of a similar nature and not based on the result of an election which can be challenged only by an election petition in accordance with the provisions of Representation of the People Act, 1951.
The decision by a constitution bench in Brundaban Nayak vs Election Commission of India and another; , indicates the significance of deciding the question of disqualification of a Member as soon as it arises, even at the instance of a citizen, since 'the whole object of democratic elections is to constitute legislative chambers composed of members who are entitled to that status, and if any member forfeits that status by reason of a subsequent disqualification, it is in public interest, '. . that the matter was decided.
There is no indication in Brundaban Nayak, that the delay in raising the question of disqualification provides justification for refusing to decide the same, and the emphasis really is on a prompt decision by the competent authority on the question being raised, since it is not the interest of the constituency which such a Member represents, to delay the decision.
This decision is an indication that the authority competent to decide the question of disqualification must act promptly in deciding the same, once it is raised even by a citizen, in order to prevent a disqualified Member from representing the constituency after incurring a disqualification subsequent to his election, so long as the question remains a live issue during the tenure of the Member.
This aspect is significant for dealing with the question of laches in the present case.
In order to justify dismissal of the writ petitions for laches Shri Nariman placed reliance on certain decisions, some of which have been referred by the High Court.
Shri Nariman argued that the doctrine of laches applies as much to the writ of quo warranto, as it does to a writ of certiorari, and that the oblique motives of the petitioner together with his conduct may disentitled him to grant of the relief claimed by such a petition.
We now refer to some of these decisions.
The basic decision for submission on the doctrine of laches, relied on, is The Lindsay Petroleum Company vs Prosper Armstrong Hurd, Abram Farewell and John Kemp, which has been followed in the decisions of this Court in The Moon Mills Ltd. vs M.R. Meher, President, Industrial Court, Bombay and Ors., AIR 1967 SC 1450 and Maharashtra State Road Transport Corporation vs Shri Balwant Regular Motor Service 836 Amravati & Ors., ; In The Moon Mills Ltd, a writ of certiorari was sought to challenge a decision affecting the rights of the Petitioner, wherein the question arose whether the petitioner could be denied the relief on the ground of acquiescence or laches.
In that context it was observed that the issue of a writ of certiorari is a matter of sound discretion, and that 'the writ will not be granted if there is such negligence or omission on the part of the applicant to assert his right as taken in conjunction with the lapse of time and other circumstances, causes prejudice to the adverse party. ' It was observed, that the exercise of discretion under Article 226 to issue a writ of certiorari is based on the principle to a great extent, though not identical with, similar to the exercise of discretion in the Court of Chancery. ' For this principle, involving the doctrine of laches in courts of equity, reference was made to the observation of Sir Barnes Peacock in Lindsay Petroleum Co. The decision was followed in, and the principle reitered in Maharashtra State Road Transport Corporation again in the context of the discretion under article 226 of the Constitution to issue a %Wit of certiorari.
Like all equitable principles, the doctrine of laches applies where it would be unjust to give a remedy to the petitioner, who is disentitled to grant of the same by his conduct or any other relevant circumstances, including the creation of third party rights during the intervening period, which are attributable to the laches of the petitioner.
Strong reliance was placed on the decision in M/s Tilokchand Motichand & Ors.
vs H.B. Munshi & Anr., , wherein relief under Article 32 of the Constitution was refused on the ground of delay, to contend that if delay can be fatal under Article 32, itself a fundamental right, it is more so in a petition under Article 226 of the Constitution, wherein grant of the relief is discretionary.
The decision of this Court in Shri Vallabh Glass Works Ltd. and Anr.
vs Union of India and Ors.
, and M/s Delhi Rohtas Light Railway Company Lid vs District Board, Bhojpur and Ors., were also cited on the point.
In Shri Vallabh Glass Words Ltd, a writ petition by way of alternative remedy was filed after expiry of statutory period of limitation prescribed for filling suit for the same claim, and yet that alone was not held to be fatal taking the view that reasonableness of delay in filing the writ petition is to be assessed having regard to the facts and circumstances of the case, since grant of the relief under Article 226 of the Constitution is a matter of sound judicial discretion and governed by the doctrine of laches.
837 In M/s Dehri Rohtas Light Railway Company Limited, Tilokchand Motichand 's case was distinguished and it was indicated that the test is not to physical running of time ' and 'the real test to determine delay in such cases is that the petitioner should come to the writ court before a parallel right is created. ' It is significant that all these decisions relate to enforcement of personal rights, wherein a writ of certiorari was claimed for quashing some decision adverse to the petitioner and neither of them related to assertion of a public right in the nature of a class action.
In the present case the claim is for the issue of a writ of quo warranto on the ground that Ravi section Naik, Chopdekar and Bandekar are holding public office, having suffered disqualification as Member of the Assembly subsequent to their election, and of them, Ravi section Naik continues to hold the high public office of Chief Minister of Goa.
The relief claimed in the present case is not the conferment of a personal benefit to the petitioners, but for cessation of the usurpation of public offices held by these persons, if the contention of the petitioners be right that orders of review setting aside the earlier orders of disqualification made by the Speaker under the Tenth Schedule are nullity The decision of the Privy Council in the Lindsay Petroleum Company was followed by the House of Lords in Emile Erlanger and Ors.
vs The New Sombrero Phosphate Company and Ors., [1878] 3 Appeal Cases 1218 wherein reliance on the doctrine of laches by Courts of Equity for refusing relief where it would be practically unjust to grant the same, was reiterated.
It was also reiterated that two circumstances always important in such cases are the length of the delay and the nature of the acts done during the interval, which might affect the justice of the cause.
Once again this principle was reiterated by the Privy Council in Anachuna Nwakobi, The Osha of Obosi and Ors.
vs Engene Nzekwu and Anr., quoting the same passage from The Lindsay Petroleum Company.
None of these cases relate to the writ of quo warranto and in them the relief claimed was only for the personal benefit of the claimant.
We are not persuaded to hold that on the basis of these decisions, some of which are referred by the High Court, the writ petitions in the present case could have been dismissed merely on the ground of laches of the petitioners.
838 We would now refer to the contention of Shri Nariman that this principle attracting the doctrine of laches equally applies to a writ of Quo Warranto, sought in the present case.
For this purpose, Shri Nariman placed reliance on the decision in Everett vs Griffiths, [1924] 1 K.B. 941 at 959 in addition to Halsbury 's Law of England, Fourth Edition, Reissue, Volume 16, Para 926.
In Halsbury 's Law of England the statement of law is based primarily on the decision of the Privy Council in The Lindsay Petroleum Company and those following it.
We have already indicated the inapplicability of those decisions in the present case.
At the same place one of the decisions referred to, in foot note 3 of para 926, is A.G. vs Proprietors of the Bradford Canal (1866) LR 2 Equity Cases 71) for the proposition that "Laches is not imputable to the Crown or to the Attorney General suing on behalf of the public. ' In this decision distinction was drawn between the claim on behalf of the public and that by an individual plaintiff indicating that even though delay or laches may be attributable to an individual plaintiff, it may not be so to an action brought on behalf of the public.
This is more so, when the grievance made is that a person continues to hold a public office without the authority of law.
Shri Nariman laid great stress on Everett vs Griffuths, (1924) 1 K.B. 941 at page 959 where it is stated: "It is plain, however, that in quo warranto proceedings the Court can and will inquire into the conduct and motives of the relator.
" Reference is made to a passage from Halsbury 's Laws of England and some earlier decisions which have been referred for treating the point as well settled.
These observations were made after examining the claim on merits, and in view of the fact that the plaintiff was known for his frequent persistent and fruitless litigation proceedings, having commenced primarily with the motive of resentment.
In spite of these strong observations in the judgment about the conduct and motive of the plaintiff the court did not refuse to go into the points raised, for that reason alone.
In our opinion this decision can not persuade us to hold that the dismissal at the admission stage of the present petitions by the High Court, on the ground merely of laches can be sustained, when the alleged usurpation of the public offices, including that of the Chief Minister of the State of Goa, continues.
839 Reference was made by Shri Nariman as well as Shri Ashok Desai to Rules 1 and 4 of Order 53 of the Rules of Supreme Court and Section 30 of the Supreme Court Act, 1981 (England) wherein limitation is prescribed for application for judicial review and delay in applying for relief 'LS a ground for denying the relief, unless the Court considers that there is good reason for extending the period of making the application.
It was urged that these provisions are substantially the same as the earlier English Practice according to which, as held in Everett vs Griffuths (supra) the order is not issued as of course, and the conduct and motives of the applicant may be enquired into.
Reference was also made to R. vs Stratford on Avon District Council and Anr., ex parts Jackson which was followed by the House of Lords in Caswell and Another vs Dairy Produce Quota Tribunal for England and Wales ; In our opinion, the position remains the same.
Emphasis in these decisions is on public interest and good administration, and the jurisdiction of the Court to extend time in suitable cases for making such an application.
In Caswell, the House of Lords took into account the larger public interest for the view that the interest of good administration required non interference with the decision which was challenged after a lapse of a considerable time, since any interference at that stage, when third party interests had also arisen, would be detrimental to good administration.
In our opinion the exercise of discretion by the court even where the application is delayed, is to be governed by the objective of promoting public interest and good administration; and on that basis it cannot be said that discretion would not be exercised in favour of interference where it is necessary to prevent continuance of usurpation of office or perpetuation of an illegality.
We may also advert to a related aspect.
Learned counsel for the respondents were unable to dispute, that any other member of the public, to whom the oblique motives and conduct alleged against the appellants in the present case could not be attributed, could file such a writ petition even now for the same relief, since the alleged usurpation of the office is continuing, and this disability on the ground of oblique motives and conduct would not attach to him.
This being so, the relief claimed by the appellants in their writ petitions filed in the High Court being in the nature of a class action, without seeking any relief personal to them, should not 840 have been dismissed merely on the ground of laches.
The motive or conduct of the appellants, as alleged by the respondents, in such a situation can be relevant only for denying them the costs even if their claim succeeds, but it cannot be a justification to refuse to examine the merits of the question raised therein, since that is a matter of public concern and relates to the good governance of the State itself Shri R.K. Garg submitted that laches of the appellants can not legitimise usurpation of office by Ravi section Naik, Chopdekar and Bandekar; and Shri Jethmalani submitted that manifest illegatlity will not be sustained solely on the ground of laches when it results in continuance in a public office of a person without lawful authority.
The fact that the situation continues unaltered, since these persons continue to hold the public offices, to which they are alleged to be disentitled, is in our opinion sufficient to hold that the writ petitions ought not to have been dismissed merely on the ground of laches at the admission stage, without examining the contention on merits that these offices including that of the Chief Minister of the State, are being held by persons without any lawful authority.
The dismissal of the writ petitions by the High Court merely on this ground can not, therefore, be sustained.
The further question now is of the availability of power of review in the Speaker under the Tenth Schedule.
POWER OF REVIEW The challenge to the orders dated 7th and 8th March, 1991 made by the Acting Speaker under the purported exercise of power of review, setting aside the earlier orders of the Speaker disqualifying Ravi section Naik, Chopdekar and Bandekar under the Tenth Schedule, is made by the appellants on the ground that the Speaker does not have any power of review under the Tenth Schedule.
It was stated in Patel Narshi Thakershi and Ors.
vs Pradyumansinghji Arjunsinghji, AIR 1970 SC 1273, thus "It is well settled that the power to review is not an inherent power.
It must be conferred by law either specifically or by necessary implication.
" This position is not disputed before us.
Admittedly, there is no express provision conferring the power of review on the Speaker in the 841 Tenth Schedule.
The only question therefore, is whether the Speaker acting as the authority under the Tenth Schedule has the power of review by necessary implication, empowering him to set aside the earlier order of disqualification made by him on merits.
On behalf of the appellants it was contended that such a power of review in the Speaker can not be implied from the provisions in the Tenth Schedule, and the only remedy available to the aggrieved Member is by judicial review of the order of disqualification.
In reply it was contended on behalf of the respondents, that the power of review inheres in the Speaker under the Tenth Schedule, in view of the finality attaching to the order made under.para 6 of the Tenth Schedule.
It was submitted that this inherent power of review in the Speaker must be read in the Tenth Schedule, at least up to 12th November, 1991 when the Judgment in Kihoto Hollohan was rendered declaring the availability of judicial review against the Speaker 's order of disqualification made under para 6 of the Tenth Schedule.
It was further submitted by learned counsel for the respondents, that only a limited judicial review being available against the Speaker 's order of disqualification, as held by the majority in Kihoto Hollohan, some power of review inheres in the Speaker even thereafter to correct palpable errors falling outside the limited scope of judicial review.
It was then submitted, that the defects in the orders of disqualification made by the Speaker in the present case, which were corrected by review, were such defect which come within the ambit of the limited power of review available to the Speaker in addition to availability of judicial review as declared in Kihoto Hollohan.
Both sides referred to the merits of the orders of dis qualification made by the Speaker but we refrain from adverting to this aspect as indicated earlier, in view of the conclusion reached by us that the Speaker has no power of review under the Tenth Schedule, and an order of disqualification made by him under para 6 is subject to correction only by judicial review as held in Kihoto Hollohan.
Accordingly, the alleged defects would require examination by judicial review in the writ petitions filed in the High Court challenging the orders of disqualification.
Shri Nariman contended that the power of review inheres in the Speaker under the Tenth Schedule as a necessary incident of his otherwise plenary jurisdiction to decide the question of disqualification.
He submitted that according to the majority in Kihoto Hallohan only 'limited scope of judicial review ' is available, and, therefore, the power of review 842 inheres in the Speaker to review his own orders on grounds analogous to those in Order 47, Rule 1, Code of Civil Procedure.
In support of this submission Shri Nariman placed reliance on the decisions in Shivdeo Singhs and Ors.
vs State of Punjab and Ors.
, AIR 1963 SC 1909 and Grindlays Bank Ltd. vs Central Government Industrial Tribunal and Ors.
; Another limb of Shri Nariman 's submission is that the majority opinion in Kihoto Hollohan does not declare para 7 of the Tenth Schedule to be unconstitutional from the inception, and Article 13 having no application to a constitutional amendment, the existence of para 7 in the Tenth Schedule till the judgment was rendered in Kihoto Hollohan on 12th November, 1991 must be accepted, and the provisions in the Tenth Schedule, including para 7 therein, must be examined for determining the implied power of review in the Speaker till 12th November, 1991.
On this basis, it was submitted that the finality declared in para 6 of the Tenth Schedule coupled with the ouster of judicial review in para 7 re enforces existence of the implied power of review in the Speaker at least till 12th November, 1991, prior to which the impugned orders of review were made in the present case.
A further submission made by Shri Nariman was that by virtue of para 6(2) read with para 8 of the Tenth Schedule, the general rules of procedure as well as Rule 7(7) of the Members of the Goa Legislative Assembly (Disqualification on ground of Defection) Rules, 1986 applied, under which the Speaker ordinarily has the power of review.
In this connection, reference was made particularly to Rule 77 of the Rule of Procedure and Conduct of Business of the Goa Legislative Assembly, regarding breach of privilege which enables the Speaker to reconsider his earlier decision, and Rule 7(7) of the Members of the Goa Legislative Assembly (Disqualification on grounds of defection) Rules, 1986, relating to the procedure.
It was submitted that these general rules relating to Speaker 's power while dealing with a breach of privilege can be read to confer an express power of review.
The last limb of Shri Nariman 's contention may be disposed of, at the outset.
There is no scope for reading into the Tenth Schedule any of the powers of the Speaker which he otherwise has while functioning as the Speaking in the House, to clothe him with any such power in his capacity as the statutory authority functioning under the Tenth Schedule of the Constitution.
This is well settled by the decisions of the Court relating to Speaker 's orders under the Tenth Schedule.
Accordingly, any power of the Speaker, available to him while functioning in the House, is not to be 843 treated as his power or privilege as the authority under the Tenth Schedule.
The majority opinion in kihoto Hollohan was pressed into service by Shri Nariman as well as Shri Ashok Desai to support several aspects of their submissions.
We may now refer to that opinion.
In Kihoto Hollohan there was no difference between the majority and minority opinions on the nature of finality attaching to the Speaker 's order of disqualification made under para 6 of the Tenth Schedule, and also that para 7 therein was unconstitutional in view of the non compliance of the proviso to clause 2 of Article 368 of the Constitution, by which judicial review was sought to be excluded.
The main difference in the two opinions was, that according to the majority opinion this defect resulted in the constitution standing amended from the inception with insertion of the Tenth Schedule minus para 7 therein, while according to the minority the entire exercise of constitutional amendment was futile and an abortive attempt to amend the constitution, since Para 7 was not severable.
According to the minority view, all decisions rendered by the several Speakers under the Tenth Schedule were, therefore, nullity and liable to be ignored.
According to the majority view, para 7 of the Tenth Schedule being unconstitutional and severable, the Tenth Schedule minus para 7 was validly enacted and, therefore, the orders made by the Speaker under the Tenth Schedule were not nullity but subject to judicial review.
On the basis of the majority opinion, this Court has exercised the power of judicial review over the orders of disqualification made by the speakers from the very inception of the Tenth Schedule, and the exercise of judicial review has not been confined merely to the orders of disqualification made after 12th November, 1991 when the judgment in Kihoto Hollohan was rendered.
Venkatachaliah, J (as he then was) wrote the majority opinion and, thereafter, on this premise, exercised the power of judicial review over orders of disqualification made prior to 12.11.1991.
The basic fallacy in the submission made on behalf of the respondents that para 7 must be treated as existing till 12th November, 1991 is that on that view there would be no power of judicial review against an order of disqualification made by the Speaker prior to 12th November, 1991 since para 7 in express terms totally excludes judicial review.
Accepting the submission of learned counsel for the respondents that para 7 must be read in the Tenth Schedule till 12th November, 1991 when 844 the judgment in Kihoto Hollohan was rendered, for which submission they place reliance on the majority opinion in Kihoto Hollohan, would amount to taking a view contrary to the decision in Kihoto Hollohan itself, as indicated.
At one stage, Shri Nariman also attempted to read the majority opinion in Kihoto Hollohan as not expressly declaring para 7 in the Tenth Schedule as unconstitutional, adding that such a declaration was made only in the minority opinion which declared the entire Tenth Schedule to be unconstitutional.
We are unable to read the majority opinion in this manner.
Any attempt to find support for the submissions of the respondents, in the majority opinion in Kihoto Hollohan, is futile.
The Constitution Bench decision in Shivdeo Singh and Ors.
vs State of Punjab and Ors.
(supra) is distinguishable and of no assistance to the respondents in the present case.
That was a case, wherein the High Court had exercised its power in a second writ petition filed under Article 226 of the Constitution by a person who was not made a party in the earlier writ petition, the order made in which was adverse to him.
This court held that the second writ petition by such a person was maintainable, and the High Court had not acted without jurisdiction in reviewing its previous order at the instance of a person who was not a party to the previous writ proceedings.
That decision has no application in this situation.
Strong reliance was placed by Shri Nariman as well as Shri Ashok Desai on the decision of a two Judge bench in Grindlays Batik Ltd. It was submitted by learned counsel, that in the present case the defects in the orders of disqualification fell in the first of the two categories mentioned at page 347 (SCR), to which extent there is inherent power of review in the Speaker.
It may be mentioned that the decision in Patel Narshi Thakershi & Ors.
vs Pradyumansinghji Arjunsinghji, AIR 1970 SC 1273 is referred and distinguished at page 347 SCR on the facts of that case.
In that decision the question was, whether the Industrial Tribunal constituted under Section 7A of the had the power to set aside an exparte award made by it.
It was held with the aid of Rule 24(b), Industrial Disputes (Central) Rules, 1957 that the Tribunal had the power of a civil court under Order XVII of the Code of Civil Procedure relating to grant of adjournments and therefore, as a necessary corollary the power under Order IX, Rule 13 was attracted to enable the Tribunal to set aside an ex 845 parte award.
In our opinion, the decision in Grindlays Bank Ltd., wherein certain statutory rules attracted the power under Order XVII read with Order IX, Rule 13 of the Code of Civil Procedure in the Tribunal to set aside an ex parte award, is clearly distinguishable and is of no assistance in the present case.
The power of review which, it is suggested by counsel for the respondents, inheres in the Speaker by necessary implication has to be found in the provisions made in the Tenth Schedule alone, and not elsewhere.
Para 7 has to be treated as non existent in the Tenth Schedule from the very inception, as earlier indicated.
As held by the majority in kihoto Hollohan, judicial review is available against an order of disqualification made by the Speaker under para 6 of the Tenth Schedule, notwithstanding the finality mentioned therein.
It is on account of the nature of finality attaching by virtue of para 6, that the judicial review available against the Speaker 's ' order has been labeled as limited in para 110 (at page 711 of SCC) of the decision in Kihoto Hollohan? [1992] Supp 2 SCC 651, and the expression has to be understood in that sense distinguished from the wide power in an appeal, and no more.
As held in Kihoto Hollohan, the Speaker 's order is final being subject only to judicial review, according to the settled parameters of the exercise of power of judicial review in such cases, which it is not necessary to elaborate in the present context.
The existence of judicial review against the Speaker 's order of disqualification made under para 6 is itself a strong indication to the contrary that there can be no inherent power of review in the Speaker, read in the Tenth Schedule by necessary implication.
The need for correction of errors in the Speaker 's order made under the Tenth Schedule is met by the availability of judicial review against the same, as held in Kihoto Hollohan.
In our opinion there is no merit in the submission that the power of review inheres in the Speaker under the Tenth Schedule as a necessary incident of his jurisdiction to decide the question of disqualification; or that such a power existed till 12th November, 1991 when the decision in Kihoto Hollohan was rendered; or at least a limited power of review inheres in the Speaker to correct any palpable error outside the scope of judicial review.
CONSEQUENCE On the above view taken by us, the orders dated 7th and 8th March, 1991 made by the Acting Speaker in purported exercise of the power of 846 review are liable to be declared nullity and to be ignored, with the result that the order dated 13th December, 1990 disqualifying Chopedekar and Bandekar and dated 15th February, 1991 disqualifying Ravi S.Naik as Members of Goa Legislative Assembly would continue to operate.
Writ petition No.321 of 1990 filed by Chopdekar and Bandekar challenging the orders of their disqualification is pending in the High Court wherein an interim order staying the operation of their orders of disqualification is subsisting.
Chopdekar and Bandekar can pursue that remedy to challenge their disqualification and no further order is required to be made by this Court for that purpose.
However, writ petition No.48 of 1991 which was filed in the High Court by Ravi section Naik challenging his disqualification, wherein also an interim order was made staying the operation of the order of his disqualification, was not pressed by Ravi S.Naik after the order in purported exercise of power of review was made in his favour on 8th March, 1 991 and, therefore, that writ petition was dismissed as not pressed on 22.4.1991.
The question is of the order, if any, required to be made by this Court in this situation.
Shri Ram Jethmalani appearing for the appellants in C.A. No.1094/92 suggested that, in all fairness writ petition No.48 of 1991 should be revived in the High Court to enable Ravi S.Naik to pursue his remedy of seeking judicial review against his disqualification.
On the other hand, Shri R.K. Garg, learned counsel for the appellant in Civil Appeal No.1096/92 opposed the making of such an order.
Both the learned counsel, however.
submitted that the interim order of stay made therein would not revive even if that writ petition is revived and the High Court will have to consider Afresh the question of making an interim order, at the behest of Ravi section Naik.
On the other hand, Shri F.S. Nariman appearing for Ravi section Naik in both these appeals submitted that it would be just in the circumstances of the case, to revive writ petition No.48 of 1991 for decision on merits by the High Court and the interim order of stay should also enure to the benefit of Ravi section Naik during the pendency of the writ petition, more so when he is the Chief Minister of the State and refusal of stay would result in uncertainty in the State.
Having given our anxious consideration to the matter we have no doubt that the fact to Ravi section Naik being the Chief Minister of the State 847 of Goa is a wholly irrelevant circumstance for this purpose.
All the same an order which would be just and proper to make in the circumstances of this case has to be made, taking into account also the fact that the law was declared and came to be settled only by the decision of this Court in Kihoto Hollohan, after making of the orders of review by the Acting Speaker in the present case, where after writ petition No.48 of 1991 was dismissed as not pressed.
We have no doubt that Article 142 of the Constitution enables us, if necessary, to enlarge the powers of this Court for making an order which would be just in the facts and circumstances of this case.
In our opinion, it would be appropriate to revive writ petition No.48 of 1991 for hearing on merit by the High Court as suggested even by Shri Ram Jethmalani, and to also order interim stay of the operation of the order of disqualification dated 15.2.1991 made by the Speaker, which was the situation prevailing till that writ petition was dismissed as not pressed.
It is, however, necessary that writ petition No.48 of 1991 and also writ petition No.321 of 1990 should be heard and disposed of at the earliest, on account of their expediency.
RELIEF Accordingly, we allow these appeals in the following manner (1) The impugned orders of the High Court, dated 4.2.1992 dismissing writ petition No.11 of 1992; dated 24.2.1992 dismissing writ petition No.70 of 1992; and dated 4.2.1992 dismissing writ petition No.8 of 1992 are set aside; (2) Writ petition Nos.11 of 1992, 70 of 1992 and 8 of 1992 are allowed declaring that orders dated 7.3.1992 and 8.3.1992 made by the Acting Speaker in purported exercise of power of review are nullity and liable to be ignored.
(3) Consequently, orders dated 13.12.1990 made by the Speaker disqualifying Ratnakar Chopdekar and Sanjay Bandekar continue to operate and writ petition No.321 of 1990 pending in the High Court has to be heard and decided on merits, in accordance with law; (4) Similarly, order dated 15.2.1991 made by the Speaker disqualifying Ravi section Naik continues to operate and writ petition No.48 of 1991 filed in the High Court by him is revived by setting aside the High Court 's order 848 dated 24.2.1991 dismissing that writ petition as not pressed.
The High Court will proceed to decide that writ petition also on merits, in accordance with law , (5) The interim order staying the order of disqualification in writ petition No.48 of 1991 is revived.
However, the parties would be at liberty to apply to the High Court for modification or cancellation of the said interim order or for any other interim relief or direction, if so advised; (6) The High Court should hear and dispose of the writ petition No.48 of 1991 itself on merits as expeditiously as possible, preferably by 30th April, 1993; (7) Writ Petition No321 of 1990 filed by Ratnakar M. Chopdekar and Sanjay Bandekar pending in the High Court be also heard and disposed of as expeditiously as possible, preferably by 30th April, 1993.
(8) Parties are directed to appear at the Goa Bench of the Bombay High Court on 6th April, 1993, without any further notice, for obtaining further directions in this behalf.
(9) In the circumstances of the case, the parties will bear their own costs.
T.N.A. Appeals allowed. [/INST] R.S., R.M. and S.B. were elected as Members of the Goa Legislative Assembly in the Elections held in November, 1989.
Subsequently, R.S. assumed office of Chief Minister and formed his Council of Ministers including R.M. and S.B. as Ministers.
Thereafter, the appellant (In C.A. 1094/92), a Member of the Assembly, presented a petition to the Speaker of the Assembly seeking disqualification of R.S. on the ground that he had voluntarily given up the membership of his political party.
By its order 821 dated 15.2.91 the Speaker passed an order under Para 6 of the Tenth Schedule of the Constitution disqualifying R.S. on the ground of defection.
R.S. filed a writ petition before the Goa Bench of the Bombay High Court challenging the order of disqualification and by an interim order the High Court stayed the operation of the disqualification order.
During the pendency of the writ petition the Speaker was removed from office and a, deputy speaker was elected in his place who began functioning as Speaker.
R.S. filed an application before the Acting Speaker seeking review of his Disqualification order and on 83.91 the Acting Speaker passed an order, in purported exercise of his power of review under the Tenth Schedule, setting aside the Disqualification order dated 15.2.91.
Consequently tie writ petition filed by R.S. challenging his disqualification order was dismissed as not pressed, by the High Court on 8.1.92 the appellant flied a petition challenging the review order dated 83.91 passed by the Acting Speaker on the ground that the Speaker did not have any power to review the earlier order of disqualification.
Without going into the merits of the case the High Court dismissed the petition at the admission stage on the ground of laches.
The decision of the High Court was impugned before this Courts.
Subsequently, another member of the Assembly, appellant in C.& 1096/92, also filed a writ petition challenging the review order dated 83.91 passed by the Acting Speaker setting aside the earlier order disqualifying R.S, on similar grounds.
The High Court also dismissed the same at the admission stage for the same reason, ie.
laches.
Against the order dismissing the writ petition an appeal was preferred in this Court In the connected appeal (CA 1095/92) the appellant applied to the Speaker seeking disqualification of R.M. and S.B. on the ground of defection and by his order dated 13.12.90 Speaker passed the order disqualifying R.M. and S.B. under the Tenth Schedule.
Both of them filed petitions challenging the disqualification order and by an interim order the High Court stayed the disqualification orders.
In the meantime, in a manner, similar to that in the case of R.S., the Acting Speaker by his order dated 7.3.91, in purported exercise of the review.
set aside the orders dated 13.12.90 disqualifying R.M. and S.B. The appellant filed a petition challenging the orders of review passed by the Acting Speaker.
It was also dismissed by the High Court on the ground of laches.
Against dismissal of the writ petition an appeal was filed before this Court 822 In appeals to this Court, it was contended on behalf of the appellants that (1) the mere delay in challenging the legality of the authority under which respondents continue to hold public office, after being disqualified as Members of the Assembly, was not a valid justification for the High Court to refuse to examine the main question of existence of power of review in the Speaker acting under the Tenth Schedule, since the discretion of the High Court under Article 226 of the Constitution must be exercised judicially, so as not to permit perpetuation of an illegality, (2) the doctrine of laches does not apply where declaration sought is of nullity, in order to prevent its continuing operation, and laches is not relevant in the domain of public law relating to public office, where the purpose is to prevent an usurper from continuing to hold a public office; (3) the power of review in the Speaker cannot be implied from the provisions in the Tenth Schedule, and the only remedy available to the aggrieved person is by judicial review of the order of the disqualification; and (4) that the motive and conduct of the petitioners appellants in such matters is not decisive or fatal to the enquiry claimed in the writ petition, inasmuch as the relief claimed by them was not for their personal benefit but for larger public interest and good governance of the State by persons holding public offices.
On behalf of the respondents it was contended that (1) even though there is no statutory limitation for filing a writ petition, yet in a case like the present, the apt analogy is of an election petition challenging an election, which is to be filed within 45 days from the date of election of the returned candidate, under Section 81(1) of the Representation of the People Act, 1951, to indicate that unless such a challenge is made promptly the courts would refuse to examine such a question after the lapse of a reasonable period; hence petitions filed after ten months of the date of the order of review made by the Speaker were rightly rejected on the ground of laches; (2) the doctrine of laches applies as much to the writ of quo warranto, as it does to a writ of certiorari; (3) in view of the finality attaching to the order made by the Speaker under para 6 of the Tenth Schedule the power of review inheres in the Speaker for preventing miscarriage of justice, in situations when the speaker himself is of the view that continuance of his earlier order of disqualification would perpetuate injustice; (4) the inherent power of review in the Speaker must be read in the Tenth Schedule, at least upto 12th November, 1991 when the Judgment in Kihoto Hollohan was rendered declaring the availability of judicial 823 review against the Speaker 's order of disqualification made under para 6 of the Tenth Schedule; (5) only a limited judicial review being available against the Speaker 's order of disqualification, as held by the majority in Kihoto Hollohan, some power of review Inheres in the Speaker even thereafter to correct palpable errors failing outside the limited scope of judicial review, and (6) the appellants were not only associated with R.S. at different times but also they obtained benefits from him, thus, in view of the oblique motive coupled with their conduct, the High Court was justified in refusing to exercise its discretionary powers under Article 226 of the Constitution at the behest of the appellants; the power under Article 136 also being discretionary this Court would also be justified in refusing to interfere with the discretion so exercised by the High Court.
Allowing the appeals, this Court, HELD: 1.
The judgment of the High Court that the writ petitions were liable to be dismissed, merely on the ground of laches cannot be sustained.
[834 C] 2.
The exercise of discretion by the Court even where the application is delayed, is to be governed by the objective of promoting public interest and good administration; and on that basis it cannot be said that discretion would not be exercised in favour of interference where it is necessary to prevent continuance of usurpation of office or perpetuation of an illegality.
[839 F] 3.
In the present case the claim is for the issue of a writ of quo warranto on the ground that respondents are holding public offices, having suffered disqualification as Member of the Assembly subsequent to their election, and one of them, continues to hold the high public office of Chief Minister.
The relief claimed in the present case in not the conferment of a personal benefit to the petitioners, but for cessation of the usurpation of public offices held by respondents.
Thus, the relief claimed by the appellants in their writ petitions filed in the High Court being in the nature of a class action, without seeking any relief personal to them, should not have been dismissed merely on the ground of laches.
[837 C D, 839 H, 840 A] 3.1.
The motive or conduct of the appellants, as alleged by the respondents, can be relevant only for denying them the costs even If their claim succeeds, but It cannot be a justification to refuse to examine the 824 merits of the question raised therein, since that is a matter of public concern and relates to the good governance of the State itself [840 A B] 4.
The remedy of an election petition Is statutory, governed by the limitation prescribed therein, unlike the remedy under Article 226 of the Constitution.
That apart, the analogy which is more apposite, is the decision on questions as to the disqualification of Members in accordance with Article 103 in the case of a Member of Parliament or Article 192 in the case of a Member of a House of a Legislature of a State.
For raising a dispute, giving rise to any question whether a Member of a House has become subject to any of the disqualification mentioned in clause (1) of Article 102 or 191, as the case may be, there is no prescribed limitation, and so also for challenging the decision rendered under Article 103 or 192 by a writ petition.
The question of the disqualification of a Member on the ground of defection and the Speaker 's order thereon, rendered under the Tenth Schedule, is of a similar nature and not based on the result of an election which can be challenged only by an election petition in accordance with the provisions of Representation of the People Act, 1951.
[834 F H, 835 A] A.G. vs Proprietor of the Bradford Canal, (1866) L.R. 2 Equity Cases 71, relied on.
Brundaban Nayak.
V. Election Commission of India and Anr., [19651 3 S.C.R. 53, explained and held inapplicable.
The Lindsay Petroleum Company vs Prosper Armstrong Hurd, Abram Farewell and John Kemp, ; The Moon Mills Ltd. vs M.R. Meher, President, Industrial Court, Bombay and Ors.
,A.I.R. ; Maharashtra State Road Transport Corporation vs Shri Balwant Regular Motor Service Amravati & Ors., ; ; M/s. Tilok chand & Motichand & Ors.
vs H.B. Munshi & Anr., ; Shri Vallabh Glass Works Ltd. & Anr.
vs Union of India & Ors.
, ; M/s Dehri Rohtas Light Railway Company Ltd. vs District Board, Bhojpur & Ors., ; Emile Erlanger and Ors.
vs The New Sombrero Phosphate Company and Ors., (1878) 3 Appeal Cases 1218; Anachuna Nwakobi, The Osha of Obosi and Ors.
vs Eugene Nzekwu & Anr., ; Everett vs Griffiths, (1924) 1 K.B. 941; R. vs Stratfort on Avon District Council and Anr.
ex parte Jackson, and Caswell and Anr.
vs Dairy Produce Quota Tribunal for England and Wales, ; , held inapplicable.
825 5.
The Speaker has no power of review under the Tenth Schedule, and an order of disqualification made by him under para 6, thereof Is subject to correction only by judicial review.
[841 F] Khoto Hollohan vs Zachillu and Ors., [1992] Supp. 2 S.C.C. 651, referred to.
Observations in Patel Narshi Thakershi & Ors.
vs Pradyumansinghji Arjunsinghji A.I.R. 1970 S.C. 1273 to the effect that the power to review is not inherent power and must be conferred by law either specifically or by necessary implications, relied on.
5.1.There is no scope for reading in to the Tenth Schedule any of the powers of the Speaker which he otherwise has while functioning as the Speaker in the House, to clothe him with any such power in his capacity as the statutory authority functioning under the Tenth Schedule of the Constitution.
Accordingly any power of the Speaker, available to him while functioning in the House, is not to be treated as his power of privilege as the authority under the Tenth Schedule.
[842 G H, 843 A] Rule 7(7) of the Members of the Goa Legislative Assembly (Disqualification on grounds of Defection) Rules, 1986 and Rule 77 of the Rules of Procedure and Conduct of Business of the Goa Legislative Assembly held inapplicable.
Para 7 has to be treated as non existent in the Tenth Schedule from the very inception.
As held by the majority in Kihoto Hollohan judicial review is available against an order of disqualification made by the Speaker under para 6 of the Tenth Schedule, notwithstanding the finality mentioned therein.
It is on account of the nature of finality attaching by virtue of para 6, that the judicial review available against the Speaker 's order has been labeled as limited in Kihoto Hollohan and the expression has to be understood in that sense, distinguished from the wide power in an appeal, and no more.
Thus the Speaker 's order is final being subject only to judicial review, according to the settled parameters of the exercise of power of judicial review in such cases.
The existence of judicial review against the Speaker 's order of disqualification made under para 6 Is Itself a strong indication to the contrary that there can be no Inherent power of review in the Speaker, read in the Tenth Schedule by necessary Implication.
[845 B E] 826 7.
There is no merit in the submission that the power of review inheres in the Speaker under the Tenth Schedule as a necessary incident of his jurisdiction to decide the question of disqualification; or that such a power existed till 12th November, 1991 when the decision in Kihoto Hollohan was rendered; or at least a limited power of review inheres in the Speaker to correct any palpable error outside the scope of judicial review.
[845 F G] Kihoto Hollohan vs Zachillhu and Ors., [1992] Suppl.
2 S.C.C. 651, explained.
Shivdeo Singh & Ors.
vs State of Punjab & Ors., A.I.R. 1963 S.C. 1909 and Grindlays Bank Ltd. vs Central Government Industrial Tribunal & Ors., ; , distinguished.
The impugned orders of the High Court, dismissing writ Petitions are setaside.
The orders made by the Acting Speaker in purported exerciseof power of review are nullity and liable to be ignored.
[847 E F] </s> |
<s>[INST] Summarize the following judgement: minal Appeal No. 724 of 1985.
From the Judgment and Order dated 21.8.1985 of the Rajasthan High Court in D.B. Criminal Appeal No. 494 of 1974.
Mahabir Singh for the Appellant.
Aruneshwar Gupta for the Respondent.
ANAND, J. This appeal under Section 2(a) of the Supreme Court (Enlargement of Appellate Jurisdiction) Act, 1970 is directed against the judgment and order of the High Court of Rajasthan dated 21.8.1985 in Criminal Appeal No.494/1974 convicting the appellant for an offence under Section 302 of the Indian Penal Code and sentencing him to suffer im prisonment for life by reversing an order of his acquittal recorded by the Additional Sessions Judge, Ganganagar vide judgment and order dated 13.2.1974.
853 According to the prosecution case, Mani Ram appellant and his brother Hari Ram had removed the fencing over the field of Hazur Singh deceased about 20 22 days prior to the occurrence, which took place on 22.6.1972 at about 12.30 noon, and that action of the appellant and his brother had resulted in a quarrel between the brothers and Hazur Singh and had created ill feelings between the parties.
On the fateful day of 22.6.1972, Hazur Singh deceased had gone to his field.
His wife Surjeet Kaur PW1 and his Son Jaskaran PW2 later on went to the field carrying meals for Hazur Singh.
After, Hazur Singh had taken his meal, all the three were returning to their village from the field at about 12.30 p.m.
Hazur Singh was ahead of Surjeet Kaur and Jaskaran PWs by about one Kila.
When Hazur Singh reached near the water course of the village, the appellant Mani Ram was seen coming from the village side.
He gave a 'lalkara ' to Hazur Singh and immediately fired a shot from his pistol at him.
His brother Hari Ram who was also armed with a gun exhorted Mani Ram appellant to kill Hazur Singh so that the enemy may not escape.
Mani Ram thereupon fired three more shots from his pistol at Hazur Singh, who fell down and died at the spot.
At some distance away, Sukh Ram PW4 was present and he also witnessed the occurrence.
Surjeet Kaur PW1 accompanied by Ganpatram went to police station Tibi and lodged the first information report, exhibit
P/1, at about 3.00 p.m.
A case was accordingly registered and the investigating officer, Nisar Ahmed, PW13, visited the spot.
He prepared the site plan, the site inspector note and effected recovery of the empty cartridges vide memo exhibit
P/6 from the spot.
The body of the deceased was sent for port mortem examination, which was conducted by Dr. K.C. Mittal PW9.
The autopsy report was prepared.
The following injuries found of the dead body of Hazur Singh deceased: (i)Gun shot wound oval in shape with inverted margins, bleeding size 3/4" x 1/2" in the mid right hypochendrium wound is traced upward and backward by the probe.
Shirt is torn over the wound.
(ii)Gun shot would size 13/4" at the lower and of the left side of chest in midaxillary size.
The edges are inverted.
Wound is continued downwards and posteriorly as he is identified by probe.
Shirt is torn.
(iii) Gun shot wound with inverted margin ,, Size 3/4" x 854 1/2" with ulterior medical size of lower and of left arm.
Little bleeding.
Wound is printing upward and posterior through bone.
Shirt over wound is torn.
(iv) Gun shot wound 1 1/4" x 2/4" with margins averted ragged with severe bleeding on the posterior lateral size of the upper fifth of left arm.
Shirt over wound is torn.
(v) Gun shot wound in intra scapular region right side 1" x 1/4" x 3/4" circular averted and tagged margins with severe bleeding.
(vi) Gun shot wound mid back left side 11/2" x 1" ragged and averted margins with severe bleeding.
According to the Doctor, the death was caused due to rupture of vital organs like liver, lung and big blood vessels causing severe hemorrhage and shock as a result of the gun shot injuries and the same were sufficient in the ordinary course of nature to cause death.
After completion of the investigation, the appellant alongwith his brother Hari Ram were sent up for trial.
While the appellant was charged for an offence under Section 302 IPC, Hari Ram was charged for the offence under Section 302/114 IPC.
Both, the appellant and Hari Ram, were also charged for an offence under Section 27 of the Arms Act.
After the trial, the learned Sessions Judge found that there was no case made out against Hari Ram at all and that the prosecution had also not been able to prove the case against the appellant beyond a reasonable doubt.
As a consequence, both Hari Ram and the appellant were acquitted of all the charges by the trial court.
On the State filing an appeal against the judgment and order of acquittal passed by the Trial Court, the High Court allowed the appeal of the State in part and while it set aside the acquittal of the appellant and convicted him for an offence under Section 302 IPC and sentenced him to suffer imprisonment for life, the acquittal of Hari Ram was maintained.
While the State has not questioned the acquittal of Hari Ram, the appellant, as already noticed, has filed this appeal.
Mr. Mahabir Singh, learned counsel for the appellant, submitted that the judgment of the Trial Court could neither be styled as perverse nor even as unreasonable and there were no other substantial and compelling reasons which could justify the setting aside of the order of acquittal and, 855 therefore, the High Court should not I have interfered with the order of acquittal.
Learned counsel urged that the presence of undigested food in the stomach of the deceased belied the prosecution case and that the Trial Court was right in holding that Hazur Sigh Could not have taken the meals at the time stated by his wife Surjeet Kaur PW1 and his son Jaskaran PW2 or murdered at 12.30 p.m. as alleged.
The learned counsel also submitted that the inordinate delay in sending the empty cartridges to the ballistic expert went to show that the possibility that the same had been substituted by the investigating agency could not be ruled out and therefore the conviction of the appellant by the High Court was not justified.
In reply, Mr. Aruneshwar Gupta, learned counsel appearing for the State of Rajasthan, submitted that since it was an appeal under Section 2 of the Supreme Court (Enlargement of Appellate Jurisdiction) Act, 1970, this Court could itself appreciate the evidence to determine the guilt or otherwise of the appellant.
Learned counsel stated that the findings recorded by the Trial Court were based on surmises and conjectures and the High Court was perfectly justified in reversing the order of acquittal.
Learned counsel emphasised that the evidence of PW1 Surjeet Kaur and PW4 Jaskaran conclusively established that the crime had been committed by the appellant by his pistol and their testimony has received ample corroboration not only from the statement of Dr. K.C. Mittal PW9 but also from the evidence of Shri G.R. Prasad PW11, the ballistic expert, who had opined that the four empty cartridges had been fired from the licensed pistol of the appellant and could not have been fired from any other weapon.
Replying to the submission regarding the presence of undigested food, learned counsel submitted that being rustic villagers much importance could not be attached to the time given by PW1 and PW2 during their depositions about the exact time when the deceased may have had his meals and therefore it could not be said that the medical evidence had in any way belied the prosecution case.
We have given our thoughtful consideration to the submissions made at the Bar and have with the assistance of learned counsel for the parties examined the judgments of the courts below as also the material evidence in the case.
We are in agreement with the High Court that the evidence of PW1 Surjeet Kaur and PW2 Jaskaran has not been viewed and considered in 856 the correct and proper prospective by the trial court and undue and unwarranted emphasis had been attached to certain minor discrepancies.
Our independent appraisal of the evidence of both the witnesses PW1 and PW2, the widow and son of the deceased, shows that they are consistent in their versions not only about the assailants but also about the manner of assault, as has been noticed by us in the earlier part of this judgment.
Both the witnesses have given a vivid description of the occurrence.
The statement of PWl Surjeet Kaur that Hazur Singh took his meals at about 10.30 a.m. and that the occurrence had taken at about 12 12.30 in the noon cannot be taken to have been contradicted by the medical evidence.
Indeed, in the postmortem examination, Dr. K.C. Mittal PW9 found semi solid undigested food in the stomach of the deceased".
The doctor opined that digestion begins in 1 or 1 1/2 hours.
From this testimony, what was sought to be made out by the defence was that had the occurrence taken place at 12.30 noon, the deceased would have had his meals before 11.00 a.m. as semi digested food was found in the stomach of the deceased.
The emphasis on this aspect of the case by the Trial Court, in our opinion, is misplaced not only because the medical evidence is only an evidence of opinion and is hardly decisive but also because when Dr. K.C. Mittal PW9 stated that digestion begins in 1 or 1.1/2 hours, he did not clarify as to what was the extent of the undigested food in the stomach of the deceased.
The process of digestion depends upon the digestive power of the an individual and varies from an individual to an individual.
It also depends upon the type and amount of food taken.
The period of digestion is different for different types of food.
Some food articles like mutton, chicken etc.
would take more time for being digested as compared to vegetarian food.
No questions at all were asked from the wife of the deceased about the type of food served to her husband or the amount of food taken by the deceased.
That apart, the time stated by the witnesses as to when the deceased took his food was only an approximate time as it was not even suggested to PWl that she had a wrist watch and had actually seen the time when her husband took his food.
Too much play on such slippery factors goes against realism and is not enough to discredit the otherwise reliable testimony of PW1.
In our opinion, the evidence of PWs 1 and 2 does not stand contradicted by the medical evidence at all and as a matter of fact, the presence of semi solid undigested food in the stomach lends support of the testimony of the two witnesses that they had gone to the field latter on with the food for the deceased and had actually served meal to him.
It lends assurance to their 857 presence in the field with the deceased.
Despite the lengthy cross examination nothing was brought out in the cross examination of either of these two witnesses which could effect the veracity of their testimony.
The first information report was lodged by Surjeet Kaur PWl at 3.00 p.m. at a distance of about 15 miles from the place of occurrence and was therefore lodged with great promptitude and the entire version of the occurrence finds mention in that report.
The testimony of both the witnesses has impressed us and they appear to us to be truthful witnesses and being the close relations of the deceased would, in the ordinary course of things, be the last persons to screen the actual offender and implicate the appellants falsely.
Their testimony also receives ample corroboration from the medical evidence and the testimony of ballistic expert Shri G.R. Prasad PWII.
Dr. Mittal PW9, as already noticed, found six injuries on the deceased and opined that the same were sufficient in the ordinary course of nature to cause the death.
In the FIR exhibit PI lodged soon after the occurrence PWI Surjeet Kaur had stated that Mani Ram appellant had fired 3 4 shots after he had fired the first shot on her husband.
At the trial, she however could not state exactly as to how many shots had been fired by the appellant from his pistol.
That is no surprising because she could not be expected to keep an exact account of the shots fired by the appellant, when she found her husband being shot at and having fallen down dead.
She categorically attributed the gun shot injuries to the appellant and did not attribute any injury to the acquitted accused Hari Ram.
Since, it has been found that the recovered empties had been fired from the pistol of the appellant, it lends sufficient corroboration to her tes timony.
We may ignore the testimony of Sukh Ram PW4 as a matter of abundant caution but that would not in any way detract from the reliability of the testimony of PWI and PW2.
The pistol, weapon of offence, was taken into possession from the appellant by PW6 SHO Bhim Singh.
It is a licensed pistol of the appellant.
According to the evidence of ballistic expert PW11, the empty cartridges sent to him for examination had been fired from that pistol and that pistol alone and from no other similar weapon.
Of course, the sealed packets containing the pistol and the cartridges were sent to the ballistic expert after a long delay and that could have created some doubts about the possibility of substitution of the cartridges, while the packets remained with the police but the evidence on the record rules out any possibility of such 858 a substitution.
The three sealed packets, one, containing pistol, the second, containing the empty cartridge recovered from the spot and the third, containing the three empty cartridges recovered from the appellant alongwith the pistol, were deposited in the malkhana of the police station.
They had been received by Head Constable Mani Ram PW10 on 23.6.1972, the very next day after the occurrence.
He had sent the same to the Police lines at Ganganagar.
The prosecution examined PW12 Amar Singh who had carried the three packets from the police station to the police lines at Ganganagar.
He categorically stated that while the packets remained with him, they were not tampered with at all.
PW10 Mani Ram also deposed that during the period, the sealed packets remained in the malkhana, they were not tampered with by anyone and that they were handed over to Amar Singh PW12 in the same condition.
According to PW7 Ram Chandra, he received the three packets from Amar Singh and after taking them into custody he made an entry in the register and that while the packets remained in his custody, nobody tampered with them.
The packets were sent to the ballistic expert and received there by Jaswant Singh PW8 and Mamraj Singh.
Jaswant Singh, appearing as PW8, deposed that he delivered the packets to the ballistic expert on the very next day after receiving them and while the packets remained in his custody, nobody tampered with them.
According to the Ballistic expert, PW11, the packets when received by him were properly sealed and the seals were intact and tallied with the specimen of the seal sent to him.
None of these witnesses were at all cross examined.
No suggestion even was made to anyone of them that the sealed packets had allegedly been tampered with while in their custody.
No such suggestion was even made to SHO Bhim Singh PW6 that he had either substituted the cartridges sent to the ballistic expert or other wise tampered with the sealed packets.
It is, therefore, futile to contend that the possibility of the substitution of the cartridges could not be ruled out.
There is no basis for such an argument.
The evidence of the ballistic expert, Shri G.R. Prasad PW11, read with the medical evidence of PW9 and the testimony of the eye witnesses PWs1 and 2 clearly establishes that the appellant had fired from his licensed pistol at the deceased and that the deceased dies as a result of the pistol shot injuries received by him.
We agree with learned Judge of the High Court that there are no suspicious features at all appearing in the evidence which may cast any doubt on the prosecution version that the deceased was shot at with the pistol by the appellant and that he died as a result of the injuries so received. 859 Thus, in view of what we have discussed above, we find that the prosecution has successfully established the case against the appellant beyond any reasonable doubt and since the Trial Court had passed an order of acquittal on wholly erroneous grounds, the High Court after a proper appraisal of the evidence was right in setting aside the order of acquittal and convicting the appellant for an offence under Section 302 IPC as well for an offence under Section 27 Arms Act.
Our independent analysis of the evidence on record shows that the order of conviction and the sentence of life imprisonment and two years rigorous imprisonment recorded by the High Court against the appellant for the offence under Sections 302 IPC and 27 Arms Act respectively is well merited and does not call for any interference.
Both the sentences shall, however, run concurrently.
Consequently, the appeal fails and is dismissed.
The appellant is on bail.
His bail bonds shall stand cancelled and he shall be taken into custody to suffer the remaining period of the sentence.
V.P.R. Appeal dismissed. [/INST] The prosecution case was that about 20 22 days prior to the occurrence the appellant and his brother removed the fencing over the field of the deceased.
This resulted in a quarrel and created ill feelings between the deceased and the appellant and his brother.
On the date of occurrence, the deceased went to his field.
Later on his wife, P.W.1 and his son, PW2 went to the field carrying meals for the deceased.
The deceased took his meal and at about 12.30 p.m., all the.
three were returning to their village from the field, near at the water course of the village, the appellant, who was coming from the village side, gave a 'lalkara ' to the deceased and he fired a shot from his pistol at the deceased.
The appellant 's brother exhorted him to kill the deceased.
Thereupon the appellant fired three more shots from his pistol.
The deceased fell down and died at the spot.
PW1 accompanied by one Ganpatram went to police station and lodged the first information report at about 3 p.m. and the police investigation was commenced.
The appellant and his brother were sent up for trial, charging the former under section 302 IPC and the latter under section 302/114 IPC.
Both were also charged under section 27 of the Arms Act.
The Trial Court acquitted the appellant and his brother of all the 850 charges, as it found that the prosecution was unable to prove the case against them.
The State 's appeal was partly allowed by the High Court.
The High Court set aside the acquittal of the appellant and convicted him for an offence under section 302 IPC and sentenced him to undergo life imprisonment.
The High Court maintained the acquittal of the appellant 's brother.
Under section 2(a) of the Supreme Court (Enlargement of Appellate Jurisdiction) Act, 1970 the present appeal was riled, contending that the judgment of the Trial Court could neither be styled as perverse nor even as unreasonable and that there was no other substantial and compelling reasons which could justify the setting aside of the order of acquittal and, therefore, the High Court should not have interfered with the order of acquittal; that the presence of undigested food in the stomach of the deceased belied the prosecutions, case and that the Trial Court was right in holding that the deceased could not have taken the meals at the time stated by his wife PW1 and his son, PW2 or murdered at 12.30 p.m., as alleged; that the inordinate delay in sending the empty cartridges to the ballistic expert went to show that the possibility that the same had been substituted by the investigating agency could not be ruled out and therefore the conviction of the appellant by the High Court was not justified.
The State submitted that since it was an appeal under Section 2 of the Supreme Court (Enlargement of Appellate Jurisdiction) Act, 1970, this court could itself appreciate the evidence to determine the guilt or otherwise of the appellant; that the findings recorded by the Trial Court were based on surmises and conjectures and the High Court was perfectly justified in reversing the order of acquittal; that the evidence of PW1 and PW2 conclusively established that the crime had been committed by the appellant by his pistol and their testimony had received ample corroboration not only from the statement of the doctor, PW9, but also from the evidence of PW11l the ballistic expert, who had opined that the four empty cartridges had been fired from the licenced pistol of the appellant and could not have been fired from any other weapon; that being rustic villagers much importance could not be attached to the time given by PW1 and PW2 during their depositions about the exact time when the deceased may have had his meals and therefore it could not be said that the medical 851 evidence had in any way belied the prosecution case.
Dismissing the appeal, this Court, HELD: 1.01.
The process of digestion depends upon the digestive power of an individual and varies from in individual to an individual.
It also depends upon the type and amount of food taken.
The period of digestion is different for different types of food.
Some food articles like mutton, chicken etc.
would take more time for being digested as compared to vegetarian food.
No question at all were asked from the wife of the deceased about the type of food served by her to her husband or the amount of food taken by the deceased.
That apart, the time stated by the witnesses as to when the deceased took his food was only an approximate time as it was not even suggested to PW1 that she had a wrist watch and had actually seen the time when her husband took his food.
Too much play on such slippery factors goes against realism and is not enough to discredit the otherwise reliable testimony of PW1.
[856E F] 1.02.
The doctor opined that digestion begins in 1 or 1 1/2 hours.
From this testimony, what was sought to be made out by the defence was that had the occurrence taken place at 1230 noon, the deceased would have had his meals before 11.00 a.m. as semi digested food was found in the stomach of the deceased.
The emphasis on this aspect of the case by the Trial Court, is misplaced because the medical evidence is only an evidence of opinion and is hardly decisive.
[856 D] 1.03.
The evidence of both the witnesses PW1 and PW2, the widow and son of the deceased, shows that they are consistent in their versions not only about the assailants but also about the manner of assault.
Both the witnesses have given a vivid description of the occurrence.
The statement of PW1 that the deceased took his meals at about 1030 a.m. and that the occurrence had taken at about 12 1230 in the noon cannot be taken to have been contradicted by the medical evidence.
[856 B] 1.04.
The first information report was lodged by PW1 at 3.00 p.m. at a distance of about 13 miles from the place of occurrence and was therefore lodged with great promptitude and the entire version of the occurrence rinds mention in that report.
[857 B] 1.05.
The testimony of the PWs 1 and 2 has impressed the Court and 852 they appear to be truthful witnesses and being the close relations or the deceased would, in the ordinary course of things, be the last person to screen the actual offenders and implicate the appellants falsely.
Their testimony also receives ample corroboration from the medical evidence and the testimony of ballistic expert, PW11.
[857 B C] 1.06.
No suggestion even was made to anyone of the PWs.
6, 7, 8, 10, 12 that the sealed packets had allegedly been tampered with while in their custody.
No such suggestion was even made to PW6 that he had either substituted the carriages sent to the ballistic expert or otherwise tampered with the sealed packets.
There is no possibility of the substitution of the cartridges.
[859 F] 1.07.
Thus there are no suspicious features at all appearing in the evidence which may cast any doubt on the prosecution version that the deceased was shot at with the pistol by the appellant and that he died as a result of the injuries so received.
The prosecution had successfully established the case against the appellant beyond any reasonable doubt.
[858 H, 859 A] </s> |
<s>[INST] Summarize the following judgement: Appeal No. 3607 11 of 1988.
From the Judgment and Order dated 12.7.1988 of the Calcutta High Court in F.M.A.T. Nos. 2301, 2326 and 2327 of 1986.
Tapas Ray, Dr. Shankar Ghosh, B. Dutta, H.K. Puri, S.K. Nandy, Sushil Kr.
Jain and R.K. Joshi for the Appellants.
G.L. Sanghi, N.R. Chowdhary, Som Nath Chatterjee for the Respondents.
The Judgment of the Court was delivered by VERMA, J.
These appeals involve for decision a common question, relating to fixation of seniority of certain Sub Assistant Engineers appointed ad hoc temporary Assistant Engineers for a specified period in the P.W.D. and the Irrigation and Waterways Department of the Government of West Bengal, vis a vis the direct recruits in the cadre of Assistant Engineers appointed regularly according to rules in these departments prior to the regularisation of the ad hoc appointees.
The question was raised by the ad hoc appointees who were regularised subsequently, by filing writ petitions in the Calcutta High Court claiming revision of their seniority, reckoned from the date of their initial ad hoc appointment.
These writ petitions were dismissed by a Single Bench of the High Court but the writ appeals were allowed by a division bench, resulting in grant of the relief claimed by the ad hoc appointees.
It is these judgments, involving the common question of the merit of the claim of the ad hoc appointees for seniority, reckoned from the date of their initial ad hoc appointment, in he facts and circumstances of the case, which are challenged in these appeals.
925 Civil Appeal No. 3607 of 1988 is by the State of West Bengal while Civil Appeal No. 3610 of 1988 is by the adversely affected direct recruits who were respondents in the writ petition filed by the ad hoc appointees in the P.W.D. Civil Appeal No. 3608 of 1988 is by the State of West Bengal while Civil Appeal No. 3611 of 1988 is by the adversely affected direct recruits who were respondents in the writ petition filed by the ad hoc appointees in the Irrigation and Waterways Department.
Civil Appeal No. 3609 of 1988 is a similar matter, also relating to the Irrigation and Water ways Department.
The material facts are only a few, and may be stated with reference to the P.W.D., pointing out the minor difference on facts between the ad hoc appointments made in the PWD and Irrigation and Waterways Department, which are not significant on the conclusion reached.
In exercise of the powers conferred by the proviso to Article 309 of the Constitution of India, the Governor of West Bengal made Rules by Notification No. 94 dated 20th August, 1959 for the regulation of recruitment to the Engineering Services under the Department of Works and Buildings of the Government of West Bengal.
In the present case, we are concerned with the cadre of Assistant Engineers, for which the relevant rules are : "Rule 4: There will be an examination held by the Public Service Commission, West Bengal, for recruitment to posts of Assistant Engineer.
A certain proportion of such posts as may be determined by the Works and Buildings Depart ment from time to time, will be filled up by candidates, in order of merit, who will be given a higher initial pay of Rs. 325 per month in the time scale of pay for Assistant Engineers.
In order to be eligible for such higher initial pay a candidate must secure 66 per cent or above of the total marks in the said examination.
Rule 9: Recruitment to the permanent posts of Assistant Engineer shall be made as follows 926 (a)Forty per cent of vacancies by direct recruitment on the results of a competitive examination to be conducted by the Public Service Commission, West Bengal as mentioned in rule 4 supra: Qualifications : (i)A degree in Civil Engineering of a recognised University or any other qualification in Civil Engineering exempting a candidate from appearing in Sections A and B of Associate Membership Examination of the Institute of Engineers (India).
(ii)One year 's post graduate practical training or study or research or practica l engineering experience.
(iii)Age not more than 27 years on the 1st August of the year in which the recruitment examination is held.
The age limit shall in the case of candidates who have been in the employ of the Central or the State Government or of the Damodar Valley Corporation or any other statutory body recognised for the purpose by the Government and are not out of such employment for more than a year on the said date be releasable to the extent of the actual period spent (continuously) in such employment.
This relaxation of age limit will not be permitted to a candidate who had already appeared in the examination thrice.
No candidate will be allowed to take more than three chances.
Departmental candidates are ' eligible to apply provided they fulfill the requisite qualifications.
(b)Forty per cent by selection from amongst directly recruited temporary Assistant Engineers who have rendered two years satisfactory service, selection wing made by the Public Service Commission, West Bengal.
927 (c)Twenty per cent by promotion of confirmed Overseer Estimators.
Rule 10 Recruitment to temporary posts of Assistant Engineer shall be made as follows . (a) Eighty per cent of the vacancies are to be filled by direct recruitment on the results of a competitive examination referred to in rule 9(a) above.
(b) Twenty percent by promotion of confirmed Overseer Estimators.
Rule 11 Notwithstanding anything contained in these rules the Governor may in case of emergency fill up vacancies in the posts of Assistant Engineer both permanent and temporary by advertisement and interview, through the Public Service Commission, West Bengal.
Rule 12 An Overseer Estimator shall not be promoted as a temporary Assistant Engineer unless he has rendered 10 years services.
To be eligible fo r promotion he must pass a written and oral examination which will be conducted by the Public Service Commission, West Bengal, and will be of the same standard as Professional Examination referred to in Chapter VI of the Service (Training and Examination) Rules, West Bengal, Overseer Estimators who have been confirmed in their posts and have tendered 8 years ' service including temporary service in that post shall be eligible to sit for such examination, a panel of Overseer Estimator fit for promotion as temporary Assistant Engineers shall be maintained in consultation with the Public Service Commission, West Bengal.
" Under these Rules, recruitment to the permanent posts of Assistant Engineers was required to be made under Rule 9, while Rule 10 governed 928 recruitment to the temporary posts of Assistant Engineers.
Rule 11 provided for emergency appointment by advertisement and interview through the Public Service Commission.
It is clear from these Rules that appointments to all the posts, permanent and temporary were to be made according to the prescribed procedure, on the basis of a competitive examination conducted by the Public Service Commission; and even the appointments made in an emergency governed by Rule 11 were to be made 'by advertisement and interview through the Public Service Commission '.
Any appointment to a permanent or temporary post of Assistant Engineer, which was not made in accordance with Rule 9 or 10 or 11 was, therefore, not in accordance with these Rules.
The writ petitioners in all these matters were duly appointed Sub Assistant Engineers who were earlier called Overseer Estimators as described in the Rules, and though initially diploma holders, having obtained the prescribed degree, were eligible for appointment as Assistant Engineers.
The writ petitioners (respondents in these appeals) were appointed temporary Assistant Engineers on ad hoc basis, initially for a period of six months in the PWD between.
1974 to 1976 and in the Irrigation and Waterways Department between 1972 to 1978.
According to writ petitioners themselves, their claim for seniority is based on direct recruitment to the post of Assistant Engineer, and not as promotee from the next below cadre of Sub Assistant Engineers in the promotion quota specified for them, in the Rules.
It is, therefore, the claim of the writ petitioners for seniority from the date of their initial ad hoc appointment, as direct recruits, and not as promotees in the promotion quota, which has to be considered.
The ad hoc appointment of all the writ petitioners was in identical terms and, therefore, it is sufficient to refer merely to the relevant part of one such notification dated 10th May, 1974, as illustrative of the nature of their ad hoc appointment.
The relevant part of the notification is as under "The Governor is pleased to appoint the following Sub Assistant Engineers of the P.W.D. now posted in the Directorates/offices mentioned against each as tempy.
Assistan t Engineers in the West Bengal Service of Engineers under the P.W. Department, on ad hoc basis, for a period of 6 (six) months with effect from the dates of joining or until further orders whichever is earlier.
929 4.
The appointment is purely on ad hoc basis and he will have to revert to the post of S.A.E. if he is not selected for regular appointment as Assistant Engineer through the P.S.C." The initial ad hoc appointment was extended periodically, on the same terms, during the entire period upto 26.2.1980.
During this period, several opportunities were given to these persons to appear before the Public Service Commission to satisfy the condition attached to their ad hoc appointment, but none of the writ petitioners complied with the requirement, declining throughout to appear before the Public Service Commission.
Strangely, the State Government requested the Public Service Commission to permit regularisation of the services of these ad hoc, appointees as Assistant Engineers, without being selected for regular appointment by the Public Service Commission, but the Public Service Commission firmly turned down that request.
The PSC 's letters dated 4.5.1978, 10.10.1979 and 22.11.1979 contain such refusal.
The Government, even then, took the decision on 26th February, 1980 to regularise these persons as Assistant Engineers, and, consequently, took three simultaneous steps on 26.2.1980: the requirement in the rules of consultation with the P.S.C. was dispensed with, for them; they were absorbed as temporary Assistant Engineers; and rule under Article 309 was made, providing for their seniority as temporary Assistant Engineers, with effect from the same date i.e. 26.2.1980.
This rule clearly provided, that all persons appointed regularly in accordance with rules, prior to 26.2.1980, as Assistant Engineers would rank above the ad hoc appointees so absorbed with effect from 26.2.1980.
This decision of the Government has also been implemented.
Surprisingly, the grievance, even then, of the writ petitioners is, that their seniority should be reckoned not only from 26.2.1980, as has been done, but from the date of their initial ad hoc appointment made temporarily in the above manner, notwithstanding the conditions attached to that appointment under the rules, and their failure to fulfill the same.
It is sufficient to refer to certain portions of the PSC 's reply dated 4th May, 1978 to the State Government 's proposal for regularisation of ad 930 hoc appointments, reiterating the strong objection of PSC that 'the appointments had been ab initio irregular, illegal and unconstitutional. ' Relevant extract from the reply is as under: "2.
It appears that the cases of 27 of 36 ad hoc appointments of Assistant Engineer (29 in the Civil Branch and 7 in the Electrical Branch) under the Public Works Department as made between May, 1974 and June, 1975 were earlier reported to the Commission in January, 1975.
The Commission informed Government that the appointments had been ab initio irregular, illegal and unconstitutional and requested Government to make regular recruitment to the posts after advertisement (vide Secretary 's D.O. No. 370 PSC dated the 8th March, 1975).
The Commission also brought the irregularity to the notice of the Chief Secretary whose reply in this regard was as follows (vide Chief Secretary 's letter No. 938/75 CS dated the 22nd August, 1975 issued by Public Works (Estt.) Department : '.
The ad hoc appointments in question were made by the Public Works Department in the exigencies of public service pending recruitment of Assistant Engineers through the Public Service Commission, West Bengal and on the express condition that the concerned of ficers would have 'lo revert if they failed to be selected by the Public Service Commission for appointment as Assistant Engineers.
" 3.It appears that of the 29 ad hoc Assistant Engineers (Civil) only 3 applied in response to the Commission 's subsequent advertisement.
None of them however appeared at the preliminary written test held by the Com mission in that connection.
As regards the 7 posts of Assistant Engineers (Electrical) it appears that all the 7 ad hoc appointees applied in response to the Commission 's advertisements issued in 1975 but that none of them was able to obtain even the pass mark at the interviews.
In the above context it is not clear how Government can 931 now sponsor a proposal for regularisation of the appointment of these ad hoc appointees.
" In this reply it was finally said that the illegality of these ad hoc appointments could not be cured.
It was after the strong stand taken by the PSC, that the State Government took the aforesaid action on 26.2.1980 to dispense with the requirement of consultation with the PSC, and regularise appointments of ad hoc appointees with effect from 26.2.1980.
The Rules for seniority made by the notification dated 26.2.1980 issued in exercise of the power conferred by the proviso to Article 309 of the Constitution, are as under "1.
These rules may be called the Seniority Rules for the Assistant Engineers recruited in the Public Works Department otherwise than through the Public Service Commission, West Bengal during the period from May 1974 t o June,1976. 2.
The Assistant Engineers under Public Works Department who were recruited otherwise than through the Public Service Commission, West Bengal during the period from May 1974 to June 1976 and who were excluded from the purview of the Public Service Commission, West Bengal under this department notification No. 1299 F dated 26.2.1982, shall be deemed to be junior to any Assistant Engineer who was selected by the Public Service Commission, West Bengal and was appointed on a date prior to 26th February, 1980.
The inter seniority in respect of the Assistant Engineers who are covered by the said notification shall be determined on the basis of select list, if any.
In the absence of any such select list the inter se seniority should be determined on the basis of their length of service as Assistant Engineer in the Public Works Department." (emphasis supplied) These ad hoc appointees having obtained the benefit of regularisation with effect from 26.2.1980 without being selected by the PSC, and being given the benefit of seniority from the date of their regularisation on 932 26.2.1980, have challenged the Government 's action and claimed seniority with effect from the date of their initial ad hoc appointment, of this nature.
It may, here be mentioned, that in case of the ad hoc appointees in the Irrigation and Waterways Department, even a rule for seniority being given to them from 26.2.1980 was not made, as was done for the ad hoc appointees in the P.W.D., and yet they have also been given the same benefit.
They make the same grievance, inspite of this.
On behalf of the appellants, State of West Bengal and the direct recruits aggrieved by the judgment of the Division Bench of the High Court, it has been urged that the claim of the writ petitioners (respondents in these appeals) for seniority being given to the, retrospectively from the date of their initial ad hoc appointment, made contrary to the rules, in spite of their regularisation being made expressly from 26.2.1980, is wholly untenable and against the decisions of this Court, particularly the constitution bench decision in Direct Recruit Class II Engineering Officer 's Association and Ors.
vs State of Maharashtra and Ors.
, ; = ; On this basis, it was submitted that the Division Bench of the High Court committed an error in reversing the judgment of the Single Bench, by which the writ petitions had been dismissed.
In reply Shri G.L. Sanghi appearing for the writ petitioners (respondents in all these appeals) submitted, that the initial ad hoc appointment of the writ petitioners was made by a mode permissible under the rules; that appointment was made in relaxation of ' the rules by the Government which is implicit in the action taken; the initial ad hoc appointment must, therefore, be equated with a regular appointment made under the rules; and on this equation there is no justification for discrimination between the initial ad hoc appointees and regular appointees coming in by direct recruitment thereafter in accordance with rules.
It was submitted that the initial ad hoc appointment being, therefore, in the nature of regular appointment, made during an emergency, after selection by a Committee consisting of five Chief Engineers, these persons are entitled to count their entire service including the ad hoc period prior to 26.2.1980, for the purpose of their seniority.
Shri Sanghi relied on the decisions of this Court in A. Janardhana vs Union of India and Ors.[1983] 2 SCR 936 and Narender Chadha Ors.
vs Union of India and Ors. ; to support his submission.
Shri Sanghi further submitted, that the case of the writ petitioners fell squarely within the ambit of conclusion (B) of the summary 933 in Maharashtra Engineers case (in para 44 of the SCR = para 47 of SCC.
The question, therefore, is whether Shri Sanghi is right in his submission that this case falls within the ambit of the said conclusion (B) in Maharashtra Engineers case.
The submission of the other side is that this case falls, not within conclusion (B) but the corollary mentioned in con clusion (A), of that decision.
Conclusions (A) and (B), which alone are material, are as under : "(A) Once an incumbent is appointed to a post according to rule, his seniority has to be counted from the date of his appointment and not according to the date of his confirmation.
The corollary of the above rule is that where the initial appointment is only ad hoc and not according to rules and made as a stop gap arrangement, the officiation in such post cannot be taken into account for considering the seniority.
(B)If the initial appointment is not made by following the procedure laid down by the rules but the appointee continues in the post uninterruptedly till the regularisation of his service in accordance with the rules, the period of officiating service will be counted.
" It is not necessary to deal at length with the decisions of this court in A. Janardhana and Narender Chadha in view of the later constitution bench judgment in Maharashtra Engineers ' case, wherein all the relevant earlier decisions have been considered before summarising the conclusions (in para 44 of SCR = para 47 of SCC).
We may, however, briefly refer to the decisions in A. Janardhana and Narender Chadha, since Shri Sanghi has strongly relied on them.
It may be mentioned that both these decisions related to inter se seniority of direct recruits and promotees, the two channels for appointment to the posts, where there was a quota prescribed for the two channels leading to rota for confirmation, and the seniority was based on the date of confirmation, according to rules.
The dispute arose as a result of promotions being made in excess of the promotees quota, in the case of the surplus promotees.
It 934 was in that context, that the question of taking into account longer period of continuous officiation for the purpose of fixing inter se seniority of direct recruits and promotees, came up for consideration.
Those cases are clearly distinguishable.
In the present case, there is no dispute between promotees and direct recruits, the claim of the writ petitioners being based only as direct recruits in the cadre of Assistant Engineers, and not as promotees from the lower cadre of Sub Assistant Engineers to which they had earlier belonged.
The present is, therefore not a case of a dispute relating to the surplus promotees, who were given promotion regularly in accordance with rules, but in excess of the quota fixed for them under the rules.
In the present case, all the writ petitioners are persons who were given ad hoc temporary appointments for a fixed period, which was extended from time to time till their regularisation on 26.2.1980, and that too by relaxation of the condition of selection by the Public Service Commission, which was an express condition of their ad hoc appointment and a requirement for regular appointment under the Rules.
Assuming the relaxation made in their case by the State Government on 26.2.1980 to be valid, as the same is not disputed before us, they could be treated as regularly appointed only with effect from 26.2.1980 when the relaxation was given to them, and an order was made simultaneously absorbing them in the cadre of Assistant Engineers, also framing a rule at the same time under Article 309 providing for fixation of their seniority only from that date.
Accordingly, there is no foundation for the claim that they could be treated at par with the direct recruits, regularly appointed prior to 26.2.1980.
The admitted facts, which are the foundation of the claim of the writ petitioners, are sufficient to negative their claim.
It is obvious that prior to the steps taken by the State Government on 26.2.1980 for their regularisation in this manner, there was no basis on which the writ petitioners could claim to be regularly appointed as Assistant Engineers; and, therefore, the manner in which they were regularised, including the mode of fixation of their seniority with effect from 26.2.1980, is decisive of the nature of their regular appointment.
This alone is sufficient to negative their further claim.
They can make no grievance to any part of that exercise, made only for their benefit.
The constitution bench in Maharashtra Engineers ' case, while dealing with Narender Chadha, emphasised the unusual fact that the promotees in question had worked continuously for long periods of nearly fifteen to 935 twenty years on the posts without being reverted, and then proceeded to state the principle thus : "We, therefore, confirm the principle of counting towards seniority the period of continuous officiation following an appointment made in accordance with the rules prescribed for regular substantive appointments in the service. ' The constitution bench having dealt with Narendra Chadha in this manner, to indicate the above principle, that decision can not be construed to apply to cases where the initial appointment was not according to rules.
We shall now deal with conclusions (A) and (B) of the constitution bench in the Maharashtra Engineers ' case, quoted above.
There can be no doubt that these two conclusions have to be read harmoniously, and conclusion (B) can not cover cases which are expressly excluded by conclusion (A).
We may, therefore, first refer to conclusion (A).
It is clear from conclusion (A) that to enable seniority to be counted from the date of initial appointment and not according to the date of confirmation, the incumbent of the post has to be initially appointed ,according to rules '.
The corollary set out in conclusion (A), then is, that 'where the initial appointment is only ad hoc and not according to rules and made as a stop gap arrangement, the officiation in such posts cannot be taken into account for considering the seniority.
Thus, the corollary in conclusion (A) expressly excludes the category of cases where the initial appointment is only ad hoc and not according to rules, being made only as a stop gap arrangement.
The case of the writ petitioners squarely falls within this corollary in conclusion (A), which says that the officiation in such posts cannot be taken into account for counting the seniority.
This being the obvious inference from conclusion (A), the question is whether the present case can also fall within conclusion (B) which deals with cases in which period of officiating service will be counted for seniority.
We have no doubt that conclusion (B) cannot include, within its ambit, those cases which are expressly covered by the corollary in conclusion (A), since the two conclusions cannot be read in conflict with each other.
936 The question therefore, is of the category which would be covered by conclusion (B) excluding therefrom the cases covered by the corollary in conclusion (A).
In our opinion the conclusion (B) was added to cover a different kind of situation, wherein the appointments are otherwise regular, except for the deficiency of certain procedural requirements laid down by the rules.
This is clear from the opening words of the conclusion (B), namely, 'if the initial appointment is not made by following the procedure laid down by the rules ' and the later expression 'till the regularisation of his service in accordance with the rules '.
We read conclusion (B), and it must be so read to re councile with conclusion (A), to cover the cases where the initial appointment is made against an existing vacancy, not limited to a fixed period of time or purpose by the appointment order itself, and is made subject to the deficiency in the procedural requirements prescribed by the rules for adjudging suitability of the appointee for the post being cured at the time of regularisation, the appointee being eligible and qualified in every manner for a regular appointment on the date of initial appointment in such cases.
Decision about the nature of the appointment, for determining whether it falls in this category, has to be made on the basis of the terms of the initial appointment itself and the provisions in the rules.
In such cases, the deficiency in the procedural requirements laid down by the rules has to be cured at the first available opportunity, without any default of the employee, and the appointee must continue in the post uninterruptedly till the regularisation of his service, in accordance with the rules.
In such cases, the appointee is not to blame for the deficiency in the procedural requirements under the rules at the time of his initial appointment, and the appointment not being limited to a fixed period of time is intended to be a regular appointment, subject to the remaining procedural requirements of the rules being fulfilled at the earliest.
In such cases also, if there be any delay in curing the defects on account of any fault of the appointee, the appointee would not get the full benefit of the earlier period on account of his default, the benefit being confined only to the period for which he is not to blame.
This category of cases is different from those covered by the corollary in conclusion (A) which relates to appointment only on ad hoc basis as a stop gap arrangement and not according to rules.
It is, therefore, not correct to say, that the present cases can fall within the ambit of conclusion (B), even though they are squarely covered by the corollary in conclusion (A).
937 In view of the above, it is clear that the claim of the writ petitioners (respondents in all these appeals) for treating their entire period of 'service prior to 26.2.1980 as regular service for the purpose of seniority, and fixation of their seniority accordingly, is untenable.
The submission of Shri Sanghi that their initial ad hoc appointment must be treated as having been made in accordance with the rules since the selection by an alternative mode, namely, by a committee of five Chief Engineers was resorted to on account of the emergency, cannot be accepted.
Rule 11 of the 1959 Rules provides for appointments to be made during emergency, and lays down that such appointments during emergency can be made only 'by advertisement and interview, through the Public Service Commission, West Bengal. ' Admittedly, this express requirement in Rule 11 was not followed or fulfilled subsequently, and, therefore, the initial ad hoc appointments cannot be treated to have been made according to the applicable rules.
These ad hoc appointments were clearly not in accordance with the rules, and were made only as a stop gap arrangement for fixed period, as expressly stated in the appointment order itself.
Thus, there is no escape from the conclusion that the present cases fall squarely within the ambit of the corollary in conclusion (A), of Maharashtra Engineers case and, therefore, the period of ad hoc service of writ petitioners (respondents) on the post of Assistant Engineer prior to 26.2.1980, cannot be counted for reckoning their seniority.
Consequently, these appeals are allowed.
The impugned judgments of the Division Bench of the High Court, are set aside, and those of the Single Bench dismissing the writ petitions are restored.
No costs.
N.V.K. Appeals allowed. [/INST] By Notification No. 94 dated 20th August, 1959 the Governor of West Bengal made Rules under the proviso to Article 309 of the Constitution of India for the regulation of recruitment to the Engineering Services under the Department of Works and Buildings of the State Government.
Under these Rules, recruitment to the permanent posts of Assistant Engineers was to be made under Rule 9, while Rule 10 governed recruitment to the temporary posts of Assistant Engineers.
Rule 11 provided for emergency appointment by advertisement and interview through the State Public Service Commission, on the basis of a competitive examination conducted by the Service Commission.
Accordingly, any appointment to a permanent or temporary post of Assistant Engineer, which was not made in accordance with Rule 9, or 10 or 11 was, therefore, not in accordance with these Service Rules.
The respondents in the appeals were petitioners in the writ petitions in the High Court.
They were duly appointed Sub Assistant Engineers who were earlier called Overseer Estimators and though Initially diploma holders having obtained the prescribed degree were eligible for appointment as Assistant Engineers.
They were appointed temporary Assistant Engineers on ad hoc basis, initially for a period of six months in the PWD 1974 to 1976 and in the Irrigation and Waterways Department 920 between 1972 to 1978.
They claimed seniority on the basis of their direct recruitment to the post of Assistant Engineer, and not as promotee from the next below cadre of Sub Assistant Engineers In the promotion quota specified for them in the Rules.
Their initial ad hoc appointment was extended periodically upto 26.2.1980, and during this period, several opportunities were given to these persons to appear before the Public Service Commission to satisfy the condition attached to the ad hoc appointment, but none of them complied with the requirement, declining throughout to appear before the Public Service Commission.
The State Government requested the Public Service Commission to permit regularisation of the services of these ad hoc appointees as Assistant Engineers, without being selected for regular appointment by the Public Service Commission but the Public Service Commission by several letters turned down that re quest.
The Government, finally took the decision on 26th February, 1980 to regularise these persons as Assistant Engineers, and, consequently took three simultaneous steps on 26 2 1980 viz. (1) the requirement in the rules of consultation with the Public Service Commission being dispensed with, (2) absorbtion as temporary Assistant Engineers and (3) a service rule under Article 309 providing for seniority as temporary Assistant Engineers with effect from the same date i.e. 26 2 1980.
This statutory rule clearly provided, that all persons appointed regularly in accordance with rules, prior to 26 2 1980, as Assistant Engineers would rank above the ad hoc appointees so absorbed with effect from 26 2 1980 and the Government implemented this decision.
The question before the High Court related to the fixation of seniority of these Sub Assistant Engineers appointed ad hoc temporary Assistant Engineers for a specified period in the PWD and the Irrigation and Waterways Department, vis a vis the direct recruits in the cadre of Assistant Engineers appointed regularly according to rules in the department prior to the regularisation of the ad hoc appointees.
The writ petitions were dismissed by a Single Judge of the High Court, but the writ appeals were allowed by the Division Bench resulting in grant of the relief claimed by the ad hoc appointees.
In the appeals to this Court by the State of West Bengal, and the adversely affected direct recruits who were respondents in the writ petitions filed by the ad hoc appointees, it has been urged that the claim of 921 the respondents for seniority being given to them retrospectively from the date of their initial ad hoc appointment, made contrary to the rules, in spite of their regularisation being made expressly from 26 2 80, is wholly untenable and against the decisions of this Court particularly the Constitution Bench decision on Direct Recruit Class II Engineering Officers ' Association and Ors.
vs State of Maharashtra and Ors.
,[1990] 2 SCR 900 = ; , and that the Division Bench of the High Court com mitted an error in reversing the judgment of the Single judge Bench which had dismissed the writ petitions.
The appeals were contested by the respondents by submitting that the initial ad hoc appointment of the writ petitioners was made by a mode permissible under the Service Rules, that appointment was made in relaxation of the rules by the Government which is implicit in the action taken, the initial ad hoc appointment must, therefore, be equated to the regular appointment made under the Rules, and on this equation there is no justification for discrimination between the initial ad hoc appointees and regular appointees coming in by direct recruitment thereafter in accordance with the rules.
It was further submitted that the case fell squarely within the ambit of conclusion (B) of the summary In Maharashtra Engineers case.
Allowing the appeals, this Court, HELD : 1.
There is no dispute between promotes and direct recruits, the claim of the writ petitioners being based only as direct recruits in the Cadre of Assistant Engineers, and not as promotees from the lower cadre of Sub Assistant Engineers to which they had earlier belonged.
The present is, therefore, not a case of a dispute relating to the surplus promotees, who were given promotion regularly in accordance with rules, but in excess of the quota fixed for them under the rules.
In the present case, all the writ petitioners are persons who were given ad hoc temporary appointments for a fixed period, which was extended from time to time till their regularisation on 26 2 1980, and that too by relaxation of the condition of selection by the Public Service Commission, which was an express condition of their ad hoc appointment and a requirement for regular appointment under the Rules.
Assuming the relaxation made in their case by the State Government on 26 2 1980 to be valid, they could be treated as regularly appointed only with effect from 26 2 1980 when the 922 relaxation was given to them, and an order was made simultaneously absorbing them in the cadre of Assistant Engineers, also framing a rule at the same time under Article 309 providing for fixation of their seniority only from that date.
Accordingly, there is no foundation for the claim that they could be treated at par with the direct recruits, regularly appointed prior to 26 2 1980.
[934 C E] 2.
Prior to the steps taken by the State Government on 26 2 1980 for regularisation, there was no basis on which the writ petitioners could claim to be regularly appointed as Assistant Engineers; and, therefore, the manner in which they were regularised, including the mode of fixation of their seniority with effect from 26 2 1980, is decisive of the nature of their regular appointment.
This alone is sufficient to negative their further claim.
They can make no grievance to any part of that exercise, made only for their benefit [934 F G] 3.
The claim of the writ petitioners (respondents in all these appeals) for treating their entire period of service prior to 26 2 1980 as regular service for the purpose of seniority, and fixation of their seniority accordingly, is untenable.
1937 A] 4.
Rule It of the 1959 Rules provides for appointments to be made during emergency, and lays down that such appointments can be made only by advertisement and interview, through the Public Service Commission.
Admittedly, this express requirement in Rule 11 was not followed or fulfilled subsequently, and, therefore, the initial ad hoc appointments cannot be treated to have been made according to the applicable rules.
These ad hoc appointments were clearly not in accordance with the rules, and were made only as a stop gap arrangement for fixed period, as expressly stated in the appointment order itself.
[937 C] 5.
Conclusions (A) and (B) of the Constitution Bench in the Maharashtra Engineer 's case have to be read harmoniously, and conclusion (B) cannot cover cases which are expressly excluded by conclusion (A).
It is.
clear from conclusion (A) that to enable seniority to be counted from the date of initial appointment and not according to the date of confirmation, the incumbent of the post has to be initially, appointed 'according to the rules '.
The corollary set out in conclusion (A), then is, that 'Where the initial appointment is only ad hoc and not according to rules and made as a stop gap arrangement, the officiation in such posts cannot be taken into 923 account for considering the seniority.
The case of the writ petitioners squarely falls within this corollary in conclusion (A), which says that the officiation in such posts cannot be taken into account for counting the seniority.
[935 D F] 6.
Conclusion (B) was added to cover a different kind of situation, wherein the appointments are otherwise regular except for the deficiency of certain procedural requirements laid down by the rules.
This is clear from the opening words of the conclusion (B), namely, if the initial appointment is not made by following the procedure laid down by the rules and the later expression 'till the regularisation of his service in accordance with the rules '.
Conclusion (B) must be so read as to reconcile with conclusion (A).
[936 B] 7.
Decision about the nature of the appointment, for determining whether it falls in this category, has to be made on the basis of the terms of the initial appointment itself and the provisions in the rules.
In such cases, the deficiency in the procedural requirements laid down by the rules had to be cured at the first available opportunity, without any default of the employee, and the appointee must continue in the post uninterruptedly till the regularisation of his service, in accordance with the rules.
In such cases, the appointee is not to blame for the deficiency in the procedural requirements under the rules at the time of his initial appointment.
In such cases also, if there be any delay in curing the defects on account of any fault of the appointee, the appointee would not get the full benefit of the earlier period on account of his default, the benefit being confined only to the period for which he is not to blame.
This category of cases is different from those covered by the corollary in conclusion (A) which relates to appointment only on ad hoc basis as a stop gap arrangement and not according to rules.
[936 E G] 8.
It is, therefore, not correct to say, that the present cases can fall within the ambit of conclusion (B), even though they are squarely covered by the corollary in conclusion (A).
[936 H] 9.
There is, therefore, no escape from the conclusion that the present cases fall squarely within the ambit of the corollary in conclusion (A), of, Maharashtra Engineers ' case and, therefore, the period of ad hoc service of writ petitioners (respondents) on the post of Assistant Engineer prior to 26 2 1980, cannot be counted for reckoning their seniority.
[937 E] 924 Direct Recruit Class II Engineering Officers 'Association and Ors.
vs State of Maharashtra and Ors.
, ; = ; , explained and followed.
[932 D] A. Janardhana vs Union of India & Ors., ; and Narender Chadha & Ors.
vs Union of India and Ors.
, ; , referred to.
[932 H] </s> |
<s>[INST] Summarize the following judgement: Appeal Nos.
1301 07 of 1991 From the Judgment and Order dated 31 3 89 of the Income Tax Settlement Commission Bombay in Settlement Application No. 10/5/41/78IT.
Ashok Desai, Debi Pal B.K. Mehta, N.K. Sahu, U.K. Sagar and P.H. Parekh for the Appellant.
Dr. V. Gaurishankar and section Rajappa for the Respondents.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
These appeals are preferred against the orders of the Settlement Commission dated March 31, 1989 in pursuance of the offers of settlement made by the appellant.
Civil Appeals 1301 07 of 1991 relate to the assessment years 1964 65 to 1970 71 while Civil Appeals 1288 1300 of 1991 relate to the assessment years 1970 71 to 1982 83.
Under its orders, the Settlement Commission computed the taxable income of the appellant 's father (who died on August 22, 1969) and of the appellant for the aforesaid assessment years and gave certain directions, applying which the I.T.O. was directed to compute the total income for each of the said assessment years and raise demand for the tax due.
The main issue in all these matters is the assessability of income from five foreign trusts created by the appellant 's father, Sri Vikramsinhji.
Sri Vikramsinhji, Ex ruler of Gondal executed three deeds of settlements (trusts deeds) in the United States of America on December 19, 1963 and two deeds in the United Kingdom on January 1, 1964.
The three settlements executed in U.S. are in identical terms.
Similarly, the two settlements, executed in U.K. are similar.
The two sets of settlements, however, differ from each other in certain particulars, though both the sets are meant for the benefit of the settlor and the members of his family.
We may refer to the relevant clauses in the settlements executed in U.S. in the first instance.
946 Under the U.S. settlements, The National City Bank, New York is constituted the sole trustee.
The trust is created for the benefit of the grantor/settlor, his wife and children and their spouses (referred to as family members) and their descendants.
The trustee is empowered to collect the income from the trust properties and to apply the same among the family members and/or their descendants in such manner as he thinks appropriate.
He is also authorised to terminate the trusts for any reason (including tax reasons) and to transfer, convey and pay off the property held thereunder to any person or persons then eligible to receive the income of the trusts.
On such termination, the entire assets in the hands of the trustee are to be paid over to the then Maharaja (Ruler) or to his living male descendants in equal shares per stripes.
The clause which is relevant herein, which according to the Revenue, makes the trusts revocable ones we may refer to it as para 1(2) for the sake of convenience reads thus: "Anything hereinabove to the contrary notwithstanding, at any time and from time to time the Trustee shall transfer, convey and pay over any portion of the income of the trust fund and any portion or all of the principal held in trust to or to the use of such one or more members of a class composed of the Grantor, the wife or widow of the Gran tor, the children of the Grantor living from time to time, the spouse of any child of the Grantor then living or deceased (hereinafter referred to as the "Family Members"), and the descendants of the Family Members living from time to time, in such amounts, shares and proportions, either absolutely or in trust, and upon such terms and conditions (including the grant of a further power to appoint) as the Trustee and a Maharaja who shall have attained the age of eighteen (18 years) shall at any time and from time to time appoint and direct in a written instrument which refers to and specifically exercises this power and which is duly executed by the Maharaja and by the Trustee then acting here under.
The foregoing power to appoint may be released in whole, or in part by the Maharaja or by the Trustee or by both at any time by one or more written instruments duly executed by the Maharaja or by the Trustee or by both and delivered to 947 the Trustee then acting here under, provided, however, that if either the Maharaja or the Trustee, but not both of them, shall release such power, then the party not so releasing shall continue to have the power to appointment hereinbefore provided, acting alone.
" Clauses (2) and (3) of the deeds confer an absolute discretion upon the trustee to pay over or apply in his discretion, any part or whole of income or any part of or whole of the principal to "any person then eligible to receive the income of this trust" at such time and in such manner, as he may decide in his absolute discretion.
Clause (3) says further that "the Trustee may omit eligible members of the class from any and all such payments and applications, and no such payment or application or commission of a person from participation therein shall cause a charge against or otherwise effect the future interest or share of any person here under." Any determination made by the trustee in good faith in exercising the said discretion is held to be binding and conclusive.
It is not necessary to notice other clauses of these settlements except to say that the object of these trusts is to provide for the education, maintenance and up keep of the members of the settlor 's family and their descendants.
The settlor died on August 22, 1969.
During his lifetime, the settlor, Vikramsinhji was filing returns of his income in India including therein whole of the income arising from the U.S. trusts.
The returns were filed by him for the assessment years 1964 65 to 1969 70 (both years inclusive).
Since he died in the middle of the accounting year relevant to the assessment year 1970 71, two returns were filed for the said assessment year, one upto the date of the death of the settlor and the other from the date of the death of settlor to the end of the accounting year.
These returns were filed by his elder son, Jyotendrasinhji, appellant in these appeals.
In these returns too, the appellant included whole of the income from the U.S. trusts in the respective returns.
At this stage, the appellant says.
he was advised that the income from U.S. trusts was not taxable in India either in the hands of settlor or in his hands and that inclusion of the said income in the returns by the settlor and by the appellant was a mistake.
Urging the said contention, the appellant filed appeals against the assessment orders pertaining to the A.Ys.
1965 66 and 1966 67.
Inasmuch as the appeals were barred with respect to other assessment orders, he preferred revisions 948 before the Commissioner of Income Tax.
(It may be mentioned at this stage itself that the income from U.K. trusts was included in the aforesaid returns just as the income from U.S. trusts was included.
Similarly, the plea of non taxability was urged with respect to the income from U.K. trusts on the same basis as was urged with respect to the income from the U.S. trusts) The Appellate Assistant Commissioner, Rajkot admitted additional grounds and allowed the aforesaid appeals by his orders dated April 4, 1975 and August 20, 1975.
The Revenue went up in appeal to Tribunal.
The Tribunal allowed the appeals holding that the A.A.C. acted contrary to Rule 46(2) of the Income Tax Rules in admitting the additional grounds and in looking into new material.
Accordingly it set aside his orders and remitted the appeals back to A.A.C.
It is at this stage that the appellant approached the settlement commission under chapter XIX(A) of the Income Tax Act, 1961.
We may now notice the relevant clauses in the deeds of settlements executed in U.K. Under these settlement deeds, one Mr. Robert Hampton Robertson McGill was designated as the trustee, referred to in the deeds as "the original trustees".
These trusts too were created for the benefit of the settlor, the members of his family and their descendants, referred to as 'beneficiaries '.
The deeds define the expression "the trustees" to mean and include the original trustee or the other trustees for the time being appointed in terms of the deeds of settlement.
The expression "the beneficiaries" was defined to mean and include (a) the settlor, (b) the children and remoter issue for the time being in existence of the settlor, and (c) any person for the time being in existence who is the wife or widow of the settlor or the wife or widow or husband or widower of any of them, the children and remoter issue of the settlor.
The clauses which are relevant for our purposes read thus: (We have, for the sake of convenient reference, numbered them as clauses (3) and (4)).
THE Settlor hereby directs that the Trustee shall and accordingly the Trustees shall stand possessed of the Trust Fund and the income thereof upon the trusts following that it 1 to say : 949 (1) UPON TRUST to raise and pay out of the capital thereof any further estate duty which may still be payable thereon in respect of the death of the Settlor 's father His Late Highness Shri Bhojrajji Maharaja Saheb of Gondal who died on the Thirty first day of July One Thousand nine hundred and fifty two and any interest payable on such duty and any costs incurred in connection with the ascertainment or payment of such duty and interest.
(2) Subject as aforesaid UPON TRUST for all or such one more and more exclusively of the others or other of the Beneficiaries at such age or time or respective ages or times if more than one in such shares and with such trusts for their respective benefit and such provisions for their respective advancement and maintenance and education at the discretion of the Trustees or of any other person or persons as the person who for the time being is the Maharaja or (of the title is abolished) would have been the Maharaja had the title not been abolished shall at any time during the specified period by any deed or deeds revocable or irrevocable appoint AND in default of and subject to any such appointment upon he trusts and with and subject to the powers and provisions hereinafter declared and contained concerning the same PROVIDED ALWAYS that the foregoing power of appointment shall not be capable of being exercised: (a) by anyone other than the Settlor or the Elder son or the Younger Son; or (b) in favour of the person making the appointment save with the consent of the Trustees (being at least two in number or a trust Corporation) such consent to be testified by their being parties to the deed of appointment and executing the same. . 4.
SUBJECT aforesaid the Trustees shall stand possessed of the Trust Fund and the income thereof upon the trusts 950 following that is to say : (1) The income of the Trust Fund accruing during the life of the Settlor shall belong and be paid to the Settlor (2) Subject as aforesaid the income of the Trust Fund accruing during the life of the Elder Son shall belong and be paid to the Elder Son. . (3) Subject as aforesaid the Trust Fund shall be held in Trust for the person who (being a descendant of the Elder Son) first during the specified period : (a) becomes the Maharaja or would become the Maharaja if his title had not been abolished and (b) attains the age of eighteen years. .
It is not necessary to notice the other provisions/clauses of these deeds.
During his lifetime, the settlor, Vikramsinhji, was including the whole of the income from these trusts in his returns of income just as he was doing in the case of U.S. trusts.
The said income was also included in the two returns filed by his son for the A.Y.1970 71.
Thereafter, however, the appellant took the stand, as mentioned hereinbefore, that the income from these trusts is not includable in his income.
He also took the stand that the inclusion of the said income in the returns submitted by his father for the A.Ys.1964 65 to 1969 70 and by him in the returns relating to A.Y.1970 71 was under a mistake.
This submission too was the subject matter of the appeals and the revisions filed before the A.A.C. and the Commissioner of Income Tax, referred to hereinbefore.
When the appellant approached the settlement commission with an application for settlement, it related to the income from U.K. trusts as well.
The Settlement Commission heard the arguments in extenso spread over several days and disposed of the matter under two elaborate orders.
One order relates to A.Ys.
1964 65 to 1970 71 (Vikramsinhji) and the other to A.Ys.1970 71 to 1982 83 (Appellant).
The findings of the Commission which constitute the bases for its orders may briefly be stated as the following : 951 (i)Though the U.S. settlements are in the nature of discretionary trusts, they fall within the mischief of sub clause (ii) of Clause (a) of Section 63 of the Act.
For this reason, the whole of the income arising from the trust properties was liable to be included and was rightly included in the income of the settlor/transferor, Sri Vikramsinhji.
(ii) On the death of the settlor, the U.S. settlement deeds ceased to be revocable but inasmuch as the entire income thereunder was received by the appellant, Sri Jyotendrasinhji, it constitutes his income and could be and was lawfully.
taxed in his hands.
(iii) So far as the U.K. trusts are concerned, clause (3) did never come into operation inasmuch as no additional trustees were appointed as contemplated by it.
If so, clause (4) sprang into operation where under the entire income under the settlements flowed to the settlor during his lifetime and on his death, to his elder son, the appellant herein.
In other words, these settlements are in the nature of specific trusts.
In any event, the entire income from these trusts was received by the settlor during his lifetime and after the settlor 's death, by the appellant.
Therefore, the said income was rightly included in the total income of the settlor and the assessee during the respective assessment years.
On the above bases, the Commission computed the taxable income of the settlor under both the sets of trusts for A.Ys.1964 65 to 1970 71 (upto the date of the death of the settlor) as also the income of the appellant for the A.Ys.1970 71 to 1982 83.
The appellant then preferred these two sets of appeals against the two orders.
At the stage of granting leave, this court ordered (vide the order dated March 22, 1991) that the appellant shall not be entitled to question the jurisdiction of the settlement commission to decide the issues before it and that he will "confine himself in appeal only to the questions relating to correctness or otherwise of the Commissioner 's order." Sri Ashok Desai, learned counsel for the appellant urged the following contentions ': (1)The settlement commission erred in law in holding that the U.S. trusts are revocable trusts within the meaning of Section 63 of the Act.
For attracting Section 63, the deed of transfer should give the transferor a right 952 to retransfer directly or indirectly whole or any part of the income or assets to the transferor or it must give him a right to re assum power directly or indirectly over the whole or any part of income or assets.
In this case, the relevant clause does not give the,transferor such a power.
The power is given to the trustee to be exercised with the concurrence of the transferor/settlor.
Even if, for any reason, the clause is construed as giving such a power to the settlor/transferor, Section 63 is not attracted inasmuch as the power is given: not to him a& such "but jointly to him and the trustee.
Such a power does not attract the mischief of Section 63.
(2) The U.S. trusts are discretionary trusts.
In such a case, the assessment can be made only upon the trustees and not upon the beneficiaries recipients.
The Revenue has no option in such a situation.
It must necessarily tax the trustees and trustees alone.
The Revenue cannot take advantage of the mistake of law on the part of the settlor or the appellant.
(3) At any rate, with the death of the settlor, the U.S. trusts ceased to be revocable trusts, assuming that they were so during his lifetime.
So " far as the appellant is concerned, he cannot be taxed on the income received by him from the said trust.
Only the trustee can be taxed.
(4) So far as U.K trusts are concerned, the settlement commission has committee an error of law in holding that clause (3) could come into operation only if and when the settlor appointed the additional trustees as contemplated by it.
In fact, the trust, had come into existence with the sole trustee (McGill) ;and it did not depend upon the appointment of additional trustees.
Clause (3) prevails over clause (4).
If so, the U.K. trusts/settlements are also discretionary trusts and not specific trusts as held by the Settlement Commission.
In such a case again the assessment can be made only upon the trustees and not upon, the beneficiaries recipients. (5) So far as U.K. trusts are concerned no income was received,by the settlor or the appellant either in U.K. or in India.
So long as the trustees decided not to exercise the discretion to distribute the income, no income arose to any of the beneficiaries.
The deeds, do not prescribe, a time limit within which the trustees should exercise their discretion to distribute income.
Until the trustees take a decision to distribute and distribute the income,the beneficiaries have no right to income nor can it be said that the income accrues to them.
The Settlement Commission committed a legal error in the income from the U.K. trusts in the total income of 953 the settlor and the appellant even though it was not paid out by the trustee ,nor received by the assessees.
At any rate, no income was received in India.
(6)In both the U.S. and U.K., tax has been levied upon the respective trust incomes under the laws of those countries.
Levying tax over again in this country on the very same 'income amounts to double taxation.
On this ground too, the tax levied in India must be waived.
On the other hand, Dr. Gauri Shankar, the learned counsel for the Revenue made the following submissions: (i)The Settlement Commission is not a regular Tribunal.
Its function is different from other quasi judicial authorities created by the Income Tax Act.
Where an offer of settlement has been made, the commission either accepts it or rejects it subject to such conditions and terms as it thinks fit to impose in that behalf.
As the name itself suggests, it is a settlement a sort of composition.
It need not even give reasons for its order.
Even if any principles are decided by the Commission, they do not bind the Income Tax authorities in proceedings relating to subsequent years.
The order of the commission is relevant to and is confined only to the assessment years to which it relates.
The jurisdiction of this court under Article 136 in an appeal against the orders of settlement commission must be conditioned by above considerations.
This court would not be able to go into the merits of the order.
The commission 's order cannot be dissected, inasmuch as it is a package deal.
Either it stands or falls as a whole.
(ii) The interpretation placed by the commission on both U.S. and U.K. trusts is perfectly in order and does not call for any interference by this court.
Indeed, under the impugned orders, several benefits have been conferred upon the settlor and the appellant like waiving of penalties, interest and other liabilities attaching to the assessees under the Act.
While accepting the same, the appellant cannot be allowed to disown those features of the order which go against him.
(iii) The argument,of not receiving the income from U.K. trusts is a mere after thought and should not be given any credence.
During his lifetime, the settlor had declared that he had received income from both the U.K. and U.S. trusts and had included the same in his returns of income for each of the assessment years relevant heroin.
The appellant too acted similarly.
954 (iv) A trustee or the trustees, as the case may be are expected to act reasonably and in furtherance of the object of the trusts.
They must apply the income for the purposes specified.
They cannot just accumulate it.
Applying the test of reasonableness it must be held that ordinarily, the trustee ought to distribute the income each year.
As a matter of fact, it was so distributed If so, it must be held that the income from these U.K. trusts has rightly been taken into account by the commission while passing its orders.
The first question we have to answer is the scope of these appeals preferred under Article 136 of the Constitution against the orders of the Settlement Commission.
The question is whether all the questions of fact and law as may have been decided by the commission are open to review in this appeal.
For answering this question one has to have regard to the scheme of Chapter XIX A.
The said chapter was inserted by the Taxation Laws (Amendment) Act, 1975 with effect from April 1, 1976.
A somewhat similar provision was contained sub sections (1A) to (1D) of Section 34 of the Income Tax Act, 1922 introduced in the year 1954.
The provisions of Chapter XIX A are, however, qualitatively different and more elaborate than the said provisions in the 1922 Act.
The proceedings under this chapter commence by an application made by the assessee as contemplated by Section 245 C. Section 245 D prescribes the procedure to be followed by the commission on receipt of an application under Section 245 C. Sub section (4) says: 'after examination of the records and the report of the commissioner received under sub section (1), and the report, if any, of the commissioner received under sub section (3), and after giving an opportunity to the applicant and to the commissioner to be heard, either in person or through a representative duly authorised.in this behalf, and after examining such further evidence as may be placed before it or obtained by it, the settlement commission may,, in accordance with the provisions of this Act, pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report of the commissioner under sub section (1) or sub section (3).
" Section 245 E empowers the Commission to reopen the completed proceedings in appropriate cases, while Section 245 F confers all the powers of an Income Tax authority upon the Commission.
Section 245 H empowers the Commission to grant immunity from penalty and prosecution, with or without conditions, in cases where it is satisfied that the assessee has made a full disclosure of his income and 955 its sources.
Under Section 245 HA, the Commission can send back, the matter to assessing.
officer, where it finds that the applicant is not cooperating with it.
Section 245 1 declares that every order of settlement passed under sub section (4) of, Section 245(D) shall be conclusive as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in, Chapter XIX A, be re opened in any proceeding under the Act or under any other law for the time being in force.
Section 245 L declares that any proceedings under chapter XIX A before the settlement commission shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 and for the purposes of Section 196 of the Indian Penal Code.
It is true that the finality clause contained in Section 245 I does not and cannot bar the jurisdiction of the High Court under Article 226 or the jurisdiction of this court under Article 32 or under Article 136, as the case may be.
But that does not mean that the jurisdiction of this Court in the appeal preferred directly in this court is any different than what it would be if the assessee had first approached the High Court under Article 226 and then come up in appeal to this court under Article 136.
A party does not and cannot gain any advantage by approaching this Court directly under Article 136, instead of approaching the High Court under Article 226.
This is not a limitation inherent in Article 136; it is a limitation which this court imposes on itself having regard to the nature of the function performed by the Commission and keeping in view the principles of judicial review.
May be, there is also some force in what Dr. Gauri Shankar says viz., that the order of commission is in the nature of a package deal and that it may not be possible, ordinarily speaking, to dissect its order and that the assessee should not be permitted to accept what is favourable to him and reject what is not.
According to learned counsel, the Commission is not even required or obligated to pass a reasoned order.
Be that as it may, the fact remains that it is open to the Commission to accept an amount of tax by way of settlement and to prescribe the manner in which the said amount shall be paid.
It may condone the defaults and lapses on the part of the assessee and may waive interest, penalties or prosecution, where it thinks appropriate.
Indeed, it would be difficult to predicate the reasons and considerations which induce the commission to make a particular order, unless of course the commission itself chooses to, give reasons for its order.
Even if it gives reasons in a given case, the scope of enquiry in the appeal remains the same as indicated above viz., whether it is,contrary 956 to any of the provisions of the Act.
In this context, it is relevant to note that the principle of natural justice (and alteram partem) has been incorporated in Section 245 D itself.
The sole overall limitation upon tire Commission thus appears, to be that it should act in accordance with the provisions of the Act.
The scope of enquiry, whether by High Court under Article 226 or by this Court under Article 136 is also the same whether the order of the Commission is contrary to any of the provisions of the Act and if so, has it prejudiced the petitioner/appellant apart from ground of bias, fraud & malice which, of course, constitute a separate and independent category.
Reference in this behalf may be had to the decision of this Court in Sri Ram Durga Prasad vs Settlement Commission , which too was an appeal against the orders of the Settlement Commission.
Sabyasachi Mukharji J., speaking for the Bench comprising himself and S.R. Pandian, J. observed that in such a case this Court is " concerned with the legality of procedure followed and not with the validity of the order. ' The learned Judge added 'judicial review is concerned not with the decision but with the decision making process.
" Reliance was placed upon the decision of the House of Lords in Chief Constable of the N.W. Police vs Evans, [1982] 1 W.L.R.1155.
Thus, the appellate power under Article 136 was equated to power of judicial review, where the appeal is directed against the orders ' of the Settlement Commission.
For all the above reasons, we are of the opinion that the only ground upon which this Court can interfere in these appeals is that order of the Commission is contrary to the provisions of the Act and that such contravention has prejudiced the appellant The main controversy in these appeals relates to the interpretation of the settlement deeds though it is true, some contentions of law are also raised.
The commission has interpreted the trust deeds in a particular manner, Even if the interpretation placed by the commission the said deeds is not correct, it would not be a ground for interference in these appeals, since a wrong interpretation of a deed of trust cannot be said to be a violation of the provisions of the Income Tax Act.
it is equally clear that the interpretation placed upon the said deeds by the Commission does not bind the authorities under the Act in proceedings relating to other assessment years.
In view of the above, though it is not necessary, strictly speaking, to go into the correctness of the interpretation placed upon the said deeds by the commission, and it is enough if we confine ourselves to the question whether the order of the Commission is contrary to the provisions of the 957 Act, we propose to, for the sake of completeness, examine also whether the order of Commission is vitiated by any such wrong interpretation? U. section TRUSTS.
The sole trustee under this settlement deed is the First National City Bank, New York.
The deed empowers the trustee to hold, manage, invest and reinvest the principal of the trust fund, to collect and receive the income thereof and to pay or apply so much of the net income as the trustee shall in his absolute and uncontrolled discretion deem advisable to or to the use of one or more members of the settlor 's family.
It is thus a discretionary trust.
A discretionary trust is described as a trust where the trustees have been vested with a discretion in the matter of distribution of trust income among the specified class of beneficiaries.
In the case of such trusts, the trustees have a discretion to pay whole or part of the income to such member or members of the designated class as they think fit and it such proportion as they deem appropriate.
Section 164(1) sets out the same idea in the following words: "Where the individual shares of the persons on whose behalf or for whose benefit such income or such part thereof is receivable are indeterminate or unknown. .
In Snell 's Principles of Equity, 25th Edn. (1965), P.129, a discretionary trust is defined in the following words: "A discretionary trust is one which gives the beneficiary no right to any part of the income of the trust property, but vests in the trustees a discretionary power to pay him, or apply for his benefit, such part of the income as they think fit. .
The beneficiary thus has no more than a hope that the discretion will be exercised in his favour.
" That these trusts are discretionary trusts is not in controversy.
The main question is whether Para 1(2), quoted hereinbefore, makes it a revocable trust within the meaning of Section 63? The said clause begins with a non obstante clause, "anything hereinabove to the contrary.
not withstanding ' thereby giving it an overriding effect over what has been said in the earlier recitals.
It then says that "at any time and from time to time, the trustee shall transfer, convey and pay over any portion or of the income 958 of the trust fund and any portion or of all the principal held in trust ', to such member of the settlor 's family 'as the trustee and a maharaja who shall have attained the age of 18 years shall at any time and from time to time appoint and direct in a written instrument which refers to and specifically exercise this power and which is duly executed by the Maharaja and the trustee then acting here under. ' In other words, the said clause empowers the settlor/transferor and the trustee, acting together to direct the trustee, at any time, to pay over the entire income and/or entire corpus.
or a pan thereof to such member of the settlor 's family or their descendants as they may direct.
The said power cannot be exercised by the settlor acting alone.
The question is whether the said clause attracts Section 63? Section 63 defines the expressions 'transfer ' and 'revocable transfer '.
It says that for the purposes of Sections 60, 61 and 62, 'a transfer shall be deemed to be revocable if (i) it contains any provisions for the retransfer directly or indirectly of the whole or any part of the, income or assets to the transferor or (ii) it in any way gives the transferor a right to reassume power directly or indirectly over the whole or any part of the income or assets. ' The expression "transfer" is defined to include any settlement, trust, covenant, agreement or arrangement.
The expression 'family members ' occurring in the aforesaid clause in the trust deeds is defined in the deeds to mean "the children of the grantor living from time to time, the wife or widow of the grantor, the spouse of any child of the grantor then living or deceased. ' The "descendants of the family members ' which expression also occurs in the aforesaid clause is defined 'in the deeds to mean "the descendants of the family members living from time to time during the trust term. ' The contention of Sri Ashok Desai the learned counsel for the appellant is that Section 63 will be attracted 'only where the transferor is vested with the exclusive and/or absolute power to give direction of the nature contemplated therein and not where such a power has to be exercised by the transferor jointly with another person or with the concurrence or consent of another person.
Indeed, he argues that the said power is really given to the trustee to be exercised in concert with the Settlor.
We find it difficult to agree with the learned counsel.
Firstly, the power, properly construed, is given to the settlor to be exercised together with the trustee and not to the trustee to be exercised together with the settlor.
The trustee is anyhow vested with an absolute discretion to distribute the income of or the principal of the trust to such member of the family, as he 959 thinks appropriate, under the clause preceding and paras following para 1(2).
If so, there was no point in saving that he can, together with the settlor, be empowered to pay over part or whole, of income/principal to "such one or more members of a class composed of the family members living".
It cannot also be forgotten that the trustee in this case is a Bank one of the largest in the U.S.A. and not an individual acquainted with the affairs of the settlor 's family.
Now coming to Section 63, it is equally not possible to agree with the learned counsel.
Section 63 does not say that the power of revocation vesting in the transferor should be absolute or unconditional.
As pointed out by Chagla, CJ.
in Behramji Sorubji vs Commissioner of Income Tar, Bombay, , "the only question that has got to be asked is whether the transfer is capable of being revoked by the assessee or not. . it may be that before the power is exercised, the consent of two beneficiaries might have to be taken but even so, although the revocation may be contingent or conditional, still the deed remains a revocable deed of trust.
" The same idea was reiterated by Tendulkar, J. in the said judgment, in the following words: "It is urged by Sir Jamshedji on behalf of the assessee that the words "revocable transfer" in this section require that the transfer should be revocable absolutely and uncondi tional and that by reason of the fact that the transfer in this case could not be revoked under clause 10 of the trust deed without the consent of the wife and the children or any two of them, it is not a revocable transfer within the meaning of Section 16(1)(c).
Apart from any authority, and reading the section by itself, I am unable to agree with this contention.
It would involve my reading into the section words which are not there, and the Court is not entitled to do so unless it appears that giving effect to the section as it stands would lead to an obvious absurdity or inconvenience which could not have been contemplated by the legislature.
No such position arises in this case.
" We find ourselves in agreement with the said opinions.
Section 63 of the present Act corresponds to the proviso appended to Section 16(1)(c) of the 1922 Act.
The first proviso read thus: "provided that for the purposes of this clause the settlement, disposition or a transfer shall be deemed to be revocable if it contains any provision for the retransfer directly or 960 indirectly of the income or assets to the settlor, disponer or transferor or in any way gives settlor, disponer or transferor a right to.
reassume power directly or indirectly over the income or assets. ' Section 63(1) also does not say that the deed of transfer must confer or vest an conditional or an exclusive power in the transferor to give the power/direction of the nature contemplated by it.
, Accordingly, we hold that merely because the concurrence of the trustee had to be obtained by the transferor/settlor for giving the said direction, it cannot be said that the deed does not contain a; provision giving the transferor a; right to reassume power directly or indirectly over the whole or any part of income or assets within the meaning of Section 63(a)(ii)of the Act In this view of the matter, it is not necessary for us to refer to other decisions cited, before us in any detail.
The decision of this Court in commissioner,of Income Tax, Bombay City vs Ratilal Nathalal emphasises,that the power of revocation must be given to the settlor as settlor and not in any other capacity.
In the deeds before us, the power is indisputably conferred upon the Settlor in the very same capacity and not in any different capacity.
The other decision of this court in Sevantilal Maneklal vs C.I.T. is distinguishable for the, reason that the power of the settlor therein was merely to choose among the several objects of the trust and, therefore, it was held that it does not attract Section 63.
On the other hand, Tarunendra Nath Tagore vs Commr.
of Income Tax Calcutta was a case where the trust deed empowered the settlor to cause a re transfer of the trust assets, in certain specified contingencies.
The question was whether such a provision makes the transfer a revocable one within the meaning of the first proviso to Section 16(1)(c) of the 1922 Act.
It was held that it does, notwithstanding the fact that the power had to be exercised only in certain specified contingencies.
The decision of the Madras High Court in K Subramania Pillai vs Agricultural Income For Officer, Thukalay was also a case where the power of revocation was to be exercised in certain specified contingencies alone.
Even so, it was held that it was a revocable settlement.
Commissioner of Income Tax, Punjab vs Raghabir Singh was case where the trust deed provided, for the application of, the trust income, for satisfying the debts which the settlor was under an obligation to discharge.
The question was whether the provision makes the deed a 961 revocable one.
It was held that it did not, inasmuch as there was no provision for re transfer of the income or the assets to the settlor, It was observed that the mere fact that the settlor 's debts had to be discharged from the trust income did not bring it within the four corners of the first proviso to Section 16(1)(c).
In the light of the above discussion it must be held that during the lifetime of the settlor, the, entire income arising from the three U.S. trust deeds was bound to be and was rightly included in the income of the settlor by virtue of Section 63 read with Section 61.
The commission was right in holding so.
With the death of the settlor Section 63 ceased to apply even though the aforesaid clause empowers not only the settlor but also the Maharaja for the time being to exercise the said ;power.
Section 63 is attracted only where such power is given to the transferor and the appellant (the son of the settlor) is not and cannot be called the transferor.
It is not denied that so far as the income from the U.S. trusts is concerned, it was indeed received by the appellant.
The only argument is that inasmuch these trusts are discretionary trusts, the, income therefrom must necessarily be taxed and can only be taxed in the hands of the trustees and not in the hands of the beneficiary.
It is argued that the Revenue has no choice to tax either the trustees or the beneficiaries in such a case.
We are unable to agree The trustees in the case of a trust declared by a. duly executed instrument in writing are treated as representative assessees (Section 160(1)(iv)).
It is equally true that in the case of a discretionary trust, trustees are liable to be taxed in respect of the income received by them at the rate specified in Section 164(1).
(Section 164(1) has undergone several changes since 1962 The sub section as introduced by the Finance Act, 1970 with effect from April 1, 1970 provided that in such case "tax shall be charged (i) as if the relevant income or part of relevant income were the total income of the association of persons, or (ii) @65%, Whichever course would be more beneficial to the Revenue.
" For the purpose of this case, it is not necessary to notice the provisos appended to sub section (1) or the subsequent amendments to the sub section).
At the same time, Section 166 expressly declares that "nothing in the foregoing sections in this chapter shall prevent either the direct assessment 962 of the person, on whose behalf or for whose benefit income therein referred is receivable or the recovery from such person of the tax payable in respect of such income." Language of this section is clear.
The, opening words "nothing in the foregoing sections in this chapter" which means chapter XV, wherein Sections 159 to 165 among other sections occur give it an over riding affect over the preceding provisions in the chapter.
The Section states in unmistakable terms that nothing contained in the preceding provisions in the chapter shall preclude the Revenue from making a direct assessment upon the beneficiary and/or from recovering the tax payable from such person.
The Revenue has thus been given an option to tax the income from a discretionary trust either in the hands of the trustees or in the hands of the beneficiaries.
This Court in Nagappa vs C.I T., and the majority of High Courts have understood this Section in this manner.
In Nagappa, the appellant had executed seven separate trusts setting specific properties for the benefit of his minor children.
He appointed himself, his wife and his married daughter as the trustees.
Under each deed, a portion of the income was to be utilised immediately for the benefit of the beneficiary and the balance accumulated for his or her benefit and handed over to the beneficiary on the specified date.
The entire income of the trusts (including the income accumulated) was included in the income of the appellant (Nagappa) which was questioned by him.
His contention was that the "I.T.O. was bound to assess the income under each deed of trust separately in the hands of 'the trustees as "representative trustees and was incompetent in view of the express enactment of sub section (2) of Section 161 to assess the income in the hands of Nagappa or of the beneficiaries" The contention was rejected with reference to Section 161(1) and Section 166 by Shah, J. (speaking foe the Bench comprising Shah, Ramaswami and Grover, JJ.) in the following words: "It is implicit in the terms.
of sub section (1) that the Income tax Officer may assess a representative assessee, but he is not bound to do so.
He may assess either the representative assessee or the person represented by him.
That is expressly so enacted in section 166 which states: "Nothing in the foregoing sections in this Chapter shall prevent either the direct assessment of the person on whose behalf or for whose benefit income therein referred 963 to is receivable, or the recovery from such person of the tax payable in respect of 'such income. ' The Income tax Officer may, therefore, assess the person represented in respect of the income of the trust property and the appropriate provisions of the income tax Act relating to the computation of the total income and the manner in which the income is to be computed will apply to that assessment.
The Income tax Officer may in appropriate cases assess the representative assessee in respect of that income and limited, to that extent, and tax may be levied and recovered from him to the same extent as may, be leviable and recoverable from the person rep resented by him.
The contention, raised by counsel, for Nagappa that, since the trustees were assessable in respect of the income of the beneficiaries under Section 161(1), that income could not by virtue of sub section (2) of Section 161 be assessed in the hands of the beneficiary is contrary to the plain terms of Section 166.
Sub section (2) of Section 161 does not purport to deny the, Income tax Officer the option to assess the income in the hands of the person represented by the representative assessee;: it merely enacts that when a representative assessee is assessed to tax in exercise of the option of the revenue, he shall be assessed tinder Chapter XV and shall not 'in respect of that income be assessed under any other provision of the Act.
We will presently state the reasons why the rule was so enacted by Parliament.
But on the plain words used by Parliament the plea raised by counsel: that the.
representative assessee alone may be assessed as regards income in respect of which he is.
a representative assessee cannot be accepted.
The learned Judge then went to explain the reasons for which section 166 among other provisions was enacted.
In another case arising under the Bihar Agricultural Income Tax Act, 1948, a Bench of this Court comprising J.L. Kapur, M. Hidayatullah and 964 J.C. Shah, JJ. took a similar view in Ram Swaroop Das vs The State of Bihar , even though that Act and did not contain a provision similar to Section 166.
Section 13 of the Bihar Act provided: "Where any person holds land, from which agricultural income is derived as a common manager appointed under any law.
from the time being in force, or under any agreement or as receiver, administrator or the like on behalf of persons jointly interested 'in such land or in the agricultural income derived therefrom the aggregate of the sums payable as agricultural income tax by each person on the agricultural income derived from such land and received by him shall be assessed on such common manager, receiver, administrator or the like, and he shall be deemed to be the assessee in respect of the agricultural income,tax so payable by each such person and shall be liable to pay the same.
" It was urged that because of Section 13, the Receiver alone can be assessed in respect of the income of the estate under his charge and that no assessment can be made upon the person who actually received such income from the receiver.
The said contention was rejected by Shah, J. speaking for the Bench in the following words: "In our view, there is no substance in the contention raised by the appellant.
The liability to pay tax is charged on the agricultural income of every person.
The income though collected by the Receiver was the income of the appellant.
By S.13, in addition to the owner, the Receiver is to be deemed to be an assessee.
But the fact that the Receiver may, because he held the property from which income was derived in the year of account, be deemed to be an ' assessee and liable to pay tax, does not absolve the appel lant, on whose behalf the income was received from the obligation to pay agricultural income tax.
Section 13 merely provides a machinery for recovery of tax, and is not a charging section.
When property is in the possession of the Receiver, common manager or administrator,, the taxing authorities may, but are not bound, to treat such 965 persons as assessee and recover tax.
The taxing authorities may always proceed against the owner of the income and assess the tax against him.
The definition in the connota tion of 'person ' undoubtedly include a Receiver, trustee, common manager, administrator or executor, and by such inclusion, it is open to the taxing authorities to assess tax against any such persons; but on that account the income in the hands of the owner is not exempt from liability to assessment of tax.
" The principle of this decision does support our view, notwithstanding certain variance between the provision concerned in the said decision and those concerned herein.
Sri Ashok Desai, however, placed strong reliance upon a Full Bench decision of the Gujarat High Court in CL T. vs Kamalini Khatau, where the majority (Divan, CJ. and B.K. Mehta, J. with P.D. Desai, J. dissenting) appears to take a contrary view.
Before we deal with the decision, it would be interesting to note that the counsel for the appellant Sri N.A. Palkhivala who appeared for the appellant before the Settlement Commission had himself repudiated this argument, though, another counsel, who appeared for the appellant at a later stage, did not agree with the view expressed by Sri Palkhivala.
The Commission has recorded the submission of Sri Palkhivala in the following words: "We may mention here that when Shri N.A. Palkhivala appeared before us on behalf of the applicant he had stated that although according to the Gujarat High Court 's decision in the case of Smt.
Kamalini Aatau, the income of a discretionary trust is assessable only in the hands of a representative assessed and not in the hands of the beneficiaries, he would not object to assessment of the amounts received by: the beneficiaries in their hands in the present case, for two reasons.
Firstly, according t o Shri N.A. Palkhivala, the Gujarat High Court 's decision in question was erroneous and it was dissently judgment in that case to the contrary, which was correct.
Secondly, in the case, before us, the representative assessees, namely, the trusts, being situated outside India, could 966 not be taxed in India and in such cases it would not be proper not to assess the beneficiaries, for that will lead to the entire income escaping the Indian 'income tax in the case of both the representative assessees and the beneficiaries.
" Be that as it may, we have been taken though both the opinions in the Full Bench decision in extensor We are told that an appeal is pending against the said decision in this Court.
In the circumstances, we are not inclined to deal with the said opinions in any detail except to say that we are inclined to agree with the dissenting.
opinion of P.D. Desai, J. and are not concerned with the reasoning of the majority.
For the above reasons, we cannot agree with Mr. Ashok Desai.
We hold that by virtue of Section 166, the Revenue has an option in the case of a discretionary trust either to make an assessment upon the trustees or to make an assessment upon the beneficiaries.
Of course, both the trustee and the beneficiary cannot be simultaneously taxed in respect of the same income.
The assessments made by the Commission on the deceased settlor and the appellant are thus unexceptionable.
U.K TRUSTS: The first contention urged with respect to U.K. trusts is that the commission has wrongly construed clause (3) which we have extracted hereinbefore.
Sri Desai argues that the trust had already come into existence with the appointment of the sole trustee, Mr. McGill, and that the coming into existence of the trust did not depend upon the appointment of additional trustees.
The commission was wrong in holding that until and unless the additional trustees are appointed, the trust in clause (3) does not come into existence.
Properly construed, says Sri 'Desai, clause (3) creates a discretionary trust.
Inasmuch as the sub clause does not prescribe any time limit within which the trustees must decide to distribute the income among the beneficiaries, says the counsel, clause (4) has, not and had never come into operation.
In this case the trustees never did decide not to exercise their discretion under clause (3).
If so, no income ever arose or accrued to the Settlor or the appellant under clause (4).
If the trustees fail to exercise their discretion under clause (3), the only remedy for the beneficiaries is to approach the court to compel the trustees to exercise their discretion one way or the other, but they cannot say that the trust 967 income has accrued to them.
Clause (4) comes into operation, says the counsel, only where the trustees decide not to distribute the income among the specified beneficiaries; only then does the trust income belongs to and has to be paid over to the settlor and after the death of the settlor to his elder son, the appellant.
Accordingly, the counsel says, the Commission was wrong in law in treating these trusts as specific trusts.
in our opinion, however, the question urged is academic in the facts and circumstances of the case.
As a matter of fact, both the settlor and the appellant have been receiving the income from these trusts during the several assessment years concerned herein.
Sri Vikramsinhji had voluntarily included the entire income from the U.K. trusts in his income in the returns filed by him for the assessment years 1964 65 to 1969 70.
It is unlikely that he would have so included unless he really received it.
The Commission treated those declarations as proof of the settlor 's real intention.
The Commission also relied upon certain other circumstances including the manner in which the accounts of these trusts were maintained in support of their opinion that all concerned with the trusts, acted on the basis that the trust income was flowing to the settlor, and after his death to the appellant.
The Commission also referred specifically to similar declarations made by the appellant in his returns.
It referred to his statements made in the two returns filed for the assessment year 1970 71, one relating to the income received by his father till his death and the other with respect to the income received by him during the accounting year after the death of his father.
Even subsequent to the death of Sri Vikramsinhji, the Commission pointed out, the appellant has been making similar declarations from time to time.
For instance, in the letter dated March 3, 1975 written by the appellant to the I.T.O., A Ward, Rajkot relating to the A.Y. 1972 73, he had stated, "as per statement of U.K. sent herewith, the trustees have arrived at income of 13,027 pounds for the benefit of Sri Jyotendrasinhji.
According to our opinion, this income is not taxable as U.K. trust is discretionary.
However, as it has been taken last, the income may be included in the hands of Sri Jyotendrasinhji subject to our appeal".
It is significant to notice the ground of non taxability put forward in the said letter.
The appellant did not say that he did not receive the income.
All he said was, since it is a discretionary trust, its income is not taxable in his hands.
If he had not received the income, he would have put forward that fact in the forefront.
But he did not.
Similarly, in the return relating to the A.Y. 1973 74, a note was appended by the appellant to the following effect: 968 "Late H.H. Maharaja Vikramsinhji of Gondal has created trusts in UK.
The assessee has been informed that income falling in the hands of the assessee is 12,627 pounds.
This is, therefore, shows as income in his return. ' (emphasis added).
It is true that the appellant had argued before the commission that the settlor as well as himself had included the said income in their returns out of ignorance and on the basis of wrong legal advice but the said explanation has not been accepted by the commission and we must go by the findings of the commission.
It is not brought to out notice that during any of the years concerned herein, did the appellant ever say that he did not receive the income from these trusts.
If so, the question of law urged is of mere academic interest and need not be dealt with by us.
Section 5 of the Act is wide enough to bring all such income to tax.
So far as the plea of double taxation is concerned, the observation made by the Commission in that behalf is quite adequate.
It has stated that in case appellant proves that any income has been taxed in U.S. or U.K., the same income shall not be taxable over again in India.
For the above reasons, the appeals fail and are dismissed.
No costs.
V.P.R. Appeals dismissed. [/INST] The appellant 's father executed on 1.1.1964, three deeds of settlements (trust deeds) in the United States of America.
The terms in them all were identical.
The object of these trusts was to provide for the education, maintenance and up keep of the members of the settlor 's family and their descendants.
He also executed two settlements in U.K. with the very same object.
The settlor (appellant 's father) was riling returns of his income in India including therein whole of the income arising from the trusts.
For the assessment years 1964 65 to 1969 70, he filed the returns.
Since he died on 22 8 1969, i.e. in the middle of the accounting year (relevant to the assessment year 1970 71), two returns were filed, one up to the date of his 938 939 death and the other from the date of his death to the end of the accounting year, by his eldest son, the appellant, including the whole of the income from the trusts.
The appellant filed appeals against the assessment orders pertaining to the assessment years 1965 66 and 1966 67 contending that the income from U.S. trusts was not taxable in India either in the hands of settlor or in his hands and that the inclusion of the said income in the returns by the settlor and by the appellant was a mistake.
The appellant preferred revisions against other assessment orders, where appeal was barred, taking the plea of non taxability with respect to the income from U.K. trusts and from the U.S. trusts.
The Appellate Assistant Commissioner allowed the appeals.
, The Revenue 's appeals to the Tribunal were allowed holding that the A.A.C. acted contrary to Rule 46(2) of the Income Tax Rules in admitting the additional grounds and in looking into new material.
The Tribunal remitted the appeals back to A.A.C.
At that stage the appellant approached the settlement commission under Chapter XIX(A) of the Income Tax Act, 1961.
The Settlement Commission went into all the aspects of the matter and computed the taxable income of appellant 's father and his income for the assessment years 1964 65 to 1970 71 and 1970 71 to 1982 83.
It directed the I.T.O. to compute the total income for each of the said assessment years accordingly and raise demand for the tax due.
The appellant preferred two sets or appeals before this Court against the two orders of the Settlement Commission.
C.A.s. 4301 07 of 1991 related to the assessment years 1964 65 to 1970 71 and C.As.12881300 of 1991 related to the assessment years 1970 71 to 1982 83.
The appellant contended that the settlement Commission erred in law in holding that the U.S. trusts were revocable trusts within the meaning of Section 63 of the Act; that for attracting Section 63, the deed of transfer must give the transferor a right to retransfer directly or indirectly whole or any part of the income or assets to the transferor or it must give him a right to reassume power directly or indirectly over the whole or any part of income or assets; that in the present case such power was not given to the transferor; that U.S. trusts were discretionary trusts and 940 therefore the assessment could be made only upon the trustees and not upon the beneficiaries recipients; that the revenue could not take advantage of the mistake of law on the part of the settlor or the appellant; that with the death of the settlor, the U.S. trusts ceased to be revocable trusts and the appellant could not be taxed on the income received by him from the said trust, because only the trustee could be taxed; that the U.K. trusts were also discretionary trusts and not specific trusts as held by the Settlement Commission and the assessment could be made only upon the trustees and not upon the beneficiaries recipients; that the Settlement Commission committed a legal error in including the income from the U.K. trusts in the total income of the settlor and the appellant even though it was not paid out by the trustee nor received by the assessees in India; that in the U.S.A and U.K, tax was levied upon the respective trust incomes under the laws of those countries; that levying tax over again in India on the very same income amounted to double taxation and therefore the tax levied in India was to be waived.
The Revenue submitted that even if any principles were decided by the Settlement Commission, they did not bind the Income Tax authorities in proceedings relating to subsequent years; that the order of the Commission was relevant to and was confined I only to the assessment years to which it related; that this Court under Article 136 of the Constitution would not be able to go into the merits of the order, that the Settlement Commission 's interpretation on the U.S. and U.K. trusts was perfectly in order and did not call for any interference by this court; that during his life time, the settlor had declared that he had received income from the U.K. and U.S. trusts and had included the same in his returns of income for each of the assessment years relevant herein; that the appellant too acted similarly and therefore the argument of not receiving the income from UK trusts was a mere after thought and should not he given any credence; that a trustee or the trustees was/were expected to act reasonably and in furtherance of the object of the trusts; that they were to apply the income for the purposes specified, because they could not just accumulate it; that applying the test of reasonableness, it was to be held that ordinarily, the trustee ought to distribute the income each year; and that it was to be held that the income from the UK trusts had rightly been taken into account by the Commission while passing its orders.
Dismissing the appeals, this Court, 941 HELD: 1.01.
The finality clause contained in Section 245 1 does not and cannot bar the jurisdiction of the High Court under Article 226 or the jurisdiction of this court under Article 32 or under Article 136, as the case may be.
But that does not mean that the jurisdiction of this court in the appeal preferred directly in this court is any different than what it would be if the assessee had first approached the High Court under Article 226 and then come up in appeal to this court under Article 136.
A party does not and cannot pin any advantage by approaching this Court directly under Article 136, instead of approaching the High Court under Article 226.
This is not a limitation inherent in Article 136; it is a limitation which this court imposes on itself having regard to the nature of the function performed by the Commission and keeping In view the principles of judicial review.
[955 D E] 1.02.
The scope of enquiry, whether by High Court under Article 226 or by this Court under Article 136 is also the same whether the order of the Commission is contrary to any of the provisions of the Act and if so, has it prejudiced the petitioner/appellant apart from ground of bias, fraud & malice which, of course, constitute a separate and independent category.
[956 B] 1.03.
The appellant power under Article 136 is similar to power of judicial review, where the appeal is directed against the orders of the Settlement Commission.
Sri Ram Durga Prasad vs Settlement Commission, 176 I.T.R. 169 and Chief Constable of the N. W. Police vs Evans,[1982] 1 W.L.R. 1155, referred to.
[956 D] 1.04.
The only ground upon which this Court can interfere in these appeals is that the order of the Commission is contrary to the provisions of the Act and that such contravention has prejudiced the appellant.
[956 E] 1.05.
The main controversy in these appeals relates to the interpretation of the settlement deeds though it is true, some contentions of law are also raised.
The commission has interpreted the trust deeds in a particular manner.
Even if the interpretation placed by the commission on the said deeds is not correct, it would not be a ground for interference in these appeals, since a wrong interpretation of a deed of trust cannot be said to be a violation of the provisions of the Income Tax Act.
[956 F] 942 1.06.
The interpretation placed upon the said deeds by the Commission does not bind the authorities under the Act in proceedings relating to other assessment years.
[956 G] 1.07.
Though it is not necessary, strictly speaking, to go into the correctness of the interpretation placed upon the said deeds by the commission, and it is enough if this court confines itself to the question whether the order of the Commission is contrary to the provisions of the Act, yet, for the sake of completeness, the Court examine whether the order of Commission is vitiated by any such wrong interpretation.
[956 H, 957 A] 2.01.
A discretionary trust is described as a trust where the trustees have been vested with a discretion in the matter of distribution of trust income among the specified class of beneficiaries.
In the case of such trusts, the trustees have a discretion to pay whole or part of the income to such member or members of the designated class as they think fit and in such proportion as they deem appropriate.
[957 C D] Snell 's Principles of Equity, 25th Edn.
(1965) page 129, referred to.
[957 E] 2.02.
The US settlement deed empowers the trustee to hold, manage, invest and reinvest the principal of the trust fund, to collect and receive the income thereof and to pay or apply so much of the net income as the trustee shall in his absolute and uncontrolled discretion deem advisable to or to the use of one of more members of the settlor 's family, It is thus a discretionary trust.
Para 1(2) of the U.S. Deed empowers the settlor/transferor and the trustee, acting together to direct the trustee, at any time, to pay over the entire income and/or entire corpus or a part thereof to such member of the settlor 's family or their descendants as they may direct.
The said power cannot be exercised by the settlor acting Alone.
[958 B] 2.04.
The power, properly construed, is given to the settlor to, be exercised together with the trustee and not to the trustee to be exercised together, with the settlor.
The trustee is anyhow vested with an absolute discretion to distribute the income of or the principal of the trust to such member of the family, as he thinks appropriate, under the clause preceding and paras following para 1(2).
If so, there was no point in saying that 943 he can, together with the settlor, be empowered to pay over part or whole of income/principal to "such one or more members of a class composed of the family members living. ' It cannot also be forgotten that the trustee in this case is a Bank one of the largest in the U.SA.
and not an individual acquaited with the affairs of the settlor 's family.
[958 H, 959 A] 2.05.
Section 63 does not say that the power of revocation vesting in the transferor should be absolute or unconditional.
[959 B] 2.06.
Section 63(1) also does not say that the deed of transfer must confer or vest an unconditional or an exclusive power in the transferor to give the power/direction of the nature contemplated by it.
Merely because the concurrence of the trustee had to be obtained by the transferor/settlor for giving the said direction it cannot be said that the deed does not contain a provision giving the transferor a right to reassume power directly or indirectly over the whole or any part of income or assets within the meaning of Section 63(a)(ii) of the Act.
[960 B C] 2.07.
During the lifetime of the settlor, the entire income arising from the three U.S. trust deeds was bound to be and was rightly included in the income of the settlor by virtue of Section 63 read with Section 61.
[961.B] 2.08.
With the death of the settlor, Section 63 ceased to apply even though the aforesaid clause empowers not only the settlor but also the Maharaja for the time being to exercise the said power.
[961 C] 2.09.
Section 63 is attracted only where such power is given to the transferor and the appellant (the son of the settlor) is not and cannot be called the transferor.
It is not denied that so far as the income from the U.S. trusts is concerned, it was indeed received by the appellant.
[961 D] 2.10.
The trustees in the case of a trust declared by a duly executed instrument in writing are treated as representative assessees (Section 160(1)(iv)).
It is equally true that in the case of a discretionary trust, trustees are liable to be taxed in respect of the income received by them at the rate specified in Section 164(1).
[961 F] 2.11.
Section 166 states in unmistakable terms that nothing contained in the preceding provisions in the chapter shall preclude the Revenue from making a direct assessment upon the beneficiary and/or recovering the tax payable from such person.
[962 B] 944 2.12.
By virtue of Section 166, the Revenue has an option in the case of a discretionary trust either to make an assessment upon the trustees or to make an assessment upon the beneficiaries.
Of course, both the trustee and the beneficiary cannot be simultaneously taxed in respect of the same income.
The assessments made by the Commission on the deceased settlor and the appellant are thus unexceptionable.
[966 D] Behramji Sorabji vs Commissioner of Income Tax, Bombay, ; Commissioner of Income Tax Bombay City vs Ratilal Nathalal, ; Tarunendra Nath Tagore vs Commr.
of Income Tax, ; K. Subramania Pillai vs Agricultural Income Tar Officer, 7hukalay, ; Commissioner of Income Tar, Punjab vs Raghubir Singh, ; Nagappa vs C.I.T, and Ram Swaroop Das vs The State of Bihar, , referred to.
Sevantilal Maneklal vs C.I.T., , distinguished.
C.I.T vs Kamalini Khatau, (F.B.) Agreed with the dissenting opinion.
3.01.Both the settlor and the appellant have been receiving the income from the UK trusts during the several assessment years concerned herein.
The settlor had voluntarily included the entire income from the U.K. trusts in his income in the returns filed by him for the assessment years 1964 65 to 1969 70.
It is unlikely that he would have so included unless he really received it The Commission treated those declarations as proof of the settlor 's real intention.
The Commission also relied upon certain other circumstances including the manner in which the accounts of these trusts were maintained in support of their opinion that all concerned with the trusts, acted on the basis that the trust income was flowing to the settlor, and after his death to the appellant.
The Commission also referred specifically to similar declarations made by the appellant in his returns.
Even subsequent to the death of the settlor, the Commission pointed out, the appellant has been making similar declarations from time to time.
[967 C E] 3.02.
The appellant did not say that he did not receive the income from the U.K. trusts.
All he said was, since it is a discretionary trust, its income is not taxable in his hands.
If he had not received the income, he would have put forward that fact in the forefront.
But he did not.
Section 945 5 of the Act is wide enough to bring all such income to tax.
In case appellant proves that any income has been taxed in U.S. or U.K., the same income shall not be taxable over again in India.
[%7 H, 968 D] </s> |
<s>[INST] Summarize the following judgement: ivil Appeal No. 215 of 1955.
Appeal from the judgment and decree dated April 1, 1953, of the Calcutta High Court in Appeal from Original Decree No. 89 of 1946, arising, out of the judgment and decree dated December 4, 1945, of the Subordinate Judge, Darjeeling, in Money Suit No. 5 of 1940.
409 L. K. Jha and D. N. Mukherjee, for the appellant.
C. B. Aggarwala, K. B. Bagchi and Sukumar Ghosh, for Respondents Nos. 1 to 5. 1959.
March 26.
The Judgment of the Court was delivered by SUBBA RAO, J.
This appeal filed against the judgment of the High Court of Judicature at Calcutta raises the question of the legality of a partnership to carry on business in wagering contracts.
The facts lie in a small compass.
They, omitting those not germane to the controversy before us, are as follows: The appellant, Gherulal Parakh, and the first respondent, Mahadeodas Maiya, managers of two joint families entered into a partnership to carry on wagering contracts with two firms of Hapur, namely, Messrs. Mulchand Gulzarimull and Baldeosahay Surajmull.
It was agreed between the partners that the said contracts would be made in the name of the respondents on behalf of the firm and that the profit and loss resulting from the transactions would be borne by them in equal shares.
In implementation of the said agreement, the first respondent entered into 32 contracts with Mulchand and 49 contracts with Baldeosahay and the nett result of all these transactions was a loss, with the result that the first respondent had to pay to the Hapur merchants the entire amount due to them.
As the appellant denied his liability to bear his share of the loss, 'the first respondent along 'With his sons filed O. section No. 18 of 1937 in the Court of the Subordinate Judge, Darjeeling, for the recovery of half of the loss incurred in the transactions with Mulchand.
In the plaint he reserved his right to claim any further amount in respect of transactions with Mulchand that might be found due to him after the accounts were finally settled with him.
That suit was referred to arbitration and on the basis of the award, the Subordinate Judge made a decree in favour of the first respondent and his sons for a sum of Rs. 3,375.
After the final accounts were settled between the first respondent and the two merchants of Hapur and after 52 410 the amounts due to them were paid, the first respondent instituted a suit, out of which the present appeal arises, in the Court of the Subordinate Judge, Darjeeling, for the recovery of a sum of Rs. 5,300 with interest thereon.
Subsequently the plaint was amended and by the amended plaint the respondents asked for the same relief on the basis that the firm had been dissolved.
The appellant and his sons, inter alia, pleaded in defence that the agreement between the parties to enter into wagering contracts was unlawful under section 23 of the Contract Act, that as the partnership was not registered, the suit was barred under section 69(1) of the Partnership Act and that in any event the suit was barred under section 2, Rule 2 of the Code of Civil Procedure.
The learned Subordinate Judge found that the agreement between the parties was to enter into wagering contracts depending upon the rise and fall of the market and that the said agreement was void as the said object was forbidden by law and opposed to public policy.
He also found that the claim in respect of the transactions with Mulchand so far as it was not included in the earlier suit was not barred under section 2, Rule 2, Code of Civil Procedure, as the cause of action in respect of that part of the claim did not arise at the time the said suit was filed.
He further found that the partnership was between the two joint families of the appellant and the first respondent respectively, that there could not be in law such a partnership and that therefore section 69 of the Partnership Act was not applicable.
In the result, he dismissed the suit with costs.
On appeal, the learned Judges of the High Court held that the partnership was not between the two joint families but was only between the two managers of the said families and therefore it was valid.
They found that the ' partnership to do business was only for a single venture with each one of the two merchants of Hapur and for a single season and that the said partnership was dissolved after the season was over and therefore the suit for accounts of the dissolved firm was not hit by the provisions of subsections (1) and (2) of section 69 of the Partnership Act.
411 They further found that the object of the partnere was to deal in differences and that though the said transactions, being in the nature of wager, were void under section 30 of the , the object was not unlawful within the meaning of section 23 of the said Act.
In regard to the claim, the learned Judges found that there was no satisfactory evidence as regards the payment by the first respondent on account of loss incurred in the contracts with Mulchand but it was established that he paid a sum of Rs. 7,615 on account of loss in the contracts entered into with Baldeosahay.
In the result, the High Court gave a decree to the first respondent for a sum of Rs. 3,807 8 0 and disallowed interest thereon for the reason that as the suit in substance was one for accounts of a dissolved firm, there was no liability in the circumstances of the case to pay interest.
In the result, the 'High Court gave a decree in favour of the first respondent for the said amount together with another small item and dismissed the suit as regards " the plaintiffs other than the first respondent and the defendants other than the appellant ".
Before we consider the questions of law raised in the case, it would be convenient at the outset to dispose of questions of fact raised by either party.
The learned Counsel for the appellant contends that the finding of the learned Judges of the High Court that the partnership stood dissolved after the season was over was not supported by the pleadings or the evidence adduced in the case.
In the plaint as originally drafted and presented to the Court, there was no express reference to the fact that the business was dissolved and no relief was asked for accounts ' of the dissolved firm.
But the plaint discloses that the parties jointly entered into contracts with two merchants between March 23, 1937, and June 17, 1937, that the plaintiffs obtained complete accounts of profit and loss on the aforesaid transactions from the said merchants after June 17, 1937, that they issued a notice to the defendants to pay them a sum of Rs. 4,146 4 3, being half of the total payments made by them on account of 412 the said contracts and that the defendants denied their liability.
The suit was filed for recovery of the said amount.
The defendant filed a written statement on June 12, 1940, but did not raise the plea based on section 69 of the Partnership Act.
He filed an additional written statement on November 9, 1941, expressly setting up the plea.
Thereafter the plaintiffs prayed for the amendment of the, plaint by adding the following to the plaint as paragraph 10: " That even Section 69 of the Indian Partnership Act is not a bar to the present suit as the joint business referred to above was dissolved and in this suit the Court is required only to go into the accounts of 'the said joint business ".
On August 14, 1942, the defendant filed a further additional written statement alleging that the allegations in paragraph 2 were not true and that as no date of the alleged dissolution had been mentioned in the plaint, the plaintiffs ' case based on the said alleged dissolution was not maintainable.
It would be seen from the aforesaid pleadings that though an express allegation of the fact of dissolution of the partnership was only made by an amendment on November 17, 1941, the plaint as originally presented contained all the facts sustaining the said plea.
The defendants in their written statement, inter alia, denied that there was any partnership to enter into forward contracts with the said two merchants and that therefore consistent with their case they did not specifically deny the said facts.
The said facts, except in regard to the question whether the partnership was between the two families or only between the two managers of the families on which there was difference of view between the Court of the Subordinate Judge and the High Court, were concurrently found by both the Courts.
It follows from the said findings that the partnership was only in respect of forward contracts with two specified individuals and for a particular season.
But it is said that the said findings were not based on any evidence in the case.
It is true that the documents did not clearly indicate any period limiting the operation of the partnership, but from the attitude adopted by the 413 defendants in the earlier suit ending in an award and that adopted in the present pleadings, the nature of the transactions and the conduct of the parties, no other conclusion was possible than that arrived at by the High Court.
If so, section 42 of the Partnership Act directly applies to this case.
Under that section in the absence of a contract to the contrary, a firm is dissolved, if it is constituted to carry out one or more adventures or undertakings, by completion thereof.
In this case, the partnership was constituted to carry out contracts with specified persons during a particular season and as the said contracts were closed, the partnership was dissolved.
At this stage a point raised by the learned Counsel for the respondents may conveniently be disposed of.
The learned Counsel contends that neither the learned Subordinate Judge nor the learned Judges of the High Court found that the first respondent entered into any wagering transactions with either of the two merchants of Hapur and therefore no question of illegality arises in this case.
The law on the subject is wellsettled and does not call for any citation of cases.
To constitute a wagering contract there must be proof that the contract was entered into upon terms that the performance of the contract should not be demanded, but only the difference in prices should be paid.
There should be common intention between the parties to the wager that they should not demand delivery of the goods but should take only the difference in prices on the happening of an event.
Relying upon the said legal position, it is contended that there is no evidence in the case to establish that there was a common intention between the first respondent and the Hapur merchants not to take delivery of possession but only to gamble in difference in prices.
This argument, if we may say so, is not really germane to the question raised in this case.
The suit was filed on the basis of a dissolved partnership for accounts.
The defendants contended that the object of the partnership was to carry on wagering transactions, i. e., only to gamble in differences without any intention to give or take delivery of goods.
The Courts, on the evidence, both 414 direct and circumstantial, came to the conclusion that the partnership agreement was entered into with the object of carrying on wagering transactions wherein there was no intention to ask for or to take delivery of goods but only to deal with differences.
That is a concurrent finding of fact, and, following the usual practice of this Court, we must accept it.
We, therefore, proceed on the basis that the appellant and the first respondent entered into a partnership for carrying on wagering transactions and the claim related only to the loss incurred in respect of those transactions.
Now we come to the main and substantial point in the case.
The problem presented, with its different facets, is whether the said agreement of partnership is unlawful within the meaning of section 23 of the .
Section 23 of the said Act, omitting portions unnecessary for the present purpose, reads as follows : " The consideration or object of an agreement is lawful, unless it is forbidden by law, or the Court regards it as immoral, or opposed to public policy.
In each of these cases, the consideration or object of an agreement is said to be unlawful.
Every agreement of which the object or consideration is unlawful is void.
" Under this section, the object of an agreement, whether it is of partnership or otherwise, is unlawful if it is forbidden by law or the Court regards it as immoral or opposed to public policy and in such cases the agreement itself is void.
The learned Counsel for the appellant advances his argument under three sub heads: (i) the object is forbidden by law, (ii) it is opposed to public policy, and (iii) it is immoral.
We shall consider each one of them separately.
(i) forbidden by law: Under section 30 of the , agreements by way of wager are void; and no suit shall be brought for recovering anything 415 alleged to be won on any wager, or entrusted to any person to abide the result of any game or other uncertain event on which any wager is made.
Sir William Anson 's definition of " wager " as a promise to give money or money 's worth upon the determination or ascertainment of an uncertain event accurately brings out the concept of wager declared void by section 30 of the Contract Act.
As a contract which provides for payment of differences only without any intention on the part of either of the parties to give or take delivery of the goods is admittedly a wager within the meaning of section 30 of the Contract Act, the argument proceeds, such a transaction, being void under the said section, is also forbidden by law within the meaning of section 23 of the Contract Act.
The question, shortly stated, is whether what is void can be equated with what is forbidden by law.
This argument is not a new one, but has been raised in England as well as in India and has uniformly been rejected.
In England the law relating to gaming and wagering contracts is contained in the Gaming Acts of 1845 and 1892.
As the decisions turned upon the relevant provisions of the said Acts, it would help to appreciate them better if the relevant sections of the two Acts were read at this stage: Section 18 of the Gaming Act, 1845: " Contracts by way of gaming to be void, and wagers or sums deposited with stakeholders not to be recoverable at law Saving for subscriptions for prizes. . . .
All contracts or agreements, whether by parole or in writing, by way of gaming or wagering, shall be null and void; and. . no suit shall be brought or maintained in any court of law and equity for recovering any sum of money or valuable thing alleged to be won upon any wager, or which shall have been deposited in the hands of any person to abide the event on which any wager shall have been made: Provided always, that this enactment shall not be deemed to apply to any subscription or contribution, or agreement to subscribe or contribute, for or towards any plate, prize or sum of money to be awarded to the winner or winners of any lawful game, sport, pastime or exercise." 416 Section 1 of the Gaming Act, 1892: " Promises to repay sums paid under contracts void by 8 & 9 Viet.
c 109 to be null and void.
Any promise, express or implied, to pay any person any sum of money paid by him under or in respect of any contract or agreement rendered null and void by the Gaming Act, 1845, or to pay any sum of money by way of commission, fee, reward, or otherwise in respect of any such contract, or of any services in relation thereto or in connexion therewith, shall be null and void, and no action shall be brought or maintained to recover any such sum of money.
" While the Act of 1845 declared all kinds of wagers or games null and void, it only prohibited the recovery of money or valuable thing won upon any wager or desposited with stakeholders.
On the other hand, the Act of 1892 further declared that moneys paid under or in respect of wagering contracts dealt with by the Act of 1845 are not recoverable and no commission or reward in respect of any wager can be claimed in a court of law by agents employed to bet on behalf of their principals.
The law of England till the passing of the Act of 1892 was analogous to that in India and the English law on the subject governing a similar situation would be of considerable help in deciding the present case.
Sir William Anson in his book " On Law of Contracts " succinctly states the legal position thus, at page 205: ". . . the law may either actually forbid an agreement to be made, or it may merely say that if it is made the Courts will not enforce it.
In the former case it is illegal, in the latter only void; but inasmuch as illegal contracts are also void, though void contracts are not necessarily illegal, the distinction is for most purposes not important, and even judges seem sometimes to treat the two terms as inter changeable.
" The learned author proceeds to apply the said general principles to wagers and observes, at page 212, thus: "Wagers 'beidg only void, no taint of illegality attached to a transaction, whereby one man employed another to make bets for him; the ordinary rules which 417 govern the relation of employer and employed applied in such a case.
" Pollock and Mulla in their book on Indian Contract define the phrase ',forbidden by law " in section 23 thus, at page 158: "An act or undertaking is equally forbidden by law whether it violates a prohibitory enactment of the Legislature or a principle of unwritten law.
But in India, where the criminal law is codified, acts forbidden by law seem practically to consist of acts punishable under the Penal Code and of acts prohibited by special legislation, or by regulations or orders made under authority derived from the Legislature.
" Some of the decisions, both English and Indian, cited at the Bar which bring out the distinction between a contract which is forbidden by law and that which is void may now be noticed.
In Thacker vs Hardy (1), the plaintiff, a broker, who was employed by the defendant to speculate for him upon the stock Exchange, entered into contracts on behalf of the defendant with a third party upon which he (the plaintiff) became personally liable.
He sued the defendant for indemnity against the liability incurred by him and for commission as broker.
The Court held that the plaintiff was entitled to recover notwithstanding the provisions of 8 & 9 Viet.
c. 109, section 18 (English Gaming Act, 1845).
Lindley, J., observed at page 687: " Now, if gaming and wagering were illegal, I should be of opinion that the illegality of the transactions in which the plaintiff and the defendant were engaged would have tainted, as between themselves, whatever the plaintiff had done in futherance of their illegal designs, and would have precluded him from claiming, in a court of law, any indemnity from the defendant in respect of the liabilities he had incurred: Cannan vs Bryce ; McKinnell vs Robinson ; ; Lyne vs Siesfeld (1 H. & N. 278).
But it has been held that although gaming and wagering contracts cannot be enforced, they are (1) 53 418 not illegal.
Fitch vs Jones ; is plain to that effect.
Money paid in discharge of a bet is a good consideration for a bill of exchange: Oulds vs Harrison ; ; and if money be so paid by a plaintiff at the request of a defendant, it can be recovered by action against him : Knight vs Camber ; ; Jessopp vs Lutwyoho ; ; Rosewarne vs Billing (15 C. B. (N. section) 316); and it has been held that a request to pay may be inferred from an authority to bet: Oldham vs Ramsden Having regard to these decisions, I cannot hold that the statute above referred to precludes the plaintiff from maintaining this action.
" In Read vs Anderson.(1) where an agent was employed to make a bet in his own name on behalf of his principal, a similar question arose for consideration.
Hawkins, J., states the legal position at page 104 : " At common law wagers were not illegal, and before the passing of 8 & 9 Vict.
c. 109 actions were constantly brought and maintained to recover money won upon them.
The object of 8 & 9 Viet.
c. 109 (passed in 1845) was not to render illegal wagers which up to that time had been lawful, but simply to make the law no longer available for their enforcement, leaving the parties to them to pay them or not as their sense of honour might dictate." After citing the provisions of section 18 of that Act, the learned Judge proceeds to observe thus, at page 105 : " There is nothing in this language to affect the legality of wagering contracts, they are simply rendered null and void; and not enforceable by any process of law.
A host of authorities have settled this to be the true effect of the Statute." This judgment of Hawkins, J., was confirmed on appeal (reported in 13 Q. B. 779) on the ground that the agency became irrevocable on the making of the bet.
The judgment of the Court of Appeal cannot be considered to be a direct decision on the point.
The said principle was affirmed by the Court of Appeal again in Bridger vs Savage (2).
There the plaintiff sued his (1) (2) 419 agent for the amount received by him in respect of the winnings from the persons with whom the agent had betted.
Brett, M. R., observed at page 366 : ". . the defendant has received money which he contracted with the plaintiff to hand over to him when he had received it.
That is a perfectly legal contract ; but for the defendant it has been contended that the statute 8 & 9 Vict.
c. 109, section 18, makes that contract illegal.
The answer is that it has been held by the Courts on several occasions that the statute applies only to the original contract made between the persons betting, and not to such a contract as was made here between the plaintiff and defendant.
" Bowen, L. J., says much to the same effect at page 367: "Now with respect to the principle involved in this case, it is to be observed that the original contract of betting is not an illegal one, but only one which is void.
If the person who has betted pays his bet, he does nothing wrong; he only waives a benefit which the statute has given to him, and Confers a good title to the money on the person to whom he pays it.
Therefore when the bet is paid the transaction is completed, and when it is paid to an agent it cannot be contended that it is not a good payment for his prin cipal. .
So much, therefore, for the principle governing this case.
As to the authorities, the cases of Sharp vs Taylor , Johnson vs Lansley (12 C. B. 468), and Beeston vs Beeston (I exhibit D. 13), all go to shew that this action is maintainable, and the only authority the other way is that of Beyer vs Adams , and that case cannot be supported, and is not law.
" This case lays down the correct principle and is supported by earlier authorities.
The decision in Partridge vs Mallandaine (1) is to the effect that persons receiving profits from betting systematically carried on by them are chargeable with income tax on such profits in respect of a " vocation " under 5 & 6 Vict.
c. 35 (the Income Tax Act) Schedule D. Hawkins, J., rejecting the argument that the (1) 420 profession of bookmakers is not a calling within the meaning of the Income Tax Act, makes the following observations, at page 278: "Mere betting is not illegal.
It is perfectly lawful for a man to bet if he likes.
He may, however, have a difficulty in getting the amount of the bets from dishonest persons who make bets and will not pay.
" The decision in Hyams vs Stuart King (1) deals with the problem of the legality of a fresh agreement between parties to a wager for consideration.
There, two bookmakers had betting transactions together, which resulted in the defendant giving the plaintiff a cheque for the amount of bets lost to him.
At the request of the defendant, the cheque was held over by the plaintiff for a time, and part of the amount of the cheque was paid by the defendant.
Subsequently a fresh verbal agreement was come to between the parties, by which, in consideration of the plaintiff holding over the cheque for a further time and refraining from declaring the defendant a defaulter and thereby injuring him with his customers, the defendant promised to pay the balance owing in a few days.
The balance was never paid and the plaintiff filed a suit to recover the money on the basis of the fresh verbal agreement.
The Court of Appeal, by a majority, Fletcher Moulton, L. J., dissenting, held that the fresh verbal agreement was supported by good consideration and therefore the plaintiff was entitled to recover the amount due to him.
At page 705, Sir Gorell Barnes posed the following three questions to be decided in the case: (1) Whether the new contract was itself one which falls within the provisions of 8 & 9 Vict.
c. 109, section 18; (2) whether there was any illegality affecting that contract; and (3) whether that contract was a lawful contract founded on good consideration.
Adverting to the second question, which is relevant to the present case, the President made the following observations at page 707: ". . . it is to be observed that there was nothing illegal in the strict sense in making the bets.
(1) 421 They were merely void under 8 & 9 Vict.
c. 109, and there would have been no illegality in paying them.
There is no doubt whatever about this.
There was also nothing illegal in giving the cheque nor would there have been any illegality in paying it, though the defendants could not have been compelled by the plaintiff to pay it, because by statute it was to be deemed and taken to have been made and given for an illegal consideration, and therefore void in the hands of the plaintiff. .
The statutes do not make the giving or paying of the cheque illegal, and impose no penalty for so doing.
Their effect and intention appear only, so far as material, to be that gaming or wagering contracts cannot be enforced in a Court of Law or Equity. . . " The view expressed by the President is therefore consistent with the view all along accepted by the Courts in England.
This case raised a now problem, namely, whether a substituted agreement for consideration between the same parties to the wager could be enforced, and the majority held that it could be enforced, while Fletcher Moulton, L. J., recorded his dissent.
We shall have occasion to notice the dissenting view of Fletcher Moulton, L. J., at a later stage.
The aforesaid decisions establish the proposition that in England a clear distinction is maintained between a contract which is void and that which is illegal and it has been held that though a wagering contract is void and unenforceable between parties, it is not illegal and therefore it does not affect the validity of a collateral contract. 'The same principle has been applied to collateral contracts of partnership also.
In Thwaites vs Coulthwaite (1) the question of legality of a partnership of bookmaking and betting was raised.
There the plaintiff and defendant were partners in a bookmakers and betting business, which was carried on by the defendant; the plaintiff claimed an account of the profits of the partnership, and the defendant contended that, having regard to the nature of the business, no such relief could be obtained.
Chitty, J., rejected the (1) 422 plea holding that the partnership was valid, for the following reasons, among others, and stated at page 498: " The Gaming Act, 1845 (8 & 9 Vict. c. 109), did not make betting illegal; this statute, as is well known, merely avoided the wagering contract.
A man may make a single bet or many bets; he may habitually bet; he may carry on a betting or bookmakers business within the statute, provided the business as carried on by him does not fall within the prohibition of the Betting Act, 1853.
" In Thomas vs Day (1), a similar question arose.
There the plaintiff claimed an account and money due under a partnership which he alleged had existed between himself and the defendant to take an office and carry on a betting business as bookmakers.
Darling, J., held that a partnership to carry on the business of a bookmaker was not recognized by law, that even if there was such a legal partnership, an action for account would not lie as between the two bookmakers founded on betting and gambling transactions.
This judgment certainly supports the appellant; but the learned Judge did not take notice of the previous decision on the subject and the subsequent decisions have not followed it.
When a similar objection was raised in Brookman vs Mather (2), Avery, J., rejected the plea and gave a decree to the plaintiff.
There the plaintiff and the defendant entered into a partnership to carry on a betting business.
Two years thereafter, in 1910, the partnership was dissolved and a certain amount was found due to the plaintiff from the defend ant and the latter gave the former a promissory note for that amount.
A suit was filed for the recovery of the amount payable under the promissory note.
Avery, J., reiterated the principle that betting was not illegal per se.
When the decision in Thomas vs Day(1) was cited in support of the broad principle that the betting business could not be recognized as legal in a Court of Justice, the learned Judge pointed out that that case was decided without reference to Thwaites (1) (2) 423 vs Coulthwaite (1).
This judgment, therefore, corrected the deviation made by Darling, J., in Thomas vs Day(2 ) and put the case law in line with earlier precedents.
The earlier view was again accepted and followed in Keen vs Price (3) where an action by one of the partners in a bookmakers and betting business against the other for an account of the partnership dealings was entertained.
But the Court gave liberty to the defendant to object to repaying anything which represented profits in such business.
The reason for this apparent conflict between the two parts of the decision is found in the express terms of the provisions of the Gaming Act of 1892.
Commenting upon Thwaites vs Coulthwaite (1) in which Chitty, J., held that such an action would lie for an account of the profits of the partnership, Sargant, J., pointed out that in that case the Gaming Act, 1892, was not referred to.
At page 101, the learned Judge says: " Curiously enough, in that case the Gaming Act, 1892, was not referred to, and although the decision is a good one on the general law, it cannot be regarded as a decision on the Act of 1892.
" This judgment confirms the principle that a wager is not illegal, but states that after the Gaming Act, 1892, a claim in respect of that amount even under a collateral agreement is not maintainable.
In O 'Connor and Ould vs Ralston (4), the plaintiff, a firm of bookmakers, filed a suit claiming from the defendant the amount of five cheques drawn by him upon his bank in payment of bets which he had lost to them and which had been dishonoured on presentation.
Darling, J., held that as the plaintiffs formed an association for the purpose of carrying on a betting business, the action would not lie.
In coming to that conclusion the learned Judge relied upon the dissenting view of Fletcher Moulton, L. J., in Hyams vs Stuart King We shall consider that decision at a later stage.
(1) (2) (3) (4) (5) 424 The opinion of Darling, J., was not accepted in Jeffrey Co. vs Bamford (1) wherein McCardie, J., held that a partnership for the purpose of carrying on a betting and bookmakers business is not per se illegal or impossible in law.
The learned Judge says at page 356: ". . betting or wagering is not illegal at common law. .
It has been repeatedly pointed out that mere betting on horse races is not illegal ".
The learned Judge, after noticing the earlier decisions already considered by us and also some of the observations of Fletcher Moulton, L. J., came to the conclusion that the partnership was not illegal.
We shall now scrutinize the decision in Hill vs William Hill (I) to see whether there is any substance in the argument of the learned Counsel for the appellant that this decision accepted the dissenting view of Fletcher Moulton, L. J., in Hyams vs Stuart King (3) or the view of Darling, J., in Thomas vs Day (4) and O 'Connor and Ould vs Ralston (5).
The facts in that case were: The appellant had betting transactions with the respondents, a firm of bookmakers.
As a result of those transactions, the appellant lost pound 3,635 12 6.
As the appellant was unable to pay the amount, the matter was referred to the committee of Tattersalls, who decided that the appellant should pay the respondents a sum of pound 635 12 6 within fourteen days and the balance by monthly instalments of pound 100.
It was laid down that if the appellant failed to make those payments, he was liable to be reported to the said committee which would result in his being warned off Newmarket Heath and posted as defaulters The appellant informed the respondents that he was unable to pay the pound 635 12 6 within the prescribed time and offered to send them a cheque for that sum post dated October 10, 1946, and to pay the monthly instalments of pound 100 thereafter.
On the respondents agreeing to that course, the appellant sent a post dated cheque to (1) (2) (3) (4) (5) 425 them and also enclosed a letter agreeing to pay the monthly instalments.
As the post dated cheque was dishonoured and the appellant failed to pay the entire amount, the respondents filed a suit claiming the amount due to them under the subsequent agreement.
The respondents contended that the sum the appellant had promised to pay was not money won upon a wager within the meaning of the second branch of section 18, but was money due under a new lawful and enforceable agreement and that even if the sum was to be regarded as won on a wager, the agreement was outside the scope of the second branch of section 18 of the Gaming Act, 1845.
The House of Lords by a majority of 4 to 3 held that the agreement contained a new promise to pay money won upon a wager and that the second branch of section 18 applied to all suits brought to recover money alleged to have been won on a wager and therefore the contract was unenforceable.
In coming to that conclusion, Viscount Simon, one of the Judges who expressed the majority view, agreed with Fletcher Moulton, L. J., in holding that the bond constituted an agreement to pay money won upon a wager, notwithstanding the new consideration, and was thus unenforceable under the second limb of section 18.
In Hyams vs Stuart King(1), the facts of which we have already given, the suit was filed on the basis of a subsequent agreement between the same parties to the wager.
The majority of the Judges held that the subsequent agreement was supported by good consideration, while Fletcher Moulton, L. J., dissented from that view.
The basis for the dissenting view is found at page 712.
After reading section 18 of the Gaming Act, 1845, the learned Judge proceeded to state: " In my opinion too little attention has been paid to the distinction between the two parts of this enactment, and the second part has been treated as being in effect merely a repetition of the first part.
I cannot accept such an interpretation.
So far as the actual wagering contract is concerned, the earlier provision is ample.
It makes that contract absolutely void, (1) 54 426 and it would be idle to enact in addition that no suit should be brought upon a contract that had thus been rendered void by statute.
The language of the later provision is in my opinion much wider.
It provides with complete generality that no action shall be brought to recover anything alleged to be won upon any wager, without in any way limiting the application of the provision to the wagering contract itself.
In other words, it provides that wherever the obligation under a contract is or includes the payment of money won upon a wager, the Courts shall not be used to enforce the performance of that part of the obligation ".
These observations must be understood in the context of the peculiar facts of that case.
The suit was between the parties to the wager.
The question was whether the second part of the concerned section was comprehensive enough to take in an agreement to recover the money won upon a wager within the meaning of that part.
Fletcher Moulton, L. J., held that the second part was wide and comprehensive enough to take in such a claim, for the suit was, though on the basis of a substituted agreement, for the recovery of the money won upon a wager within the meaning of the words of that part of the section.
The second question considered by the learned Judge was whether the defendants ' firm which was an association formed for the purpose of a betting business was a legal partnership under the English Law.
The learned Judge relied upon the Gaming Act.
1892 in holding that it was not possible under the English law to have any such partnership.
At page 718, the learned Judge observed : In my opinion no such partnership is possible under English law.
Without considering any other grounds of objection to its existence, the language of the Gaming Act, 1892, appears to me to be sufficient to establish this proposition.
It is essential to the idea of a partnership that each partner is an agent.
of the partnership and (subject to the provisions of the partnership deed) has authority to make payments on its behalf for partnership purposes, for which he is entitled 427 to claim credit in the partnership accounts and thus receive, directly or indirectly, repayment.
But by the Gaming Act, 1892, all promises to pay any person any sum of money paid by him in respect of a wagering contract are null and void.
These words are wide enough to nullify the fundamental contract which must be the basis of a partnership, and therefore in my opinion no such partnership is possible, and the action for this reason alone was wrongly framed and should have been dismissed with costs ".
It would be seen from the said observations that Fletcher Moulton, L. J., laid down two propositions: (i) The second part of section 18 of the Gaming Act, 1845, was comprehensive enough to take in a claim for the recovery of money alleged to be won upon a wager though the said claim was based upon a substituted contract between the same parties; and (ii) by reason of the wide terms of the Gaming Act, 1892, even the fundamental contract, which was the basis of a partnership, was itself a nullity.
The learned Lord Justice did not purport to express any opinion on the effect of a void contract of wager on a collateral contract.
In Hill 's case (1) the only question that arose was whether the second part of section 18 was a bar to the maintainability of a suit under a substituted agreement for the recovery of money won upon a wager.
The majority accepted the view of Fletcher Moulton, L. J., on the first question.
The second question did not arise for consideration in that case.
The House of Lords neither expressly nor by necessary implication purported to hold that collateral contract of either partnership or agency was illegal; and that the long catena of decisions already referred to by us were wrongly decided.
This judgment does not therefore support the contention of the learned Counsel for the appellant.
The legal position in India is not different.
Before the Act for Avoiding Wagers, 1848, the law relating to wagers that was in force in British India was the common law of England.
The Judicial Committee in Ramloll Thackoorseydass vs Soojumnull Dhondmull (2) (1) (2) (1848) 4 M.I.A. 339.
428 expressly ruled that the common law of England was in force in India and under that law an action might be maintained on a wager.
The wager dealt with in that case was upon the average price which opium would fetch at the next Government sale at Calcutta.
Lord Campbell in rejecting the plea that the wager was illegal observed at page 349: " The Statute, 8 & 9 Viet.
c. 109, does not extend to India ' and although both parties on the record are Hindoos, no peculiar Hindoo law is alleged to exist upon the subject; therefore this case, must be decided by the common law of England ".
It is a direct decision on the point now mooted before us and it is in favour of the respondents.
Again the Privy Council considered a similar question in Doolubdass Pettamberdass vs Ramloll Thackoorseydass and others There again the wager was upon the price that the Patna opium would fetch at the next Government sale at Calcutta.
There the plaintiff instituted a suit in the Supreme Court of Bombay in January, 1847, to recover the money won on a wager.
After the suit was filed, Act 21 of 1848 was passed by the Indian Legislature where under all agreements whether made in speaking, writing, or otherwise, by way of gaming or wagering, would be null and void and no suit would be allowed in any Court of Law or Equity for recovering any sum of money or valuable thing alleged to be won on any wager.
This section was similar in terms to that of section 18 of the Gaming Act, 1845.
Their Lordships held that the contract was not void and the Act 21 of 1848 would not invalidate the contracts entered into before the Act came into force.
Adverting to the next argument that under Hindu Law such contracts were void, they restated their view expressed in Ramloll Thackoorserdas vs Soojumnull Dhondmull (2) thus at page 127: " Their Lordships have already said that they are not satisfied from the authorities referred to, that such is the law among the Hindoos. " The Judicial Committee again restated the law in similar terms in Raghoonauth Sahoi Chotayloll vs (1) (1850) 5 M.I.A. 109.
(2) (1848) 4 M.I.A. 339.
429 Manickchund and Kaisreechund (1).
There the Judicial Committee held that a wagering contract in India upon the average price opium would fetch at a future Government sale, was legal and enforceable before the passing of the Legislative Act, No. 21 of 1848.
The aforesaid three decisions of the Privy Council clearly establish the legal position in India before the enactment of the Act 21 of 1848, namely, that wagering contracts were governed by the common law of England and were not void and therefore enforceable in Courts.
They also held that the Hindu Law did not prohibit any such wagers.
The same view was expressed by the Indian Courts in cases decided after the enactment of the Contract Act.
An agent who paid the amount of betting lost by him was allowed to recover the same from his principal in Pringle vs Jafar Khan (2).
The reason for that decision is given at page 445: " There was nothing illegal in the contract; betting at horse races could not be said to be illegal in the sense of tainting any transaction connected with it.
This distinction between an agreement which is only void and one in which the consideration is also unlawful is made in the Contract Act.
Section 23 points out in what cases the consideration of an agreement is unlawful, and in such cases the agreement is also void, that is, not enforceable at law.
Section 30 refers to cases in which the agreement is only void, though the consideration is not necessarily unlawful.
There is no reason why the plaintiff should not recover the sum paid by him. .
" In Shibho Mal vs Lachman Das (3) an agent who paid the losses on the wagering transactions was allowed to recover the amounts he paid from his principal.
In Beni Madho Das vs Kaunsal Kishor Dhusar (4) the plaintiff who lent money to the defendant to enable him to pay off a gambling debt was given a decree to recover the same from the defendant.
Where two partners entered into a contract of wager with a third (1) (1856) 6 M.I.A. 251.
(3) All.
(2) All.
(4) All.
430 party and one partner had satisfied his own and his co partner 's liability under the contract, the Nagpur High Court, in Md. Gulam Mustafakhan vs Padamsi (1) held that the partner who paid the amount could legally claim the other partner 's share of the loss.
The learned Judge reiterated the same principle accepted in the decisions cited supra, when he said at page 49: " Section 30 of the does not affect agreements or transactions collateral to wagers. .
" The said decisions were based upon the well settled principle that a wagering contract was only void, but not illegal, and therefore a collateral contract could be enforced.
Before closing this branch of the discussion, it may be convenient to consider a subsidiary point raised by the learned Counsel for the appellant that though a contract of partnership was not illegal, in the matter of accounting, the loss paid by one of the partners on wagering transactions, could not be taken into consideration.
Reliance is placed in support of this contention on Chitty 's Contract, p. 495, para. 908, which reads: " Inasmuch as betting is not in itself illegal, the law does not refuse to recognise a partnership formed for the purpose of betting.
Upon the dissolution of such a partnership an account may be ordered.
Each partner has a right to recover his share of the capital subscribed, so far as it has not been spent; but he cannot claim an account of profits or repayments of amounts advanced by him which have actually been applied in paying the bets of the partnership.
" In support of this view, two decisions are cited.
They are: Thwaites vs Coulthwaite (2 ) and Saffery vs Mayer(3).
The first case has already been considered by us.
There, Chitty, J., in giving a decree for account left open the question of the legality of certain transactions till it arose on the taking of the (1) A.I.R. (1923) Nag. 48.
(2) (3) 431 account.
Far from helping the appellant, the observations and the actual decision in that case support the respondents ' contention.
The reservation of the question of particular transactions presumably related only to the transactions prohibited by the Betting Act, 1853.
Such of the transactions which were so prohibited by the Betting Act would be illegal and therefore the contract of partnership could not operate on such transactions.
The case of Saffery vs Mayer(1) related to a suit for recovery of money advanced by one person to another for the purpose of betting on horses on their joint account.
The appellate Court held that by reason of the provisions of the Gaming Act, 1892, the action was not maintainable.
This decision clearly turned upon the provisions of the Gaming, Act, 1892.
Smith, M. R., observed that the plaintiff paid the money to the defendant in respect of a contract rendered null and void and therefore it was not recoverable under the second limb of that section.
The other Lord Justices also based their judgments on the express words of the Gaining Act, 1892.
It will be also interesting to note that the Court of Appeal further pointed out that Chitty, J., in Thwaites ' Case(2) in deciding in the way he did omitted to consider the effect of the provisions of the Gaming Act, 1892, on the question of maintainability of the action before him.
The aforesaid passage in Chitty 's Contract must be understood only in the context of the provisions of the Gaming Act, 1892.
The aforesaid discussion yields the following results: (1) Under the common law of England a contract of wager is valid and therefore both the primary contract as well as the collateral agreement in respect thereof are enforceable; (2) after the enactment of the Gaming Act, 1845, a wager is made void but not illegal in the sense of being forbidden by law, and thereafter a primary agreement of wager is void but a collateral agreement is enforceable; (3) there was a conflict on the question whether the second part of section 18 of the Gaming Act, 1845, would cover a case for the recovery of money or valuable thing alleged to be won upon (1) (2) 432 any wager under a substituted contract between the same parties: the House of Lords in Hill 's Case,(1) had finally resolved the conflict by holding that such a claim was not sustainable whether it was made under the original contract of wager between the parties or under a substituted agreement between them; (4) under the Gaming Act, 1892, in view of its wide and comprehensive phraseology, even collateral contracts, including partnership agreements, are not enforceable; (5) section 30 of the is based upon the provisions of section 18 of the Gaming Act, 1845, and though a wager is void and unenforceable, it is not forbidden by law and therefore the object of a collateral agreement is not unlawful under section 23 of the Contract Act; and (6) partnership being an agreement within the meaning of section 23 of the , it is not unlawful, though its object is to carry on wagering transactions.
We, therefore, hold that in the present case the partnership is not unlawful within the meaning of section 23(A) of the Contract Act.
(ii) Public Policy: The learned Counsel for the appellant contends that the concept of public policy is very comprehensive and that in India, particularly after independence, its content should be measured having regard to political, social and economic policies of a welfare State, and the traditions of this ancient country reflected in Srutis, Smritis and Nibandas.
Before adverting to the argument of the learned Counsel, it would be convenient at the outset to ascertain the meaning of this concept and to note how the Courts in England and India have applied it to different situations.
Cheshire and Fifoot in their book on " Law of Contract ", 3rd Edn., observe at page " 280 thus: ' The public interests which is designed to protect are so comprehensive and heterogeneous, and opinions as to what is injurious must of necessity vary so greatly with the social and moral convictions, and at times even with the political views, of different judges, that it forms a treacherous and unstable (1) 433 ground for legal decision These questions have agitated the Courts in the past, but the present state of the law would appear to be reasonably clear.
Two observations may be made with some degree of assurance.
First, although the rules already established by precedent must be moulded to fit the new conditions of a changing world, it is no longer legitimate for the Courts to invent a new head of public policy.
A judge is not free to speculate upon what, in his opinion, is for the good of the community.
He must be content to apply, either directly or by way of analogy, the ' principles laid down in previous decisions.
He must expound, not expand, this particular branch of the law.
Secondly, even though the contract is one which prima facie falls under one of the recognized heads of public policy, it will not be held illegal unless its harmful qualities are indisputable.
The doctrine, as Lord Atkin remarked in a leading case, " should only be invoked in clear cases in which the harm to the public is substantially incontestable, and does not depend upon the idiosyncratic inferences of a few judicial minds . .
In popular language . the contract should be given the benefit of the doubt ".
" Anson in his Law of Contract states the same rule thus, at p. 216: "Jessel, M. R., in 1875, stated a principle which is still valid for the Courts, when he said: ' You have this paramount public policy to consider, that you are not lightly to interfere with the freedom of contract '; and it is in reconciling freedom of contract with other public interests which are regarded as of not less importance that the difficulty in these cases arises. .
We may say, however, that the policy of the law has, on certain subjects, been worked into a set of tolerably definite rules.
The application of these to particular instances necessarily varies with the conditions of the times and the progressive development of public opinion and morality, but, as Lord Wright has said public policy, like any other branch of the Common Law, ought to be, and I think is, governed by 55 434 the judicial use of precedents.
If it is said that rules of public policy have to be moulded to suit new conditions of a changing world, that is true; but the same is true of the principles of the Common Law generally.
" In Halsbury 's Laws of England, 3rd Edn., Vol. 8, the doctrine is stated at p. 130 thus: " Any agreement which tends to be injurious to the public or against the public good is void as being contrary to public policy. . . .
It seems, however, that this branch of the law will not be extended.
The determination of what is contrary to the so called policy of the law necessarily varies from time to time.
Many transactions are upheld now which in a former generation would have been avoided as contrary to the supposed policy of the law.
The rule remains, but its application varies with the principles which for the time being guide public opinion.
" A few of the leading cases on the subject reflected in the authoritative statements 'of law by the various authors may also be useful to demarcate the limits of this illusive concept.
Parke, B., in Egerton vs Brownlow(1), which is a leading judgment on the subject, describes the doctrine of public policy thus at p. 123: " 'I Public policy ' is a vague and unsatisfactory term, and calculated to lead to uncertainty and error, when applied to the decision of legal rights; it is capable of being understood in different senses; it may, and does, in its ordinary sense, mean I political expedience ', or that which is best for the common good of the community; and in that sense there may be every variety of opinion, according to education, habits, talents, and dispositions of each person, who is to decide whether an act is against public policy or not.
To allow this to be a ground of judicial decision, would lead to the greatest uncertainty and confusion.
It is the province of the statesman, and not the lawyer, to discuss, and of the Legislature to determine, what is best for the public good, and to provide for it by proper enactments.
It 1s the province of the judge (1) ; , 123; ; ,408. 435 to expound the law only; the written from the statutes; the unwritten or common law from the decisions of our predecessors and of our existing Courts, from text writers of acknowledged authority, and upon the principles to be clearly deduced from them by sound reason and just inference; not to speculate upon what is the best, in his opinion, for the advantage of the community.
Some of these decisions may have no doubt been founded upon the prevailing and just opinions of the public good ; for instance, the illegality of covenants in restraint of marriage or trade.
They have become a part of the recognised law, and we are therefore bound by them, but we are not thereby authorised to establish as law everything which we may think for the public good, and prohibit everything which we think otherwise.
" In Janson vs Driefontein Consolidated Mines, Ltd.(1) an action raised against British underwriters in respect of insurance of treasures against capture during its transit from a foreign state to Great Britain was resisted by the underwriters on the ground that the insurance was against public policy.
The House of Lords rejected the plea.
Earl of Halsbury, L.C., in his speech made weighty observations, which may usefully be extracted.
The learned Lord says at page 491: In treating of various branches of the law learned persons have analysed the sources of the law, and have sometimes expressed their opinion that such and such a provision is bad because it is contrary to public policy; but I deny that any Court can invent a new head of public policy ; so a contract for marriage brokerage, the creation of a perpetuity, a contract in restraint of trade, a gaming or wagering contract, or, what is relevant here, the assisting of the King 's enemies, are all undoubtedly unlawful things; and you may say that it is because they are contrary to public policy they are unlawful; but it is because these things have been either enacted or assumed to be by the common law unlawful, and not because a judge or Court have a right to declare that such and such (1) 436 things are in his or their view contrary to public policy.
Of course, in the application of the principles here insisted on, it is inevitable that the particular case must be decided by a judge; he must find the facts, and he must decide whether the facts so found do or do not come within the principles which I have endeavoured to describe that is, a principle of public policy, recognised by the law, which the suggested contract is infringing, or is supposed to infringe.
" These observations indicate that the doctrine of public policy is only a branch of common law and unless the principle of public policy is recognised by that law, Court cannot apply it to invalidate a contract.
Lord Lindley in his speech at p. 507 pointed out that public policy is a very unstable and dangerous foundation on which to build until made safe by decision.
A promise made by one spouse, after a decree nisi for the dissolution of the marriage has been pronounced, to marry a third person after the decree has been made absolute is not void as being against public policy: see Fender vs St. John Mildmay (1).
In that case Lord Atkin states the scope of the doctrine thus at p. 12: " In popular language, following the wise aphorism of Sir George Jessel cited above, the contract should be given the benefit of the doubt.
But there is no doubt that the rule exists.
In cases where the promise to do something contrary to public policy which for short I will call a harmful thing, or where the consideration for the promise is the doing or the promise to do a harmful thing a judge, though he is on slippery ground, at any rate has a chance of finding a footing. .
But the doctrine does not extend only to harmful acts, it has to be applied to harmful tendencies.
Here the ground is still less safe and more treacherous ".
Adverting to the observation of Lord Halsbury in Janson vs Driefontein Consolidated Mines Ltd. Lord Atkin commented thus, at page 11: ". . .
Lord Halsbury indeed appeared to decide that the categories of public policy are closed, (1) (2) 437 and that the principle could not be invoked anew unless the case could be brought within some principle of public policy already recognised by the law.
I do not find, however, that this view received the express assent of the other members of the House; and it seems to me, with respect, too rigid.
On the other hand, it fortifies the serious warning illustrated by the passages cited above that the doctrine should only be invoked in clear cases in which the harm to the public is substantially incontestable, and does not depend upon the idiosyncratic inferences of a few judicial minds ".
Lord Thankerton summarised his view in the following terms, at p. 23: " In the first place, there can be little question as to the proper function of the Courts, in questions of public policy.
Their duty is to expound, and not to expand, such policy.
Thai does not mean that they are precluded from applying ail existing principle of public policy to a new set of circumstances, where such circumstances are clearly within the scope of the policy.
Such a case might well arise in the case of safety of the State, for instance.
But no such case is suggested here.
Further, the Courts must be watchful not to be influenced by their view of what the principle of public policy, or its limits, should be ".
Lord Wright, at p. 38, explains the two senses in which the words " public policy" are used : " In one sense every rule of law, either common law or equity, which has been laid down by the Courts, in that course of judicial legislation which has evolved the law of this country, has been based on considerations of public interest or policy.
In that, sense Sir George Jessel, M. R., referred to the paramount public policy that people should fulfil their contracts.
But public policy in the narrower sense means that there are considerations of public interest which require the Courts to depart from their primary function of enforcing contracts, and exceptionally to refuse to enforce them.
Public policy in this sense is disabling 438 Then the noble Lord proceeds to lay down the following principles on which a judge should exercise this peculiar and exceptional jurisdiction: (1) It is clear that public policy is not a branch of law to be extended ; (2) it is the province of the judge to expound the law only; (3) public policy, like any other branch of the common law, is governed by the judicial use of precedents ; and (4) Courts apply some recognised principles to the new conditions, proceeding by way of analogy and according to logic and convenience, just as Courts deal with any other rule of the common law.
The learned Lord on the basis of the discussion of case law on the subject observes at p. 40: " It is true that it has been observed that certain rules of public policy have to be moulded to suit now conditions of a changing world : but that is true of the principles of common law generally.
I find it difficult to conceive that in these days any new head of public policy could be discovered ".
The observations of the aforesaid Law Lords define the concept of public policy and lay down the limits of its application in the modern times.
In short, they state that the rules of public policy are ' well settled and the function of the Courts is only to expound them and apply them to varying situations.
While Lord Atkin does not accept Lord Halsbury 's dictum that the categories of public policy are closed, he gives a warning that the doctrine should be invoked only in clear cases in which the harm to the public is substantially incontestable, Lord Thankerton and Lord Wright seem to suggest that the categories of public policy are well settled and what the Courts at best can do is only to apply the same to new set of circumstances.
Neither of them excludes the possibility of evolving a new bead of public policy in a changing world, but they could not conceive that under the existing circumstances any such head could be discovered.
Asquith, L. J., in Monkland vs Jack Barclay Ltd. (1) restated the law crisply at p. 723: "The Courts have again and again said, that where a contract does not fit into one or other of these (1) 439 pigeon holes but lies outside this charmed circle, the courts should use extreme reserve in holding a contract to be void as against public policy, and should only do so when the contract is incontestably and on any view inimical to the public interest ".
The Indian cases also adopt the same view.
A division bench of the Bombay High Court in Shrinivas Das Lakshminarayan vs Ram Chandra Ramrattandas observed at p. 20: " It is no doubt open to the Court to hold that the consideration or object of an agreement is unlawful on the ground that it is opposed to what the Court regards as public policy.
This is laid down in section 23 of the and in India therefore it cannot be affirmed as a matter of law as was affirmed by Lord Halsbury in Janson vs Driefontein Consolidated Mines, Limited at p. 491) that no Court can invent a new head of public policy, but the dictum of Lord Davey in the same case that " public policy is always an unsafe and treacherous ground for legal decision " may be accepted as a sound cautionary maxim in considering the reasons assigned by the learned Judge for his decision ".
The same view is confirmed in Bhagwant Genuji Girme vs
Gangabisan Ramgopal (2) and Gopi Tihadi vs Gokhei Panda (3).
The doctrine of public policy may be summarized thus: Public policy or the policy of the law is an illusive concept; it has been described as " untrustworthy guide ", " variable quality ", " uncertain one ", " unruly horse ", etc. ; the primary duty of a Court of Law is to enforce a promise which the parties have made and to uphold the sanctity of contracts which form the basis of society, but in certain cases, the Court may relieve them of their duty on a rule founded on what is called the public policy; for want of better words Lord Atkin describes that something done contrary to public policy is a harmful thing, but the doctrine is extended not only to harmful cases but also to harmful tendencies; this doctrine of public policy is only a branch of common law, and, (1) I.L.R. (2) I.L.R. 1941 Bom 71.
(3) I.L.R. 1953 Cuttack 558.
440 just like any other branch of common law, it is governed by precedents; the principles have been crystallized under different heads and though it is permissible for Courts to expound and apply them to different situations, it should only be invoked in clear and incontestable cases of harm to the public; though the heads are not closed and though theoretically it may be permissible to evolve a new head under exceptional circumstances of a changing world, it is advisable in the interest of stability of society not to make any attempt to discover new heads in these days.
This leads us to the question whether in England or in India a definite principle of public policy has been evolved or recognized invalidating wagers.
So far as England is concerned, the passages from text books extracted and the decisions discussed in connection with the first point clearly establish that there has never been such a rule of public policy in that country.
Courts under the common law ' of England till the year 1845 enforced such contracts even between parties to the transaction.
They held that wagers were not illegal.
After the passing of the English Gaming Act, 1845 (8 & 9 Vict. c. 109), such contracts were declared void.
Even so; the Courts held that though a wagering contract was void, it was not illegal and therefore an agreement collateral to the wagering contract could be enforced.
Only after the enactment of the Gaming Act, 1892 (55 Vict. c. 9), the collateral contracts also became unenforceable by reason of the express words of that Act.
Indeed, in some of the decisions cited supra the question of public policy was specifically raised and negatived by Courts: See Thacker vs Hardy (1); Hyams vs Stuart King (2) ; and Michael Jeffrey & Company vs Bamford (3).
It is therefore abundantly clear that the common law of England did not recognize any principle of public policy declaring wagering contracts illegal.
The legal position is the same in India.
The Indian Courts, both before and after the passing of the Act (1) (2) (3) 441 21 of 1848 and also after the enactment of the Contract Act, have held that the wagering contracts are not illegal and the collateral contracts in respect of GI.
them are enforceable.
We have already referred to these in dealing with the first point and we need not A,, cover the ground once again, except to cite a passage from the decision of the Judicial Committee in Ramloll Thackoorseydass vs Soojumnull Dhondmull (1), which is directly in point.
Their Lordships in considering the applicability of the doctrine of public policy to a wagering contract observed at p. 350: " We are of opinion, that, although, to a certain degree, it might create a temptation to do what was wrong, we are not to presume that the parties would commit a crime; and as it did not interfere with the performance of any duty, and as if the parties were not induced by it to commit a crime, neither the interests of individuals or of the Government could be affected by it, we cannot say that it is contrary to public policy.
" There is not a single decision after the above cited case, which was decided in 1848, up to the present day wherein the Courts either declared wagering contracts as illegal or refused to enforce any collateral contract in respect of such wagers, on the ground of public policy.
It may, therefore, be stated without any contradiction that the common law of England in respect of wagers was followed in India and it has always been held that such contracts, though void after the Act of 1848, were not illegal.
Nor the legislatures of the States excepting Bombay made any attempt to bring the law in India in line with that obtaining in England after the Gaming Act, 1892.
The Contract Act was passed in the year 1872.
At the time of the passing of the Contract Act, there was a Central Act, Act 21 of 1848, principally based on the English Gaming Act, 1845.
There was also the Bombay Wagers (Amendment) Act, 1865, amending the former Act in terms analogous to those later enacted by the Gaming Act, 1892.
Though the Contract (1) (1848) 4 M.I.A. 339.
56 442 Act repealed the Act 21 of 1848, it did not incorporate in it the provisions similar to those of the Bombay Act; nor was any amendment made subsequent to the passing of the English Gaming Act, 1892.
The legislature must be deemed to have had the knowledge of the state of law in England, and, therefore, we may assume that it did not think fit to make wagers illegal or to hit at collateral contracts.
The policy of law in India has therefore been to sustain the legality of wagers.
The history of the law of gambling in India would also show that though gaming in certain respects was controlled, it has never been absolutely prohibited.
The following are some of the gambling Acts in India: The Public Gambling Act (111 of 1867); The Bengal Public Gambling Act (11 of 1867); The Bombay Prevention of Gambling Act (IV of 1887); Madhya Bharat Gambling Act(LI of 1949); Madhya Pradesh Public Gambling Act; Madras Gaming Act (111 of 1930); The Orissa Prevention of Gambling Act (XVII of 1955); the Punjab Public Gambling Act (111 of 1867); the Rajasthan Public Gambling Ordinance (Ordinance XLVIII of 1949) and the U.P. Public Gambling Act.
These Acts do not prohibit gaming in its entirety, but aim at suppressing gaming in private houses when carried on for profit or gain of the owner or occupier thereof and also gaming in public.
Gaming without contravening the provisions of the said Acts is legal.
Wherever the State intended to declare a particular form of gaming illegal, it made "an express statute to that effect: See section 29 A of the Indian Penal Code.
In other respects, gaming and wagering are allowed in India.
It is also common knowledge that horse races are allowed throughout India and the State also derives revenue therefrom.
The next question posed by the learned Counsel for the appellant is whether under the Hindu Law it can be said that gambling contracts are held to be illegal.
The learned Counsel relies upon the observations of this Court in The State of Bombay vs R. M. D. Chamarbaugwala (1).
The question raised in that case was (1) ; 443 whether the Bombay Lotteries and Prize ' Competition Control and Tax (Amendment) Act of 1952 extending 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 competition carried on through newspapers printed and published outside the State, was constitutionally valid, It was contended, inter alia, that the Act offended the fundamental right of the respondents, who were conducting prize competitions, under article 19(1) (g) of the Constitution and also violated the freedom of inter State trade under article 301 thereof This Court held that the gambling activities in their very nature and essence were extra commercium and could not either be trade or commerce within the meaning of the aforesaid provisions and therefore neither the fundamental right of the respondents under article 19(1)(g) or their right to freedom of interState trade under article 301 is violated.
In that context Das, C. J., has collected all the Hindu Law texts from Rig Veda, Mahabharata, Manu, Brihaspati, Yagnavalkya, etc., at pp.
922 923.
It is unnecessary to restate them here, but it is clear from those texts that Hindu sacred books condemned gambling in unambiguous terms.
But the question is whether those ancient text books remain only as pious wishes of our ancestors or whether they were enforced in the recent centu ries.
All the branches of the Hindu Law have not been administered by Courts in India; only questions regarding succession, inheritance, marriage, and religious usages and institutions are decided according to the Hindu Law, except in so far as such law has been altered by legislative enactment.
Besides the matters above referred to, there are certain additional matters to which the Hindu Law is applied to the Hindus, in some cases by virtue of express legislation and in others on the principle of justice, equity and good conscience.
These matters are adoption, guardianship, family relations, wills, gifts and partition.
As to these matters also the Hindu Law is to be applied subject to such alterations as have been made by legislative enactments: See Mulla 's Hindu Law, para.
444 3, p. 2.
In other respects the ancient Hindu Law was not enforced in Indian Courts and it may be said that they became obsolete.
Admittedly there, has not been a single instance in recorded cases holding gambling or wagering contracts illegal on the ground that they are contrary to public policy as they offended the principles of ancient Hindu Law.
In the circumstances, we find it difficult to import the tenets of Hindu Law to give a novel content to the doctrine of public policy in respect of contracts of gaming and wagering.
To summarize: The common law of England and that of India have never struck down contracts of wager on the ground of public policy ; indeed they have always been held to be not illegal notwithstanding the fact that the statute declared them void.
Even after the contracts of wager were declared to be void in England, collateral contracts were enforced till the passing of the Gamina Act of 1892, and in India, except in the State of Bombay, they have been enforced even after the passing of the Act 21 of 1848, which was substituted by section 30 of the Contract Act.
The moral prohibitions in Hindu Law texts against gambling were not only not legally enforced but were allowed to fall into desuetude.
In practice, though gambling is controlled in specific matters, it has not been declared illegal and there is no law declaring wagering illegal.
Indeed, some of the gambling practices are a perennial source of income to the State.
In the circumstances it is not possible to hold that there is any definite head or principle of public policy evolved by Courts or laid down by precedents which would directly apply to wagering contracts.
Even if it is permissible for Courts to evolve a new head of public policy under extraordinary circumstances giving rise to incontestable harm to the society, we cannot say that wager is one of such instances of exceptional gravity, for it has been recognized for centuries and has been tolerated by the public and the State alike.
If it has any such tendency, it is for the legislature to make a law prohibiting such contracts and declaring them illegal and not for this Court to resort to judicial legislation.
445 Re. Point 3 Immorality: The argument under this head is rather broadly stated by the learned Counsel for the appellant.
The learned counsel attempts to draw an analogy from the Hindu Law relating to the doctrine of pious obligation of sons to discharge their father 's debts and contends that what the Hindu Law considers to be immoral in that context may appropriately be applied to a case under section 23 of the Contract Act.
Neither any authority is cited nor any legal basis is suggested for importing the doctrine of Hindu Law into the domain of contracts.
Section 23 of the Contract Act is inspired by the common law of England and it would be more useful to refer to the English Law than to the Hindu Law texts dealing with a different matter.
Anson in his Law Of Contracts states at p. 222 thus : " The only aspect of immorality with which Court of Law have dealt is sexual immorality. . .
" Halsbury in his Laws of England, 3rd Edn., Vol.
makes a similar statement, at p. 138: " A contract which is made upon an immoral consideration or for an immoral purpose is unenforceable and there is no distinction in this respect between immoral and illegal contracts.
The immorality here alluded to is sexual immorality.
" In the Law of Contract by Cheshire and Fifoot, 3rd Edn., it is stated at p. 279: " Although Lord Mansfield laid it down that a contract contra bonos mores is illegal, the law in this connection gives no extended meaning to morality but concerns itself only with what is sexually reprehensible." In the book on the by Pollock and Mulla it is stated at p. 157: " The epithet " immoral " points, in legal usage, to conduct or purposes which the State, though disapproving them, is unable, or not advised, to visit with direct punishment." The learned authors confined its operation to acts which are considered to be immoral according to the standards of immorality approved by Courts.
The case law both in England and India confines the operation of the doctrine to sexual immorality.
To cite 446 Only some instances: settlements in consideration of encubinage, contracts of sale or hire of things to be used in a brothel or by a prostitute for purposes incidental to her profession, agreements to pay money for future illicit cohabitation, promises in regard to marriage for consideration, or contracts facilitating divorce are all held to be void on the ground that the object is immoral.
The word " immoral " is a very comprehensive word.
ordinarily it takes in every aspect of personal conduct deviating from the standard norms of life.
It may also be said that what is repugnant to good conscience is immoral.
Its varying content depends upon time, place and the stage of civilization of a particular society.
In short, no universal standard can be laid down and any law based on such fluid concept defeats its own purpose.
The provisions of section 23 of the Contract Act indicate the legislative intention to give it a restricted meaning.
Its juxtaposition with an equally illusive concept, public policy, indicates that it is used in a restricted sense; otherwise there would be overlapping of the two concepts.
In its wide sense what is immoral may be against public policy, 'for public policy covers political, social and economic ground of objection.
Decided cases and authoritative text book ' writers, therefore, confined it, with every justification, only to sexual immorality.
The other limitation imposed on the word by the statute, namely, " the court regards it as immoral ", brings out the idea that it is also a branch of the common law like the doctrine of public policy, and, therefore, should be confined to the Principles recognized and settled by Courts.
Precedents confine the said concept only to sexual immora lity and no case has been brought to our notice where it has been applied to any head other than sexual immorality.
In the circumstances, we cannot evolve a new head so as to bring in wagers within its fold.
Lastly it is contended by the learned Counsel for the appellant that wager is extra commercium and therefore there cannot be in law partnership for wager within the meaning of section 4 of the Partnership Act; for partnership under that section is relationship between 447 persons who have agreed to share the profits of a business.
Reliance is placed in respect of this contention on the decision of this Court in The State of Bombay vs R. M. D. Chamarbaugwala (1).
This question was not raised in the pleadings.
No issue was framed in respect of it.
No such case was argued before the learned Subordinate Judge or in the High Court; nor was this point raised in the application for certificate for leave to appeal to the Supreme Court filed in the High Court.
Indeed, the learned Advocate appearing for the appellant in the High Court stated that his client intended to raise one question only, namely, whether the partnership formed for the purpose of carrying on a business in differences was illegal within the meaning of section 23 of the Contract Act.
Further this plea was not specifically disclosed in the statement of case filed by the appellant in this Court.
If this contention had been raised at the earliest point of time, it would have been open to the respondents to ask for a suitable amendment of the plaint to sustain their claim.
In the circumstances, we do not think that we could with justification allow the appellant to raise this new plea for the first time before us, as it would cause irreparable prejudice to the respondents.
We express no opinion on this point.
For the foregoing reasons we must hold that the suit partnership was not unlawful within the meaning of section 23 of the .
In the result, the appeal fails and is dismissed with costs.
Appeal dismissed. [/INST] The question for determination in this appeal was whether an agreement of partnership with the object of entering into wagering transactions was illegal within the meaning of section 23 Of the Indian Contract Act.
The appellant and the respondent No. 1 entered into a partnership with the object of entering into forward contracts for the purchase and sale of wheat with two other firms and the agreement between them was that the respondent would enter into the contracts on behalf of the partnership and the profit or loss would be shared by the parties equally.
The transactions resulted in loss and the respondent paid the entire amount due to the third parties.
On the appellant denying his liability for the half of the loss, the respondent sued him for the recovery of the same and his defence, inter alia, was that the agreement to enter into the wagering contracts was unlawful under section 23 Of the Contract Act.
The trial Court dismissed the suit.
The High Court on appeal held that though the wagering contracts were void under section 30 Of the Indian Contract Act, the object of the partnership was not unlawful within the meaning of the Act and decreed the suit.
It was contended on behalf of the appellant (1) that a wagering contract being void under section 30 Of the Contract Act, was also forbidden by law within the 407 meaning of S.23 Of the Act, that (2) the concept of public policy was very comprehensive in India since the independence, and such a contract would be against public Policy, (3) that wagering contracts were illegal under the Hindu Law and (4) that they were immoral, tested by the Hindu Law doctrine of pious obligation of sons to discharge the father 's debts.
Held, that the contentions raised were unsustainable in law and must be negatived.
Although a wagering contract was void and unenforceable under section 30 Of the Contract Act, it was not forbidden by law and an agreement collateral to such a contract was not unlawful within the meaning of section 23 Of the Contract Act.
A partnership with the object of carrying on wagering transactions was not, therefore, hit by that section.
Pringle vs Jafer Khan, All. 443, Shibho Mal vs Lachman Das, All. 165, Beni Madho Das vs Kaunsal Kishor Dhusar, All.
452, Md. Gulam Mustafakhan vs Padamsi, A.I.R. (1923) Nag.
48, approved.
ThacKer vs Hardy, , Read vs Anderson, , Bridger vs Savage, , Hyams vs Stuart King, , Thwaites vs Coulthwaite, , Brookman vs Mather, and Jaffrey & Co. vs Bamford, (1921) 2 K.B. 351, Ramloll Thackoorseydass vs Soojumnull Dhondmull, (1848) 4 M.l.A. 339, Doolubdas Pettamberdass vs Ramloll Thackoorseydass and Ors.
(1850) 5 M.I.A. 109, Raghoonauth Shoi Chotayloll vs Manickchund and Kaisreechund, (1856) 6 M.I.A. 251, referred to.
Hill vs William Hill, , considered.
The doctrine of public policy was only a branch of the com mon law and just like its any other branch, it was governed by precedents ; its principles had been crystallised under different heads and though it was permissible to expound and apply them to different situations, it could be applied only to clear and undeniable cases of harm to the public.
Although theoretically it was permissible to evolve a new head of public policy in exceptional cirumstances, such a course would be inadvisable in the interest of stability of society.
Shrinivas Das Lakshminarayan vs Ram Chandra Ramrattandas, I.L.R. , Bhagwanti Genuji Girme vs Gangabisan Ramgopal, I.L.R. , and Gopi Tihadi vs Gokhei Panda, I.L.R. 1953 Cuttack 558, approved.
Egerton vs Brownlow, ; ; , Janson vs Driefontein Consolidated Mines, Ltd., , Fender vs St. John Mildmay, (1938) A.C. :1 and Monkland vs Jack Barclay Ltd., , referred to.
Like the common law of England, which did not recognise any principle of public policy declaring wagering contracts illegal, the Indian Courts, both before and after the passing of Of 1848 and also after the enactment of the , held that wagering contracts were not illegal as being contrary to public policy and collateral contracts in respect of them were enforceable in law.
Ramloll Thackoorseydass vs Soojumnull Dhondmull, (1848) 4 M.I.A. 339, referred to.
Gambling or wagering contracts were never declared to be illegal by courts in India as being contrary to public policy as offending the principles of ancient Hindu Law and it was not possible to give a novel content to that doctrine in respect of gaming and wagering contracts.
The State of Bombay vs R. M. D. Chamaybaugwala, ; , considered.
The common law of England and that of India never struck down contracts of wager on the ground of public policy and such contracts had always been held not to be illegal although the statute declared them to be void.
The moral prohibitions in Hindu Law texts against gambling were not legally enforced but were allowed to fall into desuetude and it was not possible to hold that there was any definite head or principle of public policy evolved by courts or laid down by precedents directly applicable to wagering contracts.
There was neither any authority nor any legal basis for importing the doctrine of Hindu Law relating to the pious obligation of sons to pay the father 's debt into the dominion of ' contracts.
Section 23 Of the Contract Act was inspired by the common law of England and should be construed in that light. ' The word " immoral " was very comprehensive and varying in its contents and no universal standard could be laid down.
Any law, therefore, based on such fluid concept would defeat its purpose.
The provisions of section 23 of the indicated that the Legislature intended to give that word a restricted meaning.
The limitation imposed on it by the expression " the Court regards it as immoral " clearly indicated that it was also a branch of the common law and should, therefore, be confined to principles recognised and settled by courts.
judicial decisions confined it to sexual immorality, and wager could not be brought in as new head within its fold. </s> |
<s>[INST] Summarize the following judgement: Appeal No. 1287(NT) of 1982.
From the Judgment and Order dated 22.2. 1978 of the Madras in Tax Case No. 24 of 1975.
M. Gaurishankar Murthy, C. Ramesh, P. Parmeswaran and Ms. A. Subhashini for the Appellant.
Ms. Janki Ramachandran for the Respondent.
The following Order of the Court was delivered In this appeal preferred against the Judgment of the Madras High Court, the words "whose income chargeable under the head 'salaries ' occurring in the second proviso to sub clause (iii) of clause (c) of section 40 fall for interpretation.
The assessment year concerned is 1965 66.
During the accounting year relevant to the said assessment year, the assessee paid to its foreign technical director a total remuneration of Rs. 66,000 including a sum of Rs. 28,576 paid by way of perquisites.
The Income tax Officer held that by virtue of section 40(c)(iii) perquisites exceeding one fifth amount of the salary cannot be allowed as a deduction.
He held further, the second Proviso to the said sub clause is not applicable inasmuch as the income chargeable under the head salaries was not Rs. 7,500 or less.
Accordingly he allowed only a, sum of Rs. 13,200 by way of perquisites.
He disallowed the balance of Rs. 15,376.
The Appellate Assistant Commissioner, however, allowed the assessee 's appeal holding that inasmuch as the salary of the foreign technical director was exempt from tax under section 10(6)(vii), the provision contained in section 40(c)(iii) was not applicable.
The appeal filed by the 995 Revenue was allowed by the Tribunal.
The Tribunal opined that merely because the salary is exempt under section 10(6)(vii), the provision in section 40(c)(iii) does not cease to apply.
Under the proviso to the said sub clause, only an employee whose income chargeable under the head salaries was Rs. 7,500 or less is exempted.
Inasmuch as the income chargeable under the head salaries in this case is more than Rs. 7,500, the exemption does not operate.
Since the said foreign technical director was an employee of the assessee, he was certainly governed by the provision section 40(c)(iii), said the Tribunal.
At the request of the assessee, it stated the following question for the opinion of the High Court: "Whether on the facts and circumstances of the case, the Tribunal was justified in holding that the provisions of Section 40(c)(iii) were rightly invoked for the assessment year 1965 66 in relation to the remuneration of the Technical Director of the assessee company." Section 40(c)(iii) as applicable to the assessment year 1965 66, read as follows: "40.
Notwithstanding anything to the contrary in Sections 30 to 39, the following amounts shall not be deducted in computing the income chargeable under the head "profits and gains of business or profession".
(c) in the case of any company (iii)any expenditure incurred after the 29th day of February, 1964, which results directly or indirectly in the provision of any benefit or amenity or perquisite, whether convertible into money or not, to an employee (including any sum paid by the company in respect of any obligation which but for such payment would have been payable by such employee), to the extent such expenditure exceeds one fifth of the amount of salary payable to the employe e for any period of his employment after the aforesaid date: Provided further that nothing in this sub clause shall 996 apply to any expenditure which results directly or indirectly in the provision of any benefit or amenity or perquisite to an employee whose income chargeable under the head "Salaries ' is seven thousand five hundred rupees or less ' Under section 10(6)(vii) of the Act, the remuneration due to any technician, who was not a resident in any of the four financial years immediately preceding the financial year in which he arrived in India, chargeable under the head 'salaries ', for Services rendered as a technician, was exempt.
In this case, the salary paid to the foreign technical director was admittedly exempt under section 10(6)(vii).
The contention of the assessee which has been accepted by the High Court, runs thus: the salary payable to the said director was exempt by virtue of Section 10(6)(vii).
In other words, it is nil for the purposes of the Act.
If so, the second proviso to the sub clause is attracted, inasmuch as 'nil ' income, under the head 'salaries" is less than Rupees seven thousand five hundred.
By virtue of the said second proviso, the main provision in sub clause (iii) goes out of picture.
The High Court reasoned that if income of one rupee is less than Rs. 7500, there is no reason for saying that 'nil ' income is not an income less than Rs. 7,500.
Since the income exempted under Section 10 is not liable to be included in the total income, such exempted salary income should be treated as 'nil ' income for the purposes of Section 40(c)(iii), opined the High Court.
After hearing the counsel for the parties, we are of the opinion that the view taken by the High Court is a reasonable one and does not call for any interference.
The appeal accordingly fails and is dismissed.
No costs.
G.N. Appeal dismissed. [/INST] During the accounting order relevant to assessment year 1965 66, the Respondent assessee paid to its foreign technical director a total remuneration of Rs. 66,000 including a sum of Rs. 28,576 paid by way of perquisites.
The Income tax Officer allowed only a sum of Rs. 13,200 by way of perquisites and disallowed the balance of Rs. 15,376 in view of Section 40(c)(iii) of the Income tax Act, 1961.
On an appeal by the assessee, the Appellate Assistant Commissioner held that since the salary of the foreign technical director was exempt under S.10(6)(vii), the provision contained in Sec.40(c)(iii) was not applicable.
Revenue preferred an appeal and the Tribunal held that S.40(c)(iii) was applicable.
At the instance of the Assessee, Tribunal referred the question to the High Court.
Since the High Court answered the question in favour of the assessee, Revenue preferred the present appeal.
Dismissing the appeal, this Court, HELD: Under section 10(6)(vii) of the Income tax Act, 1961 the remuneration due to any technician, who was not a resident in any of the four financial years immediately preceding the financial year in which he arrived in India, chargeable under the head 'salaries ', for services rendered as a technician, was exempt.
Thus in the instant case, the salary paid to the foreign technical director was admittedly exempt under Section 10(6)(vii) of the Income tax Act, 1961.
In other words, it was nil for the purposes of the Act.
If so, the second proviso to sub clause (iii) of S.40(c) 994 is attracted, inasmuch as 'nil ' income, under the head 'salaries" is less than Rupees seven thousand five hundred.
By virtue of the said proviso, the main provision in sub clause (iii) goes out of picture.
The High Court reasoned that if income of one rupee is less than Rs. 7,500, there is no reason for saying that 'nil ' income is not an income less than Rs. 7,500.
The High Court was right in taking the view that since the income exempted under Section 10 is not liable to be included in the total income, such exempted salary income should be treated as 'nil ' income for the purposes of Section 40(c)(iii) of the Act.
[996 B E] </s> |
<s>[INST] Summarize the following judgement: Appeal No. 3522(NT) of 1979.
From the Order dated 24.1.1979 of the Punjab and Haryana High Court in Income Tax Case No.50 of 1978.
WITH (C.A. NOS. 2456(NT)/78, 5987 88(NT)/90,1368(NT)/82,1549 57(NT)/93 & 1558(NT)/93.
G.Vishwanatha Iyer, C. Ramesh, T.V. Ratnam and Ayyam Perumal for P. Parmeswaran for the Appellants.
C.S. Aggarwal for B.V. Desai for the Respondents.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
Civil Appeal No.2456(NT) of 1978.
This appeal is preferred against the judgment and order of the Punjab and Haryana High Court dismissing an application filed by the Revenue under Section 256(2) of the Income Tax Act.
The question which the Revenue wanted to raise reads thus: "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the receipt of Rs.1,38,577 realised @1 per bilty per customer through the bills and credited to a separate account called 'DHARMADA 'was not assessable to tax as revenue receipt?" The case of the Revenue briefly stated is to the following effect: the assessee is a private Ltd. company engaged in the business of transport.
During the accounting period ending January 31, 1970 relevant to the assessment year 1970 71, the respondent collected an amount of Rs.1,38,577 on account of DHARMADA.
The Income Tax Officer called upon the respondent assessee to explain why the said amount should not be treated as its trading receipt.
The respondent 's case was that according to the custom prevailing in the transport business, he two collected Re.1 876 per bilty for spending on charitable purposes.
He stated that out of this amount collected, a major portion was spent on charity and that the balance of Rs.8,871 was carried over in the separate account kept for DHARMADA.
His case was that this amount was never credited to his income account and it always constituted a distinct account.
This explana tion was not accepted by the Income Tax Officer who included the said amount of Rs.1,38,577 in the business income of the respondent.
On appeal, the Appellate Assistant Commissioner accepted the respondent 's contention and deleted the said addition.
The Tribunal confirmed the same.
However, says the counsel, the true state of affairs is disclosed from the assessees ' own letter extracted in the assessment order.
When called upon to explain the collection of the said amount and its purpose, the assessee submitted a reply in writing stating as under: "It is customary in the Transport business to collect/charge DHARMADA, at the rate of Re.1 per Bilty.
Not only this but also all the Transport Companies, charge/collect this customary Dharmada.
This amount is meant for distribution to the poor relatives of labourers working in the business premises and also to give at the time of marriages of girls in their families.
This is just to get full cooperation from them.
The company has nothing to do with this collection as it has to distribute the same.
" It is thus evident, says the counsel for the Revenue, that the amount though collected in the name of Dharmada was neither meant for charity nor was it ever spent on charitable purposes.
Distribution of the said money among the "poor relatives of the labourers working in the business premises (of the assessee) and also to give at the time of marriages of girls in their families" cannot be called a charitable purpose.
Indeed, according to the respondent, himself these amounts were distributed among them with a view "to get full cooperation from them.
" According to learned counsel, the assessee is really using the money collected in the name of Dharmada for his own business purposes.
In the above circumstances, say the counsel, the High Court ought to have directed the Tribunal to state the aforesaid question under Sec.256(2) of the Act, 877 So far as inclusion of amounts collected as Dharmada which are kept in a separate account and are utilised for charitable purposes is concerned, there can be no dispute that they are not liable to be included in the income of the assessee vide CL T. vs Bijli Cotton Mills (P) Ltd., but the Revenue 's case herein is that though collected in the name of Dharmada, these amounts were neither meant for any charitable purpose nor were they spent on charitable purposes.
In support of the same they rely upon the aforesaid written reply of the respondent assessee itself.
In our opinion this was a proper case where the High Court ought to have directed the Tribunal to state the said question under Section 256(2) of the Act.
We do not think it necessary to say more than this on this occasion, lest it may prejudice the case of the parties at the hearing of the reference.
The appeal is accordingly allowed, the judgment and order of the High Court is set aside and the application filed by Revenue under Section 256(2) is allowed.
The Tribunal shall state the aforesaid question for the opinion of the High Court under Section 256(2) of the Act.
No order as to costs.
CIVIL APPEAL NO.3522(NT)179, 1368(NT)182, 5987 88 (NT)190 AND S.L.P. (C) No.8353185.
These appeals and Special Leave Petition pertain to the very same assessee who is the respondent in Civil Appeal No.2456(NT) of 1978.
For the reasons given hereinabove, leave is granted in S.L.P. (C) No.8353 of 1985 and all these appeals are allowed in the same terms as the appeal No.2456(NT) of 1976.
S.L.P. (C) NOS 3257 3265 OF 1979.
The facts in these Special Leave Petitions are identical to the facts in Civil Appeal No.2456(NT) of 1978, though the assessee is different.
The assessee too is engaged in transport business.
No separate argument is addressed in these matters.
Leave granted in all these Special Leave Petitions.
For the reasons stated in the judgment in Civil Appeal No.2456(NT) of 1978, these appeals too are allowed and the Tribunal is directed to state the following question for the opinion of the High Court under Section 256(2) of the Act.
878 "Whether on the facts and in the circumstances of the case, the Appellate Tribunal is right in Law in holding the of Rs.5506, Rs.26,039, Rs33,385, Rs.49,634 and Rs.57,902 charged in `bilties ' in the assessment years 1967 68 to 1971 72 are not assessable to tax as revenue receipts.
it No costs.
G.N. Appeals allowed. [/INST] The question involved in these appeals was whether the amounts collected for spending on charity and kept in a separate account for Dharmadha could be included in the business income of the assessee.
The explanation that these amounts were distributed among the poor relatives of the labourers and to the girls in their families at the time of marriage, was not accepted by the Income tax Officer as a charity.
He added the entire dharmadha amounts to the business income of the appellant assessees.
On appeal the Appellate Assistant Commissioner deleted the said additions, and the Tribunal confirmed the deletions.
Revenue filed ap plications before the High Court for reference.
The High Court having dismissed the applications, Revenue preferred the present appeals contending that the assessees were using the amounts collected in the name of dharmadha for business purposes.
Allowing the appeals, this Court, HELD:1.
So far as the inclusion of amounts collected as Dharmada which are kept in a separate account and are utilised for charitable purposes is concerned, there can be no dispute that they are not liable to be included in the income of the assessee.
The Revenue 's case is that though collected in the name of Dharmada, these amounts were neither meant for any charitable purpose nor were they spent on charitable purposes.
In these circumstances, the High Court ought to have directed the Tribunal to state the question under Sec.256(2) of the Income tax Act, 875 1961, as to whether such amounts could be assessed to tax as revenue receipts.
The Tribunal is directed to do so.
[877 A C] </s> |
<s>[INST] Summarize the following judgement: Appeal No. 1374 of 1974 From the Judgment and Order dated 13/14 2 1974 of the Gujarat High Court in Special Civil Application No. 220 of 1970.
WITH Civil Appeal No. 1776 of 1980 From the Judgment and Order dated 21.4.1980/2.5.1980 of the Gujarat High Court in Special Civil Application No. 942 of 1976.
B.K. Mehta and H.S. Parihar for the Appellant.
807 Dave, Ms. Meenakshi Arora, Anip Sachthey for the Respondents.
The Judgment of the Court was delivered by SAWANT, J.
Civil Appeal No. 1374/1974 Some tax payers of the appellant Morvi Municipality [the 'Municipality '] had filed a writ petition in the High Court challenging the validity of the rules made by it for the levy of consolidated property tax on lands and buildings and also the assessment lists prepared and authenticated by the Municipality for the years 1967 68, 1968 69 and 1969 70.
There is no dispute that the concerned rules have been made by the Municipality under Section 271 (1) read with Section 99 (1) of the Gujarat Municipalities Act, 1963 [the 'Act '].
The relevant contentions of the writ petitioners who are the respondents before us, before the High Court were as follows 1.
Rules 2 (7), 4 and 5 of the Rules of the consolidated property tax on the lands and buildings were ultra vires Section 99 (1) (i) and proviso (e) to it read with Section 2 (1) of the Act.
The assessment lists for the years 1967 68, 1968 69 and 1969 70 were invalid since they were prepared without following the procedure laid down in Sections 105 to 112 of the Act.
The High Court upheld the validity of Rules 2 (7) and 4.
No appeal is preferred against that part of the High Court 's decision.
We are, therefore, concerned in this appeal only with the validity of Rule 5 which has been struck down by the High Court.
The High Court has also declared that the tax collected by the Municipality for the assessment years 1968 69 and 1969 70 in excess of the amounts which may be determined in accordance with the principles laid down by it in the judgment under appeal, was without the authority of law.
So far as the assessment lists for the said two years are concerned, we are concerned in this appeal only with the validity of the excess amount.
However, as far as the assessment list for the year 1967 68 is concerned, it has been struck down in its entirety by the High Court also on the ground that it was not prepared in compliance with the procedure laid down in Sections 105 to 112 of the Act.
Hence, we have to 808 consider the validity of the entire assessment for the said year.
Rules 4 and 5 have obviously been made by the Municipality to give effect to Section 99 (1) (i) which provides for imposition of taxes on buildings or lands situate within its limits.
That section reads as follows: "99.
Taxes which may be imposed.
(1) Subject to any general or special orders which the State Government may make in this behalf and to the provisions of sections 101 and 102, a municipality may impose for the purposes of this Act any of the following taxes, namely : (i) a tax on building or lands situate within the municipal borough to be based on the annual letting value or the capital value or a percentage of capital value of the buildings or lands or both;" Further, Clause (e) of the second proviso to sub section (1) of Section 99 reads as follows: "(e) the municipality in lieu of imposing separately any two or more of the taxes described in clauses (i), (vii), (ix) and (x) except a special water rate may impose a consolidated tax assessed as a tax on buildings or lands or both situated within the municipal borough.
" Since the Municipality has chosen to impose the tax on the basis of the "annual letting value" of the buildings and lands and not on the basis of the capital value or percentage of capital value, we have to ascertain in the present case the precise connotation of the expression "annual letting value".
Section 2 (1) of the Act defines the expression "annual letting value" as follows: "(1) 'annual letting value ' means the annual rent for which any building or land, exclusive of furniture of machinery contained or situate therein or thereon might reasonably be expected to let from year to year, and shall include all payments made or agreed to be made by a tenant to the owner of the building or land on account of occupation, taxes under any law for the time being in force, insurance or other charges incidental to his tenancy" 809 The crucial expressions in the above definition are "might reasonably be expected to let ' and 'all payments made or agreed to be made by a tenant to the owner on account of occupation." Shri Mehta, the learned counsel for the Municipality contended that the said expressions unmis takably indicate the actual rent received by the landlord from his tenant.
According to him, the reasonable rent means the rent which a willing tenant will pay to the willing owner and the agreement between the parties would indicate the same and no more and no less.
He further argued that the standard rent under the rent restriction legislation was only one of the factors relevant for the estimation of the reasonable expectation of the rent from the property and was not the sole basis of such rent and hence the assessment can be made on the basis of the actual rent received.
It is not necessary for us to go into a detailed discussion of the 'pros and cons of the question since the question is no longer res Integra.
The decisions of this court rendered in The Corporation of Calcutta vs Smt.
Padma Debi and others; , , Corporation of Calcutta vs Life Insurance Corporation of India; , , Guntur Municipal Council vs Guntur Town Rate Payers Association ; and Dewan Daulat Rai Kapoor and Others vs New Delhi Municipal Committee and Others, ; have consistently held that it is not the value of occupation of the property to the tenant, but the rental income from it to the owner which is to be taken into consideration while estimating the reasonable return that a landlord can expect from his property.
It has also been held there that wherever the rent is restricted on account of the operation of the rent restriction legislation, the outer limit of the reasonable rent that can be expected from the property stands defined by such restriction.
Hence, while estimating or calculating the annual rent which might reasonably be expected from such property, the provisions of such legislation have to be taken into consideration.
Different rent restriction legislations have described the maximum rent recoverable under them differently such as standard rent, fair rent etc.
Hence the annual letting value of the building or land or both to which the rent restriction legislation is applicable cannot exceed the annual standard or fair rent.
It is the annual standard/fair rent which alone, therefore, can form the basis of the assessment of the property tax by the local authority.
It is true that although a four judge Bench of this Court as early as in Padma Debi 's case [Supra], had taken this view which has been reiterated in the other decisions cited above, a three Judge Bench of this Court in a decision in Municipal 810 Corporation Indore vs Smt.
Ratnaprabha and Others, ; has held that the actual annual rent received by the owner of the property notwithstanding the application of the rent restriction legislation can provide a basis for assessment of the property tax.
However, this view taken in the above case has been explained in Dewan Daulat Rai Kapoor 's case [Supra], which is the latest decision of this Court on the point.
It has been pointed out there that the said view in the case of the Municipal Corporation, Indore [supra] turned on the presence of the non obstante clause 'notwithstanding anything contained in any other law" in the provisions of the Act levying the property tax there.
Since in the present Act, namely, the Gujarat Municipalities Act, 1963, there is no such non obstante clause, the view taken there would not apply to the present case.
Shri Mehta, learned counsel appearing for the Municipality did not press his further contentions that the presence or the absence of such non obstante clause would not make any difference to the proposition laid down there that the annual letting value should always be based upon the actual annual rent received and not on the standard or fair rent under the rent restriction legislation.
We, therefore, refrain from going into the said question in the present case and leave the point open for consideration, if necessary, in future cases.
For our purpose, it is sufficient to proceed on the footing that the annual letting value has to be determined, as held in the aforesaid three decisions of this Court, keeping in mind the outer limit down in the rent restriction legislation.
Rule 4 of the Municipality is as under: "4.
The tax on open lands and buildings shall be levied in accordance with the following rate.
The buildings which are used for residential purpose shall be levied on the annual letting value by the percentage as follows: x x x x x x 2.
The buildings which arc used for non residential purpose shall be levied on the annual letting value by the percentage as follows: x x x x x x 811 It merely prescribes that the tax that may be levied on buildings used both for residential and non residential purposes will be on the basis of the annual letting value by the percentages prescribed therein, Hence if the expression "annual letting value ' in the said rule is read as the annual letting value as determined by the out limit prescribed by the standard or fair rent under the rent restriction legislation applicable to the premises, which in the present case is the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the validity of the said rule cannot be assailed.
The High Court has, therefore, rightly upheld it.
However, Rule 5 with the validity of which we are concerned here, reads as follows: "5 (a).
The rental actually realised in each case of the buildings, shops and lands which are let, shall be considered to be the annual letting value, but if the assessment officer has reasons to believe that the rent shown in the rent note or in account, does not represent the correct letting value, then the case of such properties he [officer] shall assess the reasonable annual letting value according to his own decision.
(b) In the case of buildings which are sublet, the rent paid by the occupier shall be taken as annual letting value.
(c) In the case of the buildings used by the owner himself, the annual letting value, shall be fixed with the rent derived from the properties [buildings] which are let nearby.
The assessment officer will not assess the annual letting value more than 6 1/4% of the capital value in the case of the properties noted in sub rule C." It will be apparent that the rule seeks to lay down the mode of working out the annual letting value of the property.
According to the rule, it is to be worked out by taking the actual rental realised as the basis.
However, where the assessment officer has reason to believe that the rent shown in the rent note or in the accounts does not represent the correct letting value, the rule permits the officer to assess the reasonable annual 812 letting value according to his own decision.
In clause (c) the rule states that so far as the buildings used by the owner himself are concerned, the annual letting value should be fixed with reference to the rent derived from the properties which are let nearby.
It is clear that to the extent the rule mandates the actual rent received to be taken into consideration for fixation of the annual letting value, even if it is in excess of the standard rent fixed under the rent restriction legislation, it is contrary to the interpretation placed by this Court on the expression "annual letting value".
It is for this reason that the High Court has struck down the whole of the said rule.
Shri Mehta does not dispute the premise that where the rent restriction legislation is applicable, Rule 5 will have to be read down to mean that the annual letting value is to be fixed only on the basis of the annual standard rent.
However, he contends that it is not necessary to strike down the said rule for there may be properties which are not governed by the rent restriction legislation and their annual letting value can be determined unrestricted by the provisions of the rent restriction legislation.
His grievance is that since the High Court has struck down the rule, instead of reading it down to bring it in conformity with the judicial decisions, the Municipality is hampered in assessing the properties to which the rent restriction legislation does not apply.
Shri Mehta may be right there, if there are such properties within the limits of the Municipality.
The correct mode of getting over the difficulty is to amend Rule 5 itself suitably to take care of such properties instead of keeping it on the rule book as it is.
There is nothing to prevent the Municipality from introducing a new rule in place of the said rule.
Even without Rule 5 and on the basis of Rule 4 as it is, the annual letting value can be calculated on the basis of the standard rent where the rent restriction legislation is applicable.
Where it is not applicable, nothing prevents the Municipality from assessing the properties on the basis of the actual rent received, under the same Rule 4 itself.
However, pending the framing of the new rule, Rule 5 as it can be interpreted as being applicable only to such properties which are not governed by the rent restriction legislation.
Hence the decision of the High Court will have to be modified to the extent the High Court has struck down the said rule instead of allowing it to remain on the rule book confining its operations only to those properties which are not governed by 813 the, Rent Control Act.
Coming now to the assessment list for 1967 68 which is struck down in its entirety by the High Court, we are afraid that the High Court has misinterpreted the provisions of Sections 105 to 112 of the Act which relate to the assessment of taxes on properties.
Section 105 provides for preparation of an assessment list containing the particulars mentioned therein such as the address and description of the property, the name(s) of the owner, the valuation based on the annual letting value, of the amount of tax assessed thereon etc.
Section 106 indicates the person(s) primarily liable for tax and the procedure to be followed when the name of such person cannot be ascertained.
Section 107 provides for the publication of notice when the assessment has been completed and the right of the owner or occupier of the property included in the list or any agent of such person, to inspect the list, and to make extracts therefrom.
Section 108 then provides for a public notice of a date before which the objections to the valuation or assessment in the assessment list, shall be made and of the hearing of objections.
Sub section (3) of Section 108 provides for the hearing of objections by the Executive Committee of the Municipality constituted under Section 53 of the Act.
Upon hearing of the objections and disposing them of, the Executive Committee is required to cause the result thereof to be noted in the book kept for the purpose.
The Executive Committee is also empowered to amend the assessment list, if necessary, in accordance with the result of the hearing.
However, before any amendment is made in the assessment list, the reasons thereof are required to be recorded in the book concerned.
This sub section also provides that the powers and duties of the Executive Committee under it, may be transferred to any other committee appointed by the Municipality or with the permission of the Development Commission to any officer or pensioner of the Government.
Sub section (4) of the said section provides that as and when in respect of any property the objections made under the section have been disposed of and the amendment required by sub section (3) have been made in the assessment list, the said list, so tar as such properties are concerned.
shall be authenticated by the signature of the Chairman and at least one other member of the Executive Committee.
If the Executive Committee 's powers and functions under sub section (3) have been transferred to any other committee or to an officer or pensioner of the Government, the authentication is to be made by the signatures of 814 not less than 2 members of such Committee or of the officer or pensioner as the case may be.
The person or the persons so authenticating the list have to certify that no valid objection has been made to the valuation and assessment of the property contained in the list except in the cases in which amendments have been made therein.
Sub section (5) of the said Section then provides that the lists so authenticated shall be deposited in the Municipal Office and shall be open for inspection to an owners and occupiers of the property entered in the list or to their agents.
Sub section (6) states that subject to such alterations made therein under the provisions of Section 109 and to the result of any appeal or revision under that Section, the entries in the assessment list so authenticated and deposited shall be accepted as conclusive evidence (i) for the purposes of the Municipal taxes and of the valuation of the annual letting value and [ii] for the purposes of the tax for which such assessment list has been prepared and the amount of the tax leviable on such properties in any official year in which the fist is in force.
Section 109 gives power to the Executive Committee to amend the assessment list if any entry in respect of any property has been either omitted from or erroneously made therein through fraud, accident or mistake.
It also gives power to the Executive Committee to amend the list if any building has been constructed, altered or reconstructed either in whole or part, after the preparation of the assessment list.
Section 110 provides that where any building or any portion of such building which is liable to payment of tax is demolished or removed otherwise than by an order of the Executive Committee, the person primarily liable for the said tax has to give notice to the Chief Officer of the Municipality.
Section 111 states that it shall not be necessary to prepare a new assessment list every year subject to the condition that the assessment list shall be completely revised every four years.
The Chief Officer is given power to adopt the valuation and assessment contained in the list for any year such alteration as may be deemed necessary for the year immediately following.
However, the provisions of Sections 107, 108 and 109 are applicable to the said list as if a new assessment list has been completed at the commencement of the official year.
The 'official year ' has been defined in Section 2 (17) of the Act to mean the year commencing on the first day of April.
815 Section 112, then gives power to the State Government to appoint a person to authenticate the assessment list in case of default by the Municipality in authenticating it.
It states that where in any year, a new assessment list is prepared or a list is revised or the valuation and assess ment contained in the list for the year immediately preceding is adopted with or without alterations, such new, revised or adopted assessment list shall be authenticated in the manner provided by Section 108 at any time not later than 31st of July of the official year to which the list relates.
If the list is not so authenticated, then the State Government shall appoint such person or persons as it thinks fit, to prepare, revise or adopt and authenticate the assessment list.
Such person or persons have to authenti cate such list at any time before the last day of the official year, i.e., 31st March of the year to which the list relates.
The section also states that Sections 105 to 108 and Section 111 shall, so far as may be necessary, apply to the preparation, revision or adoption of the list as the case may be by the person or persons appointed by the State Government.
Section 99, among others, of the Act to which we have already made a reference earlier, empowers the Municipality to impose various taxes, fees and cesses as a source of revenue for discharging its duties and functions.
The tax on buildings or lands or both, is only one of such taxes.
This tax can be recovered separately or as the consolidated tax along with general water rate and lighting tax as provided in Clause (e) of the second proviso to sub section (1) of Section 99.
The provisions contained in Sections 105 to 112 above only relate to the preparation of an assessment list of properties which are liable to such tax.
They are procedural in nature and the charging section for the tax is Section 99 of the Act.
Section 99 itself does not provide for any limitation of time on the imposition of tax.
The High Court has, however, read limitation of time in Section 112 on the authentication of the assessment list.
According to the High Court, the period of limitation for the Municipality to authenticate the list is upto 31st July of the official year to which the list relates, and in default by the Municipality.
the period of limitation for the person appointed by the State Government is upto the 31st March of the said official year.
What is further.
according to the High Court, the Municipality cannot authenticate the assessment list beyond 31st July of the official year and it is the person (s) appointed by the State Government alone who can do so and that too upto 31st March of that official year.
It is difficult to accept this reasoning.
According to us, the High Court has erred in reading in the provisions of H 816 Section 112 an intention by the legislature to lay down a period of limitation either for the Municipality or for the person or persons appointed by the State Government.
It is obvious that Section 112 in the context in which it appears is both directory and enabling in nature insofar as it requires the Municipality to authenticate the list before 31st July of the official year.
That the provisions are no more than directory is clear from the fact that they provide that if the Municipality fails to do its duty, the State Government may complete the work by appointing a person(s) to do it.
This is as it should be since the various provisions of the Act show that the revenue and the expenditure of the Municipality, among others, is controlled and regulated by the State Government.
Further the Section requires that the Municipality should complete the authentication of the assessment list before a particular date which, in the present case happens to particular date which, in the present case happens to be, 31st July of the year.
It was necessary to incorporate in the section the said provision to give enough time to the State Government to step in and authenticate the list before the end of the official year.
The official year is the same for the Municipality as well as the State Government and for the purposes of budgeting, the provision that the assessment list should be authenticated by the particular dates was necessary to be incorporated.
However, even Section 112 which is procedural in nature, does not state that the list which is authenticated by the Municipality after 31st July of the official year and by the person appointed by the Government after 31st March of the same official year would be invalid.
On the contrary, when the Municipality fails to authenticate the assessment list till 31st July of the official year, the section empowers the State Government to appoint a person or persons to authenticate the same.
It was also necessary to prescribe some time limit for the authentication by the person so appointed and hence the section provides that person(s) so appointed shall authenticate it by 31st March of the official year.
In any case, neither the Municipality is prevented from authenticating it beyond 31st July nor is the person(s) appointed by State Government prevented from doing so beyond 31st March of the official year.
In the present case, there was an additional factor which was relevant to be taken into consideration.
The Municipality had levied the property tax for the first time in the official year 1967 68 and the State Government felt that it should be given time to authenticate the same before 31st March, 1968.
That is the reason why the State Government did not appoint a person to authenticate the list after 31st July 1967, even though the Mun 817 cipality had failed to do so.
Instead, the State Government had extended the time for the Municipality to do so, till 31st March, 1968.
The step taken by the government was in conformity with the interpretation of the provisions of Section 112 which, as stated earlier, are only directory and enabling in nature.
The High Court has, therefore, erred in holding that the Municipality could not authenticate the assessment list after July, 1967 and it is only the State Government which could do it.
This the High Court did, as stated earlier, by reading 31st July, 1967 as the period of limitation for the Municipality to authenticate the list for the official year 1967 68.
There is no dispute that the Municipality authenticated the list by 28th March, 1968.
The finding of the High court that the assessment list for the year 1967 68 is void and illegal is, therefore, clearly wrong.
6.In the result, we set aside the finding of the High Court that Rule 5 is ultra vires the Act and hold that 'the same is to be read as being applicable only to the properties which are not governed by the provisions of the Rent Control Act.
As far as the properties which are amenable to the provisions of the Rent Control Act are concerned, their annual letting value will be calculated only on the basis of the standard rent determined or determinable under the said Act.
We, further, set aside the decision of the High Court striking down the assessment list for 1967 68 and hold that the said assessment list is validly authenticated and the taxes can be recovered on the basis of the same.
The appeal is allowed accordingly with no order as to costs.
CIVIL APPEAL NO.
1776/1980 7.
In the present case, Rule 5 of the rules made by the appellant Junagadh Municipality [ 'the Municipality] under Section 271 (1) and Section 99 (1) (i) of the Act has been struck down by the High Court to the extent it provides for calculating the annual letting value on the basis of actual rent, as being ultra vires Section 99 (1) (i) read with Section 2(1) of the Act.
The relevant portion of the said Rule 5 reads as follows: "In the case of buildings or lands.
which are let.
the rent which is the actual rent, or in the case where the standard rent is determined by the Civil Court, the same shall in such case be considered to be the annual letting value, unless the executive committee or the special committee on the Chief Officer or his delegate entrusted with the 818 work of valuation has reasons to believe that the rent shown in the rent note or account does not represent the correct letting value or is collusive or is not determined by the Court on merits as the case may be in which case reasons for such belief shall be stated in the decision provided that in case rent actually charged is in excess of the rent as determined by the Court at any time the rent actually charged shall be considered to be the annual letting value. ' 8.
It is not necessary to repeat what we have discussed on the subject in the accompanying appeal, viz., C.A. No. 1374 of 1974.
Suffice it to say that in the present case, the rule itself has provided that where the standard rent is determined by the Civil Court, of course under the rent restriction legislation, the annual letting value will be determined on the basis of such standard rent.
The rule, however, goes further and says that in other cases, viz., [1] where the standard rent is not determined and 121 even if it is determined, where actual rent charged is in excess of the standard rent, it is the actual rent, which will be taken as the basis for calculating the annual letting value.
The latter two situations do not make distinction between the properties to which the rent restriction legislation is applicable and the properties to which it is not applicable.
In other words, under the rule, even where the rent restriction legislation is in force, it is the actual rent which will be taken as the basis for calculating the annual letting value if the standard rent is not determined by the Court.
The High Court has, therefore, rightly struck down the rule to the extent that it applies to properties to which the rent restriction legislation is applicable.
In view of what we have stated in the accompanying appeal, we see no reason to take a different view.
However, Shri Mehta appearing for the Municipality is right in contending that it is not necessary to declare the rule ultra vires Section 99(1) read with Section 2 because it also provides for assessing the annual letting value of property on the basis of the actual rent.
That part of the rule which enables the authorities to take the actual rent as the basis for calculating the annual letting value can be read down to apply only to those properties to which the rent restriction legislation does not apply.
We agree with him there, if there are such properties within the limits of the 819 Municipality.
We, therefore, allow the appeal set aside the decision of the High Court striking down the part of the rule which enables the authorities to adopt actual rent as the basis for calculating the annual letting value of the properties.
Instead, we declare that Rule 5, to the extent it enables the authorities to take the actual rent as the basis for calculating the annual letting value, will apply only to the properties to which the rent restriction legislation which in the present case is the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, does not apply.
The appeal is allowed accordingly with no order as to costs.
V.M. Appeal allowed. [/INST] Some tax payers of the appellant Municipality filed a writ petition in the High Court challenging the validity of the rules made by it for the levy of consolidated property tax on lands and buildings and also the assessment list prepared and authenticated by the Municipality for the year 1967 68, 1968 69 and 1969 70.
It was contented before the High Court that Rules 2(7), 4 and 5 of the Rules of the consolidated property tax on the lands and buildings were ultra vires section 99(1) (i) and the proviso (e) to it read with section 2(1) of the Act, and that the assessment lists for the years 1967 68, 1968 69 and 1969 70 were invalid since they were prepared without following the procedure laid down in Sections 105 to 112 of the Act.
The High Court upheld the validity of Rules 2(7) and 4 and struck down the validity of Rule 5.
It also declared that the tax collected by the 803 804 Municipality for the assessment years 1968 69 and 1969 70 in excess of the amounts which may be determined in accordance with the principles laid down was without the authority of law and struck down the assessment list for the year 1967 68 on the ground that it was not prepared in compliance with the procedure I aid down in Sections 105 to 112 of the Act.
Being aggrieved by the High Court 's decision the appellants preferred the present appeals.
Allowing the appeals, this Court, HELD: 1.
It is not the value of occupation of the property to the tenant, but the rental income from it to the owner which is to be taken into consideration while estimating the reasonable return that a landlord can expect from his property.
While estimating or calculating the annual rent which might reasonably be expected from such property, the provisions of such legislation have to be taken into consideration.
Different rent restriction legislations have described the maximum rent recoverable under them differently such as standard rent, fair rent etc.
Hence the annual letting value of the building or land or both to which the rent restriction legislation is applicable cannot exceed the annual standard or fair rent.
It is the annual standard/fair rent which alone, therefore, can form the basis of the assessment of the property tax by the local authority.
[809 E G] 1.2.
Since there is no non obstante clause in the Gujarat Municipalities Act, 1963, this Court refrains from going into the question of non obstante clause in the provisions of the Act levying property tax.
[810 C] 13.
If the expression 'annual letting value ' in rule 4 is read as the annual letting value as determined by the outer limit prescribed by the standard or fair rent under the rent restriction legislation applicable to the premises, which in the present cast is the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, the validity of the said rule cannot be assailed.
[811 B] 1.4.
Rule 5 mandates the actual rent received to be taken into consideration for fixation of the annual letting value, even if it is in excess of the standard rent fixed under the rent restriction legislation, which is contrary to the interpretation placed by this Court on the expression 'annual letting value".
The correct mode of getting over the difficulty is to 805 amend Rule 5 itself suitably to take care of such properties Instead of keeping it on the rule book as it is.
There is nothing to prevent the Municipality from introducing a new rule in place of the said rule.
[812B E] 1.5.
Even without Rule 5 and on the basis of Rule 4 as it is, the annual letting value can be calculated on the basis of the standard rent where the rent restriction legislation is applicable.
Where it is not applicable, nothing prevents the Municipality from assessing the properties on the basis of the actual rent received under the same Rule 4 itself.
[811 F] 1.6.
Rule 5 is to be read as being applicable only to the properties which are not governed by the provisions of the Rent Control Act.
As far as the properties which are amenable to the provisions of the Rent Control Act are concerned, their annual letting value will be calculated only on the basis of the standard rent determined or determinable under tile said Act.
Where the standard rent is determined by the Civil Court, of course under the rent restriction legislation, the annual letting value will be determined on the basis of such standard rent.
The rule, however, goes further and says that in other cases, viz., (1) where the standard rent is not determined and (2) even if it is determined, where actual rent charged is in excess of the standard rent, it is the actual rent, which will be taken as the basis for calculating the annual letting value.
The latter two situations do not make distinction between the properties to which the rent restriction legislation is applicable and the properties to which it is not applicable.
In other words, under the rule, even where the rent restriction legislation is in force, it is the actual rent which will be taken as the basis for calculating the annual letting value if the standard rent is not determined by the Court.
[817 D, 818 E F] 1.7.
Rule 5, to the extent it enables the authorities to take the actual rent as the basis for calculating the annual letting value, will apply to the properties to which the rent restriction legislation.
which in the present case is the Bombay Rent, Hotel and Lodging Housing Rates Control Act, 1947, does not apply.
[819 B] The Corporation of Calcutta vs Smt.
Padma Debi and Others, ; ; Corporation of Calcutta vs Life Insurance Corporation of India, ; , Guntur Municipal Council vs Guntur Town Rate Payers 806 Association ; and Dewan Daulat Rai Kapoor and Others vs New Delhi Municipal Committee & Others, ; , relied on.
Municipal Corporation Indore vs Smt.
Ratnaprabha and Others, ; , referred to.
[809 D] 2.
Section 112 in the context in which it appears is both directory and enabling in nature insofar as it requires the Municipality to authenticate the list before 31st July of the official year.
That the provisions are no more than directory is clear from the fact that they provide that if the Municipality fails to do its duty, the State Government way complete the work by appointing person(s) to do it.
This is as it should be since the ,various provisions of the Act show that the revenue and the expenditure of the Municipality, among others, is controlled and regulated by the State Government Further the Section requires that the Municipality should complete the authentication of the assessment list before a particular date which, in the present case happens to be, 31st July of the year.
It was necessary to incorporate in the section the said provision to give enough time to the State Government to step in and authenticate the list before the end of the official year.
The official year is the same for the Municipality as well as the State Government and for the purposes of budgeting, the provision that the assessment list should be authenticated by the particular date was necessary to be incorporated.
In any case neither the Municipality is prevented from authenticating it beyond 31st July nor is the person or persons appointed by the State Government prevented from doing so beyond 31st March of the official year.
[816 E G] </s> |
<s>[INST] Summarize the following judgement: Appeal No. 2169(NT).
of 1993.
From the Judgment and Order dated 10.12.1979 of the Madras High Court in Tax Case No. 398 of 1976.
Mrs. Janaki Ramachandran for the Appellant.
K.N. Shukla, Sudhir Walia and P. Parmeswaran for the Respondent.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
Under Section 256(1) of the Income Tax Act, the Income Tax Appellate Tribunal, Madras stated the following question of law for the opinion of the Madras High Court: "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum of Rs. 19 being the interest received on the deposits made with the 1000 Electricity company is a business receipt and accordingly deleting the additional surcharge of Rs. 81,920 charged .for the assessment year 1963 64?" The High Court returned the reference unanswered.
It directed the Tribunal to consider the case 'on all points that require consideration of the question, whether additional surcharge was attracted '.
In short, it asked the Tribunal to examine whether the additional surcharge was attracted even if the income of Rs. 19 is chargeable under the head 'Profits and gains of business '.
The learned counsel for the assessee submits that the High Court exceeded its jurisdiction in making the above direction.
It is submitted that the matter be sent back to the High Court for answering the question of law as stated by the Tribunal.
The contention of the learned counsel is that by giving the impugned direction the High Court has sought to widen the scope of enquiry which it is not empowered to do in a reference under Section 256.
The assessee is a cooperative society engaged in the business of banking.
The previous year relevant to the assessment year 1963 64 was the year ending June 30, 1962.
Its business income was exempt under the provisions of Section 81(1) as it then stood.
During the said accounting year, the assessee received a sum of Rs. 19 being the interest on the deposit made by it with the Salem Erode Electricity Distribution Company.
This deposit was made by the assessee as required by the conditions notified by the said company for supply of energy.
The deposit carried interest and it is on account of the said interest that the sum of Rs. 19 was received by the assessee.
The Income Tax Officer treated the said amount of Rs. 19 as 'income from other sources '.
On that basis, he levied additional surcharge, in a sum of Rs. 81,920, under the provisions of the relevant Finance Act.
On appeal, the Appellate Assistant Commissioner upheld the contention of the assessee that the said sum of Rs. 19 also constituted its business income and, therefore, exempt.
Accordingly, he held, the levy of surcharge was unsustainable.
The Revenue appealed to the Appellate Tribunal.
Its case was that the said receipt cannot be treated as a business receipt and that it was rightly treated by the I.T.O. as "income from other sources '.
The Tribunal recorded in its order : "Before us it is made clear by both sides that the levy of additional surcharge and interest would depend upon the classification of the head of income for this interest income of Rs. 19 and that if it fell under income from business, the appeal has to be dismissed 1001 and that if it fell under 'income from other sources ', the appeal has to be allowed and the levy of surcharge and interest restored.
So we proceed to discuss the vital issue in this case on which hangs the result of this appeal.
" The Tribunal held it 'income from business ' and accordingly dismissed the appeal filed by the Revenue.
At the instance of the revenue, the Tribunal stated the aforesaid question.
Before the High Court it was contended by the Revenue that both the A.A.C. and the Tribunal laboured under an erroneous assumption that the said sum of Rs. 19 represented business income and the liability of surcharge was not attracted.
It was submitted that whether the said sum was a business income or income from other sources, it attracted the liability of additional surcharge.
The assessee, however, submitted that it was not open to the revenue to take the said stand, inasmuch as it agreed before the Tribunal that in case the said sum constituted business income, liability of additional surcharge was not attracted.
The assessee submitted further that the High Court should not allow the revenue to shift its stand and urge a new contention.
The High Court held, after an examination of the relevant provisions of the Finance Act and of the decisions relating to the nature of jurisdiction of the High Court in such a reference, that the assumption made by the A.A.C. and the Tribunal that the liability of surcharge is not attracted in case 'the said sum of Rs. 19 represented business income may not be warranted and that in such a situation the High Court does possess the power to correct the error so long as the point arose out of the Tribunal 's order.
The High Court held: "This Court cannot look on helplessly with reference to an error which is manifested in the contention of both sides before the Tribunal.
This court has jurisdiction to correct an error in the order of the Tribunal, so long as the point arose out of its order, whoever be the author of the mistake or error in taking up an particular contention.
Having regard to the nature of the issue that was before the Tribunal and having regard to what we have stated above, we think it proper to set aside the order of the Tribunal and direct the Tribunal to consider the case on all the points that require consideration of the question whether additional surcharge was attracted.
The reference is returned unanswered.
" 1002 We find it difficult to agree with Smt.
Janaki Ramachandran, learned counsel for the assessee that the High Court has exceeded its jurisdiction under Section 256 in making the above direction.
As rightly observed by the High Court, if the Tribunal proceeds upon an assumption which is erroneous in law and refers a question to the High Court, it cannot be said that the High Court is bound by the terms of the question referred and cannot correct the erroneous assumption of law underlying the question.
If such power is not conceded to the High Court, the result would be that the answer given by the High Court may equally be erroneous in law.
Such a situation cannot certainly be countenanced.
It would not be in the interest of law or justice.
It is not as if the High Court has asked for any fresh investigation of facts in this case not that such power does not exist in the High Court in a appropriate case.
All that the High Court has asked the Tribunal to do is to consider whether the liability of surcharge is not attracted even if the said sum of Rs. 19 is treated as income from business, The fact that the revenue was also a party to the said erroneous assumption before the Tribunal cannot stand in the way of the Revenue resiling from an erroneous assumption of law.
In C.I.T., Bombay vs Scindia Steam Navigation Ltd., ; the facts were these: a steam ship belonging to the respondent company was requisitioned by the government.
The ship was lost by enemy action on March 16, 1944.
The company received a sum of Rs. 20 lacs by way of compensation on July 17, 1944, a sum of Rs. 23 lacs on December 22.
1944 and a sum of Rs. 33,333 on August 10, 1946.
The total compensation so received exceeded the cost price of the steam ship.
The difference between the cost price and written down value was Rs. 9,26,532.
In the assessment proceeding for the A.Y. 1946 47, the revenue sought to charge the said amount under the fourth proviso to Section 10(2)(vii) of the Income Tax Act, 1922, inserted by the Income Tax (Amendment) Act, 1946, which came into force on May 4, 1946.
The assessee contended that the amount should be deemed to have been received on April 16,1944 as was done for the purposes of Excess Profits Tax Act, in which case it could not fall within the accounting period July 1, 1944 to June 30, 1945, relevant to the A.Y. 1946 47.
The Tribunal was of the opinion that the material date for the purpose of the fourth proviso to Section 10(2)(vii) was the date when the compensation was in fact received and that therefore the amount was assessable in the A.Y. 1946 47.
At the instance of the assessee, the Tribunal 1003 stated the following question of law for the opinion of the High Court "whether the sum of Rs. 9,26,532 was properly included in the assessee company 's total income computed for the A.Y. 1946 47?" Before the High Court the assessee raised a new contention for the first time that the fourth proviso to section 10(2)(vii) did not apply to the assessment as it was not in force on April 1, 1946 and the liability of the company had to be determined as on April 1, 1946, when the Finance Act, 1946 came into force.
A preliminary objection was raised by the revenue that the said aspect, or question as it may be called, did not arise out of the order of the Tribunal, that it was not raised before or dealt with by the Tribunal and that it was also not referred for the opining of the High Court.
The High Court over ruled the objection opining that the form in which the question was framed was sufficiently wide 'to take in the new contention and that the company was entitled to raise it even if that aspect of the question had not been argued before the Tribunal.
It upheld the new contention raised by the assessee and answered the question in its favour.
On appeal, this court affirmed.
It was held that the High Court had jurisdiction to entertain the new contention raised by the assessee for the first time inasmuch as it was within the scope of the question framed by the Tribunal and was implicit therein.
This court enunciated several principles relating to the nature of the jurisdiction of the High Court under Section 256, of which the following principle is relevant for our purpose: "Section 66(1) speaks of a question of law that arises out of the order of the Tribunal.
Now a question of law might be a simple one, having its impact at one point, or it may be a complex one, branching over an area with approaches leading to different points therein.
Such a question might involve more than one aspect, requiring to be tackled from different standpoints.
All that Section 66(1) requires is that the question of law which is referred to the court for decision and whic h the court is to decide must be the question which was in issue before the Tribunal.
Where 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.
It will be an over refinement of the position to hold that each aspect of a question is 1004 itself a distinct question for the purpose of section 66(1) of the Act. ' This decision of the Constitution Bench, in our opinion justifies and warrants the approach adopted by the High Court in the judgment under appeal.
The question in the present case is whether additional surcharge was leviable for the A.Y. 1963 64 under the relevant Finance Act.
The assessee 's contention was that it has no income which was liable to be assessed to income tax inasmuch as its entire income was exempt under Section 81(1)(a).
In tune with this submission, the assessee submitted that the said sum of Rs. 19 was also a business income and, therefore, the liability of additional surcharge did not attach to the assessee.
The I.T.O. took the view that the said sum of Rs. 19 represented income from other sources and therefore liability of additional surcharge was attracted.
On Appeal, the AAC and the Tribunal upheld the assessee 's contention that it was business income and therefore the liability of surcharge was not attracted.
The High Court, however, thought that having regard to the language of the provisions of the relevant Finance Act, the Tribunal ought to examine whether the liability to additional surcharge is attracted even if the said sum of Rs. 19 was treated as income from business.
The High Court was of the opinion that the legal submission urged by the Revenue before the High Court, no doubt for the first time, did call for serious consideration.
This was done to arrive at a correct decision in law relating to the liability to additional surcharge.
If really, additional surcharge was chargeable according to the Finance Act even in case the said sum of Rs. 19 represented business income, the High Court cannot be called upon to act on the assumption that it is not so chargeable and answer the question stated.
Such a course would neither be in the interest of law or justice.
That the Revenue was also a party to the erroneous assumption of law makes little difference to the principle.
Counsel for the parties have cited several decisions touching upon the nature of the jurisdiction of the High Court under Section 256 viz., V.R. Y.K.N. Kallappa Chettiar vs Commissioner of Income Tax, C.I.T vs Ogale Class Works Ltd., and Keshav Mills Co. Ltd. vs Commissioner of Income Tax Bombay North, Ahmedabad, by the learned counsel for the appellant and Commissioner of 'Income Tax, Bihar and Orissa vs kirkend Coal Co., and Kusunben D. 1005 Mahadevia vs Commissioner of Income Tax, Bombay City, by the learned counsel for the Revenue.
We do not, however, think it necessary to refer to them, since the situation present herein was not present in those cases.
The principles of these decisions does not in any manner run contrary to the one affirmed by us herein, which is consistent with the one enunciated in Scindia Steam Navigation.
The appeal accordingly fails and is dismissed.
No costs.
N.V.K. Appeal dismissed. [/INST] The appellant assessee was a cooperative society engaged in the business of banking The previous year relevant to the assessment year 1963 64 was the year ending June 30, 1962.
The business income of the assessee was exempt under the provisions of Section 80(1) as it then stood.
During the aforesaid accounting yew, the assessee received a sum of Rs. 19 being the interest on the deposit made by it with an Electricity Distribution Company.
This deposit had to be made by the assessee as it was required by the conditions notified by the electricity company for supply of energy, and it carried interest.
It was on account of the said deposit that the sum of Rs. 19 was received by the assessee, by way of interest.
The Income tax Officer treated the amount of Rs. 19 as income from other sources, and on that basis, he levied additional surcharge, in a sum of Rs. 81,920.
The assessee appealed to the Appellate Assistant Commissioner who upheld the assessee 's contention that the said sum of Rs. 19 constituted its business income and, was therefore, exempt.
He held that the levy of surcharge was unsustainable.
The Revenue appealed to the Appellate Tribunal which held that it was 'income from business ', and accordingly dismissed the Revenue 's 997 998 appeal.
At the instance of the Revenue, the Tribunal referred the question to the High Court.
The High Court held, that the assumption made by the Appellate Assistant Commissioner and the Tribunal that the liability of surcharge was not attracted in case the said sum of Rs. 19 represented business income may not be warranted and that in such a situation the High Court does possess the power to correct the error so long as the point arose out of the Tribunal 's order.
It returned the reference unanswered and directed the Tribunal to consider the case on all points that require consideration of the question whether additional surcharge was attracted.
In the assessee 's appeal to this Court, it was submitted that the High Court exceeded its jurisdiction in making the aforesaid direction, that the High Court widened the scope of enquiry which it was not empowered to do in a reference under Section 256 and that the matter should be sent back to the High Court for answering the question of law as stated by the Tribunal.
Dismissing the appeal, this Court, HELD : All that the High Court has asked the Tribunal to do is to consider whether the liability of surcharge is not attracted even if the said sum of Rs. 19 is treated as income from business.
The fact that the revenue was also a party to the said erroneous assumption before the Tribunal cannot stand in the way of the Revenue resiling from an er roneous assumption of law.
[1004 D F] In the instant case, the question was whether additional surcharge was leviable for the assessment year 1963 64 under the relevant Finance Act.
The assessee 's contention was that it had no income which was liable to be assessed to income tax inasmuch as its entire income was exempt under Section 81 (1) (a), and it was submitted that the sum of Rs. 19 was also a business income and, therefore, the liability of additional surcharge did not attach to the assessee.
The I.T.O. took the view that the said sum of Rs. 19 represented income from other sources and, therefore, liability of additional surcharge was attracted.
The Appellate Assistant Commissioner upheld this contention.
The High Court, however, thought that having regard to the language of the provisions of the relevant Finance Act, the Tribunal ought to examine whether the liability to additional 999 surcharge was attracted even if the said sum of Rs. 19 was treated as income from business.
The High Court was of the opinion that this legal submission, though raised for the first time, did call for serious consideration.
This was done to arrive at a correct decision in law relating to the liability to additional surcharge.
If really, additional surcharge was chargeable according to the Finance Act even In case the said sum of Rs. 19 represented business income, the High Court cannot be called upon to act on the assumption that it is not so chargeable and answer the question stated.
Such a course would neither be in the interest of law or justice.
That the Revenue was also a party to the erroneous assumption of law makes little difference to the principle.
[1004 B F] C.I.T. Bombay vs Scindia Steam Navigation Ltd., 42 I.T.R. 589, relied on.[1004 H] V.R.Y.K.N. Kallappa Chettiar vs Commissioner of Income Tax, ; C.L T. vs Ogale Glass Works Ltd., 25 I.T.R. 529; Keshav Mills Co. Ltd. vs Commissioner of Income Tax, Bombay North, Ahmedabad, ; Commissioner of Income Tax, Bihar and Orissa vs Kirkend Coal Co., 74 I.T.R. 67 and Kusumben D. Mahadevia vs Commissioner of Income Tax, Bombay City , not applicable.
[1004 H] </s> |
<s>[INST] Summarize the following judgement: Appeal No. 1240 of 1993.
From the Judgment and Order dated 27.2.1992 of the Delhi High Court in C.W.P. No. 877 of 1991.
Arun Jaitley, Ms. Ayesha Khatri and Ms. Indu Malhotra (NP) for the Appellant.
P.P. Khurana and Arun K. Sinha for the Respondent.
The Judgment of the Court was delivered by VERMA, J.
The respondent, H.C. Khurana, was employed as Execu 1037 tive Engineer in the Delhi Development Authority (D.D.A.).
A preliminary memo was served on the respondent on 6.11.1985, alleging some irregularities by him in the construction works, and they were being investigated.
A chargesheet was framed on 11.7.1990 against the respondent on the basis of irregularities in the constructions made in a housing colony.
On 13.7.1990, the chargesheet was despatched for being served on the respondent.
However, the respondent proceeded on two months ' medical leave and, therefore, on 17.7.1990 another Executive Engineer R.K. Sood, working in the same Wing as the respondent, received it and gave the intimation that the respondent was on leave, adding that the same would be handed over to the respondent on his return from leave.
On 28.11.1990, the Departmental Promotion Committee (D.P.C.) met, and in view of the earlier decision to initiate disciplinary proceedings against the respondent, it followed the 'sealed cover procedure ' in the case of respondent.
It appears, that the effort to effect personal service of the chargesheet on the respondent on account of his non availability continued, and the same could be served personally on the respondent only on 25.1.1991.
As a result of the selection made by the D.P.C., certain persons were promoted to the post of Superintending Engineer, while the respondent 's matter was kept in obeyance to await the outcome of the disciplinary proceedings.
In these circumstances, the respondent filed Writ Petition No. 877 of 1991 in the Delhi High Court claiming a mandamus directing the D.D.A. to promote him as Superintending Engineer with effect from the date on which his juniors had been promoted to the post of Superintending Engineer, on the basis of selection made by the D.P.C.
The High Court has allowed that writ petition taking the view, that 'the framing of charge would carry with it the duty to issue and serve the same on the employee, there was no justification for the respondent to follow the sealed cover procedure in this case on 28.11.1991 when the Departmental Promotion Committee met ', since actual service of the chargesheet on the respondent was made only after the date on which the D.P.C. met.
According to the High Court, issuance of the chargesheet to the employee means its actual service on him, and this should be complete before following the sealed cover procedure.
The High Court has read Union of India and Others vs
K.V Jankiraman and Others, ; , to this effect, for taking the view, that on these facts, the disciplinary proceedings cannot be said to have been initiated prior to 29.11.1990, when the D.P.C. followed the sealed cover procedure.
Accordingly, the High Court has directed the D.D.A. to 1038 open the sealed cover; to promote the respondent as Superintending Engineer, if he has been otherwise found suitable by the D.P.C.; and, in that event, lo give him seniority with all consequential benefits from the date on which his juniors were so promoted.
The judgment of the High Court is challenged by special leave, in this appeal.
The short question for consideration, is: Whether, in the present case, the High Court has correctly applied the decision in Jankiraman? Learned counsel for the appellant contended that Jankiraman cannot be read to hold, in a case like the present, where the disciplinary proceedings had been initiated by framing the chargesheet and despatching the same, that the chargesheet had not been issued; and, therefore, the 'sealed cover procedure ' could not be followed by the D.P.C. on 28.11.1990.
On the other hand, learned counsel for the respondent strenuously urged that Jankiraman holds that without effective service of the chargesheet on the employee, the disciplinary proceedings cannot be said to have been initiated against him.
Learned counsel for the respondent referred to the Office Memorandum No. 22O `11/4/91 Estt.
(A) dated 14.9.1992 of the Department of Personnel & Training, Ministry of Personnel, Public Grievances and Pensions, Government of India, issued in supersession of the earlier.
Office Memorandum No. 220 11/2/86 Estt.
(A) dated 12.1.1988, consequent upon the judgment in Jankiraman, to support his submission that even though mere issuance or despatch of a chargesheet without the further requirement of its actual service on the employee would now be sufficient according to the O.M. dated 14.9.1992 for following the sealed cover procedure, yet the same was not sufficient earlier according to the O.M. dated 12.1.1988, which required actual service and not mere issuance of the chargesheet for initiating the disciplinary proceedings.
Admittedly, the guidelines in the O.M. dated 12.1.1988 were in force, in the present case.
The subject of the two memoranda, containing the guidelines, is the same, as under: "Promotion of Government servants against whom disciplinary/court proceedings are pending or whose Conduct is under investigation Procedure and guidelines to be followed" (emphasis supplied) 1039 Para 2 is the relevant portion in these memoranda.
In 0.M. dated 12.1.1988, para 2 is as under : "Cases of Government Servants, to whom Sealed Cover Procedure will be applicable.
2.At the time of consideration of the cases of Government servants for promotion, details of Government servants in the consideration zone for promotion falling under the following categories should be specifically brought to the notice of the Departmental Promotion Committee : (i) Government servants under suspension; (ii)Government servants in respect of whom disciplinary proceedings are pending or a decision has been taken to initiate disciplinary proceedings; (iii)Government servants in respect of whom prosecution for a criminal charge is pending or sanction for prosecution has been issued or a decision has been taken to accord sanction for prosecution.
(iv)Government servants against whom an investigation on serious allegations of corruption, bribery or similar grave misconduct is in progress either by the CBI.
or any other agency, departmental or otherwise." (emphasis supplied) The substituted clause (ii) in para 2, in O.M. dated 149.1992, is as under : "(ii) Government servants in respect of whom a Chargesheet has been issued and the disciplinary proceedings are pending; and" (emphasis supplied) It is the change made in clause (ii) of para 2 in the O.M. dated 14.9.1992, from which learned counsel for the respondent tried to find 1040 support for his submission.
Before we refer to Jankiraman, we may advert to clause (ii) of para 2 of O.M. dated 12.1.1988 which was the guideline applicable at the material time, in the present case, and is as under : "(a) Government servants in respect of whom disciplinary proceedings are pending or a decision has been taken to initiate disciplinary proceedings," (emphasis supplied) These words clearly indicate that the sealed cover procedure was applicable, in cases where the 'disciplinary proceedings are pending ' in respect of the government servant; or a decision has been taken to initiate disciplinary proceedings '.
Thus, on a decision being taken to initiate disciplinary proceedings, the guidelines attract the sealed cover procedure.
The reason is obvious.
Where a decision has been taken to initiate the disciplinary proceedings against a government servant, his promotion, even if he is found otherwise suitable, would be incongruous, because a government servant under such a cloud should not be promoted till he is cleared of the allegations against him, into which an inquiry has to be made according to the decision taken.
In such a situation, the correctness of the allegation being dependent on the final outcome of the disciplinary proceedings, it would not be fair to exclude him from consideration for promotion till conclusion of the disciplinary proceedings, even though it would be improper to promote him, if found otherwise suitable, unless exonerated.
To reconcile these conflicting interests, of the government servant and public administration, the only fair and just course is, to consider his case for promotion and to determine if he is otherwise suitable for promotion, and keep the result in abeyance in sealed cover to be implemented on conclusion of the disciplinary proceedings; and in case he is exonerated therein, to promote him with all consequential benefits, if found otherwise suitable by the Selection Committee.
On the other hand, giving him promotion after taking the decision to initiate disciplinary proceedings, would be incongruous and against public policy and principles of good administration.
This is the rationale behind the guideline to follow the sealed cover procedure in such cases, to prevent the possibility of any injustice or arbitrariness.
1041 The question now, is: What is the stage, when it can be said, that 'a decision has been taken to initiate disciplinary proceedings '? We have no doubt that the decision to initiate disciplinary proceedings cannot be subsequent to the issuance of the chargesheet, since issue of the chargesheet is a consequence of the decision to initiate disciplinary proceedings.
Framing the chargesheet, is the first step taken for holding the enquiry into the allegations, on the decision taken to initiate disciplinary proceedings.
The chargesheet is framed on the basis of the allegations made against the government servant; the chargesheet is then served on him to enable him to give his explanation; if the explanation is satisfactory, the proceedings are closed, otherwise, an enquiry is held into the charges , if the charges are not proved, the proceedings are closed and the government servant exonerated; but if the charges are proved, the penalty follows.
Thus, the service of the chargesheet on the government servant follows the decision to initiate disciplinary proceedings, and it does not precede or coincide with that decision.
The delay, if any, in service of the chargesheet to the government servant, after it has been framed and despatched, does not have the effect of delaying initiation of the disciplinary proceedings, inasmuch as information to the government servant of the charges framed against him, by service of the chargesheet, is not a part of the decision making process of the authorities for initiating the disciplinary proceedings.
This plain meaning of the expression used in clause (ii) of para 2 of O.M. dated 12.1.1988, also promotes the object of the provision.
The expression refers merely to the decision of the authority, and knowledge of the government servant, thereof, does not form a part of that decision.
The change made in clause (ii) of para 2 in O.M. dated 14.9.1992, merely clarifies this position by using the expression 'chargesheet has been issued ' to indicate that service of chargesheet is not necessary; and issue of the chargesheet by its despatch indicates beyond doubt that the decision to initiate disciplinary proceedings was taken.
In our opinion, Jankiraman takes the same view, and it is not possible to read that decision otherwise, in the manner suggested by learned counsel for the respondent.
The decision in Jankiraman is based, inter alia, on O.M. dated 12.1.1988.
The facts of the cases dealt with in the decision in Jankiraman do not indicate that the Court took the view, that even though the chargesheet against the government servant was framed and direction given to despatch the same to the government servant as a result of the decision to 1042 initiate disciplinary proceedings taken prior to the meeting of the D.P.C., that was not sufficient to attract the sealed cover procedure merely because service of the chargesheet was effected subsequent to the meeting of the D.P.C. Moreover, in Jankiraman itself, it was stated thus : "14.
To bring the record up to date, it may be pointed out that in view of the decision of this Court in Union of India vs Tejinder Singh, , decided on September 26, 1986, the Government of India in the Deptt.
of Personnel and Training issued another Office Memorandum No.22011/2/86.
(A) dated January 12, 1988 in supersession of all the earlier instructions on the subject including the Office Memorandum dated January 30,1982. .
A further guideline contained in this Memorandum is that the same sealed cover procedure is to be applied where a government servant is recommended for promotion by the DPC, but before he is actually promoted, he is either placed under suspension or disciplinary proceedings are taken against him or a decision has been taken to initiate the proceedings or criminal prosecution is launched or sanction for such prosecution has been issued or decision to accord such sanction is taken.
10.These differences in the two Memoranda have no bearing on the questions to be answered.
" (emphasis supplied) (PP.
117 118) Thereafter, in Jankiraman, the conclusions of the Full Bench of the Tribunal, under consideration, were quoted, and then while restating that the conclusions of the Tribunal could be reconciled, it was further stated, thus: '17.
There is no doubt that there is a seeming contradiction between the two conclusions.
But read harmoniously, and that is what the Full Bench has intended, the two conclusions can be reconciled with each other.
The conclusion No.1 should be read to mean that the promotion etc.
cannot be withheld merely because some disciplinary/criminal proceedings are pending against the employee.
To, deny the said benefit, they must be at the relevant time pending at the stage when charge memolcharge sheet has 1043 already been issued to the employee.
Thus read, there is no inconsistency in the two conclusions. ' (emphasis supplied) PP.
119) It will be seen that in Jankiraman also, emphasis is on the stage when a decision has been taken to initiate the disciplinary proceedings ' and it was further said that 'to deny the said benefit (of promotion), they must be at the relevant time pending at the stage when charge memo/charge sheet has already been issued to the employee '.
The word 'issued ' used in this context in Jankiraman it is urged by learned counsel for the respondent, means service on the employee.
We are unable to read Jankiraman in 'this manner.
The context in which the word 'issued ' has been used, merely means that the decision to initiate disciplinary proceedings is taken and translated into action by despatch of the chargesheet leaving no doubt that the decision had been taken.
The contrary view would defeat the object by enabling the government servant, if so inclined, to evade service and thereby frustrate the decision and get promotion in spite of that decision.
Obviously, the contrary view cannot be taken. 'Issue ' of the chargesheet in the context of a decision taken to initiate the disciplinary proceedings must mean, as it does, the framing of the chargesheet and taking of the necessary action to despatch the chargesheet to the employee to inform him of the charges framed against him requiring his explanation; and not also the further fact of service of the chargesheet on the employee.
It is so, because knowledge to the employee of the charges framed against him, on the basis of the decision taken to initiate disciplinary proceedings, does not form a part of the decision making process of the authorities to initiate the disciplinary proceedings, even if framing the charges forms a part of that process in certain situations.
The conclusions of the Tribunal quoted at the end of para 16 of the decision in Jankiraman which have been accepted thereafter in para 17 in the manner indicated above, do use the word 'served ' in conclusion No.(4), but the fact of 'issue ' of the chargesheet to the employee is emphasised in para 17 of the decision.
Conclusion No.(4) of the Tribunal has to be deemed to be accepted in Jankiraman only in this manner.
The meaning of the word 'issued ', on which considerable stress was laid by learned counsel for the respondent, has to be gathered from the 1044 context in which it is used.
Meanings of the 'word issue ' given in the Shorter Oxford English Dictionary include 'to give exit to; to send forth, or allow to pass out; to let out; . to give or send out authoritatively or officially; to send forth or deal out formally or publicly , to emit, put into circulation '.
The issue of a chargesheet, therefore, means its despatch to the government servant, and this act is complete the moment steps are taken for the purpose, by framing the chargesheet and despatching it to the government servant, the further fact of its actual service on the government servant not being a necessary part of its requirement.
This is the sense in which the word 'issue ' was used in the expression 'chargesheet has already been issued to the employee ', in para 17 of the decision in Jankiraman.
In view of the above, we are unable to accept the respondent 's contention, which found favour with the High Court, that the decision in Jankiramnan, on the facts in the present case, supports the view that the decision to initate the disciplinary proceedings had not been taken or the chargesheet had not been issued to the respondent prior to 28.11.1990, when the D.P.C. adopted the sealed cover procedure, merely because service of the chargesheet framed and issued earlier could be effected on the respondent after 28.11.1990, on account of his absence.
Consequently, the appeal is allowed and the judgment of the High Court is set aside, with the result that the writ petition of the respondent stands dismissed.
No costs.
N.V.K. Appeal allowed. [/INST] The respondent who was employed as an Executive Engineer in the DDA appellant was served on 6.11.85 a preliminary memo alleging irregularities committed by him in the construction works, and that they were being investigated.
On 11.7.90 a chargesheet was framed on the basis of these irregularities, and on 13.7.90 the chargesheet was despatched for being served on him.
The respondent, however, proceeded on two months medical leave and, therefore, on 17.7.90 another Executive Engineer workIng in the same Wing as the respondent, received It and gave intimation that the respondent was on leave and adding the same would be handed over to the respondent on his return from leave.
A Departmental Promotion Committee met on 28.11.90, and in view of the earlier decision to Initiate disciplinary proceedings against the respondent, It followed the 'sealed cover procedure ' in the case of the respondent.
Efforts to effect personal service of the chargesheet on the respondent on account of his non availability continued and the same could be served personally on him only on 25.1.91.
As a result of the selection made by the D.P.C. certain persons were promoted to the post of Superintending Engineer, while the respondent 's matter was kept In abeyance to await the result of the disciplinary proceedings.
The respondent riled a writ petition In the High Court for a writ of 1034 mandamus directing the.
DDA to promote him as Superintending Engineer with effect from the date on which his juniors had been promoted to the said post on the basis of the selection by the D.P.C.
The High Court allowed the writ petition relying on Union of India and Others vs K V. Jankiraman and Others, ; , and taking the view that the framing of charge would carry with it the duty to issue and serve the same on the employee, that there was no justification for the DDA to follow the sealed cover procedure in this case on 28.11.91 when the Departmental Promotion Committee met since actual service of the chargesheet was made only after the date on which the D.P.C. met.
Accordingly, the High Court directed the DDA to open the sealed cover, and to promote the respondent as Superintending Engineer if otherwise found suitable by the D.P.C., and to give him seniority and all consequential benefits from the date on which his juniors were so promoted.
The DDA appellant challenged the aforesaid, decision by special leave in this Court, and contended that fankiraman cannot be read to hold, in a case like the present one where the disciplinary proceedings have been initiated by framing the chargesheet and despatching the same that the chargesheet had not been issued and, therefore, the sealed cover procedure could not be followed by the D.P.C. on 28.11.90.
On behalf of the respondent official it was urged that Jankiraman holds that without effective service of the chargesheet on the employee the disciplinary proceedings cannot be said to have been initiated, and reliance was also placed on the Office Memorandum dated 12.1.88 which required actual service and not mere issuance of the chargesheet for initiating the disciplinary proceedings.
Allowing the appeal, and setting aside the judgment of the High Court, this Court, HELD : 1.
The 'sealed cover ' procedure is applicable, in cases where the 'disciplinary proceedings are pending ' in respect of the government servant; or 'a decision has been taken to initiate disciplinary proceedings '.
Thug, on a decision being taken to initiate disciplinary proceedings, the guidelines contained in OMs dated 14.9.92 and 12.1.88 attract the sealed cover procedure.
[1040 D] 2.
The decision to initiate disciplinary proceedings cannot be sub 1035 sequent to the issuance of the chargesheet, since issue of the chargesheet is a consequence of the decision to initiate disciplinary proceedings.
The service of the chargesheet on the government servant follows the decision to initiate disciplinary proceedings, and it does not precede or coincide with that decision.
The delay, if any, if service of the chargesheet to the government servant, after it has been framed and despatched, does not have the effect of delaying initiation of the disciplinary proceedings, inas much as information to the government servant of the charges framed against him, by service of the chargesheet, is not a part of the decision making process of the authorities for initiating the disciplinary proceedings.
[1041 B D] 3.The plain meaning of the expression 'a decision has been taken to initiate disciplinary proceedings ' used in clause (ii) of para 2 of O.M. dated 12.1.88, also promotes the object of the provision.
The expression refers merely to the decision of the authority, and knowledge of the government servant, thereof, does not form a part of that decision.
The change made in clause (ii) of para 2 in O.M. dated 14.9.92, merely clarifies this position by using the expression 'chargesheet has been issued ' to indicate that service of chargesheet is not necessary; and issue of the chargesheet by its despatch indicates beyond doubt that the decision to initiate disciplinary proceedings was taken.
Jankiraman takes the same view, and it is not possible to read that decision otherwise.
[1041 E F] 4.
The decision in Janiraman is based, interalia, on O.M. dated 12/1/88.
The facts of the cases dealt with in the decision in Jankiraman do not indicate that the court took the view, that even though the chargesheet against the government servant was framed and direction given to despatch the same to the government servant as a result of the decision to initiate disciplinary proceedings taken prior to the meeting of the D.P.C., that was not sufficient to attract the sealed cover procedure merely because service of the chargesheet was effected subsequent to the meeting of the D.P.C. [1041 H, 1042 A] 5. 'Issue ' of the chargesheet in the context of a decision taken to initiate the disciplinary proceedings must mean, as it does, the framing of the chargesheet and taking of the necessary action to despatch the chargesheet to the employee to inform him of the charges framed against him requiring his explanation; and not also the further fact of service of the 1036 chargesheet on the employee.
It is so, because knowledge to the employee of the charges framed against him, on the basis of the decision taken to initiate disciplinary proceedings, does not form a part of the decision making process of the authorities to initiate the disciplinary proceedings, even if framing the charges forms a part of that process in certain situations.
[1043 E F] 6.
The meaning of the word 'issued ' has to be gathered from the context in which it is used.
The issue of a chargesheet, therefore, means its despatch to the government servant, and this act is complete the moment steps are taken for the purpose, by framing the chargesheet and despatching it to the government servant, the further fact of its actual service on the government 'servant not being a necessary part of its requirement.
This is the sense in which the word 'issue ' was used in the expression 'chargesheet has already been issued to the employees ', in para 17 of the decision in Janakiraman.
[1044 B C] 7.
The decision to initiate the disciplinary proceedings against the respondent had been taken and chargesheet had also been issued to the respondent prior to 28.11.90 when the D.P.C. adopted the sealed cover procedure.
It cannot be held otherwise merely because service of the chargesheet framed and issued earlier could be effected on the respondent after 28.11.90, on account of the absence of the respondent.
[1044 D] Union of India and Others vs K.V Jankiraman and Others, ; , referred to and relied on.
[1037 G] </s> |
<s>[INST] Summarize the following judgement: minal Appeal No. 540 of 1985.
From the Judgment and Order dated 27.3.85 & 22.5.85 of the Patna High Court in Govt.
Appeal No. 28 of 1979.
Udai Narain Sinha and M.P. Jha for the Appellants.
D. Goburdhan for the Respondent.
ANAND, J. This appeal under Section 2(a) of the , is directed against the judgment and order of the High Court of Patna dated 27th March, 1985 in Government Appeal No. 28 of 1979, convicting and sentencing the appellants, Shatrugan Singh (Al), Kapildeo Singh (A2), Rampriya Yadav (A4), Brij Bihari Singh (A5), Ram Ekbal Singh (A6) and Suresh Singh (A7), (Awadesh Singh (A3) died after the judgment of the High Court) for offences under Sections 302, 302/149, 148, 324 and 326 IPC, by reversing an order of acquittal recorded by the Additional Sessions Judge VI, Patna dated 28th April 1979.
While Al and A2 are brothers, A3 is the son of A2, A4 is a ploughman of A 1.
A5 is the son in law of A2, A6 is the brother in law of A3 and A7 is the son of A6.
The prosecution case in brief is that the deceased Shyamdeo Singh was on enimical terms with A1 and A2 and litigation was going on between the two parties.
On the night intervening 12/13 October 1977, at about mid night at village Malia Gaura, the appellants along with Awadesh Singh A3, variously armed went to the house of the deceased and knocked at the door of the room in which he was sleeping.
Rajmani Devi PW 13, the daughter of the deceased alongwith her ailing child was also sleeping in the same room.
On hearing the knocking, she opened the door and found Al, A3 and A5 armed with pistols, A2 armed with a gun, A4 and A7 armed with a grasa each and A6 armed with a dagger present there As soon as she opened the door 5 Kapildeo Singh A2 fired from his gun at her causing an injury to her person.
Rampriya Yadav A4 hurled a grasa blow as a result of which two of her fingers of the left hand were chopped off.
Ram Ekbal Singh A6, thereupon, told his companions to spare her and to kill her father, Shyaindeo Singh, for which purpose they had come there.
Rajmani Devi PW 1 3 was pushed aside by the accused who entered the room.
When her father moved towards her, A1 Shatrugan Singh opened fire at him with his pistol aiming it at his chest.
Shyamdeo Singh on receipt of the pistol shot fell down in the room and died.
Ram Ekabal Singh A6 hurled a dagger below on the deceased.
After committing the crime, the accused party opened the entrance door and fled away.
While they were retreating, some villagers who were coming towards the house of the deceased on hearing the noise were also attacked and in the process a gun shot injury was caused to Basant Sao PW II.
The villagers, thereafter, made arrangements for a cot to carry Rajmani Devi PW 1 3 to the Police Station and while going to the Police Station, they stopped at the house of the local Mukhiya, Ram Nandan Singh PW 8, who also accompanied her to the Police Station Naubatpur.
Basant Sao PW 11 was also brought to Naubatpur Police Station on a cot by his relations and villagers.
On the basis of the statement of Rajmani Devi PW13, FIR exhibit 7 was drawn up at the Police Station Naubatpur and a case was registered in the early hours of the morning of 13.10.1977.
Investigation was immediately taken up by Pameshwar Parshad Singh PW 15 and both the injured Rajmani Devi PW 13 and Basant Sao PW 11 were sent for treatment to Naubatpur Hospital where their injuries, were examined by Dr. Ramesh Kumar Ran PW14.
Considering the serious nature of the injuries of Basant Sao PW II, he was referred to Patna Medical College Hospital ' The investigating officer Parmeshwar Prasad Singh PW 15 visited the place of occurrence and prepared the inquest report of the dead body of Shyamdeo Singh and sent the body forpost mortem examination.
During the investigation, the investigating officer PW 1.5 seized blood stained earth from the place of occurrence.
An empty cartridge was produced before the investigating officer by one Ram Rekha Singh.
After Basant Sao PW11 reached PMCH for treatment, information was sent by the doctor to the local police of Pirbahore Police Station.
ASI Ram Lakhan Jha of Pirbahore Police Station went to the hospital and recorded the statement of Basant Sao PW 11, exhibit 12 on 14.10.1977 at about 8 P.M., after Basant Sao PWI 1 had regained consciousness.
He sent the same to the officer 6 in charge of Naubatpur Police Station.
Mr. Udai Sinha, learned senior advocate, appearing for the appellants submitted that the version of the occurrence given by Basant Sao PW 11 in his statement recorded at PMCH by Ram Lakhan Jha DW1 (exhibit 12) was materially different from the statement of Rajmani Devi PW 1 3 recorded as FIR exhibit 7 at Police Station Naubatpur and gave a lie to the prosecution case rendering the prosecution case doubtful.
Learned counsel submitted that the High Court erroneously ignored the statement of Basant Sao PW 11 holding it inadmissible in evidence on the ground that it had been recorded after the investigation in the instant case had started on the FIR being lodged by Rajmani Devi PW 13.
According to the learned counsel, statement of Basant Sao, exhibit 12 could not be said to have been recorded during the investigation of the case and should not have been ruled out of consideration.
We cannot agree.
In our opinion, the High Court was justified in ignoring the statement of Basant Sao, exhibit 12, as it admittedly was recorded during the investigation of the case registered on the basis of FIR exhibit 7 and had been sent to the investigating officer PW 15 by Ram Lakhan Jha DW 1.
The statement was, therefore, hit by Section 162Cr.
P.C. and could not be read in evidence.
Even if be assumed for the sake of argument, though without accepting it, that exhibit 12 was in the nature of an FIR lodged by Basant Sao PWI 1, the same could not have been brought on record as not only Basant Sao PW11 denied making any such statement, he was not even confronted with the alleged statement exhibit 12 nor his signatures got proved on it.
exhibit 12 could not, therefore, be read at all in evidence.
The trial court not only committed an error in bringing on record exhibit 12 and reading it in evidence but also going further and comparing it with FIR exhibit 7 lodged by Rajamani Devi and finding discrepancies in the two documents.
Learned counsel then submitted that due to the admitted enmity between the parties and the hostility of the Mukhiya of the Gram Panchayat, PW8 towards A1 and A2, it would not be safe to rely upon the testimony of the prosecution witnesses without looking for independent corroboration and since none was forth coming in the case, the conviction of the appellants was not justified.
In view of the hostile relations between the parties and the fact that all the accused are closely related to each other and the prosecution 7 witnesses are also closely related or connected with each other, we have scrutinised the evidence on the record with care.
Our independent and careful appraisal of the evidence on the record has convinced us that the version given by the first informant, PW13, about the occurrence in the first FIR exhibit 7, lodged almost within three hours of the occurrence, is a truthful version of the manner in which she had received the injuries as also how her father had been shot at and as to who the assailants were.
Rajmani Devi PW 13, is the.
injured person and as such she would be the last person to spare her real assailants or the assailants of her father and substitute the real assailants by innocent persons.
She was the first victim of the assault.
Her statement in court corroborates FIR exhibit 7 and the medical evidence and the testimony of other witnesses lends sufficient corroboration to her testimony.
From the evidence on the record it is established that Rajmani Devi PWI 3 was sleeping along with her child in the same room as her father, deceased Shyamdeo Singh, at the time of the occurrence.
She knew all the appellants and she had enough time to see them in the light of the burning lantern.
It is the consistent case of prosecution witnesses PW9, PW 1 0 and PW 1 2 that a lantern was burning in the room and the mere fact that the investigating officer failed to take the lantern into possession cannot render the testimony of these witnesses doubtful.
Rajmani Devi PW13 attributed specific acts to Kapildeo Singh A 1 and Rampriya Yadav A4 in so far as the injuries on her own person were concerned and to Shatrugan Singh A1 in so far as the fatal pistol shot on her father was concerned.
She, of course, deposed that the other accused persons variously armed were also present at the time of occurrence.
Kunti Devi PW10, the sister of Rajmani Devi PWI 3, stated that after hearing the sound of gun shot she woke up and went into the room where her sister was sleeping with the child.
She then went on to say " I saw that the accused Kapildeo Singh, Shatrugan Singh and Awadesh Singh were coming out from the room of my father.
Besides these other people were also there but I could not recognize them due to darkness.
A lantern was hitting up in the room of my father.
I had recognised the aforesaid three accused persons in the lantern light".
This witness, 8 therefore, recognized only Al, A2 and A3.
though she knew all the accused persons.
Varat Devi PW 1 2, the sister in law of the deceased, Shyamdeo Singh, who was also present in the house on the night of the occurrence and was sleeping in another room with Kunti PW 1 0 and the wife of the deceased deposed that at mid night she heard the shot of a gun and as she got up and opened the door to go out, she saw some persons coming out from Shyamdeo Singh 's room.
She went on to say that "out of them, I recognized Kapildeo Singh, Shatrugan Singh and Awadesh Singh.
All the three accused persons are present in the court".
This witness also thus recognized only three accused Al, A2 and A4, even though according to the prosecution case, all the accused were known to her.
Ram Nandan Singh PW8, who according to the prosecution case, being the Mukhiya of the village went to the police station, stated in his examination that he had told the police that seven persons had their hand in the killing of the deceased but admitted in the cross examination that before the police, he had named only two accused persons, namely, Kapildeo Singh A2 and Shatrugan Singh A1 as the assailants.
Rajeshwar Singh PW5, a neighbour of the deceased, who woke up on hearing the firing of the gun and went to the house of the deceased stated that he had seen the deceased Shyamdeo Singh lying an Rajmani Devi PWI3 sitting near the dead body with injuries on her breast and fingers and that on his inquiry from Rajmani Devi PW 1 3 as to what had happened was told by her that Kapildeo Singh had caused her the injury by his gun and that Rampriya Yadav had cut her fingers with a grasa and that Shatrugan Singh had killed her father by the shot of pistol.
This witness has also, therefore, supported PW13 about the manner of assault and the nomination of the actual assailants.
From an analysis of the evidence referred to above, it is clear that while Rajmani Devi PW 1 3 had named all the seven accused, she had attributed specific acts only.to Kapildeo Singh A2, Rampriya Yadav A4 and Shatrugan Singh A 1.
Kunti Devi PW10 and Varat Devi PW 12, on I their own showing had" recognized only Kapildeo Singh A2, Shatrugan Singh Al and Awadesh Singh Al.
They did not recognize and other accused persons even though they were known to them.
PW5 also did not state that Rajmani Devi PW13 had given to him the names 9 of any other accused, when he had reached her house soon after the occurrence.
In view of the admitted enmity between the parties and the close relationship of the witnesses inter se and the close relationship of the accused persons with one another, the possibility that alongwith the actual assailants some other have also been implicated cannot be ruled out.
Prudence therefore requires that this court should look for corroboration of the testimony of PWI3 in respect of each of the accused before finding them guilty.
Since, the prosecution witnesses referred to above knew each of the accused, the non identification by any one of them of A5, A6 and A7 renders the presence of these accused and their participation rather doubtful.
It is not possible to say with any amount of certainty that they were actually involved in the commission of crime with the other accused persons.
Of course, PW 1 3 would not leave her own assailants or the assailants of her father, but it is not unknown that in view of the pronounced hostility between the parties, the close relations of A 1, A2, A3 and A4, namely, accused A5, A6 and A7 may have also been roped in.
Though PW 1 0 and PW 12 did not recognize Rampriya Yadav A4 as one of the accused but the participation of Rampriya Yadav A4, who according to Rajmani Devi PWI3 had given her the blow with the grasa chopping off her two fingers of the left hand, in our opinion has been conclusively established.
The presence of Awadesh Singh A3, since deceased, is admitted by all the prosecution witnesses.
The testimony of Rajmani Devi PW 1 3, is consistent about the participation of Shatrugan Singh Al and Kapildeo Singh A2 alongwith Rampriya Yadav A4 in the crime.
Inspite of lengthy cross examination nothing has been brought out to discredit her testimony in so far as either the occurrence or the actual assault on her and the deceased is concerned.
The ocular testimony regarding the participation of the accused in the crime as well as the manner of assault and the nature of weapons used by A1, A2 and A4 for causing injuries has received ample corroboration from the medical evidence and the recovery of the blood stained clothes and earth from the place of occurrence.
The FIR lodged by the injured witnesses promptly also lends enough assurance as regards the participation of A 1, A2, A3 and A4 in the crime.
We have, therefore, no hesitation to hold that the prosecution has established the case against Shatrugan Singh A1, Kapildeo Singh A2, Awadesh Singh A3 (since dead) and Rampriya Yadav A4, beyond any reasonable doubt.
10 This now takes us to the question of the nature of the offence committed by the aforesaid four appellants.
Since, we have doubted the presence of A5, A6 and A7 and their participation in the crime,they are entitled to the benefit of doubt and giving them the benefit of doubt, we allow their appeal and setting aside their conviction and sentence acquit them.
With the acquittal of A5, A6 and A7, it is only the four appellants Al, A2, A3 and A4 against whom the prosecution can be said to have established its case beyond a reasonable doubt.
Section 148 IPC under the circumstances would have no application.
Similarly, Section 149 IPC would also not be attracted and A2, A3 and A4 cannot be convicted under Section 302 with the aid of Section 149 IPC.
From the prosecution evidence, however, it stands amply established that the three appellants, Al, A2 and A4 alongwith A3 (since dead) had come together armed with deadly weapons to the house of the deceased Shyamdeo Singh and while Al Shatrugan Singh had fired pistol shot at Shyamdeo Singh resulting in his death, Kapildeo Singh A2 had fired from his gun at Rajmani Devi PW 13, causing her a serious injury on her breast while Rampriya Yadav A4 had caused her grievous injuries with a grasa resulting in the chopping off two of her fingers of the left hand.
The crime was committed in the presence of Awadesh Singh A3.
Therefore, while A2, A3 and A4 cannot be convicted for the offence under Section 302/149 IPC all of them can be said to have shared the common intention, with Shatrugan Singh Al, for committing the murder of Shyamdeo Singh deceased.
The very fact of Al, A2, A3 and A4 came together armed with deadly weapons, at the night, to the house of the deceased and cause deadly injuries to the deceased and seriously wounded Rajmani Devi PW 13 and thereafter escaped together would undoubtedly go to show that all of them shared the common intention to murder Shyamdeo Singh.
They are, therefore, liable to be convicted with the aid of Section 34 IPC and learned counsel was unable to point out any impediment in the way of convicting them with the aid of Section 34 IPC instead of Section 149 IPC.
The evidence on the record has established beyond any doubt that Shatrugan Singh A 1 committed the murder of Shyamdeo Singh deceased by firing the pistol shot.
He has, therefore, rightly been 11 convicted by the High Court for the offence under Section 302 IPC and sentenced to suffer imprisonment for life.
His conviction for the offence under Section 27 of the Arms Act and the sentence of two years R. 1. is also justified.
We, maintain his conviction and sentence on both counts.
We, however, alter the conviction of Kapildeo Singh A2, Awadesh Singh A3 and Rampriya Yadav A4, for the offence under Section 302/149 lPC to the one under Section 302/34 IPC and sentence A2 and A4 each to suffer imprisonment for life (A3 being already dead).
We maintain the conviction of Kapildeo Singh A2 for the offence under Section 27 of the Arms Act as also the sentence of two years R.I. imposed on him for the said offence.
His conviction and sentence for an offence under Section 324 IPC as recorded by the High Court is also maintained.
Rampriya Yadav A4 has also been convicted for the offence under Section 326 IPC and sentenced to three years R.I.
We maintain his conviction and sentence for the said offence.
The conviction of A1, A2 and A4 for the offence under Section 148 is, however, set aside.
The sentence of imprisonment imposed on Al, A2 and A4 on different counts shall, however, run concurrently.
As a result of the above discussion, the appeal of Brij Bihari Singh A5, Ram Ekbal Singh A6 and Suresh Singh A7 is accepted and allowed.
Their conviction and sentence, as recorded by the High Court, are set aside.
They are given the benefit of the doubt and acquitted.
They are on bail.
Their bail bonds shall stand discharged.
The appeal of Al.
A2 and A4 except to the extent of the modification of the judgment under appeal, as indicated above, is dismissed.
All the three appellants Shatrugan Singh A1, Kapildeo Singh A2 and Rampriya Yadav A4 are on bail.
Their bail bonds shall stand cancelled.
They shall be taken into custody to under go the remaining period of their sentence.
G.N. Appeal partly allowed. [/INST] The appellants were charged with offences under Sections 302/ 149, 148,324 and 326 IPC for causing the murder of one IS ' and for causing grievous Injury to one `R '.
The Trial Court acquitted them.
On appeal by the State, the High Court reversed the order of acquittal.
Aggrieved by the High Court 's judgment, the appellants preferred the present appeal.
It was contended on behalf of the appellants that the version of the occurrence given by PW II in his statement recorded viz. exhibit P12 was materially different from the statement of PW 13 recorded as FIR (Ex.7) and gave a lie to the prosecution case rendering the prosecution case doubtful; that the High Court erroneously ignored the statement of PW 11 holding it inadmissible in evidence on the ground that it had been recorded during the investigation; and that due to the admitted enmity between the parties and the hostility of the Mukhiya of the Gram Panchayat towards Al and A2, it would not be safe to rely upon the testimony of the prosecution witnesses without looking for independent corroboration and in the absence of which the conviction of the appellants was not justified.
Partly allowing the appeal, this Court, HELD: 1.
In view of the admitted enmity between the parties and the close relationship of the witnesses inter se and the close relationship of the accused persons with one another, the possibility that 2 alongwith the actual assailants some others have also been implicated cannot be ruled out.
Prudence therefore requires that this court should look for corroboration of the testimony of PW 13 in respect of each of the accused before finding them guilty.
Since, the prosecution witnesses knew each of the accused, the non identification by any one of them of A5, A6 and A7 renders the presence of these accused and their participation rather doubtful.
It is not possible to say with any amount of certainty that they were actually involved in the commission of the crime along with the other accused persons.
Of course, PW 13 would not leave her own assailants or the assailants of her father, but it is not unknown that in view of the pronounced hostility between the parties, the close relations of Al, A2, A3 and A4, namely, accused A5, A6 and A7 may have also been roped in (8 H, 9 A C).
Though PW 10 and PW 12 did not recognize A4 as one of the accused but the participation of A4, who according to PW 13 had given her the blow with the grass chopping off her two ringers of the left hand, has been conclusively established.
The presence of A3, since deceased, is admitted by all the prosecution witnesses.
The testimony of PW 13, is consistent a bout the participation of Al and A2 alongwith A4 in the crime.
Inspite of long thy cross examination nothing has been brought out to discredit her testimony in so far as either the occurrence or the actual assault on her and the deceased is concerned.
The ocular testimony regarding the participation of the accused in the crime as well as the manner of assault and the nature of weapons used by A 1, A2 and A4 for causing injuries has received ample corroboration from the medical evidence and the recovery of the blood stained clothes and earth from the place of occurrence.
The FIR lodged promptly by the injured witnesses also lends enough assurance as regards the participation of A 1, A2, A3 and A4 in the crime.
Thus, the prosecution has established the case against Al, A2, A3 (since dead) and A4, beyond any reasonable doubt (9 D G) 3.
Since, the presence of A5, A6 and A7 and their participation in the crime is in doubt they are entitled to the benefit of doubt and giving them the benefit of doubt, their conviction and sentence are set aside and they are acquitted.
With their acquittal it is only the four appellants Al, A2, A3 and A4 against whom the prosecution can be said to have established its case beyond reasonable doubt Section 148 IPC under the circumstances would have no application.
Similarly, 3 Section 149 IPC would also not be attracted and A2, A3 and A4 cannot be convicted under Section 302 with the aid of Section 149 IPC.
From the prosecution evidence, however, it stands amply established that the three appellants, Al, A2 and A4 alongwith A3 (since dead) had come together armed with deadly weapons to the house of the deceased and while A I had fired pistol shot at the deceased resulting in his death, A2 had fired from his gun at PW 13 causing her a serious injury on her breast while A4 had caused her grievous injuries with a grass resulting in the chopping off two of her fingerson the left hand.
The crime was committed in the presence of A3.
Therefore, while A2, A3 and A4 cannot he convicted for the offence under Section 302/149 IPC all of them can be said to have shared the common intention with A 1 for committing the murder of the deceased.
The very fact that A 1, A2, A3 and A4 came together armed with deadly weapons, at the night, to the house of the deceased and caused deadly injuries to the deceased and seriously wounded PW 13 and thereafter escaped together would undoubtedly go to show that all of them shared the common intention.
They are, therefore, liable to be convicted with the aid of section 34 IPC.
(9 H, 10 A F) 5.
The evidence on record has established beyond any doubt that A 1 committed the murder of the deceased by firing the pistol shot.
He has, therefore, rightly been convicted by the High Court for the offence under Section 302 IPC and sentenced to suffer imprisonment for life.
His conviction for the offence under Section 27 of the Arms Act and the sentence of two years R.I. is also justified.
Hence, his conviction and sentence on both counts is maintained.
However, the conviction of A2, A3.
and A4, for the offence under section 302/149 IPC is altered to the one under Section 302/34 IPC.
A2 and A4 are sentenced to suffer imprisonment for life (A3 being already dead).
The convic tion of Al, A2 and A4 for the offence under Section 148 is, however, set aside.
The conviction and sentence of the appellants under section 27 of the Arms Act and under Sections 324 and 326 IPC are maintained.
The sentence of imprisonment imposed on A 1, A2 and A4 on different counts shall, however, run concurrently.
(10 H, 11 A C) 4 </s> |
<s>[INST] Summarize the following judgement: Appeal No. 6120 of 1983.
From the Judgment and Order dated 25.4.1983 of the Disciplinary Committee of the Bar Council of India in B.C.I. Tr.
Case No. 32 of 1982.
Bharat Sangal for the Appellant.
V.R. Reddy, Addl.
Solicitor General, T. Ratnam and D.N. Goburdhan for the Respondents.
by MOHAN, J. This is a statutory appeal under Section 38 of the Advocates Act of 1961.
The brief facts are as under: The respondent engaged the appellant as a counsel in suit No. 510 of 1964, this was in April, 1976.
The suit was ultimately compromised on 14.6.77.
It was ordered that out of the total amount lying with the court receiver, a sum of Rs. 64,000 shall be paid over to the plaintiff; the balance was to be paid to the respondent and possession of suit property was to be handed over to the respondent by the court receiver.
During the pendency of the suit the court receiver inducted one Usman Ghani Haji Mohamed as a tenant.
He filed CS No. 7 of 1978 praying for an interim injunction restraining the court receiver from handing over possession to the respondent.
That suit was continued.
After the compromise decree was passed on 14.6.77 the appellant who was the counsel for the respondent was requested to withdraw the amount lying with the court receiver and hand over the same to the 1009 respondent.
For this purpose a, letter of authorisation to enable the appellant to receive the amount was also issued, Pursuant to the letter of authorisation and instructions, a total amount of Rs. 50,379 was withdrawn by the appellant from the court receiver.
Out of this, he paid only Rs. 18,000 and the rest was not paid.
Therefore, the respondent preferred a. complaint before the Bar Council of India on 9.1.81.
The appellant was issued a notice by the Bar Council to which he submitted his reply.
On consideration of his reply and hearing the arguments, the Disciplinary Committee of the Bar Council of India, was of the view that the burden of proving the fact that the respondent had paid a sum of Rs. 50,379 lay on the appellant.
Certain receipts produced to evidence payment to the respondent were not accepted.
The plea of the appellant that the account books had been lost was held to be untrue.
Ultimately the appellant was suspended for a period of two years and further directed to pay a sum of Rs. 500 to the complainant (the respondent herein).
It is against this order the present appeal has been preferred.
Learned counsel for the appellant took us through the impugned order and urged that the Committee had not properly appreciated the evidence especially the receipts which were produced by the appellant to evidence the payment.
It is incorrect to hold that the receipt dated 8.8.77 was a suspicious document merely because the account books were not produced, it would not follow that the payments made by the appellant could be disbelieved.
We pointed out to the learned counsel for the appellant that the order under appeal is unexceptional and there was no case for interference.
We felt that the order of suspension of two years was not commensurate with the charges of misappropriation.
Therefore, we directed the issue notice to the appellant which came to be accepted by the learned counsel Mr. Bharat Sangal.
Inspite of the fact that the appellant has not chosen to appear, in order to make over the payment of the amount voluntarily.
Therefore, we are left with no option then to decide the case ourselves on merits.
The Disciplinary Committee of the Bar Council on a proper appreciation of the evidence disbelieved the so called receipts evidencing the payment.
It has come to the correct conclusion that the receipt dated 8th of August, 1979 was got up on a blank signed paper.
Hence, the due 1010 execution of the receipt had not been proved by the appellant.
Besides, the statement of the appellant that the account books had been lost in transit had been rightly disbelieved.
Under these circumstances this is a clear case wherein the misappropriation by the appellant has been fully established.
Once this conclusion is arrived at, the question is what is the punishment to be imposed? Advocacy is not a craft but a calling; a profession wherein devotion to duty constitutes the hall mark.
Sincerity of performance and the earnestness of endeavor are the two wings that will bare aloft the advocate to the tower of success.
Given these virtues other qualifications will follow of their own account.
This is the reason why legal profession is regarded to be a noble one.
But it cannot be allowed to become a sorriest of trades.
It will be useful to quote what Sharaswood said of this profession: A lower, without the most sterling integrity, may shine for a while with meteoric splendor; but his light will soon go out in blackness of darkness.
It is not in every man 's power to rise to eminence by distinguished abilities.
It is not in every man 's power, with fe w exceptions, to attain respectability, competence, and usefulness.
The temptations, which beset a young man in the outset of his professional life, especially if he is in absolute dependence upon business for his subsistence, are very great.
The strictest principles of integrity and honour are his only safety.
Let him begin by swerving from truth or fairness, in small particulars, he will find his character gone whispered away, before he knows it.
Such a one may not indeed be irrecoverably lost; but it will be years before he will be able to regain a firm foothold.
There is no profession in which moral character is so soon fixed as in that of the law; there is none in which it is subjected to severer scrutiny by the public.
It is well that it is so.
The things we hold dearest on earth, out fortunes, reputations, domestic peace, the future of those dearest to us, nay, our liberty and life itself, we confide to the integrity of our legal counselors and advocates.
Their character must be not only without a stain, but without suspicion.
From the very commencement of a lawyer 's career, let him cultivate 1011 above all things, truth, simplicity and candor.
They are cardinal virtues of a lawyer.
Let him always seek to have a clear understanding of his object: be sure it is honest and right and then march directly to it.
The covert, indirect and insidious way of doing anything, is always the wrong way.
It gradually hardens the moral faculties, renders obtuse the perception of right and wrong in human actions, weighs everything in the balance of worldly policy, and ends most generally, in the practical adoption of the vile maxim, "that the end sanctifies the means.
" Therefore an exacting standard is what is expected of an advocate.
This court has taken the view in M. Veerabhadra Rao vs Tek Chand, [1984] Supp.
SCC 571 as to how in such a case professional misconduct has to be dealt with.
In that case, the advocate committed forgery by attesting false affidavits which was held to be a serious misconduct.
This court pointed out the duties of the members of the bar in the following passage: "Legal profession is monopolistic in character and this monopoly itself inheres certain high traditions which its members are expected to upkeep and uphold.
Members of the profession claimed that they are the leaders of thought and society.
In the words of Justice Krishna Iyer in Bar Council of Maharashtra vs M.V Dabholkar, [19751 2 SCC 702 the role of the members of the Bar can be appreciated.
He said at page 718: The bar is not a private guild, like that of 'barbers, butchers and candlestick makers ' but, by bold contrast, a public institution committed to public justice and pro bono public service.
The grant of a monopoly licence to practice law is based on three assumptions: (1) There is a socially useful function for the lawyer to perform, (2) The lawyer is a professional person who will perform that function, and (3) His performance a,, a professional person is regulated by himself and more formally, by the profession as a whole.
The central function that the legal profession must perform is nothing less than the ad 1012 ministration of justice ( 'The Practice of Law is a Public Utility ' 'The Lawyer, the Public and Professional Responsibility ' by F. Raymond Marks et al Chicago American Bar Foundation, 1972, pp. 288 289).
A glance at the functions of the Bar Council, and it will be apparent that a rainbow of public utility duties, including legal aid to the poor, is cast on these bodies in the national hope that the members of this monopoly will serve society and keep to canons of ethics befitting an honorable order.
If pathological cases of member misbehavior occur, the reputation and credibility of the Bar suffer a mayhem and who, but the Bar Council, is more concerned with and sensitive to this potential disrepute the few black sheep bring about? The official heads of the Bar, i.e. the Attorney General and the Advocates General too are distressed if a lawyer 'stoops to conquer ' by resort to soliciting, touting and other corrupt practices.
If these are the high expectations of what is describes as a noble profession, its members must set an example of conduct worthy of emulation.
If any of them falls from that high expectation, the punishment has to be commensurate with the degree and gravity of the misconduct".
Accordingly, the punishment was increased to one of suspension for a period of five years, having regard to the gravity of the misconduct and keeping in view the motto that the punishment must be commensurate with the gravity of the misconduct.
In the case on hand admittedly the complainant (respondent) does not know English.
It is equally admitted that the appellant had withdrawn the money from the Court Receiver.
None of the correspondence addressed to the respondent mentioned about the receipt dated 8th of August, 1977.
The plea taken by the appellant based on the receipt is clearly false.
The appellant has been withdrawing the money over 14 years and he has illegally retained the amount.
Out of a sum of Rs. 50,379 which was admittedly withdrawn from the court receiver only Rs. 18,000 was paid on different occasions.
The said amount was also spread over and paid on 1013 different occasions.
On a direction of this court a sum of Rs. 10,000 had been deposited by the appellant which has been withdrawn by the respondent as per order dated 3rd September, 1991.
Still a sum of Rs. 22,379 is due.
In view of the established finding of misappropriation, we think the proper punishment will be the name of the Advocate must be struck off the rolls.
We order accordingly.
In addition to this the question arises, whether we can direct the refund of the sum of Rs. 22,379 which still is pending for the appellant.
Section 38 of the Advocates Act says as follows.
"Appeal to the Supreme Court: Any person aggrieved by an order made by the disciplinary committee of the Bar Council of India under Section 36 or Section 37 [or the Attorney General of India or the Advocate General of the State concerned, as the case may be], may within sixty days of the date on which the order is communicated to him, prefer an appeal to the Supreme Court and the Supreme Court may pass such order [including an order varying the punishment awarded by the disciplinary committee of the Bar Council of India] thereon as it deems fit: [Provided that no order of the disciplinary committee of the Bar Council of India shall be varied by the Supreme Court so as to Prejudicially affect the person aggrieved without giving him a reasonable opportunity of being heard]." "when it says, ' deems fit, it must be construed as to meet the ends of justice.
We feel the respondent should not be driven to a civil court for recovery of this amount even when the appellant has been found guilty by his own peers which we have also confirmed.
Therefore, we direct that there shall be a decree in favour of the respondent (complainant) for a sum of Rs. 22,379 together with interest at 9% per annum from the date of the complaint till the date of payment.
The appeal is dismissed in the above terms with costs of the respondent which is quantified at Rs. 3000 (Rs. three thousand only).
Before we part with the case we may usefully quote Harry R. Blythe 1014 (cited in "Great God the hour has come when we must clear The legal fields from poison and from fear; We must remould our standards build them higher, And clear the air as though by cleansing fire, Weed out the damning traitors to the law, Restore her to her ancient place of awe." V.P.R. Appeal dismissed. [/INST] The respondent was defendant in a suit.
He engaged the appellant as an Advocate.
The suit was compromised on 14.6.77 ordering that out of the amount lying with the Court receiver, plaintiff was to be paid a sum of Rs. 64,000 and the balance to be paid to the defendant respondent and possession of suit property to be handed over to the respondent.
During the tendency of the suit the Court Receiver inducted a tenant in a suit property.
The tenant filed a suit praying for an interim injunction restraining the court receiver from handing over possession to the respondent.
Tenant 's suit was continued.
After the compromise decree was passed on 14.6.77, the appellant withdrew a total amount of Rs. 50,379 from the Court receiver.
Out of the amount, appellant paid only Rs. 18,000 to the respondent.
On 9.1.81 the respondent filed a complaint against the appellant before the Bar Council of India.
On receiving a notice, the appellant submitted reply.
The Disciplinary Committee of the Bar Council rejected certain receipts produced to evidence payment to the respondent and also the plea of the appellant that the account books were lost.
The Committee suspended the appellant for a period of two years and further directed to pay a sum of Rs. 500 to the respondent.
Before this Court the order of the Disciplinary Committee of the Bar Council of India was challenged contending that the Committee did not properly appreciate the evidence and that it was incorrect to hold that the 1007 receipt dated 8.8.77 was a suspicious document merely because the account books were not produced.
Dismissing the appeal, this Court, HELD : 1.01.
Advocacy is not a craft but a calling , a profession wherein devotion to duty constitutes the hall mark.
Sincerity of performance and the earnestness of endeavor are the two wings that will bare aloft the advocate to the tower of success.
Given these virtues other qualifications will follow of their own account.
This is the reason why legal profession is regarded to be a noble one.
But it cannot be allowed to become a sorriest of trades.
Therefore.
an exacting standard is what is expected of an advocate.
[1010 C D, 1011 C] 1.02.
The members of the noble profession must set an example of conduct worthy of emulation.
If any of them falls from the high expectations, the punishment has to be commensurate with the degree and gravity of the misconduct.
[1012 E] Sharasawood on legal profession, Harry R. Blythe cited if? , referred to.
M. Veerabhadra Rao vs Tek Chand, [1984] Supp.
SCC 571, referred to.[1011 C] 2.01.
The appellant had withdrawn the money from the Court Receiver.
None of the correspondence addressed to the respondent mentioned about the receipt dated 8th of August, 1977.
The plea taken by the appellant based on the receipt is clearly false.
The statement of the appellant that the account books had been lost in transit cannot be believed.
Under these circumstances this is a clear case wherein the misappropriation by the appellant has been fully established.
[1012 F] 2.02.
The appellant has been withdrawing the money over 14 years and lit has illegally retained the amount.
Out of a sum of Rs. 50,379 which was admittedly withdrawn from the court receiver only Rs. 18,000 was paid on different occasions.
Still a sum of Rs. 22,379 is due.
[1012 H, 1013 A] 2.03.
In view of the established finding of misappropriation the proper punishment will be the name of the Advocate must be struck off the rolls.
[1013 B] 1008 2.04.
When Section 38 of the Advocates Act says, 'deems fit", it must be construed as to meet the ends of justice.
The respondent should not be driven to a civil court for recovery of this amount even when the appellant has been found guilty.
Therefore, it is directed that there shall be a decree in favour of the respondent (complainant) for a sum of Rs. 22,379 together with interest at 9% per annum from the date of the complaint till the date of payment 11013 F G] </s> |
<s>[INST] Summarize the following judgement: Appeal No. 372 of 1979.
From the Judgement and Order dated 25.5.1978 of the Delhi High Court in Civil Writ Petition No. 1494 of 1973.
Dr. N.M. Ghatate and D.N. Mishra (for J.B.D. & Co.) for the Appellant.
V.C. Mahajan, C. Ramesh and C.V. Subba Rao for the Respon dents.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
The appeal is preferred against the judgment of the Delhi High Court allowing the writ petition filed by the second respondent M/s Ferro Alloys Corporation Ltd. The writ petition was directed against the judgment and order of the Government of India, Ministry of Finance, dated September 19, 1973 in an appeal preferred under paragraph (9) of the Tax Credit Certificate (Exports) Scheme, 1965.
The second respondent is the manufacturer cxportcr of ferro manganese and chrome concentrates.
During the year 1964 65 (from February 28, 1965 to June 5, 1965) the second respondent entered into a number of agreements with the foreign buyers for the sale of the aforesaid two commodities.
The export was routed through the M. M.T.C. the appellant herein, to bring it within the system of private barter introduced by the Government of India with a view to encourage exports.
It would be appropriate to notice the essential features of the barter system in vogue during the relevant period at this stage.
The main objective behind the system was to provide a mechanism which would result in increased export of particular commodities which were ordinarily difficult to sell abroad and to destinations, in which the selling countries were not able to _Pet a foot hold.
This objective was sought to be achieved by linking them to imports of an equivalent or 15 lesser value of essential commodities, which, in any event, the country had to import.
All barter proposals were scrutinized in the first instance by the M.M.T.C. and then by the Barter Committee.
The essential stipulations were: "(i) All imports made under barter deals were subject to such sale price and distribution control as were laid down by the Government and (ii)All barter deals were to be routed through S.T.C./ M.M.T.C. unless otherwise decided upon by barter committee." As and when approval was given by the Government of India, a letter of indent used to be issued by the M.M.T.C. to the bartering firm or the local supplier, as the case may be.
(In this case, there was no bartering firm.
Ferro Alloys was directly sending the goods).
As far as purchase and sale contracts were concerned, the M.M.T.C. insisted that there should be one contract of sale between the local supplier and the M.M.T.C. and another contract of sale by the M.M.T.C. to the foreign buyer on principal to principal basis.
The foreign exchange so generated under this arrangement was the basis for issue of import licences, which were issued in the name of M.M.T.C. with the letter of authority in favour of the bartering firm or the local supplier, as the case may be.
This enabled the bartering firm/local supplier to import the approved commodity under its approval barter and thus he in a position to recoup the losses incurred by it in arranging the supply or in supplying, as the case may be of export commodities to the M.M.T.C.
It was agreed and understood that the ferro alloys should intimate the foreign buyer to enter into a direct contract with the M.M.T.C. treating it as the seller.
It was also agreed that G. R.I. Form prescribed by the Reserve Bank of India under the Rules framed under the Foreign Exchange Regulation Act (for accounting the receipt of foreign exchange) was to be signed by the M.M.T.C. showing it as the exporter and seller vis a vis the foreign buyer.
Letters of credit was also to be opened in the name of M.M.T.C.? which was to be assigned to the Feffo alloys.
This was done with a view to enable the Ferro alloys to receive the payment directly for the goods supplied to M.M.T.C.
The Shipping Bill, which is a document prescribed under the Customs Act, was also to be made out 16 showing M.M.T.C. as the exporter.
The transactions were gone through.
Dispute arose between the parties when the question of issuance of a tax credit certificate under Section 280 (Z) (C) of the Income Tax Act arose.
Sub section (1) of section 280 (Z) (C), as in force at the relevant time, read as follows "Tax Credit Certificate in relation to exports (1) Subjects to the provisions of this section.
a person who exports any goods or merchandise out of India after the 28th day of February, 1965, and receives the sale proceeds thereof in India in accordance with the Foreign Exchange Regulation Act, 1947 (7 of 1947), and the rules made thereunder, shall be granted a tax credit certificate for an amount calculated at a rate not exceeding fifteen per cent on the amount of such sale proceeds.
" A reading of the sub section shows that the tax Credit Certificate is issued to the person "who exports any goods or merchandise out of India after the 28th day of February, 1965, and receives the sale proceeds thereof in India in accordance with the Foreign Exchange Regulation Act, 1947 and the Rules made thereunder.
" Question, therefore, arose who is the person, in the case of this transaction, who can be said to have exported the goods and received the sale proceeds in the shape of foreign exchange.
The matter was taken in appeal before the Government of India under paragraph (9) of the Tax Credit Certificate Exports Scheme, 1965.
On an elaborate consideration of the bartering scheme and the several documents which came into existence in connection with the transactions between the parties, the Government of India held that the M.M.T.C. must be held to be the exporter for the purpose of Section.280(Z)(C) and not the Ferro alloys.
This order was challenged by Ferro alloys by way of a writ petition in the High Court.
The High Court allowed the writ petition on the following reasoning: "While the terms of the scheme of barter and the 17 arrangement between the exporter and the Corporation visualizes in theory that the contracts to be entered into between the exporter and the foreign buyers would be duly substituted by principal to principal contracts between the foreign buyer and the Corporation as well as the Corporation and the Indian supplier of the goods, so that the Corporation virtually gets substituted for the exporter for all external appearance, in actual practice, however, it appears that the substituted contracts are rarely executed and were, in any event, not executed in the present case at either of the two ends although the letter of credits were opened by the foreign buyers in favour of the Corpo ration and the shipments were made in some cases in the name of the Corporation on account of the exporter while in the others in the name of the exporter on account of the Corporation.
No consideration, however, passed between the Corporation and the exporter on account of any sale of the commodity to the Corporation.
The letters of credit being transferable are endorsed immediately on receipt in favour of the exporter by the corporation and the sale proceeds are directly realized by the exporters through their bankers and the commission of the Corporation agreed to is paid by the exporter to the Corporation.
The declaration under Section 12 of the Foreign Exchange (Regulations) Act in Form GR I contains the name of the Corporation as the exporter.
But the form lists the name of the exporters ' banker as the banker concerned.
" In other words, the High Court 's approach was that while for external appearances, the corporation was given out as the exporters, Ferro alloys was the real exporter for all purposes and it was Ferro alloys which earned and received the foreign exchange.
M.M.T.C. got only its commission of 2% and nothing more.
Alternatively held the High Court even if it is held that the documents executed between the parties had the legal effect of transferring title in the goods to and in favour of the Corporation, even so Ferro alloys must be deemed to be 18 the real exporter for the purposes of Section 280(Z)(C), having regard to the objective underlying the said section viz., providing an additional incentive to the real exporter.
The correctness of the said view is questioned in this appeal.
Though the second respondent, Ferro alloys Corporation Ltd., has been served, no one appears on its behalf.
We are, therefore, obliged to dispose of this appeal only with the assistance of the counsel for the M.M.T.C.
May be that there are factors in this case supporting the contentions of both the parties.
In such a case, we have to decide the question on a totality of relevant factors applying the test of predominance.
It is true that there was initially an agreement or contract between Ferro alloys and the foreign buyer for export of manganese and other goods but that was substituted and superseded by the two contracts entered into with respect to the very same goods.
One contract was between Ferro alloys and M.M.T.C. for sale of the said goods to and in favour of M.M.T.C. and the other was a sale by M.M.T.C. to the foreign buyer.
It is significant to notice that these contracts were on principal to principal basis.
Apart from this fact all the statutory documents viz., G. R.I. Form prescribed under the Foreign Exchange Regulation Act, 1947 and the shipping bill prescribed by the Customs Act were made out in the name of M.M.T.C. showing it as the exporter.
We have perused the Form G.R.I.Column 1 pertains to exporter 'sname.
Against this column is shown Minerals and Metals Trading Corporation of India Limited '.
The Form contains a declaration to be signed by the exporter declaring that he is the seller/consignor of goods and a further undertaking that they will deliver to the Bank mentioned in the said Form, the foreign exchange resulting from the export of the goods mentioned therein.
It was signed by the M.M.T.C. Letters of credit were opened in the name of M.M.T.C.
All this was done as required by the system of barter.
Ferro alloys availed of this system presumably because it was to its advantage.
In fact, it appears that it was not able to sell the said goods otherwise.
Be that as it may, whether by choice or for lack of alternative, it chose to route its goods through M.M.T.C.
Is it open to the Ferro alloys now to say that all this must be ignored in the name of "external appearances" and it must be treated as the real exporter for the purposes of Section 280(Z)(C).
It wants to be the gainer in both the events.
A case of "heads I win, tails you lose.
" As against the above circumstances, the factors appearing in favour of the 19 Ferro alloys are the following: The contract between the parties spoke of "commission" of two per cent payable to the M.M.T.C. Use of the expression "commission", it is pointed out, is indicative of the fact that M. M.T.C. was only an agent.
For the M.M.T.C., it is explained that it was one way of describing the difference between the export price and the sale price.
It is submitted that the said feature must be understood in the context of the totality of the scheme, which was not a mere commercial scheme but a scheme conceived in the interest of foreign trade, economy and balance of payments.
Ferro alloys also relied upon a certificate given by the foreign buyer stating that the goods in question were sold to it by Ferro alloys.
But as rightly pointed out by the Government of India, this certificate was obtained long after the relevant transactions were over and evidently to buttress its case with respect to the tax credit certificate.
Not much significance can be attached to it, also because it is in the teeth of the contracts signed by the foreign buyer with the M.M.T.C. with respect to the very same It is also pointed out that some of the documents required to be executed according to (he system of barter were not actually executed between the parties.
May be so.
The fact yet remains that the entire export was done through M.M.T.C. in accordance with the system of barter.
There is no half way house; either it is no '? barter system or it is.
This is an undisputed fact as are the several statutory documents made out in the name of M.M.T.C., referred to here in before.
On a consideration of all the relevant factors and circumstances, we are of the opinion that the M.M.T.C. must be held to be the exporter for the purpose of Section 280(Z)(C).
The entire system of barter and the several documents executed in that behalf including those required by statutory provisions cannot be explained away as mere "external appearances".
The Ferro alloys cannot come to M.M.T.C. when it is profitable to it and disavow it when it is not profitable to it.
It cannot have it both ways.
The title to goods passed to M.M.T.C. by virtue of the several documents executed between the parties.
Indeed, that was the fulcrum of the entire scheme of Barter.
We are also not convinced with the alternative reasoning of the High Court that even if it is held that the title to the goods passed to M.M.T.C., even so Ferro alloys must be held to be the real exporter, in view of the objective underlying Section 280(Z)(C).
If M.M.T. C. has acquired the title to the goods and is the exporter for all other purposes it equally the exporter 20 for the purposes Section 280(Z)(C).
There can he no dichotomy of the nature propounded by the High Court.
We are, therefore of the opinion that the High Court was not right in holding to the contrary.
The appeal is allowed.
The judgment and order of the High Court of Delhi is set aside and the order of the Government of India dated September 19, 1973 is restored.
The writ petition filed by the second respondent in the Delhi High Court is dismissed.
No costs.
G. N. Appeal allowed. [/INST] The Second Respondent (Ferro Alloys Corporation), manufac turer exporter of ferro maganese and chrome concentrates, entered into a number of agreement .
with foreign buyers for sale of the said commodity.
The export was routed through the appellant to bring it within the system of private barter introduced by the Government of India with a view to encourage exports.
The main objective of barter system was to provide a mechanism which would result in increased export of particular commodities which were ordinarily difficult to sell abroad where the selling countries were not able to get a foot hold.
This objective was sought to he achieved by linking them to exports of an equivalent or lesser value of essential commodities which in any event had to he imported.
As for as purchase and sale contracts were concerned, M.M.T.C. insisted that there should be one contract of sale between the local supplier and the M.M.T.C. and another contract of sale by the M.M.T.C. to the foreign buyer on principal to principal basis.
It was agreed that Ferro Alloys should intimate the foreign buyer to enter into a direct contract with M.M.T.C. treating it as the seller.
, Also, the G.R.I. form prescribed by the Reserve Bank of India under the Rules framed under FERA was to be signed by M.M.T.C. showing it as the exporter and seller.
Letters of credit was opened in the name of M.M.T.C. which was to be assigned to Ferro Alloys so that Ferro Alloys could receive the payment directly.
for the goods supplied to 13 M.M.T.C.
The shipping documents also showed M.M.T.C. as the exporter.
The transactions were gone through.
Dispute arose between the parties when the question of issuance of Tax Credit Certificate u/S 280ZC of the Income tax arose as to who could be said to have exported the goods and received the sale proceeds in the shape of foreign exchange.
The matter was taken in appeal before the Government of India.
It held that M.M.T.C. was the exporter for the purpose of S.280ZC.
Ferro Alloys challenged the said order before the High Court by way of a Writ Petition.
The High Court allowed the Writ Petition, and held that the real exporter was Ferro Alloys which earned and received the foreign exchange and M.M.T.C. got only its commission of 2% and nothing more.
Aggrieved by the judgment of the High Court, M.M.T.C. preferred the present appeal.
Allowing the appeal.
this Court, HELD: 1.
The entire export was done through M.M.T.C. in accordance with the system of barter.
There is no half way house; either it is not barter system or it is in accordance with the system of barter.
This is an undisputed fact as , are the several statutory documents made out in the name of M.M.T.C.
Thus M.M.T.C. is the exporter for the purpose of Section 280ZC of the Income tax Act, 1961.
The entire system of barter and the several documents executed in that behalf including those required by statutory provisions cannot be explained away as mere "external appearances".
Ferro alloys cannot come to M.M.T.C. when it is profitable to it and disavow it when it is not profitable to it.
It cannot have it, both ways.
The title to goods passed to M.M.T.C by virtue of the several documents executed between the parties.
Indeed,that was the fulcrum of the entire scheme of Barter.
(19 E F).
This Court is not convinced with the alternative reasoning of the High Court that even if it is viewed that the title to the goods passed to M.M.T.C., even so Ferro alloys must be held to be the real exporter, in view of the objective underlying Section 280ZC.
If M.M.T.C. has acquired the title to the goods and is the exporter for all other purposes it is equally the exporter for the purpose of Section 14 280ZC.
There can be no dichotomy of the nature propounded by the High Court.
(19 H, 20 A). </s> |
<s>[INST] Summarize the following judgement: (c) No. 509 of 199 1.
(Under Article 32 of the Constitution of India.) Dr. Rajiv Dhawan, V. Akshya Bali and Miss Kamini Jaiswal for the Petitioner.
M.C. Bhandare P. Chidambaram, Sushil Kumar Jain, Ms. Meenakshi Arora, S.S. Jauhar, Aruneshwar Gupta and E.C. Agrawala for the Respondents.
The Judgment of the Court was delivered by 29 B.P. JEEVAN REDDY, J.
Tarun Bharat Sangh, a voluntary Organisation interested inter alia in protection of environment, approached this court complaining that widespread illegal mining activity was going on in the area declared as Tiger Reserve in Altar District of Rajasthan.
In the interest of ecology, environment and rule of law, it said, the activity should stop.
The petitioner 's case is that the area wherein the illegal mining is going on has been declared as a tiger reserve under Rajasthan Wild Animals and Birds Protection Act, 195 1, as a Sanctuary and a National Park under Wild Life (Protection) Act, 1972, and as protected forest under the Rajasthan Forest Act, 1953.
These various notifications, said the petitioner, prohibit all or any mining activity and yet the Government of Rajasthan had granted hundred of Licences for mining marble, dolomite and other minerals in late 1980s, contrary to law.
After issuing notices to the Government of Rajasthan and the mine owners (which expression is used in this order to denote lessees and licences under the leases and licences granted by the State of Rajasthan), this court gave certain directions on October 11, 1991.
An interlocutory direction was issued to the effect that "no mining operation of whatever nature shall be carried on in the protected area".
A Committee under the chairmanship of Shri M.L. Jain, J., former Judge of the Rajasthan High Court was appointed to ensure due observance of the various Acts and Notifications issued there under with respect to the said protected area.
In particular, the committee was asked to demarcate the area declared as protected forest under the notification dated January 1, 1975 issued by the Rajasthan Government under section 29 of the Rajasthan Forest Act.
This demarcation was felt necessary in view of the ambiguity prevailing with respect to the precise boundaries of the protected forest declared as such under the notification aforesaid.
Petitioner 's case was that no mining lease/ licence can be granted within the protected forest except with the prior permission of the Government of India Section 2 of the and Rule 4(6) of Rajasthan Minor Mineral Concession Rules) and that no such permission was obtained in fact.
By its order dated November 26, 1991, the court clarified that the order dated October 11, 1991 was not intended to permit the mine 30 owners to carry on their mining activity where such activity was prohibited by any Act, Rule or Notification having the force of Law.
In effect, the order said, it meant to prohibit and not to permit the mining activity.
In its order dated May 14, 1992, the court clarified the meaning (if the expression "protected area" used in the order dated October 11, 1991.
The expression, it was clarified, was intended to and does refer to all the areas which have had legal protection against non forest activities that devastated the environment including poaching, mining, felling of trees etc.
It was further clarified that once an area is declared as protected forest, it becomes a protected forest notwithstanding the fact that a part of that area is waste.
The idea behind declaring an area as protected forest, it was pointed out, is not merely the protection of the existing forest but also afforestation.
The Committee submitted its report dated September 28, 1992.
The Report states that the Committee verified and cross checked the tracing maps furnished by the Forest Department with the maps furnished by the Revenue Department and found that both of them Watched.
After looking into the khasra numbers mentioned in the notification dated January 1, 1975 and all other material placed before it by the parties including the mine owners, the report states, the committee identified the areas declared as protected forest.
The report indicates that the areas declared as protected forest under the said notification was not in one contiguous block but was comprised in several blocks or areas, as it may be called.
As per the said Report, 215 mines mentioned in appendix A to the Report fall completely within the areas declared as protected forest while 47 mines mentioned in Appendix B to tile Report fall partly inside and partly outside the areas declared as protected forest.
(These 262 mines are referred to hereinafter as. "Listed mines").
To this extent.
there is no difference of opinion among the members of the committee.
Differing opinions have, however, been expressed when it came to making of recommendations for the consideration of this court.
The Chairman, Shri Justice M.L. Jain recommended that the mining operations in all the 215 mines listed in appendix A should be stopped forthwith and that the mining operations in the 47 mines listed 31 in appendix B should be stopped forthwith to the extent they fell within the area declared as protected forest.
Three other members of the Committee (Collector.
Always.
the Chief Conservator of Forest and Chief Wild Life Warden, Rajasthan and the Additional Director of Mines) differed from the Chairman.
They suggested that this Court be pleased to accept the representation of the State Government (appended as appendix C to the Report) wherein it was prayed that the area covered by the mines should be allowed to be excluded from the protected forest, in lieu of which the Government of Rajasthan will provide an equal extent of area for being included in the protected forest.
An application has also been filed by the State of Rajasthan to the same effect.
It is stated therein that the protected forest area measures about 800 sq.
km., whereas the 262 mines mentioned in appendix (A) and (B) cover only an area of 2.08 sq.
In the interest of economy of the State, industry and the workers engaged therein, it is submitted.
an extent of 5.02 sq.
including the area covered by the said mines be allowed to be deleted from the protected forest.
In lieu thereof, the Government of Rajasthan offered to place an equal extent for the purpose of being declared as protected forest.
It is submitted further that when the mining leases with respect to the said 262 mines were granted.
the Government of Rajasthan was under the impression that the said mines did not fall within the protected forest area, Indeed, it was so certified by the Forest Department.
This happened because of want of clarity about the precise boundaries of the areas declared as protected forest.
The mine owners too have filed objections to the Report of the Committee, to the recommendation made by the Chairman of the Committee and submitted alternately that the proposal of the Government of Rajasthan be.
accepted and they be allowed to continue their mining operations.
At this stage, we directed the Government of India to file an affidavit making their stand clear in the matter.
Accordingly, an affidavit sworn to by Shri section P. Singh, Deputy Director in the Ministry of Environment and Forest, Project Tiger, New Delhi has been filed.
It is stated in the affidavit that the area declared as project tiger/tiger reserve is covered by notifications issued under the Rajasthan Forest Act, Environment (Protection) Act, 1986 and Mines and Minerals 32 (Regulation and Development) Act, 1957.
It is submitted that the applies not only to reserve and protected forest but to all areas recorded as forest in Government records.
Mining is non forestry activity and, therefore cannot be carried on in the areas to which applies without the prior approval of the Government of India.
It is stated further that on May 7, 1992, the Government of India has issued the final notification under Section 3 of the Environment (Protection) Act, 1986 prohibiting all mining activity, except with the approval of the Government of India, in the protected forest, Sariska National Park and certain areas of Alwar District mentioned in the Notification.
Since no permission is obtained under any of the said enactments with respect to the said 262 mines, it is submitted, no mining operations can be carried on in the area until and unless they obtain the permission of the Central Government.
Indeed.
the prohibition extends not merely to protected forest areas but to the entire area declared as tiger reserve and as Sariska National Park.
A copy of the notification dated May 7, 1992 issued under Section 3 of the Environment (Protection) Act is appended to the affidavit.
It is necessary to notice the relevation portions of the said notification.
They read: "Now, therefore, in exercise of the powers conferred by sub section (1) and clause (v) of sub section (2) of section 3 of the Environment (Protection) Act, 1986 (29 of 1986) read with rule 5 of the Environment (Protection) Rules, 1986, the Central Government hereby prohibits the carrying on of the following processes and operations, except with the prior permission, in the areas specified in the Table appended to this Notification: (i) Location of any new industry including expansion/modernisation; (ii) (a) All new mining operations including renewals of mining lease.
(b) Existing mining leases in sanctuaries National Park and areas covered under Project Tiger and; or 33 (c) Mining is being done without permission of the competent authority; (iii)Cutting of trees; (iv) Construction of any clusters of dwelling units, farms houses, sheds, community centers, information centres and any other activity connected with such construction (including roads a part of any infrastructure relating thereto); (v) Electrification(laying of new transmission lines).
TABLE Areas where carrying on of processes and operations without permission is prohibited.
(i) all reserved forests ,protected forests or any other area shown as "forest" in the land records maintained by the State Government as on the date of this notification in relation to Gurgaon District of the State of Haryana and the Alwar District of the State of Rajasthan.
(ii) all areas shown as (a) Gair Mumkin Pahar, or (b) Gain Mumkin Rada, or (c) Gain Mumkin Behed, or (d) Banjad Beed, or (e) Rundh In the land records maintained by the State Government as on the date of this notification in relation to Gurgaon District of the State of Haryana and the Alwar district of the State of Rajasthan.
34 (iii)all areas covered by notifications issued under sections 4 and 5 of the Punjab Land Preservation Act, 1900 as applicable to the State of Haryana in the district of Gurgaon upto the date of this Notification.
(iv) all areas of Sariska National Park and Sariska Sanctuary notified under the Wildlife (Protection) Act, 1972 (53 of 1972). " (emphasis added) We have heard Dr. Rajiv Dhawan, counsel for the writ petitioner, Shri Aruneshwar Gupta, counsel for the State of Rajasthan and S/Shri M.C. Bhandare and P. Chidambaram, council appearing for the mine owners.
Certain other mine owners have intervened.
We permitted them to file their written Submissions.
Dr. Rajiv Dhawan submitted that in view of the earlier orders of this court and the report of the committee, all the mining activity in all the areas declared as protected forest and in the areas notified under the notification dated May 7, 1992 should stop forthwith.
Indeed, he says, it should have stopped long ago.
Continuance of mining activity is in gross contempt of this court and constitutes a clear violation of its orders.
The Government of Rajasthan is equally guilty of contempt in as much as it has come forward with an application for directions instead of taking stringent action forthwith to stop the mining activity in all the listed mines.
As a matter of fact, he says, the Government of ' Rajasthan appears to be colluding with the mine owners which is evident from the dissent expressed by the officers of the Rajasthan Government (who were members of the Committee appointed by this Court) to the straight forward and logical recommendation of the Chairman of the Committee.
The Government of India 's affidavit places the matter beyond doubt.
Not only the mining operations in the listed mines should be injunction forthwith but the mine owners and the Government of Rajasthan should be proceeded against for contempt says the counsel.
He pointed out further that the mining leases granted by the Government of Rajasthan are ex facie illegal inasmuch as prior permission of the Central Government was admittedly not obtained for the said leases as required by the and Rule 4(6) of the Rajasthan Minor Mineral Concession Rules.
Prohibition of 35 mining flows from the provisions of the as, well as the notification issued under the Environment (Protection) Act in May, 1992.
Shri Aninseshwar Gupta, learned counsel for the State of Rajasthan submitted that the Rajasthan Government and its officers were not aware, when they granted leases/licences in respect of listed mines that they fell within the area declared as protected forest.
Indeed, a certificate was issued by the Forest Department to the effect that they did not fall within the protected forest area.
It was thus a bonafide grant.
The boundaries of the areas declared as protected areas were not clearly known nor were they demarcated on the spot.
Of course, it now turns out that the said listed mines fall wholly or partly within the protected forest but for the reasons mentioned in the application filed by the Government of Rajasthan, the area of five sq.
kilometers should be allowed to be deleted from out of the protected forest subject to the conditions offered in the said application.
Counsel says that the Government of Rajasthan is neither colluding with the mine owners nor has it any intention to flout the orders of the court.
It is prepared to abide fully by the orders of this court.
It has already shut down 54 mines.
It is also prepared to shut down all the other listed mines if this court so directs.
It is.
however, making an earnest request that it may be allowed to exclude the areas covered by these mines from the protected forest in public interest.
Learned counsel has placed before us map, said to have been prepared by the officers of the Rajasthan State, showing the areas covered by tiger reserve, sanctuary, protected forest and the location of the listed mines.
Shri M.C. Bhandare, learned counsel appearing for the mine owners in Mallana village submitted that demarcation of protected forest by the committee is defective, erroneous and unacceptable for the various reasons set out in the objections filed by his clients.
It is technically imperfect.
The very description of the boundaries in the notification dated January 1, 1975 is vague and misleading.
It mentions old khasra numbers which were not in vogue in the year 1975.The map produced by the Government of Rajasthan, for the perusal of this court, delineating the tiger reserve is equally incorrect besides being unauthenticated.
It is not know who prepared the map and on what basis.
The mine owners do not admit that their mines fall within the 36 tiger reserve or within the protected forest areas.
Closing down hundreds of mines employing thousands of workers, wherein a large amount of capital is invested would disturb the economy of the State besides affecting the supplies of marble and other minerals.
No public purpose would be served by such closure.
The mine owners are not guilty of contempt of this court inasmuch as their mines do not fall within the protected forest or protected area.
Even otherwise, it appears that the areas declared as protected forest are in disparate patches away from each other.
Mines are located not only within the areas declared as protected forest but also in the adjacent areas which are not declared as protected forest.
In such a case, no purpose is served by closing the mines within the protected forest inasmuch as the mining activity in the mines located outside the protected forest will continue uninterrupted.
The purpose of ecology and environment would not be served by such a situation.
Moreover, the notification issued by the Government of Rajasthan on January 1, 1975 declaring certain areas as protected areas is only a provisional or an interim notification.
It is not a final notification.
The final notification is yet to be issued.
Since there is no forest in the areas covered by the mines nor is any afforestation possible in such areas, they should be allowed to be deleted from the protected forest in the final notification to be issued.
Shri P. Chidambaram, learned counsel appearing for some of the mine owners submitted that it is unsafe for this court to act upon and/ or to pass any orders based upon the map produced by State of Rajasthan showing the tiger reserve and identifying the areas declared as protected forest.
It is not known who prepared the said map and on what basis and for what purpose.
The declaration as tiger reserve by the Government of India is not under any statutory authority.
The area declared as tiger reserve and the area notified as sanctuary under Section 18 of the Wildlife (Protection) Act, as also the area declared as National Park under Section 35 of the Wildlife (Protection) Act are not co extensive with each other.
More particularly, the areas declared as protected forest are not co extensive with the area declared as tiger reserve, sanctuary or National Park.
It is not known how many areas declared as protected forest fall within tiger reserve and how many in the sanctuary and/or National Park.
The Government of India has not prepared or submitted any map showing these various areas.
None of 37 the mines fall within the sanctuary or the National Park, not even within project tiger.
In such a situation, any orders stopping the mining operations merely on the basis of the report of the commission or the unauthenticated map produced by the Government of Rajasthan would be wholly unsafe.
The proper course would be to appoint a committee, or to call upon the Government of India, to identify the areas declared as tiger reserve, sanctuary, National Park and the areas declared as protected forest indicating at the same time the location of mines, if any, in the said areas.
Only then will the correct position be known.
Counsel also submitted that the proposal of the Government of Rajasthan merits acceptance by this court.
Both the counsel appearing for the mine owners affirmed that the mine owners are not acting in a spirit of adversarial litigation but in a spirit of cooperation.
They are as much interested in protecting the environment and ecology as the petitioner but, they say, it should not be a one sided affair.
At the outset we may be permitted to clarify an aspect.
This is not a case where we are called upon to shut down an activity being carried on lawfully, in the name of higher considerations of ecology and environment.
This is a simple case where we are called upon to ensure observance of enacted laws made by the State to protect the environment and ecology of the area.
In such a case, we need not be oppressed by considerations of balancing the interests of economy and ecology.
Mat has already been done by the Legislature and Parliament.
The grievance of tile petitioner is against the executive.
Charged with the delegation of implementing the laws of the land, the executive is yet failing to do its duty by law and by people, when faced with the might of money; respect for law is dissolving into respect for gammon says the petitioner.
Let us therefore first find out which laws are violated, if any, and then decide, what are the proper directions to make.
(A) Section 2 of the Forest(Conservation)Act read with Section 29 of the Rajasthan Forest Act and Rule 4 (6) of the Rajasthan Minor Mineral Concessions Rule.
Section 29 of the Rajasthan Act empowers the Government to declare any forest land or waste land to be a protected forest.
Subsection (1) says that, "the State Government may by notification in the official gazette declare the provisions of this chapter applicable to any 38 forest land or waste land which is not included in a reserve forest hut which is the property of the State Government or over which the State Government has proprietary rights" It is not disputed in this case that the land over which the listed mines (mines listed in Appendix A and to the Report of the Justice M.L. Jain Committee) are situated is the property of the State Government.
The State Government is empowered not only to declare any forest land as a protected forest but also any waste land as such.
The idea evidently is not only to protect the existing forest hut also to bring waste lands under schemes of afforestation.
Once declared as protected forest the distinction between forest land and waste land disappears.
The entire area becomes a protected forest.
Before, however, declaring any forest land or waste land as a protected forest, the State Government is obliged to make an enquiry into the nature and extent of the rights of the State Government and of private persons in or over the forest land or waste land proposed to be declared as protected forest and record the same at a survey or settlement or in such other manner as the State Government thinks sufficient.
This is the requirement of sub section (3).
However, the proviso to sub section (3) empowers the State Government, in case it thinks that such an enquiry and record will occupy such length of time as in the meantime to endanger the rights of the State Government, it may, pending such enquiry and record, declare a particular area to be a protected forest without, of course, abridging or affecting any rights of individuals or communities.
Sub section (4) empowers the State Government to delete any area from out of the area declared as protected forest.
Reading Section 29 as a whole, it appears, the normal rule is to make an enquiry into the rights of the State Government and of the private parties over the land proposed to be declared as protected forest in the first instance, prepare a record thereof and then declare it as a protected forest.
But in case of urgency it is open to the State Government to issue such notification forthwith subject, of course, to the existing rights of individuals and communities in the area concerned.
In this case, the notification dated January 1, 1975 issued by the Government of Rajasthan appears to be one issued under the proviso to sub section (3).
Sri Bhandare submits that a notification issued under the proviso to sub section (3) is only an interim or provisional notification and that after conducting the enquiry contemplated by the main limb of sub section,(3) a regular and proper notification under sub section (1) has still to be issued.
Until then, he submits, the declaration as protected forest does not take effect.
We are not 39 prepared to agree.
Section 29 contemplates only one notification declaring an area as a protected forest.
Whether issued after a normal enquiry and record or without enquiry or record, Section 29 contemplates only one notification and not two in any event.
Therefore, the notification issued is the valid and effective one.
It is not a provisional or preliminary notification.
It is not also the case of the mine owners that leases or licences in their favour were granted prior to January 1, 1975.
All of them were granted in the middle of or in the late eighties.
The savings clause contained in the proviso to sub section (3) does not avail them.
In view of the ambiguity prevailing with respect to the precise boundaries of the area or areas declared as protected forest under the notification dated January 1, 1975, the Justice M.L. Jain committee was appointed by this court to demarcate and identify the areas declared as protected forest under the said notification, with the help of the Revenue and Forest Departments of the State of Rajasthan.
It has done so.
Besides being headed by a former Judge of the Rajasthan High Court, it was composed of high officials of the Government of Rajasthan.
They have undertaken an elaborate and intensive exercise and have demarcated the areas declared as protected forest with the help of the official maps and records.
We see no reason not to accept the said report.
The several objections submitted by the mine owners cannot prevail over the official maps and records.
They were represented before the Commission at the time of the said exercise.
It is significant to notice that the dissent note appended by the officers of the Government of Rajasthan was not with respect to the demarcation or identification of areas declared as protected forest, but only with respect to the closure of the mines operating within those areas.
The report of the committee is accordingly accepted herewith.
Once an area is declared as a protected forest, it comes within the purview of the .
It becomes a forest land within the meaning of Section 2.
The effect of this position is that no non forest activity can be carried on in the said area except with the prior approval of the Central Government.
Even the State Government cannot carry on any such non forest activity in the said area without such prior approval.
That the mining activity amounts to non forest purpose is beyond dispute.
Thus, the grant of mining leases/licences 40 and their renewal by the State Government.
without obtaining the prior approval of the Central Government, in respect of the mines situated within the protected forest, after January 1, 1975 is contrary to law.
All the mines listed in Appendix A to the committee 's report do fall within the areas declared as protected forest while the mines listed in Appendix B fall partly within and partly outside such areas.
According to Rule 4(6) of the Rajasthan Minor Mineral Concession Rules, 1986 too, no mining )ease could have been granted or renewed within the forest "without clearance from the Central Government.
in accordance with the and the Rules made thereunder".
Admittedly, no such prior approval or clearance of Central Government was obtained.
The Chairman of the Committee, Sri justice M.L. Jain has recommended that 215 mines mentioned in appendix A to his report, which are situated wholly within the protected forest should he closed forthwith.
There can hardly be any valid objection in law to the said recommendation.
Similarly, with respect to 47 mines mentioned in appendix B to the report, the learned Chairman has recommended that they should be closed forthwith in so far as they fall within the protected forest.
To this recommendation also, there can be no valid objection in law.
At this stage, it would be appropriate to consider the application filed by State of Rajasthan for permission to delete an extent of 5.02 sq.
from out of the protected forest.
The application is confined only to 208 mines out of 262 listed mines.
54 mines mentioned in para (9) of the application are proposed to be closed: indeed, according to the counsel for the State, they have already been closed.
Reliance is placed upon the order dated May 14, 1992 in this behalf.
It is pointed out that the said order does contemplate such modification, of course, with the permission of this Court and for valid reasons.
It is pointed out that for such deletion or modification, the prior approval of the Central Government is not required.
No such requirement is prescribed either in the or Rajasthan Forest Act, it is submitted.
In this context, the submission of Sri M.C. Bhandare may also be considered.
He says that there are a number of mines around and outside the area declared as protected forests and that no purpose would be served by merely closings the mines within the protected forest and leaving those outside unhindered.
He says that all these mines within and outside, are within the tiger reserve, as per the Rajasthan Government map though outside the sanctuary.
May be so.
41 But it cannot he forgotten that purpose of Forest Acts and purpose of Environmental Protection Acts may not always be the same.
Such closure may not serve the environmental purpose assuming that factual situation asserted by the learned counsel is true, upon which aspect we need not and do not make any pronouncement but it may serve the forest purpose.
Be that as it may, both the purposes appear to be intertwined in this case.
In this situation, we think it appropriate that the merits of the said proposal be examined by the Ministry of Environment and Forests, Government of India and a report submitted to this Court, within three months from today.
Orders will be passed on the application for directions filed by the State of Rajasthan after considering tile said report.
(B) Notification issued by the Central Government under Section 3 of the Environment (Protection) Act, 1986 on May 7, 1992: This notification expressly prohibits the carrying on of the mining operations, except with the Central Government 's prior permission, in the "areas covered under project tiger".
The prohibition extends to existing mining leases in Sanctuaries/National Park.
All mining operations are prohibited therein.
The table appended to the notification particularises the areas where carrying on the processes and operations aforesaid is prohibited without the permission of the Central Government.
They include all reserve forest.
protected forest or any other area shown as forest in the land records maintained by the State Government as on the date of the issuance of tile said notification in relation to inter alia Alwar district of the State of Rajasthan.
The table also includes "all areas of Sariska National Park and Sariska Sanctuary notified under the Wildlife (Protection) Act, 1972 (53 of 72)".
we cannot agree with the learned counsel for mine owners that the area declared as project tiger in the Alwar district has not been properly identified or that it is not properly identifiable.
Both the State Government and Central Government have demarcated them in exactly identical manner.
The map produced before us by the State Government is a detailed plan, prepared with great care.
There is no reason to presume that it is not prepared by competent persons on the basis of the relevant material.
The map delineates the area declared as sanctuary within the area declared as tiger reserve.
The location of listed mines is clearly marked.
They fall within the tiger reserve 42 though outside the sanctuary.
A publication by the Forest Survey of India.
Dehradun.
Ministry of Environment and Forest, Government of India,entitled 'Status of Forest covering in Project ' Tiger Reserve has been placed before us.
At pages 92 94.
we find the map of Sariska 'Tiger reserve, Rajasthan.
The boundaries, shape and dimensions of the said map tally fully and perfectly with the map prepared by the State of Rajasthan.
Thus, there can be no legitimate dispute with respect to the correctness of the map produced by Government of Rajasthan or with respect to the area declared as tiger reserve.
Both the State Government and Central Government have delineated it.
May be that the declaration as tiger reserve was without any statutory authority and is relatable to the executive power of the Union of India but tile notification issued under Section 3 of the Environment (Protection) Act puts the stamp of statutory authority over it.
The Central Government has specifically stated in its affidavit that no "prior permission was obtained with respect to the mines located within the tiger reserve.
On this ground, the mining operations being carried on in the tiger reserve, including the listed mines also, appears to be contrary to law of course, this notification has come only in May, 1992.
Now coming to the appropriate directions to be made in this behalf, it should be borne in mind that there is a distinction between the listed mines and those mines which are situated outside (he protected forest but within the tiger reserve.
So far as the listed mines are concerned, the very grant and renewal of those mining lease/licences is itself illegal.
These areas were declared as protected forest is far back as January 1, 1975.
If so no mining lease or licence could have been granted in respect of the mines situated within the protected forest without clearance from the Central Government as required by Rule 4(6) of the Rajasthan Minor Mineral Concession Rules and without prior approval of the Central Government under section 2 of the .
It is an admitted fact that all these leases and licences were granted after 1980.
There is also (he order of this Court dated October 11, 1991 directing that "no mining operation of whatever nature shall be carried on in the protected area" Protected area does, without a doubt, include the areas declared as protected forest).
The recommendation of the Chairman of the Committee, Sri justice M.L. Jainisal so to the effect that the mining activity in the listed mines should be stopped forthwith.
Even with respect to the mines in appendix B (which partly full within and partly outside the protected 43 forest areas) the recommendation of the Chairman is that they should he closed to the extent they fall within the protected forest.
The Central Government has also taken the stand that the mining activity in these areas is illegal and cannot PO on.
As against this is the plea of the Rajasthan Government and of the mine owners that the area covered by these mines should be allowed to be deleted/ excluded from the protected forest in lieu of their offer to include an equal extent of area within the protected forest.
We do not propose to express any opinion on this plea of the Rajasthan Government and the mine owners for the reasons recorded hereinbefore.
We would like to have the opinion of the Central Government on the said plea or proposal, as it may be called, Only thereafter shall we consider the request of the State Government.
But is on today, the situation is that the mining activity in the listed mines (according to the Rajasthan Government, it has already stopped all mining activities in 54 mines specified in its application) is illegal and has to stop.
May be that this will have the effect of mining to halt the activity involving a good amount of capital and a large number of workers.
But in view of the inherent illegality attaching to them, indicated hereinbefore.
we have no option but to close them.
We cannot permit them to operate.
If and when the central government recommends the plea of the State Government and any of the areas already declared as protected forest are deleted with leave of this court, can the mining activity go on in these areas.
It is accordingly directed that all mining activity in the mines mentioned in appendix A to the report of Sri justice M. I .
Jain Committee shall stop forthwith.
Similarly, the mining activity in the mines mentioned in appendix B to the said report shall also stop forthwith in so far as they fall within the protected forest areas. 'The plea of the Rajasthan Government and of ' the mine owners shall he considered by Department of Forest and Environment, Government of India and report submitted to this Court within three months.
Now coming to the mines located outside the protected forest areas but within the tiger reserve, it cannot be said that the very grant of mining lease/licence is itself illegal in their case unless, of course, such mining lease/ licence or its renewal has been granted on or after May 7,1992 (particulars in this behalf are not made available to us).
The illegality has attached to these mines by virtue of the notification issued by the central government under Section 3 of the Environment 44 (Protection) Act on May 7,1992.
In the circumstances, it is directed that the mining activity in the mines situated outside the protected forest areas but within the tiger reserve may continue for a period of four months.
Within this period it shall be open to the concerned mine owners to approach the Department of Forest and Environment, Government of India for permission to continue their mining operations.
They can continue the mining operations in these mines only if the central government permits them and subject to the orders of the central government in that behalf.
If no permission is obtained from the central government within the said period of four months, the mining activity in the entire area declared as tiger reserve shall stop and cease on the expiry of four months.
List this matter for further orders on July 12, 1993. [/INST] The petitioner, a voluntary Organization Interested In protecting environment, approached this Court under Article 32 of the Constitution of India complaining of the widespread illegal mining activity going on in the area declared as a Tiger Reserve In Alwar District in the State of Rajasthan.
It prayed that in the interest of ecology, environment and rule of law, the activity should stop.
It was alleged that the area where the mining activity was carried on was declared as a tiger reserve under the Rajasthan Wild Animals and Birds Protection Act, 1951; as a sanctuary and a National Park under the Wild Life (Protection) Act, 1972 and as protected forest under the Rajasthan Forest Act, 1953, and that these notifications prohibit all or any mining activity, and yet the State Government had granted hundreds of licences for mining marble, dolomite and other materials and that such section was contrary to law.
This Court Issued notices to the State Government and the mineowners respondents In the Writ Petition.
An interlocutory direction was also made that no mining operation be carried on in the protected 22 area.
The Court also appointed a Committee under the Chairmanship of a Former Judge of the State High Court to ensure due observance of the various Acts and Notifications that had been issued in respect of the protected area.
The Committee was requested in particular to demarcate the area declared as protected forest under the notification dated January 1, 1975 issued by the Rajasthan Government under Section 29 of the Rajasthan Forest Act.
The Committee submitted its Report dated September 28,1992, stating that the committee had verified and cross checked the tracing maps furnished by the Forest Department with the maps furnished by the Revenue Department and found that both of them matched, and that after looking into the Khasra numbers mentioned in the notification dated January 1, 1975 and the other material placed before it by the parties, the Committee identified the areas declared as protected forest.
It stated that they were not in one contiguous block but were comprised in several blocks or areas.
The 215 mines mentioned in Appendix A to the Report fall completely within the areas declared as protected forest while 47 mines mentioned in Appendix II to the Report fall partly inside and partly outside the areas declared as protected forest.
There was no difference of opinion among the members of the committee regarding the location of the mines but only with respect to the question whether they should be directed to he closed.
The Chairman recommended that the mining operations in all the 215 mines listed in Appendix A should be stopped forthwith and the mining operation in the 47 mines listed in Appendix B be stopped forthwith to the extent they fell within the area declared as protected forest.
The three other Members of the Committee viz. Collector, Chief Conservator of Forest and Chief Wildlife Warden and Additional Director of Mines differed from the Chairman.
They suggested that this Court should accede to the representation of the State Government (Appendix IC ') that the area covered by the mines should be allowed to be excluded from the protected forest, in lieu of which the state Government undertook to provide an equal extent of the area for being included in the protected forest.
The Sate Government 's application to the Court was also to the same effect.
It was stated therein that the protected forest area measures about 800 23 Sq.
kilometers whereas the 262 mines mentioned in Appendixes 'A ' and `B ' cover only an area of 2.08 Sq.
kilometers and that in the interest of the economy of the State, industry and workers, an extent of 5.02 Sq.
kilometers including the area covered by the said mines be allowed to be deleted from the protected forest, the State Government offering to place an equal extent for the purpose of being declared as protected forest.
The mine owners also riled objections to the Report of the Committee and requested that they he allowed to continue their mining operations.
The Government of India which was directed to file an affidavit.
riled the same and stated that the area declared as project tiger/tiger reserve was covered by notification issued under the Rajasthan Forest Act, Environment Protection Act, 1986 and the Mines and Minerals Regulation and Development Act, 1957.
It submitted that the Forest Conservation Act applies not only to reserve and protected forest but to all areas recorded as forest in Government records, and that Mining was non forestry activity and, therefore, cannot be carried on in areas to which the Forest Conservation Act applies, without prior approval of the Government of India.
It was further stated that on May 7,1992 the Government of India had issued the final notification under Section 3 of the Environment Protection Act, 1986 prohibiting all mining activity, except with the approval of the Government of India and that since no permission was obtained under any of the said enactments with respect to the said 262 mines, no mining operations can be carried on in the area unless and until the permission of the Central Government was obtained.
On petitioner 's behalf it was submitted that all the mining activity in the areas notified under the notification dated May 7,1992 should have stopped long ago and continuance of mining activity amounts to gross contempt and constitutes a clear violation of orders; that the State Government appears to be colluding with the mineowners which is evident from the dissent expressed by officers of the State Government who were Members of the Committee to the straight forward and logical recommendation of the Chairman, and that prohibition of mining flows from the provisions, of the Forest 24 Conservation Act as well as the notification issued under the Environment Protection Act in May, 1992.
On behalf of the State Government It was submitted that the State Government and Its, officers were not aware when they granted leases/licences in respect of the listed mine that they fell within the area declared as protected forest and that the certificate issued by the Forest Department indicates that they did not fall within the protected forest area.
It was thus a bonafide grant.
It was further submitted that the State was prepared to abide fully by the orders of this Court, 54 mines had been shut down and it was prepared to shut down all the listed mines if this Court so directs.
A map prepared by the State officers showing the areas covered by tiger reserve, sanctuary, protected forest, and the location of the listed mines was placed before the Court for consideration.
On behalf of the mine owners in Mallana village it was submitted that demarcation of protected forest by the Committee was defective, erroneous and unacceptable for the various reasons set out in the objections riled to the report, that the map produced by the State Government delineating the tiger reserve was incorrect besides being an authenticated, that the mine owners do not admit that their mines fell within the tiger reserve or within the protected forest areas, and that closing down of hundreds of mines employing thousands of workers, wherein a large amount of capital was invested would disturb the economy of the State besides affecting the supplies of marble and other minerals, serving no public purpose.
On behalf of the some of the other mine owners it was submitted that it was unsafe to act upon and to pass any orders based upon the map produced by the State Government; that the declaration as tiger reserve by the Government of India was not under any statutory authority; that the areas declared as protected forest was not coextensive with the area declared as tiger reserve and sanctuary and national park; that none of the mines fell within the sanctuary or the National Park not even within project tiger, and that the mine owners are as much interested In protecting the environment and ecology as the petitioner.
25 Declaring that the relevant laws were violated, and passing directions, the Court, HELD: 1.
This is not a case where the Court is called upon to shut down an activity being carried on lawfully, in the name of higher considerations of ecology and environment.
It is a simple case to ensure observance of enacted laws made by the State to protect the environment and ecology of the area.
In such a case, there is no need to be oppressed by considerations of balancing the interest . of economy and ecology.
That has already been done by the Legislature and Parliament (37 D E).
In the instant case, the petitioner 's grievance is against the executive.
Charged with the delegation of implementing the laws of the land, the executive is yet failing to do its duty by law and by people, and that when faced with the might of money, respect for law is dissolving into respect for gammon (37 E F).
The State Government is empowered not only to declare any forest land as a protected forest but also any waste land as such.
The idea evidently is not only to protect the existing forest but also to bring waste lands under schemes of afforestation.
Once declared as protected forest, the distinction between forest land and waste land disappears.
The entire area becomes a protected forest.
(38 B) 3.
Reading Section 29 of the Rajasthan Forest Act as a whole, it appears, the normal rule is to make an enquiry into the rights of the state Government and of the private parties over the land proposed to be declared as protected forest in the first in stance, prepare a record thereof and then declare it as a protected forest.
But in case of urgency, It is open to the State Government to Issue such notification forthwith subject, of course, to the existing rights of individuals and communities in the area concerned.
(38 F) In the instant case, the notification dated January 1, 1975 issued by the Government of Rajasthan appears to be one issued under the proviso to sub section (3) of Section 29.
(38 G) 4.
Section 29 contemplates only one notification declaring an 26 area as a protected forest.
Whether issued after a normal enquiry and record or without enquiry or record, Section 29 contemplates only one notification and not two in any event.
Therefore, the notification issued is the valid and effective one.
It is not a provisional or preliminary notification.
It is not also the case of the mine owners that leases or licences in their favour were granted prior to January 1, 1975.
All of them were granted in the middle of or in the late eighties.
The savings clause contained in the proviso to sub section(3)does not avail them.
(39 A B) 5.
The Committee appointed by this court to demarcate and identify the areas declared as protected forest was composed of high officials of the Government of Rajasthan.
They had undertaken an elaborate and intensive exercise and have demarcated the areas declared as protected forest with the help of the official maps and records.
There is no reason not to accept the said report.
The several objections submitted by the mine owners cannot prevail over the official maps and records.
They were represented before the commission at the time of the said exercise.
The dissent note appended by the officers of the Government of Rajasthan was not with respect to the demarcation or identification of areas declared as protected forest, but only with respect to the closure of the mines operating within those areas.
The report of the committee is accepted.
(39 D F) 6.
Once an area is declared as a protected forest it comes within the purview of the .
Even the State Government cannot carry on any non forest activity in the said area without prior approval of the Central Government.
That the mining activity amounts to non forest purpose is beyond dispute.
Thus the grant of mining lease /licenses their renewal by the State Govern ment, without obtaining the prior approval of the Central Government in respect of the mines situated within the protected forest after January, 1, 1975 is contrary to law.
(39 G H, 40 B) 7.
All the mines listed in Appendix A to the Committee 's Report do fall within the areas declared as protected forest while the mines listed in Appendix B fall partly with in and partly out side such areas.
(41 B) 27 8.
According to rule 4(6) of the Rajasthan Minor Mineral A ' Concession Rules, 1986 no mining lease could have been granted or renewed within the forest "without clearance from the Central Government in accordance with the forest (Conservation) Act, 1980 and the Rules made there under".
Admittedly, no such prior approval or clearance of central Government was obtained.
The purpose of Forest Acts and Environmental Protection Act may not always be the same.
Closure of the mines may not serve the environmental purpose but it may serve the forest purpose.
(40 B) 10.
It is appropriate that the merits of the proposal of the State Government to delete an extent of 5.02 Sq.
kilometers from out of the protected forest be examined by the Ministry of Environment and Forest, forests, and a report submitted to this Court, within three months.
Orders will be passed thereafter on the application riled by the State of Rajasthan.
(40 E) 11.The notification issued by the Central Government under Section 3 of the Environment (Protection) Act 1986 on May 7, 1992 expressly prohibits the carrying on of mining operations, except with the Central Government 's prior permission, in the "areas covered under project tiger".
The prohibition extends to existing mining leases in Sanctuaries/National Park.
All mining operations are pro hibited therein.
(41 C D) 12.
There can he no legitimate dispute with respect to the correctness of the map produced by Government of Rajasthan or with respect to the area declared as tiger reserve.
Both the State Government and Central Government have delineated it.
May be that the declaration as tiger reserve was without any statutory authority and is relatable to the executive power of the Union of India but the notification issued under Section 3 of the Environment (Protection) Act puts the stamp of statutory authority over it.
The Central Government has specifically stated in its affidavits that no "prior permission" was obtained with respect to the mines located within the tiger reserve.
On this ground, the mining operations being carried on in the tiger reserve, including the listed mines also appears to be 28 contrary to law.
(42 C D) 13.The situation is that the mining activity in the listed mines mining activities in 54 mines has already been stopped) is illegal and has to stop.
May be that this will have the effect of bringing to halt the activity involving a good amount of capital and a large number of workers.
But in view of the inherent illegality attaching to them, there is no option but to close them.
They cannot be permitted to operate.
If and when the Central Government recommends the plea of the State Government and any of the areas already declared as protected forest are deleted with the leave of this Court, can the mining activity go on in these areas.
(43 D) 14.It is directed that the mining activity in the mines situated outside the protected forest areas but within the tiger reserve may continue for a period of four months.
Within this period it shall be open to the concerned mine owners to approach the Department of Forest and Environment, Government of India for permission to continue their mining operations.
They can continue the mining operations in these mines only if the Central Government permits them and subject to the orders of the Central Government in that behalf.
If no permission is obtained from the Central Government within the said period of four months, the mining activity in the entire area declared as tiger reserve shall stop and cease on the expiry of four months.
(44 B C) </s> |
<s>[INST] Summarize the following judgement: on (c) No. 857/87 etc.
(Under Article 32 of the Constitution of India).
Altaf Ahmed, Addl.
SolicitorGeneral, M.L. Verma, G.L. Sanghi.
K. Labiri, Sarva Miner, Narain, section Bhattacharya, Vivek Gambhir, S.K. Gambhir, Vijay Hansaria, P. Pameswaran, P.K.Jain, Rajiv Dutta, M.N. Shroff, Ms. A.Subhashini, Ms. PratibhaJain, L.K. Gupta, M.A. Firoz, Naresh K. Sharma, A.K. Goel, Ashok K. Mahajan, Ms. 54 Sushma Suri and Kailash Vasdev for the appearing parties.
The judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
The petitioners in this batch of writ petitions question in the validity of the levy and collection of cess under section 3 of the Vegetable Oils Cess Act, 1983 for the period commencing 1st March, 1986 and ending with 31st March, 1987.
Parliament enacted in the year 1983 the National Oilseeds and Vegetable Oils Development Board Act, 1983 (being Act 29 of 1983) hereinafter referred to as the Board Act.
The Act was intended to provide for the development, under the control of the Union, of the oilseeds Industry and the Vegetable Oils Industry and for matters connected therewith.
The Act contemplated establishment and constitution of a board called the National Oilseeds and Vegetable Oils Development Board.
The functions of the Board were specified in section 9.
In short the duty of the Board was to promote the development, by such measures as it thought fit, subject to the control of the Central Government, the Oilseeds Industry and the Vegetable Oils Industry.
Section 12 provided for constitution of Oilseeds and Vegetable Oils Development Fund.
The fund was to be applied for promoting the purposes of the Act.
Simultaneously with the Board Act was enacted the Vegetable Oils Cess Act, 1983 (being Act 30 of 1983), hereinafter referred to as the Cess Act.
The purpose of this Act is stated in sub section (1) of section 3.
It is to levy and collect "by way of cess, for the purposes of the National Oilseeds and Vegetable Oils Development Board Act, 1983, a duty of excise on vegetable Oils produced in any m ill in India at such rate not exceeding Rs.5 per quintal on vegetable oil, as the Central Government may, from time to time, specify by notification in the Official Gazette".
Sub section (2) of Section 3 clarified that the duty of excise levied under sub section (1) section 3 shall be in addition to the duty of excise leviable on vegetable oils under the or any other law for the time being in force.
Sub section (3) stated that the duty of excise levied on section 3 (1) shall be payable by the occupier of the mill in which the vegetable oil is produced.
Sub section (.4) provided that the provisions of the 55 Central Excise Act and the Rules made thereunder including those relating to refunds and exemptions from duty, "shall so far as may be, apply in relation to the levy and collection of the said duty of excise as they apply in relation to the levy and collection of the duty of excise on vegetable oils under that Act".
Section 4 provided that the proceeds ,of the duty of excise levied under section 3 (1) shall first be credited to the Consolidated Fund of India.
Subject to appropriation made by law by the Parliament, the Central Government could pay to the Board from time to time such amounts from out of the said collections as it thought fit for being utilised for the purposes of the Board.
Section 7 amended certain provisions of the .
It is thus clear that the cess, which is called a duty of excise, levied under section 3 of the cess Act was intended to serve the purposes of the Board Act.
The said cess was accordingly levied and collected on and from 1983.
The Cess Act was, however, repealed by section 12 of the Cotton, Copra and Vegetable Oils Cess (Abolition) Act, 1987 (being Act 4 of 1987), hereinafter referred to as the Repeal Act.
Chapter IV of the Repeal Act provides for the repeal inter alia of the Vegetable Oil Cess Act, 1983.
Section 12 is the repealing section.
Chapter V, containing only one section namely section 13, is relevant for purposes.
Chapter V carries the heading "COLLECTION OF ARREARS OF DUTIES OF EXCISE",.
Section 13 reads as follows: "13.
Collection and payment of arrears of duties of excise Notwithstanding anything contained in the amendments made to the (15 of 1966) or the repeal of the Copra Cess Act, 1979 (4 of 1979) or the Vegetable Oils Cess Act, 1983 (30 of 1983) , by this Act, any duty of excise, levied under any of the said Acts immediately before the commencement of this Act, but has not been collected before such commencement, shall be liable to be collected after such commencement in accordance with the provisions of the said Acts for being paid into the Consolidated Fund of India as if this Act had not been enacted," The Statement of Objects and Reasons appended to the Bill,.
56 (which became the Repeal Act) stated inter alia that the abolition of the said cess was with a view to reduce the number of cesses and multiplicity of taxes.
The petitioners do not dispute the validity of the levy of the said cess/duty of excise till the 28th February, 1986.
Their submission is confined, as stated hereinbefore, to the period commencing on.
March 1, 1986 and ending with March 31, 1987.
As noticed here in before, the Cess Act was repealed on and with effect from March 31, 1987 by section 12 of the Repeal Act.
Section 13 of the Repeal Act expressly provides notwithstanding the said repeal, the duty of excise levied under the said Act immediately before the commencement of the Repeal Act, but which has not been collected before such commencement, shall be liable to be collected even after the repeal, in accordance with the Cess Act, as if the said Cess Act has not been repealed.
In the face of this provision, it would appear that the petitioners ' dispute as to their liability to pay the said cess for the period March 1, 1986 to March 31, 1987 is of little avail.
The petitioners, however, rely upon certain circumstances/grounds in support of their contention which we may now deal with.
The petitioners are manufacturers of vegetable oil, which was subject to the cess/duty of excise under section 3 of the Cess Act.
They rely upon the following circumstances and ground in supports of their plea: (1) In his Budget Speech delivered on 28.2.1986, presenting the Budget 1986 87, the Union Minister of Finance stated: "the long term Fiscal Policy recognises that cesses levied as excise duties contribute to the multiplicity of taxes.
As an endeavour to reduce the number of the cesses it has been decided to dispense with the cess on cotton, copra and vegetable oils.
The Ministry of Agriculture will take appropriate action in the matter.
The loss to the exchequer on this account will be Rs.5.90 crores.
" The Budget proposals also specify the loss of revenue on account of the decision to dispense with the cess on vegetable oils among others.
This, Speech made on the floor of the Lok Sabha speaks of a decision already taken by the Government and is enforceable and effective from the said date.
57 (2) In pursuance of the said decision of the Government of India, the Directorate of Vanaspati, Vegetable Oils and Fats addressed the letter dated August 11, 1986 to the Commissioner (Tax Research) Department of Revenue,.
New Delhi asking him to issue instructions to all concerned indicating that the cess on vegetable oils has been dispensed with and as such the cess shall not be collected.
It was further directed that the cess collected, if any, since April 1, 1986 shall be refunded.
A copy of this letter was sent to the President, Central Organisation for Oil Industries and Trade, Bombay.
Counsel for the petitioners Shri M.L. Verma and G.L. Sanghi urged the following contentions: (a) The Budget Speech of the Finance Minister delivered on the floor of the Lok Sabha constitutes a enforceable and effective decision upon which the petitioners were entitled to act.
The said decision was exemplified and implemented by way of a communication from the Directorate of Vanaspati, Vegetable Oils and Fats referred to above.
In view of the said communication, the petitioners did not pass on the burden of the said cess to their purchasers on and from March 1, 1986.
It is not open to the Government to go back upon the said decision and demand cess for the period subsequent to March 1, 1986.
(b) By virtue of sub section (4) of section 3 of the Cess Act, Rule 8 of the Central Excise Rules is attracted among other provisions of the Central Excise Act and Rules.
Rule 8 empowers the Central Government to grant exemption on any excisable goods from the whole or any part of duty leviable on such goods.
Sub rule (1) of Rule 8 empowers the Central Government to grant exemption while Sub rule (2) em powers the Central Board of Excise and Customs to grant exemption.
Inasmuch as section 3 (4) of the Cess Act applies the provisions of the Central Excise Act and the Rules subject to the rider "so far as may be", the provisions in Rule 8 should be read with the necessary modification.
In other words, while sub rule (1) of rule 8 must be read as empowering the Central Government to grant exemption, sub rule (2) must be read as conferring a similar power upon the Central Government and/or the Directorate of Vanaspati, Vegetable Oils and Fats.
Unlike sub rule (1), sub rule (2) does not require the order of exemption to be published in the Official Gazette nor does it require that such 58 exemption should be through a notification.
The budget proposals of the Finance Minister and the letter of the Directorate of the Vanaspati and Vegetable Oils aforesaid are relatable to sub rule (2) or Rule 8 of Central Excise Rule read with sub section (4) of section 3 of the Cess Act.
Reading them together it must be held that the Government and the Directorate have exempted the vegetable oils from the levy under section (1) of section 3.
We find it difficult to agree.
It is not brought to our notice that the budget proposals contained in the Finance Minister 's speech were accepted by the Parliament.
The cess having been imposed by a Parliamentary enactment could be rendered inoperative only by a Parliamentary enactment.
Such repealing enactment came only in the year 1987 with effect from April 1, 1987.
Not only that.
The repealing Act expressly provided in section 13 that the cess due before the date of said repeal.
but not collected, shall be collected according to law as if the Cess Act is not repealed.
This provision amounts to a positive affirmation of the intention of the Parliament to keep the said imposi tion alive and effective till the date of the repeal of the Cess Act.
In the face of the said statutory provisions, no rights can be founded nor can the levy of the cess be said to have been dispensed with by virtue of the alleged decision referred to in the Finance Minister 's speech or on account of the letter dated August 11, 1986.
The Finance Minister 's speech is not law.
The Parliament may or may not accept his proposal.
Indeed, in this case, it did not accept the said proposal immediately but only a year later.
It is only from the date of the repeal that the said levy becomes inoperative.
Now coming to the argument based upon Rule 8 of the Central Excise Rules read with section 3(4) of the Cess Act, we find it totally unacceptable.
No notification has been issued under rule 8 (1) by the Central Government much less was any such notification published in the Gazette.
No special order has also been made by the Central Board of Excise and Customs in this behalf under rule 8 (2).
The cess imposed under section 3 (1) of the Cess Act, it may be remembered, is a duty or Excise as stated in section 3 itself.
Therefore, the Central Board of Excise and Customs was perhaps competent to grant exemption even in the case of said cess though we do not wish to express any definite opinion on this question since it was not debated at the Bar.
Suffice it to say that the Central Government cannot again be brought 59 in under sub rule (2) of rule 8 in the place of Central Board nor can the Directorate of Vanaspati and Vegetable Oils be equated to Central Board of Excise and Customs.
The words "so far as may be" occurring in section 3 (4) of the Cess Act can not be stretched to that extent.
Above all it is extremely doubtful whether the power of exemption conferred by rule 8 can be carried to the extent of nullifying the very Act itself.
It would be difficult to agree that by virtue of the power of exemption, the very levy created by section 3(1) can be dispensed with.
Doing so would amount to nullifying the Cess Act itself.
Nothing remains thereafter to be done under the Cess Act.
Even the language of rule 8 does not warrant such extensive power.
Rule 8 contemplates merely exempting of certain excisable goods from the whole or any part of the duty leviable on such goods.
The principle of the decision of this Court in Kesavananda Bharti Sripadagalvaru and others vs State of Kerala and another A.I.R. 1973 S.C. 1461 applies here perfectly.
It was held therein that the power of amendment conferred by Article 368 cannot extend to scrapping of the Constitution or to altering the basic structure of the constitution.
Applying the principle of the decision, it must he held that the power of exemption cannot be utilised for, nor can it extend to, the scrapping of the very Act itself.
To repeat, the power of exemption cannot be utilised to dispense with the very levy created under section 3 of the Cess Act or for that matter under section 3 of the Central Excise Act.
Mr. Sanghi submitted that the Board contemplated under the Board Act never did actually start functioning and, therefore, the levy of cess is impermissible.
It is difficult to agree with this contention either.
As the Preamble to the Cess Act indicates, the levy of the said cess was not for the purpose of the Board but for the purpose of the development of the Oilseeds Industry and Vegetable Oils Industry.
The Board was merely a medium in that effort.
It must be noticed that the cess was to be credited to the Consolidated Fund of India, out of which requisite sums of money to be utilised for the purpose of the Board Act.
In any event there is nothing to show that the Board did not become operational except the bare assertion to that effect.
A vague allegation cannot merit any credence.
In Writ Petition 963 of 1987 Mr. Sanghi raised an additional contention that the goods concerned therein cannot be called "Veg 60 eatable Oil" within the meaning of section 3 (1) of the Cess Act and, therefore, the levy of the cess thereon is incompetent.
We cannot, however, allow this contention to be raised in a petition under Article 32 of the Constitution.
It is open to the petitioner to raise the said contention before the appropriate authority at the appropriate stage.
For the above reasons the writ petitions fail and are dismissed but in the circumstances without costs.
N. V. K. Petitons dismissed. [/INST] Parliament enacted In 1983 the National Oilseeds and Vegetable Oils Development Board Act, 1983 to provide for the development, under the control of the Union, of the Oilseeds Industry and the Vegetable Oils Industry and for matters connected therewith.
The Act contemplated the establishment of a board called the National Oilseeds and Vegetable Oils Development Board, and the Constitution of Oilseeds and Vegetable Oils Development Fund for promoting the purposes of the Act.
The Vegetable Oils Cess Act, 1983, was, simultaneously enacted to levy and collect by way of cess, for the purpose of the National Oilseeds and Vegetable Oils Development Board Act,1983, a duty of excise on vegetable oils produced in any mill in India at such rate not exceeding Rs. 5 per quintal on vegetable oil.
This Cess Act was, however, repealed by Section 12 of the Cotton, ' Copra and Vegetable Oils Cess (Abolition) Act, 1987.
Chapter 5 of the ' said Act carried the heading 'Collection and Payment of Arrears of Duties and Excise '.
The petitioners who were manufacturers of vegetable oil, which was subject to the cess/duty of excise under Section 3 of the Cess Act, in their writ petitions to this Court questioned the validity of the levy and collection of cess for the period commencing on, 1st March, 1986 and ending with 31st March.
It was contended that (1) In his Budget Speech delivered on 28.2.1986 while presenting the Budget 52 1986 87, the Union Finance Minister had stated that as an endeavour to reduce the number of cesses it had been decided to dispense with the cession cotton, copra and vegetable oils and that this statement was exemplified and implemented by way of a communication from the Directorate of Vanaspati.
It is not open to the Government to go back upon the said decision and demand cess for the period subsequent to March 1, 1986, and (2) By virtue of Sub section (4) of Section 3 of the Cess Act, Rule 8 of the Central Excise Rules is attracted among other provisions of the Central Excise Act and Rules.
Reading the budget proposals of the Finance Minister and the letter of the Directorate of Vanaspati together it must be held that vegetable oils have been exempted from the levy under Section 3 (1).
Dismissing the Writ Petitions, this Court, HELD: 1 (a) The cess having been imposed by a Parliamentary enactment could he rendered inoperative only, by a parliamentary enactment.
Such repealing enactment came only in the year 1987 with effect from April 1, 1987.
(58 C) (b) The repealing Act expressly provided in Section 13 that the cess due before the date of said repeal, but not collected, shall be collected according to law", as if the Cess Act is not repealed.
This provision amounts to a positive affirmation of the intention of the parliament to keep the said imposition alive and effective till the date of the repeal of the Cess Act.
(58 1).
) (c) In the face of the aforesaid statutory provisions, no rights can he founded nor can the levy of the cess be said to have been dispensed with by virtue of the alleged decision referred to in the Finance Minister 's speech or on account of the letter dated August 11., 1986.
(58 E) (d) The Finance Minister 's speech is not law.
The Parliament may or may not accept his proposal.
Indeed, in this case, it did not accept the said proposal immediately but only a %ear later.
It is only from the date of the repeal that the said levy becomes inoperative.
2 (a) The cess imposed under section 3 (1) of the Cess Act.
is a duty of Excise as stated in Section 3 Itself.
Therefore, the Central Board of Excise and Customs was perhaps competent to grant exemption even in the case of said cess though no definite opinion on this question need be expressed since it was not debated.
Suffice It to say that the Central Government cannot again be brought in under sub rule (2) of rule 8 in the place of the Central Board nor can the Directorate of Vanaspati and Vegetable Oils be equated to the Central Board of excise and customs.
(58 H, 59 A) (b) The words "so far as may bell occurring In section 3 (4) of the Cess Act cannot be stretched to that extent.
Above all It Is extremely doubtful whether the power of exemption conferred by rule 8 can be carried to the extent of nullifying the very Act itself.
It would be difficult to Wee that by virtue of the power of exemption, the very levy created by Section 3 (1) can be dispensed with.
Doing so would amount to nullifying the Cess Act Itself.
Nothing remains thereafter to be done under the cess Act.
Even the language of Rule 8 does not warrant such extensive power; Rule 8 contemplates merely exempting of certain excisable goods from the whole or any part of the duty leviable on such goods.
(59 B) 3.
The power of exemption cannot be utilised to dispense with the very levy created under Section 3 of the Cess Act or for that matter under Section 3 of the Central Excise Act.
(59 E) Kesavananda Bharti Sripadagalvaru and others vs State of kerala and another A.I.R. 1973 S.C. 1461, (62 G) relied on. </s> |
<s>[INST] Summarize the following judgement: Appeals Nos. 231 and 232 of 1958.
Appeal by special leave from the judgment and order dated October 21, 1957, of the Madras High Court in Writ Petitions Nos. 675 and 676 of 1957.
R. Ganapathy Iyer, section B. Adityan and G. Gopalakrishnan, for the appellant.
A. N. Sinha and P. K. Mukherjee, for respondent No. 1. 1958.
November 24.
, J. These appeals raise a question of considerable importance as to the scope of an enquiry in an election petition wherein election is called in question under section 100(1)(c) of the Representation of the People Act, 1951 (43 of 1951), on the ground that a nomination paper had been improperly ' rejected.
625 The facts are that during the general elections which were held in 1957 six persons including the,, appellant, Veluswami Thevar, the second respondent ' Chellapandian, and the fourth respondent, Arunachalam, were nominated for election to the Legislative Assembly of the State of Madras from Alangulam Constituency in the District of Tirunelveli At the time of the scrutiny which was on February 1, 1957, Chellapandian raised an objection to the nomination of Arunachalam on the ground that he was the Head Master of the National Training School, Tiruchendur, which was a Government aided school, and that he was therefore disqualified under section 7, cls.
(d) and (e) of the Representation of the People Act, 1951 (hereinafter referred to as the Act), as holding an office of profit under the Government.
In upholding this objection, the returning officer observed: " Sri section Arunachalam is not present at the time of scrutiny of nominations nor any authorised agent of his could take notice of the objection and file a reply. ' In view of the objection which has not been cleared by Sri section Arunachalam by satisfying me that he is not holding an office of profit in a concern in which the State Government has financial interest, the objection is upheld and Sri section Arunachalam is disqualified under Sections 7(d) and (e) of Act 43 of 1951.
Accordingly his nomination is rejected.
" The five nomination papers were accepted; two of the candidates subsequently withdrew from the election; the other three went to the polls, and on March 10, 1957, the appellant who secured the largest number of votes was declared elected.
On April 18, 1957, Raja Nainar, the first respondent, who was not a candidate but a voter filed E. P. No. 109 of 1957 praying that the election of the appellant be declared void on the ground that the rejection of the nomination paper of Arunachalam was improper, because he had ceased to be a Head Master at the time of his nomination, and that further the institution was a private one.
The appellant filed a written statement in which he pleaded that Arunachalam was 79 626 not qualified to be chosen not merely on the ground put forward by Chellapandian before the returning officer but also on the grounds that he was interested as a partner in contracts for the execution of works for the Government, and that further he had entered into an agreement with the District Board, Chittoor, to serve as a teacher in that Board, and that his nomination paper was therefore rightly rejected.
Raja Nainar then came out with the application, 1.
A. No. 5 of 1957, out of which the present proceedings arise, to strike out the additional grounds of disquali fication raised in the statement of the appellant on the ground that the Tribunal had no jurisdiction to enquire into any ground of disqualification which was not taken before the returning officer, and that accordingly the new grounds put forward by the appellant should be struck out.
By its order dated August 17, 1957, the Tribunal held that the question to be decided by it was whether there was a valid nomination paper, and that to decide that, it could go into grounds other than those which were put forward before the returning officer, and, in that view, dismissed the application.
The correctness of this order was challenged by Raja Nainar in two Writ Petitions Nos. 675 and 676 of 1957, preferred under article 226.
Therein, he repeated his contention that it was not competent to the Tribunal to enquire into any but the grounds which had been put forward before the returning officer, and prayed that a writ of certiorari be issued to quash the order in 1.
A. No. 5 of 1957 and a writ of prohibition, to restrain the Tribunal from enquiring into the new grounds raised by the appellant.
These applications were heard by a Bench of the Madras High Court consisting of Rajagopalan and Rajagopals Ayyangar, JJ., who upheld the contention of the petitioner, and stated their conclusion in these terms: " We are clearly of opinion that the enquiry before the Tribunal must be restricted to the objections which the returning officer had to consider and decide, but not necessarily to the material placed 627 before the returning officer at the stage of the summary enquiry.
The Tribunal has jurisdiction to adjudicate upon the truth and validity of those objections on relevant material, even if that material be other than that placed before the returning officer.
The Tribunal has no jurisdiction to investigate the truth or validity of the objections which were not put forward before the returning officer, and which he had therefore no occasion to consider.
Once again we have to point out that we are discussing only the position of a candidate whose nomination was rejected, and not, for instance, that of a returned candidate." " A further objection was also taken before the learned judges that as the decision of the Election Tribunal was open to appeal under section 116A of the Act, the court should, in exercise of its discretion under article 226, decline to entertain writ petitions against interlocutory orders.
But the learned judge held that as the Tribunal had no jurisdiction to entertain grounds other than those which were put forward before the returning officer, writs could issue under article 226.
In the result, they quashed the order of the Election Tribunal in 1.
A. No. 5 of 1957, and issued a writ of Mandamus directing it to dispose of the application afresh in accordance with law as laid down in the judgment.
It is against this judgment that the present appeals have been preferred on leave granted by this Court under article 136, and the point that arises for decision is whether in an election petition questioning the propriety of the rejection of a nomination paper under section 100(1)(c) of the Act, it is open to the parties to raise grounds of disqualification other than those put forward before the returning officer.
It will be convenient at this stage to refer to the provisions of the Act hearing on this question.
Section 32 of the Act provides that, "Any person maybe nominated as a candidate for election to fill a seat if he is qualified to be chosen to fill that seat under the provisions of the Constitution and this Act.
" Under section 33(1), the candidate is to deliver to the returning officer a nomination paper completed in the 628 prescribed form and signed by the candidate and by an elector of the constituency as proposer.
Section 33 (4) enacts that, " On the presentation of a nomination paper, the returning officer shall satisfy himself that the names and electoral roll numbers of the candidate and his proposer as entered in the nomination paper are the same as those entered in the electoral rolls: Provided that the returning officer shall permit any clerical or technical error in the nomination paper in regard to the said names or numbers to be corrected in order to bring them into conformity with the corresponding entries in the electoral rolls; and where necessary, direct that any clerical or printing error in the said entries shall be overlooked.
" Section 35 provides inter alia that the returning officer shall cause to be affixed in some conspicuous place in his office a notice of the nomination containing descriptions similar to those contained in the nomination paper both of the candidate and of the proposer.
Section 36, omitting what is not material, is as follows: 36.
(1) " On the date fixed for the scrutiny of nominations under section 30, the candidates, their election agents, one proposer of each candidate, and one other person duly authorized in writing by each candidate, but no other person, may attend at such time and place as the returning officer may appoint; and the returning officer shall give them all reasonable facilities for examining the nomination papers of all candidates which have been delivered within the time and in the manner laid down in section 33.
(2) The returning officer shall then examine the nomination papers and shall decide all objections which may be made to any nomination, and may, either on such objection or on his own motion, after such summary inquiry, if any, as he thinks necessary, reject any nomination on any of the following grounds: (a) that the candidate either is not qualified or is disqualified for being chosen to fill the seat under any of the following provisions that may, be applicable, namely 629 Articles 84, 102, 173 and 191, Part 11 of this Act, or (b) that there has been a failure to comply With any of the provisions of section 33 or section 34; or (c) that the signature of the candidate or the pro.
poser on the nomination paper is not genuine. . . . . . . . . . (5) The returning officer shall hold the scrutiny on the date appointed in this behalf under clause (b) of section 30 and shall not allow any adjournment of the proceedings except when such proceedings are interrupted or obstructed by riot or open violence or by causes beyond his control: Provided that in case an objection is made the candidate concerned may be allowed time to rebut it not later than the next day but one following the date fixed for scrutiny, and the returning officer shall record his decision on the date to which the proceedings have been adjourned.
(6) The returning officer shall endorse on each nomination paper his decision accepting or rejecting the same ania, if the nomination paper is rejected, shall record in writing a brief statement of his reasons for such rejection.
" Then, we have section 100(1)(c), the construction of which is the main point for determination.
It is as follows: 100.
(1) " Subject to the provisions of subsection (2), if the Tribunal is of opinion (c) that any nomination has been improperly rejected ;. the Tribunal shall declare the election of the returned candidate to be void." Now, the whole controversy between the parties is as to what the expression " improperly rejected " in section 100(1)(c) means.
According to the appellant, when the nomination paper of a candidate who is under no such disqualification as is mentioned in section 36(2) has been rejected, that is improper rejection within section 100(1)(c).
Acoording to the respondent, when the 630 nomination paper of a candidate is rejected by the returning officer on the ground that he is subject to a specified disqualification, the rejection is improper, if it is found that that disqualification does not exist.
If the former view is correct, then the scope of an enquiry before the Tribunal must extend to all matters which are mentioned in section 36(2), and if the latter, then it must be limited to determining whether the ground on which the returning officer has rejected the nomination is well founded.
Now, to decide what the expression " improperly rejected " in section 100(1)(c) precisely imports, it is necessary to examine the relevant provisions of the Act bearing on the question and the setting of the above section therein.
Under section 32 of the Act, any person may be nominated as a candidate for election if he is duly qualified under the provisions of the Constitution and the Act.
Section 36(2) authorises the returning officer to reject any nomination paper on the ground that he is either not qualified, that is, under sections 3 to 7 of the Act, or is disqualified under the provisions referred to therein.
If there are no grounds for rejecting a nomination paper under section 36(2), then it has to be accepted, and the name of the candidate is to be included in a list.
Vide section 36(8).
Then, we come to section 100(1)(c) and section 100(1)(d)(1), which provide a remedy to persons who are aggrieved by an order improperly rejecting or improperly accepting any nomination.
In the context, it appears to us that the improper rejection or acceptance must have refer ence to section 36(2), and that the rejection of a nomination paper of a candidate who is qualified to be chosen for election and who does not suffer from any of the dis qualifications mentioned in section 36(2) would be improper within section 100(1)(c), and that, likewise, acceptance of a nomination paper of a candidate who is not qualified or who is disqualified will equally be improper under s.100(1)(d)(1).Section 32 confers a substantive right on a candidate to be chosen to the legislature subject only to the limitations enacted in articles 84, 102, 173 and 191 of the Constitution and sections 3 to 7 of the Act, and sections 36 and 100 provide the machinery for the exercise and enforcement of that right.
It is a sound 631 rule of construction that procedural enactments should be construed liberally and in such manner as to render the enforcement of substantive rights effective.
Readings section 100(1)(c) in the context of the whole enactment, we think that an enquiry before the Tribunal must embrace all the matters as to qualification and disqualification mentioned in section 36(2), and that it cannot be limited to the particular ground of disqualification which was taken before the returning officer.
It was contended for the respondent that the proceedings before the Tribunal are really by way of appeal against the decision of the returning officer, and that, therefore, the scope of the enquiry in the election petition must be co extensive with that before the returning officer, and must be limited to the ground taken before him.
It was argued that a decision could be said to be improper only with reference to a ground which was put forward and decided in a particular manner by the returning officer, and that therefore the expression " improperly rejected " would, in its true connotation, restrict the scope of the enquiry before the Tribunal to the ground taken before the returning officer.
We are unable to agree with this contention.
The jurisdiction which a Tribunal exercises in hearing an election petition even when it raises a question under section 100(1)(c) is not in the nature of an appeal against the decision of the returning officer.
An election petition is an original proceeding instituted by the presentation of a petition under section 81 of the Act.
The respondents have a right to file written statements by way of reply to it; issues have to be framed, and subject to the provisions of the Act, the provisions of the Code of Civil Procedure regulate the trial of the petition.
All the parties have the right to adduce evidence, and that is of the essence of an original proceeding as contrasted with a proceeding by way of appeal.
That being the character of the proceedings, the rule applicable is that which governs the trial of all original proceedings; that is, it is open to a party to put forward all grounds in support of or negation of the claim, subject only to such limitations as may be found in the Act.
632 It should be noted in this connection that if a petition to set aside an election on the ground of improper rejection of a nomination paper is in the nature of an appeal against the decision, of the returning officer, then logically speaking, the decision of the Tribunal must be based only on the materials placed before the returning officer given with respect to the ground which was urged before him, and no fresh evidence could be admitted before the Tribunal except in accordance with 0. 41, R. 27.
The learned judges in the court below, however, observe that though the enquiry before the Tribunal is restricted to the particular ground put forward before the returning officer, it is not restricted to the material placed before him, and that all evidence bearing on that ground could be adduced before the Tribunal.
This, in our view, is quite correct.
The enquiry which a returning officer has to make under section 36 is summary in character.
He may make " such summary enquiry, if any, as he thinks necessary "; he can act suo motu.
Such being the nature of the enquiry, the right which is given to a party under section 100(1)(c) and section 100(1)(d)(1) to challenge the propriety of an order of rejection or acceptance of a nomination paper would become illusory, if the Tribunal is to base its decision only on the materials placed before the returning officer.
It was contended for the respondent that even with reference to the ground taken before the returning officer, no evidence other than what was placed before him could be brought before the Tribunal, and he relied on the following observations of the learned judges in Charanjit Lal vs Lehri Singh (1) : " Whether a nomination has been improperly rejected or not, has to be considered in relation to the state of evidence before the returning officer at the time of the scrutiny.
The testimony of the returning officer shows that he rejected the nomination, because it did not appear to him that on the question of age the candidate Shri Pirthi was qualfied to stand for election ' " (1) A. I. R. 1958 punj.
633 There,, a nomination paper had been rejected by the returning officer on the ground that the candidate did,, not appear to possess the age qualification required by article 173.
The correctness of this order was challenged in an election petition.
Evidence was taken as to the age of the candidate in this petition, and eventually it was held that the order of the returning officer was right.
In the order of rejection, the returning officer also stated: " The nomination is rejected as the age is not mentioned in the nomination paper.
Neither the candidate nor the proposer or any person duly authorised on his behalf is present to testify to his age.
" Now, the argument before the High Court was that the failure to mention the age in the nomination paper was a formal defect which should have been condoned under section 36(4) of the Act.
The learned judges held that the defect was not merely one of failure to mention the age but of want of the requisite qualification in age, and that that could not be cured under section 36(4).
In this context, the observations relied on could not be read as meaning that no evidence could be adduced even in respect of a ground which was urged before the returning officer, as, in fact, evidence was taken before the Tribunal and a finding given, and if they meant what the respondent suggests they do, we do not agree with them.
It is to be noted that in many of the cases which came before this Court, as for example, Durga Shankar Mehta vs Thakur Raghuraj Singh and others (1), the finding of the Tribunal was based on fresh evidence admitted before it, and the propriety of such admission was never questioned.
And if the true position is, as we have held it is, that it is open to the parties to adduce fresh evidence on the matter in issue, it is difficult to imagine how the proceedings before the Tribunal can be regarded as in the nature of appeal against the decision of the returning officer.
In support of his contention that it is only the ground that is urged before the returning officer that (1) [1955] 1 S.C.R. 267.
80 634 can be raised before the Tribunal, Mr. Sinha, learned counsel for the respondent, relies on the provision in section 36(6) that when a nomination paper is rejected, the returning officer should record his reasons therefor.
The object of this provision, it is argued, is to enable the Tribunal to decide whether the order of the returning officer is right or not, and by implication it confines the scope of the enquiry before the Tribunal to the ground put forward before the returning officer.
This contention is, in our opinion, unsound.
Now, when a nomination paper is accepted, section 36(6) does not require that any reason should be recorded therefor.
If the contention of the respondent is right, it would follow that acceptance of a nomination paper can never be questioned.
But that would be against section 100(1)(d)(1), and it must therefore be held that an acceptance can be questioned on all the grounds available under section 36(2).
Section 100(1)(d)(1) deals with improper acceptance of a nomination paper, and if the word " improper " in that provision has reference to the matters mentioned in section 36(2), it must have the same connotation in section 100(1)(c) as well.
The word " improper " which occurs in both section 100(1)(c) and section 100(1)(d)(1) must bear the same meaning in both the provisions, unless there is something in the context to the contrary, and none such has been shown.
There is another difficulty in the way of accepting this argument of the respondent.
A candidate may be subject to more than one disqualification, and his nomination paper may be questioned on all those grounds.
Supposing that the returning officer upholds one objection and rejects the nomination paper on the basis of that objection without going into other objections, notwithstanding that under section 36(2) he has to decide all the objections, is it open to the respondents in the election petition to adduce evidence on those objections ? According to the respondent, it is not, so that if the decision of the returning officer on the objection on which he rejected the nomination paper is held to be bad, the Tribunal has no option but to set aside the election under section 100(1)(c), even though the candidate was, in fact, disqualified and his nomination paper was rightly rejected.
Mr. Sinha for the respondent concedes that the result would be anomalous, but he says that the Law of Election is full of anomalies, and this is one of them, and that is no reason for not interpreting the law on its own terms.
It is no doubt true that if on its true construction, a statute leads to anomalous results, the Courts have no option but to give effect to it and leave it to the legislature to amend and alter the law.
But when on a construction of a statute, two views are possible, one which results in an anomaly and the other not, it is our duty to adopt the latter and not the former, seeking consolation in the thought that the law bristles with anomalies.
Anomalies will disappear, and the law will be found to be simple and logical, if it is understood that when a question is raised in an election petition as to the propriety of the rejection of a nomination paper, the point to be decided is about the propriety of the nomination and not the decision of the returning officer on the materials placed before him, and that decision must depend on whether the candidate is duly qualified and is not subject to any disqualifications as provided in section 36(2) It remains to deal with one more contention advanced on behalf of the respondent, and that is based on the following observations in Hari Vishnu Kamath vs Syed Ahmad Ishaque and others (1): " Under this provision R. 47(4), the Tribunal is constituted a court of appeal against the decision of the returning officer, and as such its jurisdiction must be co extensive with that of the returning officer and cannot extend further.
" The argument is that if the jurisdiction of the Tribunal is co extensive with that of the returning officer, then the enquiry before it must be confined to the grounds which were urged before the returning officer.
Now, the observations quoted above were made statedly with reference to R. 47, and assuming that they apply to an enquiry under section 100(1)(c), the question still remains, what is the jurisdiction of the returning officer in hearing objections to nomination papers? (31) ; , 1132.
636 His jurisdiction is defined in section 36(2), and the Tribunal must therefore have jurisdiction to decide all the questions which can be raised under that section.
The fact that a particular ground which could have been raised was not, in fact, raised before the returning officer does not put an end to his jurisdiction to decide it, and what he could have decided if it had been raised, could be decided by the Tribunal, when raised.
Mr. Ganapathy Iyer, learned counsel for the appellant, invited our attention to the decisions of the Election Tribunals on the question whether grounds other than those raised before the returning officer could be put forward in an enquiry in an election petition.
They held, with one solitary exception, that it is permissible, and indeed, it is stated in Mengh Raj vs Bhimandas (1) as settled law that the rejection of a nomination paper can be sustained on grounds not raised before the returning officer.
If the legislature which must be taken to have knowledge of the law as interpreted in those decisions wanted to make a departure from it, it would have said so in clear terms, and in the absence of such an expression, it would be right to interpret section 100(1)(c) as not intended to alter the law as laid down in those decisions.
It is now necessary to refer to the decisions which have been cited before us.
In Durga Shankar Mehta 's case (2), the election was to a double member constituency.
The appellant who obtained the largest number of votes was declared elected to the general seat and one Vasantarao, to the reserved seat.
The validity of the election was challenged on the ground that Vasantarao was below the age of 25 years, and was, therefore, disqualified to stand.
The Election Tribunal upheld that objection, and set aside the entire election.
The decision was taken in appeal to this Court, and the point for determination was whether the election of the appellant was liable to be set aside on account of the disqualification of Vasantarao.
It was held that the matter fell within section 100(2)(c) as it then stood and not under section 100(1)(c), and that the election of the appellant could not be declared void.
(1) , 31O. (2) [19551 1 S.C.R. 267.
637 This is not a direct pronouncement on the point now in controversy, and that is conceded.
In Vashist Narain Sharma vs Dev Chandra and others (1), a question was raised as to what would be " improper acceptance " within the meaning of section 100; but in the view taken by this Court, no opinion was expressed thereon.
The question now under consideration came up directly for decision before the High Court of Rajasthan in Tej Singh vs Election Tribunal, Jaipur (2), and it was held that the respondent to an election petition was entitled to raise a plea that the nomination of the petitioner rejected on one ground by the returning officer was defective on one or more of the other grounds mentioned in section 36(2) of the Act, and that such a plea, if taken, must be enquired into by the Election Tribunal.
In Dhanraj Deshlehara vs Vishwanath Y. Tamaskar (3), it was observed by a Bench of the Madhya Pradesh High Court that in determining whether a nomination was improperly rejected, the Election Tribunal was not bound to confine its enquiry to the ground on which the returning officer rejected it, and that even if the ground on which the returning officer rejected the nomination could not be sustained, the rejection could not, be held to be improper if the Tribunal found other fatal defects in the nomination.
An unreported judgment of the Andhra Pradesh High Court in Badrivishal Pitti vs J. V. Narsing Rao (4) has been cited before us, and that also takes the view that in an enquiry before the Election Tribunal, it is open to the parties to support an order of rejection of a nomination paper on grounds other than those which were put forward before the returning officer.
We are in agreement with these decisions.
As the question has also been raised as to the propriety of interfering in writ petitions under article 226 with interlocutory orders passed in the course of an enquiry before the Election Tribunal, we shall express our opinion thereon.
The jurisdiction of the High Court to issue writs against orders of the Tribunal is (1) ; (2) [1954] 9 E.L.R.193 (3) (4) Special Appeal No. 1 Of 1957.
638 undoubted; but then, it is well settled that where there is another remedy provided, the court may properly exercise its discretion in declining to interfere under article 226.
It should be remembered that under the election law as it stood prior to the amendment in1956, election petitions were dismissed on preliminary grounds and the correctness of the decision was challenged in applications under article 226 and in further appeals to this Court, with the result that by the time the matter was finally decided, the life of the legislatures for which the election was held would have itself very nearly come to an end thus rendering the proceedings infructuous.
A signal example of a case of this kind is to be found in the decision reported in Bhikaji Keshao Joshi and another vs Brijlal Nandlal Biyani and others (1).
It is to remedy this defect that the legislature has now amended the law by providing a right of appeal against a decision of the Tribunal to the High Court under section 116 A, and its intention is ' obviously that proceedings before the Tribunal should go on with expedition and without interruption, and that any error in its decision should be set right in an appeal under that section.
In this view, it would be a proper exercise of discretion under article 226 to decline to interfere with interlocutory orders.
In the result, we allow the appeals, set aside the orders of the court below, and dismiss the writ petitions.
filed by the respondent, with costs here and in the court below.
Appeal allowed (1) [1055] 2 S.C.R. 428. [/INST] The nomination paper of the fourth respondent who was one of the candidates for election to the Legislative Assembly of the State, was rejected by the returning officer on the ground that as he was the Headmaster of a Government aided school he was disqualified under section 7(d) and (e) of the Representation of the People Act, 1951, to be chosen for election.
One of the voters of the constituency filed a petition praying that the election of the appellant be declared void under section 100(1)(c) of the Act on the ground that the rejection of the nomination paper of the fourth respondent was improper because the latter had ceased to be a Headmaster at the time of his nomination and that, further, the institution was a private one.
The appellant, who was the second respondent in the petition, contended that the nomination paper of the fourth respondent was rightly rejected not only on the ground put forward before the returning officer but also for the reasons that he was interested in Government contracts and that he had agreed to serve as a, teacher under the District Board.
The question was whether in an election petition challenging the validity of the rejection of a nomination paper under s: 100(1)(c) of the Act, it was open to the parties to raise grounds 624 of disqualification other 'than those put forward before the returning officer.
It was contended for the respondent that the proceedings before the Election Tribunal were really by way of appeal against the decision of the returning officer and that, therefore, the scope of the enquiry in the election petition must be co extensive with that before the returning officer and must be limited to the grounds taken before him.
Held, that an election petition is an original proceeding instituted by the presentation of a petition under section 81 of the Representation of the People Act, 1951, and that the jurisdiction which a Tribunal exercises in hearing an election petition even when it raises a question under section 100(1)(c) of the Act is not in the nature of an appeal against the decision of the returning officer.
Held, further, that in considering whether a nomination paper was improperly rejected under section 100(1)(c), the real question for decision would be whether the candidate was duly qualified and was not subject to any disqualifications as provided in section 36(2) of the Act.
The Tribunal would, consequently, be competent to entertain grounds of disqualification other than those put forward before the returning officer.
The expression " improperly rejected " in section 100(1)(c) of the Act, explained.
Mengh Raj vs Bhimandas, , Tej Singh vs Election Tribunal, JaiPur, and Dhanraj Deshlehara vs Vishwanath Y. Tamaskar, (1958) 15 E. L. R. 260, approved. </s> |
<s>[INST] Summarize the following judgement: Appeal Nos.
173031/1993.
From the Judgment and Order dated 30.6.1992 and 2.9.1992 of the Jammu and Kashmir High Court in L.P.A. No 161/90.
and C.W. P. No. 1352/88.
D.D. Thakur, M.H. Baig.
Rajendra Mal Tatia, Indra Makwana and K. K. Gupta (for Suresh A. Shroff & Co.) for the Appellants.
V.R. Reddy, Addl.
Solicitor General and Ashok Mathur for the Respondents.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
Heard counsel for the parties.
Leave granted in S.L.Ps. 12608/92 and 16418/92.
The appeals are directed against the judgment of the Division Bench of the Jammu and Kashmir High Court allowing a special appeal preferred by the State of Jammu and Kashmir against the judgement of the learned Single Judge.
The learned Single Judge had allowed the writ petition filed by the appellants herein.
The matter pertains to approval and publication of the select list of District Munsifs prepared by the Jammu and Kashmir Public Service Commission.
On May, 28. 1984 the High court intimated the Government of ten vacancies in the category of munsifs and requested the Government to initiate appropriate steps for selection of candidates.
The government wrote to the public service commission and the latter issued the notification and put the process in motion.
Written test was held in the year 1985.
viva voce was also held.
At that stage, the High Court requested the government (with a copy forwarded to the public service commission) to select twenty candidates in the place of ten.
This was done on December 10, 1985.
The government, in turn, requested the public service commission on December 27, 1985 to select twenty 100 candidates.
On March 11, 1986 the Public Service Commission sent three select lists,.
one containing twenty candidates, the other containing three scheduled castes candidates and a waiting list of ten candidates.
From the record placed before us by the learned counsel for the State of Jammu and Kashmir, it appears that the government received several complaints against the selection process.
The government appears to have been satisfied prima facie with some of those complaints and was toying with the idea of scrapping the entire list and asking for a fresh selection.
The select list sent by the commission was kept pending without being approved as required by Rule 39 of the Jammu and Kashmir Civil Service,, (.Judicial) Recruitment Rules, 1967.
Meanwhile, the High Court had been pressing for approval of the names in view of a number of vacancies and the consequent accumulation of work.
Number of courts were without presiding officers.
In particular, the High Court said, there was urgent need for at least thirteen Munsifs.
In the circumstances, the government approved, on December 23, 1986.
tile names of thirteen persons out of the list recommended by the public service commission and Published the same.
They were appointed on December 30, 1986.
Meanwhile, a writ petition had been tiled in the High Court for a direction to the Government to approve and publish the list recommended by the public Service commission.
On December 30, 1986.
the Advocate General for the State stated before the court that the Government has already approved thirteen entries and that the question of approval of the remaining, persons in the list was under the active consideration of the Government.
Recording the said statement, the writ petition was dismissed as settled.
The Government however, did not approve any of the other names in the lists.
evidently in view of the very same reasons for which they were disinclined initially to approve the said lists.
Meanwhile, the candidates in the select list below serial No. 13 were pressing the Government to approve and publish the list.
The High Court was also addressing the government from time to time to approve the list in view of certain vacancies arising since the appointment of the thirteen Munsifs aforementioned.
Since no further names were being approved by the Government, the writ petition, from which these appeals arise, was filed on September 14, 1988.
The writ petition was allowed on July 11,1990 by a learned Single Judge and a direction was issued to the State Government to approve and publish the list of 101 the remaining candidates submitted by the public service commission to it for appointment as munsifs immediately in accordance with the Rules of 1967 and to consider the appointment of such candidates (including the writ petitioners) as munsifs in the vacancies existing or likely to exist in accordance with the recommendations to be made by the High Court.
On appeal, the Division Bench disagreed with the learned Single Judge.
The Bench held that approval and publication of the select list by the Government under Rule 39 is not a mere ministerial act but a meaningful one.
It is open to the government to examine the select list carefully and to reach its own conclusion regarding the suitability and merits of the candidates and publish the names of only those candidates who are found suitable.
While approving the list, the Division Bench held, the State Government cannot alter or temper with the order of merit determined by the commission but it is certainly open to the government to stop at a particular point where it feels that a particular candidate is not meritorious and not to approve the remaining list.
The government is not bound to fill up the existing vacancies within a particular time frame.
The mere inclusion in the select list also does not confer upon the candidates any indefeasible right to appointment.
The recommendations of the commission are not binding upon the State Government held the Division Bench.
In the facts and circumstances of the case, it must be held that the remaining seven names in the select list have been disapproved by the government.
The writ petition also suffers from leaches.
The persons who had meanwhile become eligible and qualified to apply for the said post should also be given a chance.
A list prepared as far back as 1985 86 cannot be directed to be approved in the year 1992.
In these appeals, it is submitted by the learned counsel for the appellants that once the public service commission prepares and recommends a select list, the government has no power to sit in judgment over it.
It is bound to approve the list as recommended.
The function of the government under Rule 39 of the 1967 Rules is merely ministerial and formal.
Even otherwise, the government has not disclosed any reasons for not approving the seven names while approving the first thirteen.
The government 's action is arbitrary and capricious.
It is indeed vitiated by inadmissible and extraneous considerations.
The government cannot be allowed an absolute power in the matter.
On the other hand, it is contended by Sri Dipankar Gupta, learned Solicitor General appearing for the State of Jammu and 102 Kashmir that the function of the government under Rule 39 is not merely formal or ministerial.
The government being the appointing authority, is entitled to scrutinise the list prepared by the public service commission.
It is open to the government either to approve or disapprove the list either wholly or in part.
As a matter of fact, a large number of complaints were received by the government against the said selection and many of them were also found to be not without substance.
However, in view of the pressing need expressed by the High Court, the first thirteen candidates in the list were approved in the interest of judicial administration.
The remaining seven names were not approved inasmuch as no vacancies were available at that time.
In all the circumstances of the case, the Hon 'ble Chief Minister took a decision on March 28, 1988 not to approve any further names and to go in for fresh selection.
Inasmuch as the vacancies at the end of the year 1986 were not more than thirteen, the refusal to approve the remaining seven is a valid and bonafide exercise of power and discretion on the part of the government.
The appellants have no legal right to be appointed just because their names have been included in the select list prepared by the public service commission.
The first requisition by the High court was sent in May, 1984.
The written test was held in 1985.
The select list was recommended in March, 1986.
After a lapse of more than seven years, the said list cannot now be directed to be given effect to, the learned Solicitor general submitted.
Such a direction would deprive a large number of persons, who have become qualified and eligible to apply and complete for the said post meanwhile of the opportunity of applying for the said post.
Many of them may even become age barred meanwhile, he submitted.
It is true that the government is the appointing authority for the munsifs but it is misleading to assert that in the matter of selection and appointment the government has an absolute power.
Such an argument does violence to the constitutional scheme.
The Constitution has created a public service commission and assigned it the function of Conducting examinations for appointments to the services of the Union or to the services of the State, as the case may be.
According to Article 320 clause (1) this is the primary function of the commission.
The Government is directed to consult the public service commission on all matters relating to methods of recruitment to civil services and to civil posts and on the principles to be followed in making.
appointment to civil services and posts and on the suitability of candidates for 103 such appointment, among other matters.
An examination of Articles 317 to 320 makes it evident that the constitution Contemplates the commission to he an independent and effective body outside the governmental control.
This is an instance of application of the basic tenet of democratic form of government viz., diffusion of governing power, The idea is not to allow the concentration of governing power in the hands of one person, authority or organ.
It is in the light of this constitutional scheme that one has to construe Rules 39 and 41 of the 1967 Rules.
They read as follows: 39.Final List: The list of selected candidates after it is approved shall be published by the Government Gazette and a copy thereof shall be sent to the court along with the Waiting list, if any, furnished by the commission for record in their office.
Security to the list: The list and the Waiting list of the selected candidates shall remain in operation for a period of one year from the date of its publication in the, Govt.
Gazette or till it is exhausted by appointment of the candidates whichever is earlier, provided that nothing in this Rule shall apply to the list and the waiting list prepared as a result of the examination held in 1981 which will in operation till the list or the waiting list is exhausted.
" Construed in the above light, Rule 39, in our opinion, does not confer an absolute power upon the government to disapprove or cancel the select list sent by the public service commission.
Where, however, the government is satisfied, after due enquiry that the selection has been vitiated either on account of violation of a fundamental procedural requirement or is vitiated by consideration of corruption, favourtism or nepotism, it can refuse to approve the select list.
In such a case, the government is bound to record the reasons for its action, and produce the same before a Court, if and when summoned to do so, apart from placing the same before the Legislature as required by clause (2) of Article 323.
Indeed, clause (2) of Article 323 obliges the Governor of a State to ray a copy of the annual report received from the 104 commission before the Legislature "together with a memorandum explaining, as respect the cases, if any, where the advice of the commission was not accepted (and) the reasons for such non acceptance.
" Evidently, this is meant as a check upon the power of the government.
This provision too militates against the theory of absolute power in the government to disapprove or reject the recommendations of the commission.
For the same reason, it must be held that the government cannot pick and choose candidates out of the list.
Of course, where in respect of any particular candidate any material is discovered disclosing his involvement in any criminal activity, the government can.
always refuse to appoint such person but this would not be a case touching the select list prepared and recommended by the commission.
It is equally not open to the government to approve a part of the list and disapprove the balance.
In this case, it may be remembered that the government itself had asked for a list of twenty and the commission had sent a list of twenty.
(we are not concerned with the waiting list sent by the commission, at this stage).
It could not have been approved in part and rejected in part.
The number of vacancies available on the date of approval and publication of the list is not material.
By merely approving the list of twenty, there was no obligation upon the government to appoint them forthwith.
Their appointment depended upon the availability of vacancies.
A reading of Rule 41 makes this aspect clear.
The list remains valid for one year from the date of its approval and publication.
If within such one year, any of the candidates therein is not appointed, the list lapses and a fresh list has to be prepared.
In this case, no doubt, a number of complaints appears to have been received by the government about the selection process.
We have seen the note file placed before us.
It refers to certain facts and complaints.
But if the government wanted to disapprove or reject the list, it ought to have done so within a reasonable time of the receipt of the select list and for reasons to be recorded.
Not having done that and having approved the list partly (thirteen out of twenty names) the cannot put forward any ground for not approving the remaining list.
I indeed, when it approved the list to the extent of thirteen, it ought to have approved the entire list of twenty or have disapproved the entire list of twenty.
The objection, the government have pertains to the very process of selection i.e., to the entire list, and not individually to any of the remaining seven candidates.
It is true that mere inclusion in the select list does not confer upon 105 the candidates included therein an indefeasible right to appointment State of Haryana vs Subhash Chandra Marwaha A.I.R. 1 973 S.C.2216; M.S, Jain vs
State of Haryana A.I.R. and State of Kerala vs A. Lakshmikutty A.I.R. but that is only one aspect of the matter.
The other aspect is the obligation of the government to act fairly.
The whole exercise cannot be reduced to a farce.
Having sent a requisition/request to the commission to select a particular number of candidates for a particular category, in pursuance of which the commission issues a notification, holds a written test, conducts a notification, holds a written test, conducts interviews, prepares a select list and then communicates to the government the government cannot quietly and without good and valid reasons nullify the whole exercise and tell the candidates when they complain that they have no legal right to appointment.
We do not think that any government can adopt such a stand with any justification today.
This aspect has been dealt with by a Constitution Bench of this Court in Shankarsan Dash vs Union of India 1991 1 3 S.C.C.47 where the earlier decisions of this court are also noted.
The following observations of the court are apposite: "It is not correct to say that if a number of vacancies are notified for appointment and adequate number of candidates are found fit, the successful candidates acquire an indefeasible right to be appointed which cannot be legitimately denied.
Ordinarily the notification merely amounts to an invitation to qualified candidates to apply for recruitment and on their selection they do not acquire any right to the post.
Unless the relevant recruitment rules so indicate, the State is under no legal duty to fill up all or any of the vacancies.
However, it does not mean that the State has the licence of acting in an arbitrary manner.
The decision not to fill up the vacancies has to he taken bona fide for appropriate reasons.
And if the vacancies or any of them are filled up, the State is bound to respect the comparative merit of the candidates, as reflected at the recruitment test, and no discrimination can be permitted.
This correct position has been consistently followed by this Court, and we do not find any discordant note in the decisions in State of Hary 106 ana vs Subhash Chander Marwahs, Neelima.
Shangla vs State of Haryana or Jatendra Kumar vs State of Punjab.
" We may reiterate that the principle of Article 323, referred to hereinabove, is equally relevant on the nature of the power of the government in such a matter.
Looked at from the above stand point, it appears that the government 's action in not approving the rest of the seven names in the Select list is unsustainable but there are certain circumstances which induce us not to interfere in this matter.
They are: (i) During the period of one year from the date of approval of ' thirteen names (23.12.1986/30.12.1986) no vacancy bid arisen.
which means that even if the list of twenty had been approved and published on December 23 or December 30.
1986 none of the seven persons would have been appointed.
At the end of one year.
the list lapis and becomes inoperative.
The first letter of the High Court stating that one or two more vacancies have arisen and requesting the Government to approve the remaining names, was sent only on August 13,1988 i.e., long after the expiry of the one year period.
Any direction at this stage to approve the list would be a futile exercise.
The list cannot be operated with respect to the vacancies existing as on today; and (ii) When the government failed to act within a reasonable period from the date of the order December 30, 1986 ) of the High Court in writ petition 1316/84 (which was disposed of recording the statement of the Advocate General ) the petitioners ought to have moved in the matter.
They did not do so.
They waited for more then twenty months and approached the High Court only on September 14.
This delay in our opinion, disentitles the petitioners from any relief in the facts and circumstances of the case.
For the above reasons, the appeals fail and are dismissed.
No costs.
WRIT PETITION (C) NO.
81 OF 1993: 107 The petitioner in this writ petition was included in the waiting list prepared by the public service commission.
Since the appeals preferred by the candidates at serial No. 14 onwards in the main list have themselves failed.
there is no question of giving any relief to this petitioner.
The writ petition accordingly fails and is dismissed.
No costs.
V. P. R. Appeals dismissed. [/INST] On 28.5.1984, the High Court intimated the government of ten vacancies in the category of Munsifs and requested it to initiate appropriate steps for selection of candidates.
Written test was held in the year 1985 and viva voce was also held by the Public Service Commission.
On 10.12.1985 the High Court requested the Government to select twenty candidates in the place of ten.
On 27.12.1885 the Government requested the public Service Commission to select twenty candidates.
On 11.3.1986 the public service commission sent three select lists, one containing twenty candidates the other containing three Scheduled castes candidates and a waiting list of ten candidates.
The Government received several complaints against the pro cess of selection.
It was toying with the idea of scrapping the entire list and asking for a fresh selection.
95 On 23.12.1986, as the High Court said that there was urgent need for at least thirteen Munsifs, the government approved the name,,, of thirteen persons out of the list recommended by the Public Service commission and published the same.
They were appointed on 30.12.
Meanwhile a writ petition had been riled in the High Court for a direction to the Government to approve and publish the list recommended by the Public Service Commission.
On 30.12.1986, the State stated before the High court that it has already approved thirteen names and approval of the remaining seven persons was under its active consideration.
The High Court dismissed the writ petition as settled.
The Government did not approve any other names in the list in view of the complaints against the selection process by the Public Service Commission.
The candidates in the select list below serial No. 13 were pressing the Government to approve and publish the list and the High Court was also pressing the Government to approve the list in view of the vacancies.
Another writ petition was riled to direct the Government to approve the remaining seven names from the select list.
The High Court (Single judge) allowed the writ petition and directed the Government to approve and publish the list of the remaining candidates submitted by the Public Service Commission to it for appointment as Munsifs, immediately in accordance with the Jammu and Kashmir Civil Services (judicial) Recruitment Rules, 1967 and to consider the appointment of the candidates (including the writ petitioner .) as Munsifs in the vacancies existing or likely to arise, in accordance with the recommendations to he made by the High Court.
On appeal, the division Bench of the High Court reversed the decision of the Single Judge.
The present appeals by special leave were flied against the 96 decision of the Division Bench,.
contending that once the Public Service Commission prepared and recommended a select list, the Government had no power to sit in judgment over it; that the Government was bound to approve the list as recommended; that the function of the Government under Rule 39 of the 1967 Rules was merely ministerial and formal; that the Government 's action was arbitrary and capricious and vitiated by any admissible and extraneous consideration.
The State Government submitted that the function of the Gov ernment under Rule 39 was not merelY formal or ministerial; that the Government, being the appointing authority, was entitled to scrutinies the list open to the Government either to approve or disapprove the list, either whollY or in part , that a number of complaints were received bY the Government against the selection and many of them were found to he not without substance; that in view of the pressing need expressed by the High Court, the first thirteen candidates in the list were approved in the interest of judicial administration; that refusal to approve the remaining seven names inasmuch as no vacancies were available at that time was a valid and bonafide exercise of power and discretion ton the part of the Government; that the appellants had no legal right to be appointed just because their names were included in the select list prepared by the Public Service Commission.
Dismissing the appeals.
this Court.
HELD: 1.1.
It is true that the Government is the appointing authority for the munsifs but it is misleading to assert that in the matter of selection and appointment the Government has an absolute power.
Such an argument does violence to the constitutional scheme.
(102 F) 1.2.
Rule 39 does not confer an absolute power upon the Government to disapprove or cancel the select list sent by the Public Service Commission Where, however, the Government is satisfied, after due enquiry that the selection has been vitiated either (on account of violation of a fundamental procedural requirement or is vitiated by consideration or corruption.
favourtism or nepotism.
it can refuse to 97 approve the select list.
In such a case, the Government is bound to record the reasons for its action, and produce the same before a Court, if and when summoned to do so, apart from placing the same before the Legislature as required by clause (2) of Article 323.
(103 F H) 1.3.
article 323 (2) is meant as a check upon the power of the Government.
The provision militates against the theory of absolute power in the Government to disapprove or reject the recommendations of the commission.
For the same reason, it must he held that the Government cannot pick and choose candidates out of the list.
It is equally not open to the Government to approve a part of the list and disapprove the balance.
(104 B) 1.4.
Where is respect of any particular candidates an), material is discovered disclosing his involvement in any criminal activity the Government can always refuse to appoint such person but this would not he a case touching the select list prepared and recommended by the commission.
(104 C) 1.5.
In this case the Government itself had asked for a list of twenty and the commission had sent a list of twenty.
It could not have been approved in part and rejected in part.
The number of vacancies available on the date of approval and publication of the list is not material.
By merely approving the list of twenty, there was no obligation upon the Government to appoint them forthwith.
Their appointment depended upon the availability of vacancies.
The list remains valid for one year from the date of its approval and publication, if within such one year, any of the candidates therein is not appointed, the list lapses and a fresh list has to be prepared.
(104 E F) 1.6.
If the Government wanted to disapprove or reject the list, it ought to have done so within a reasonable time of the receipt of the select list and for reasons to be recorded.
Not having done that and having approved the list partly (thirteen out of twenty names), they cannot put forward any ground for not approving the remaining list.
Indeed, when it approved the list to the extent of thirteen, it ought to have approved the entire list of twenty or to have disapproved the 98 entire list of twenty.
The objection, the Government have pertains to the very process of selection i.e., to the entire list and not individually to any of the remaining seven candidates.
(104 G) 1.7.
Mere inclusion in the select list does not confer upon the candidates included therein an indefeasible right to appointment.
(104 H) State of Haryana vs Subhash Chandara Marwaha, ; , M. section Jain vs State of Haryana , A.I.R. 1977 S.C. and State of Kerala vs A. Lakshmikutty: A.I.R. 1987 S.C. 331, referred to.
(111 E) 1.8.
The other aspect is the obligation of the Government to act fairly.
The whole exercise cannot be reduced to a more farce.
Having sent a requisition/request to the commission to select a particular number of candidates for a particular category, in pursuance of which the commission issues a notification, holds a written test, conducts interviews, prepares a select list and then communicates to the Government the Government cannot quietly and without good and valid reasons nullify the whole exercise and tell the candidates when they complain that they have no legal right to appointment.
(105 B C) Shankarsan Dash vs Union of India.
; , referred to.
The Government 's action In not approving the rest of the seven names in the select list is unsustainable but there are certain circumstances which induce the Court not to interfere in this matter.
They are: (1) During the period of one year from the date of approval of thirteen names (23.12.1986/30.121986) no vacancy had arisen, which means that even if the list of twenty had been approved and published on December 23 or December 30, 1986 none of the seven persons would have been appointed.
At the end of one year, the list lapses and becomes inoperative.
(II) When the Government failed to act within a reasonable period from the date of the order (December 30, 1986) of the High Court in writ petition 1316/84 (which was disposed of recording the statement of the Advocate General) the petitioners ought to have moved in the matter.
They did not do so.
They waited for more than twenty months and approached the High Court only on 99 September 14, 1988.
This delay disentitles the petitioners from any relief in the facts and circumstances of the case.
(106 C G) </s> |
<s>[INST] Summarize the following judgement: l Leave Petition (Civil) No. 10784 of 1992 etc.
From the judgment and Order dated 13.3.1992 of the Central Administrative Tribunal, New Delhi in O.A. No. 262 of 1991.
M. K. Ramamoorthy, H.S. Gururaja Rao, R. Venkataramani, S.M. Garg, T.L. Roy, T.V. Ratnam, E.X. Joseph, D.N. Paul and M.M. Kashyap for the Petitioners.
D.N. Dwivedi, Addl.
Solicitor General, V.K. Verma and Ms. Ameeka Singh for the Respondents.
The Judgment of the Court was delivered by VENKATACHALA,J.
In these Special Leave Petitions, we are concerned with the Grievance of the employees belonging to the office of the Comptroller and Auditor General of India, working in the Railway Audit Department.
These employees who were Section Officers prior to 1st March, 1984, got promotion from that day as Assistant Audit Officers on a pay scale of Rs. 650 30 740 35800 EB 40 1040 and were designated as Officers 'Group B Gazetted '.
On the recommendations of the Fourth Pay Commission; the said pay scale of Assistant Audit Officers was revised to Rs. 2,000 3,200 from 1st January, 1986.
The grievance of the Assistant Audit Officers Group B Gazetted, is that the Indian Railways should not have denied to them the benefits, such as, issue of Railway Travel Passes/P.T.0s., allotment of Railway Quarters, giving of accommodation in Rest Houses/Retiring Rooms, taking of family members while on tour, etc.
admissible to Group B Gazetted Officers of the Railways.
The Principal Bench of the Central Administrative Tribunal, to be referred to herein after as "the Tribunal", which examined the said grievance, rejected it by order dated 13th March, 1992.
The grievance, so rejected by the Tribunal, is again ventilated in these Special Leave Petitions, seeking redressal therefor.
Since the facts which have given rise to the grievance, furnish the background, for examining its merit, it would be advantageous to advert to them at the 299 out set.
The Railway Board in its letter No. E(G) 58PS5 20/1 dated 14th April, 1960, addressed to the General Managers of the Indian Railways, spelled out its policy in the matter of issuance of Railway Passes/P.T.0s.
to the staff of the Railway Audit Department including the Indian Audit & Accounts Service Officers (IA&AS Officers) of that Department, thus: i.
The scale of Passes/P.T.0s.
and the rules governing their issue will be the same as applicable to Railway servants from time to time.
Passes/P.T.0s.
to IA & AS Officers, if are to be issued when they are proceeding on leave exceeding four months, they should have completed one year 's service in the Railway Audit Department and the Comptroller and Auditor General of India ought to assure by declaring that the Officers concerned will return to Railway Audit Department on the expiry of such Officers ' leave.
IA & AS Officers working in the Railway Audit Department will pot be entitled to grant of certificates which would entitle them to obtain travel concessions on Railways outside India.
Passes/P.T.0s.
will be issued by the Chief Auditors irrespective of home or foreign line.
It was mentioned in the above letter that the same was issued with the sanction of the President of India.
The policy contained in the above letter was followed by the Indian Railways for several years.
In the meantime, the Director of Audit, Central Railway, by his notice dated 19th December, 1983, made it known that the Central Government had, on the recommendations of the Comptroller and Auditor General of India, sanctioned higher scale of pay of Rs. 650 30 740 35 800 EB 40 1040 to 80 per cent of Section Officers on the staff of the Railway Audit Department and that scale of pay would become effective from 1st March, 1984.
It was indicated in that notice that the Section Officers on the staff of the Railway Audit Department getting such higher scale of pay, will have their designation as Assistant Audit Officers (Group B Gazetted).
Similar notice, it is said, was issued by the concerned Director of Audit of every other Zone of the lndian Railways.
The said scale of the pay of the Assistant Audit Officers (Group B Gazetted) came to be revised as Rs. 2,000 300 3,200 from 1st January, 1986 as per the recommendations of the Fourth Pay Commission.
Even then, the Assistant Audit Officers who Were designated as 'Group B Gazetted ' continued to have the privileges and facilities of 'Group B Officers of the Indian Railways.
However, by its letter No. E(W) 87PS51/3 dated 27th July, 1989 addressed to all General Managers, Indian Railways, the Railway Board referring to the creation of posts of Assistant Audit Officers in the Railway Audit Department and the incumbents in those posts having been given Group B Gazetted status, stated thus: "As a result of restructuring of the cadre of Indian Audit and Accounts Department, a number of posts of Assistant Audit Officers have been created in the scale of Rs. 2000 3200 and classified as Group 'B 'posts carrying a gazetted status.
The eligibility of these officers to various facilities as admissible to the Gazetted Officers on Railways in scale of Rs. 2000 3500 has been considered but the same has not been agreed to.
It has been decided that the Audit Officers in scale of Rs. 2000 3200 may be given the privileges and facilities viz. Passes/PTOs.
allotment of Railway Quarters and Rest Houses/retiring Rooms and taking family with them while on tour etc.
as admissible to the Railway Employees in identical scale of pay viz. Rs. 2000 3200.
" The said letter shows that it had been issued with the concurrence of the Finance Directorate of the Ministry of Railways.
But, the contents of the said letter were modified by a telegram, which read thus: "No. E(W)87PS51/3.
In partial notification of Ministry of Railway 's letter of even number dated 27.7.89 Ministry of Railway have decided that the Assistant Audit Officers given the Gazetted status between 1st March, 1984 and 31.12.1985 shall continue to enjoy the facility of passes, PTOS.
Quarters etc.
enjoyed by them as a result of conferring of the gazetted status on them during the period mentioned above (As personal to them.)" The said telegram makes it obvious that those Assistant Audit Officers in the Railway Audit Department who got Gazetted status between 1st March, 1984 and 31st December, 1985, shall alone be entitled to the facilities of Passes/P.T.0s.
, Quarters etc,and not those who got such Gazetted status after 31st December, 301 Then, there is the letter No. PCIV/86/ Imp./46 dated 30th October, 1987 issued by the Railway Board to the General Managers of the Indian Railways, which shows that the president of India had, consequent upon the revision of pay scales of the Central Government employees recommended by the Fourth Pay Commission, reclassified all the posts under the Indian Railways, thus: "Classification Description of Posts of posts Group A All posts in scale Rs. 2200 4000 and above.
Group B Posts in scale Rs. 2375 3500 applicable to accounts Officers only and other posts of Officers in scale Rs. 2000 3500(all Deptts.) Group C.
All posts in scales Rs. 825 1200 and above including posts of Post graduate Teachers (Selection Grade)/Head masters Middle School (Selection Grade)in scale Rs. 2000 3500, Supervisors in scale Rs. 2375 3500 and excluding those mentioned for Groups 'A ' and `B '.
Group D All posts in scales Rs. 750 940, Rs. 7751025 and Rs. 800 1150.
" The said classification of posts in the Indian Railways is done, as becomes clear from the said letter, consequent upon the introduction of Railway Services (Revised Pay) Rules, 1986.
In this context, it would be necessary to advert to the Railway Servants (Pass) Rules, 1986 made by the President of India under the proviso to Article 309 of the Constitution regulating the issuance of passes and Privileged Ticket Orders to Railway servants.
Meaning of 'railway servant for the purposes of the said Rules is given in clause (h) of Rule 2 thereof,.
thus: "railway servant ' means a person who is a member of a service or who holds a post under the administrative control of Railway Board and includes a person who holds a post in the Railway Board.
Persons lent from a service or post which is not under the administrative control of the Railway Board to a service or post which is under such administrative control do not come within the scope of this definition.
This term excludes casual labour for whom special 302 orders have been framed.
" Schedule II of the said Rules contains the classification (categorisation) of Railway servants into Group A, Group B, Group C and Group D and refers to certain privileges admissible to them.
That Schedule, which provides for issue of passes on privilege account to Railway servants puts Group A Group B Railway servants in one category.
Group C Railway servants are put in altogether a different category for the purpose of issue of passes to them.
From the said facts, it becomes clear that the Assistant Audit Officers in the Railway Audit Department, who hold the posts on the pay scale of Rs. 2,0003,200, although designated as Group B Officers, are not treated on par with Railway servants of the Indian Railways in the category of Group B Officers, to wit, the Railway servants holding the posts of Assistant Accounts Officers and other Officers on the higher pay Scale of Rs 2,000 3,500.
Therefore, the obvious reason for denial of the privileges conferred upon Group B Railway Officers under the Railway Servants (Pass) Rules, 1986, to Assistant Audit Officers of the Railway Audit Department, was the latter holding posts of lower pay scale of Rs. 2,000 3,200.
It was contended by the learned counsel for the petitioners that the Assistant Audit Officers working in the Railway Audit Department could not have been treated differently from Group B Officers of the Indian Railways in the matter of issue of privilege Passes/P.T.0s.
to them when the latter No. E. (G) 58PS5 20/1 dated 14th April, 1960 issued by the Railway Board with the sanction of the President, clearly laid down the policy that scale of Passes/P.T.0s.
and the Rules governing their issue will be the same as applicable to Railway servants from time to time.
It was also contended by them that the Railway Servants (Pass) Rules, 1986 issued by the President of India, since exclude the Assistant Audit Officers from 'B ' category Officers, they would be violative of Article 14 of the Constitution.
Lastly, it was contended by them that the decision of the Indian Railways that the Assistant Audit Officers of the Railway Audit Department, who were given the Gazetted status between 1st March, 1984 and 31 st December, 1985, alone shall continue to enjoy the facilities of Passes/P.T.0s., Quarters etc. has since resulted in denial of such facilities to the Assistant Audit Officers who were given the Gazetted status after 31st December, 1985, the same (decision) is violative of Article 14 of the Constitution.
We are unable to find merit in any of the said contentions urged on behalf of the Assistant Audit Officers in support of their grievance, for the reasons which we shall presently state.
303 The Assistant Audit Officers although working in the Railway Audit Department, are the Officers who are appointed by the Comptroller and Auditor General of India and work under his.
control and supervision.
No doubt, the Railway Board, as seen from its letter dated 14th April, 1960 adverted to earlier, had decided to give to the staff and Officers working in the Railway Audit Department the facilities admissible to Railway servants of comparable status.
It is not for us to go into the question whether it was obligatory for the Railways to confer such facilities on the staff and Officers of the Railway Audit Department, who in reality belong to the Department of Comptroller and Auditor General of India, inasmuch as that question is not required to be decided by us.
When the said letter dated 14th April, 1960, containing the Railway Board 's policy of issuance of Passes/P.T.0s.
is seen, it shows that the staff of the Railway Audit Department is treated more generously than the Officers of the same Audit Department in the matter of issuance of Passes/P.T.0s.
to them (Officers), in that, the issuance of passes to the latter category is made subject to certain restrictions.
No doubt, when certain Section Officers were promoted as Assistant Audit Officers and conferred the status of 'Group B Gazetted ' by the Comptroller and Auditor General of India, such Officers were treated notwithstanding their lower pay scale, on par with 'B ' Group Officers in the Indian Railways as regards privileges/facilities obtainable by them from the Railways.
But, when the scale of pay of the Assistant Audit Officers of the Railway Audit Department was revised on the recommendations of the Fourth pay Commission, the scale of pay of the Assistant Audit Officers, who had been designated as Group 'B ' Officers, by the Comptroller and Auditor General of India, fell short of the scale of pay of the Railway servants of the Railway Department classified as Group 'B ' Officers by the President of India.
It cannot be overlooked that it is the President of India, who made the Railway Services (Revised Pay) Rules, 1986, on the basis of the pay revision of the Central Government Servants, as recommended by the Fourth Pay Commission and it is again the order of the President of India, which classified the Railway servants into Group A, Group B, Group C, and Group D according to the minimum and maximum scale of pay of the posts held by them.
Indeed, it was not disputed on behalf of the petitioners that the Assistant Audit Officers of the Railway Audit Department who are on the pay scale of Rs. 2,000 3,200 are treated on par with the Railway servants (Officers) who are on the pay scale of Rs. 2,000 3,200 in matters of giving the facilities or conferring of privileges.
What has happened is that the Railway Servants (Pass) Rules, 1986, when are made, certain extra privileges relating to issuance of Passes/P.T.0s.
are conferred on Railway servants, that is, Officers in Group 'A ' and Group 'B ' However, Group 'B ' Railway servants, according to classification made by the president of India, on revision of their pay scales are those whose pay scales are Rs.2,000 3,500.
What is contended for on behalf of the Assistant Audit Officers, is that the fact that their 304 scale of pay is lower then Rs. 2,000 3,500 as applicable to `B ' Group Gazetted Officers of the Railways should be ignored and the status that is conferred upon them by the Comptroller and Auditor General of India as Group B Gazetted ' alone should form the basis to give them facilities or confer privileges on par with 'B ' Group Gazetted Railway servants.
The submission made on behalf of the Railways, was to the contrary.
According to the submission, the fact that the Assistant Audit Officers in the Railway Audit Department, on the pay scale of Rs. 2,000 3,200, are designated by the Comptroller and Auditor General of India as 'Group B Gazetted ' is not sufficient to equate them with Group B Officers of the Indian Railways who hold higher posts with scale of pay of Rs. 2,000 3,500.
If the Railways give the facilities and privileges to the Assistant Audit officers, who are not Railway servants, treating them on par with Railway servants of Group 'B ' they could find no valid reason to deny such facilities and privileges to the Railway servants holding posts on the pay scale of Rs. 2,000 3,200.
If that has to be done, the Indian Railways would be required to extend similar facilities and privileges to all Railway servants who hold posts in the Indian Railways on the scale of pay of Rs. 2,000 3,200.
It means extending the benefits to thousands of Railway servants involving heavy financial burden on the Indian Railways.
We find that the contentions raised on behalf of the Assistant Audit Officers, are unacceptable in that, if accepted, they would lead to unjust results of the Indian Railways conferring special privileges and facilities upon persons belonging to foreign Department of Comptroller and Auditor General of India, while their own servants who hold equivalent posts on the same scale of pay will be denied such privileges and facilities.
Therefore, there is substance in the submissions made on behalf of the Indian Railways that the grievance sought to be made out on behalf of the Assistant Audit Officers lacks merit and calls to be rejected.
We, accordingly, reject the contention advanced on behalf of the Assistant Audit Officers that they should be treated by the Indian Railways on par with Railway servants classified in Group 'B "in matters relating to the conferring of privileges and giving of facilities.
Again, when the Railway Servants (Pass) Rules, 1986, made in consonance with the classification of Railway servants, rightly made by the President of Indian consequent upon the Railway services (Revised Pay) Rules, 1986 issued under the proviso to Article 309 of the Constitution, confer facilities or privileges according to the class to which Railway servants belong, they cannot be treated as Rules which are violative of Article 14 of the Constitution.
Nor can they be regarded as arbitrary.
Hence, the contentions raised on behalf of the Assistant Audit Officers on the unsustainability of the Railway Servants (Pass) Rules, 1986 based on Article 14 of the Constitution, wan ant rejection as those lack in merit.
305 Coming to the last contention, viz, that the privileges given to and facilities conferred on the Assistant Audit Officers, who had been given the status of `Group B Gazetted by the comptroller and Auditor General of India, between 1st March, 1984 and 31st December, 1985, are discriminatory, all that we would wish to say is that even if such discrimination is brought about by the Railways in regard to the officers of the same category, that is, Assistant Audit Officers, such discriminatory treatment accorded to a small number cannot be availed of by the petitioners to obtain the benefit of such wrongly conferred privileges and facilities.
However, we do not consider it appropriate to pronounce upon the correctness of the conferment of such privileges and facilities on a small number of Assistant Audit Officers in these petitions, when they are not impleaded by the petitioners as party respondents, in these petitions.
Hence, we reject the last contention, as well.
We, therefore, find no good reason to disagree with the order of the Tribunal impugned in these Special Leave Petitions.
In the result, we dismiss these Special Leave Petitions.
However,.in the facts and circumstances of the cases we make no order as to costs.
SLPs dismissed. [/INST] Petitioners were in service, under Comptroller and Auditor General of India (C & AG for short), as Assistant Audit Officers (A.A.O. for short) Group B Gazetted, in pay scale Rs. 2000 3200, and were working in Railway Audit Department, after December 31,1985.
In 1960, Railway Board spelled out its policy, stating that scale of passes/P.T.0s.
and the rules governing their issue to staff of the Railway Audit Department will be the same as applicable to Railway servants.
However some distinctions were made as regards Indian Audit and Accounts Service Officers (IA & AS Officers) of Railway Audit Department, on recommendations of the C & AG., Central Government sanctioned higher scale of pay effective from March 1, 1984, for 80 per cent of Section officers in the Railway Audit Department to be designated as A.A.Os (Group B Gazetted).
Their pay scale was revised to Rs. 2000 3200 from January 1, 1986, on recommendation of Fourth Pay Commission.
They continued to have the privileges and facilities of Group B Officers of Indian Railway.
In 1987, consequent to the revision of pay scales of Railway posts, on recommendation by the Fourth pay Commission, the posts under Indian Railways were re classified.
Posts in scale of Rs. 2000 3200 were classified as Group 'C ' instead of Group B.
In 1989, the Railway Board, in view of restructuring of cadre of Indian Audit and Accounts Department, creation of posts of A.A.Os in scale of Rs. 2000 3200, classified as Group B Gazetted status, issued instructions that Audit Officers in Scale of Rs. 2000 3200 may 297 be given privileges and facilities viz Passes/P.T.0s.
Quarters etc, as admissible to Railway employees in identical scale.
Consequently they were not entitled to the privileges and facilities admissible to gazetted Railway Officers.
classified in Group B in scale of Rs. 2000 3500.
However, Assistant Audit Officers given Gazetted status between March 1, 1984, and December 31, 1985 were allowed to continue to enjoy the facilities of Passes/p.
T.Os quarters etc.
Petitioners filed application before the Central Administrative Tribunal, Principal Bench, claiming that Assistant Audit Officers, given Gazetted status Group B after December 31, 1985, were also entitled to the privileges and facilities admissible to Railway Officers, classified 'Group B '.
The application was rejected by the Tribunal and the Petitions filed Special Leave petition seeking redressal.
This Court dismissed the special leave petition and, HELD: That conferring special privileges and facilities, to Assistant Audit Officers, which are not provided to Railway servants in identical pay scale would lead to unjust results.
It would result in conferring special privileges and facilities, by the Indian Railways to persons belonging to foreign department of Controller and Auditor General of India, while their own servants, who hold equivalent posts on the same scale of pay will be denied such privileges and facilities.
The Railway Board 's letter dated April 14, 1960 also shows that the staff of the Railway Audit Department is treated more generously than the officers (if the same Audit Department in matters of issuance of Passes/P.T.0s.
The Assistant Audit Officers, who had been given status of gazetted Group B, by the comptroller and Audit General, cannot be treated, by the Indian Railways on par, with Railway servants, classified group B. In matters relating to conferring privileges and giving of facilities.
The Railway Servant (Pass) Rules, 1986, made in Consonance with classification of Railway servants, rightly made by the President of India, consequent upon the Railway services (Revised Pay) Rules, 1986, issued under the proviso to Article 309 of the Constitution, confer facilities and privileges according to class to which Railway servants belong, they can not be treated as Rules violative of Article 14 of the Constitution.
Nor can they be regarded as arbitrary.
(303 C, 304 G) That even if discrimination was brought about by the Railways in regard to officers of the same category, that is, Assist Ant Audit Officers, such discriminatory treatment accorded to a small number cannot be availed of by the Petitioners, to obtain she benefit of such wrongly conferred privileges and facilities.
However, this Court did not consider it appropriate to pronounce 298 upon the correctness of the conferment of such privileges and facilities to the Assistant Audit Officers, given status of Gazetted Group B between March 1, 1984 and December 31, 1985, when they had not been impleaded as party respondents.
(305 A C) </s> |
<s>[INST] Summarize the following judgement: Appeal Nos.
1583 & 1584 (NT) of 1977.
From the Judgment and Order dated 22.11.1976 of the Bombay High Court in I.T. Application No. 191 of 1976.
S.C. Manchanda, Dr. K.P Bhatnager, C. Ramesh, T.V. Ratham for P. Parmeswaran for the Appellant.
Mrs. A.K. Verma, S.V. Pathak, for J.B.D. & Co. for the Respondent.
The judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
These appeals are preferred by the Revenue against an order of the Bombay High Court rejecting an application under section 256 (2) of the Income Tax Act, By means of the said application the Revenue sought to raise the following three questions: " (1) Whether, on the fact and in the circumstances of the case, the Tribunal was right in holding that the commission paid by the assessee company to its directors was an additional remuneration forming part and parcel of the salary allowed to them and that the said remuneration would not be covered by section 40 (a) (v) of the Income tax Act and thereby allowing the assessee 's claim for allowing the deduction of the whole amount of commission paid to the directors ? (ii)Whether the Tribunal was right in their view that the words "Whether convertible into money or not" used in section 40 (a) (v) of the Act postulated that ,the 88 benefit, amenity or perquisite mentioned therein covers benefit, amenity or perquisite allowed in Kind but not in cash? (iii)Whether the Tribunal was right in holding that the expenditure of Rs. 19,386 for the assessment year 1971 72 and Rs. 29,283 for the assessment year 197273 did not represent entertainment expenditure within the meaning of section 37 (ii) of the Income tax Act ?" The assessment years concerned here in are 1971 72 and 1972 73.
The first two questions go together.
The provision applicable for the A.Y. 1971 72 was Section 40 (a) (v) whereas for the A Y. 1972 73, the provision applicable is Section 40 (a) (5) which is a successor provision to Section 40 (a) (v).
The respondent is a private limited company trading in tractors and earth moving equipment.
During the accounting years relevant to the aforesaid assessment years, the assessee paid to three of its Directors commission on sales in addition to salary as follows: Assessment Director Salary Commission year 1971 72 Sh.
S.B Lal 39,000 36,171 Sh.
S.B. Mathur 18,000 36,171 Sh.
A.B. Mathur 7,800 36,171 1972 73 Sh.
S.B Lal 39,000 40,792 Sh.
S.B. Mathur 18,000 40,792 Sh.
A.B. Mathur 7,800 40,792 The 'commission ' in the above table means the commission paid to the said Directors on the sales effected by the assessee, at a prescribed percentage.
The Income Tax Officer treated the commission on sales as "perquisites" and disallowed the same applying Section 40 (a) (v) for the year 1971 72 and Section 40 (A) (5) for the assessment year 1972 73.
fie also disallowed the expenses referred to 89 in question No. (iii) as entertainment expenses.
On appeal, the Assistant Appellate Commissioner held that the commission on sales cannot he treated as "perquisites".
He also held that the expenditure on dinner and tea cannot be characterised as entertainment expenditure and ought not to have been disallowed.
The Revenue preferred appeals before the Tribunal against the orders of the A.A.C., which appeals were dismissed by the Tribunal following its order dated August 25, 1973 relating to assessment years 1967 68 to 1968 70.
The order dated August 25, 1973 dealt anter alia with the questions arising herein ind held the same against the Revenue.
An application under section 256 (1) was dismissed by the Tribunal.
The first question urged before us which was also the question urged before the Tribunal is whether commission on sales (paid in cash) falls within the fourcornersot Section40 (a) (v)/Section40(A) (5)" It Would be appropriate to set out the said provisions in so far as they are relevant: " Section 40 Amounts not deductible: Notwith standing anytime, to the contrary in section 30 to 38 the following amounts shall not be deducted in computing the income chargeable under the head "Profits and gains of business or profession (a) in the case of any assessee. . . " (v) any expenditure which results directly or indirectly in the provision of any benefit or amenity or perquisite.
whether convertible into money or not, to an employee (including any sum paid by the assessee in respect of any obligation which but for such payment would have been payable by such employee) or any expenditure or allowance in respect of any assets of the assessee used by such employee either wholly or partly for his own purpose or benefit, to the extent such expenditure or allowance exceeds one fifth of the amount of salary payable to the employee.
or an amount calculated at the rate of one thousand rupees for each month or part thereof com 90 prised of his employment during the previous year, whichever is less:" Note: (The two provisos and the two explanations are omitted as not necessary for the purpose of this case.
) Section 40 (A) (5), which in so far as it is material, is substantially in the same terms, reads as follows: "Section 40 (A) Expenses or payments not deductible in certain circumstances.
(5) (a) Where the assessee (i) incurs any expenditure which results directly or indirectly in the payment of any salary to an employee or a former employee.
or (ii) incurs any expenditure which results directly or indirectly in the provision of any perquisite (whether convertible into money or not) to an employee or incurs directly or indirectly any expenditure or is entitled to any allowance in respect of any assets of the assessee used by an employee either wholly or partly for his own purposes or benefit.
then, subject to the provisions of clause (b), so much of such expenditure or allowance as is in excess of the limit specified in respect thereof in clause (c) shall not be allowed as a deduction:" Explanation 2: In this sub section (b) "perquisite" means (i) rent free accommodation provided to the em ployee by the assessee; (ii) anv concession in the matter of rent respecting any 91 accommodation provided to the employee by the assessee: (iii)any benefit or amenity granted or provided free of cost or at concessional rate to the employee by the assessee: (iv)payment by the assessee of any sum in respect of any obligation which, but for such payment, would have been payable by the employee.
and (v) payment by the assessee of any sum whether directly or through a fund.
other than a recognised provident fund or an approved superannuation fund.
to effect an assurance on the life of the employee or to effect a contract for in annuity.
" Incidentally Section 40 (A) (5) which was inserted repealing section 10 (a) (v) his itself been deleted with effect from April 1, 1989 by the Direct Tax Laws (Amendment) Act, 1987.
The sister provision contained in sub clauses (i) and (ii) of clause (c) of ' section 40.
applicable to directors of a company (and other persons mentioned therein) has also been deleted by the very same enactment with effect from April 1. 1989.
Since the relevant provisions in section 40 (a) (v) and 40 (A) (5) are substantially similar.
we smile consider the language employed in the latter provision.
Sub clause (5) of section 40 (A) is applicable in the following Situations: (1) Where the assessee incurs any expenditure which results directed or indirectly in the payment of any salary to in employee or it former employee or (2) Where the assessee incurs any expenditure which results directly or indirectly in the provision of ' any perquisite (whether convertible into money or not to an employee; (3) (it) Where the assessee incurs directly or indirectly any 92 expenditure or provides an allowance in respect of any assets of the assessee used by the employee either wholly or partly for his own purpose or benefit; (b)Where an employee of the assessee is provided any allowance ("entitled to any allowance") in respect of any assets of the assessee used by such employee either wholly or partly for his own purposes or benefit.
In either of these situations, so much of such expenditure or allowance as is in excess of the limits specified will not be allowed as a deduction.
The question is whether the commission paid to its directors/employees on the sales effected by the assessee falls within any of the situations/clauses mentioned above.
The Revenue relies upon the second one among them.
According to them, the commission paid is a 'perquisite.
which submission they say is borne out by the words within the brackets " whether convertible into money or not" immediately following the word "perquisite".
On the other hand the contention of the assesses which his been accepted by the A.A.C. and situations/clauses contemplated by sub section 5.
Having regard to the language employed in clause (c) we are inclined to agree with the assessee.
The language of sub section (5) is significant.
The first two situations, as we have called them start with the words "where the assessee incurs any expenditure which results directly or indirectly. . . .It is difficult to say that payment of a certain cash amount by wayof commission on sales directly to an employee can be said to fall within the words "where the assessee incurs any expenditure which results directly or indirectly".
Such a payment cannot also fall within the two sub clauses of clause (3) in our analysis since they speak of an expenditure or allowance in respect of ' any assents of the assesee used by the employee.
Learned counsel for the Revenue.
Shri Manchanda argued that the words "whether convertible into money or not" bring out the intention of the Parliament and support his contention.
He says, there is no reason not to include cash payment within the ambit of sub section(5) to Section 40 (A).
We are, however.
not concerned with the generality of cash payments but only with the payment concerned herein.
Reading, the Sub section as a whole and having regard to the language employed therein, the the Tribunal is that Such cash payment does not fall within any of the 93 payment concerned herein does not fit into it.
The employees concerned herein also happen to be directors.
The provision in clause (c) of Section 40 applies to directors among others.
Of course.
Section 40 (A) (5) is applicable only to companies where as Section 40 (A) (5) is applicable to employees whether of companies or others.
In the case of directors, who are also employees, both the provisions will be attracted the higher of the two ceilings has to be applied.
The learned counsel for the respondent assessee brought to our notice it circular issued by the Central Board of direct Taxes which inter alia say.
"its read is payment of commission to the employees the question whether it forms part of salary or perquisite has to he decided on the 'acts of each case.
If the terms and conditions of service are such that commission is paid not as a bounty or benefit but is paid ,is part and parcel of 'the remuneration for the service renders by the employees.
such payment partake the nature of salary rather than as a benefit or perquisite.
If, however, on terms and conditions of service either there is no obligation for the employer to pay the commission or it is a matter purely in the discretion of the employer, such payment should he treated ,is a benefit by way of addition to salary rattler thin in lieu of salary.
" It is not necessary for us to make any comment on the said circular.
For the above reasons.
we are of the opinion that the High Court was justified refusing to direct the Tribunal to state question (1) and (2) under section 256 (2).
So far its question No.3 is concerned, it his not been seriously pressed before us having regard to the smallness of the amount involved.
It is also stated that the said question is pending consideration is a batch of appeals before this Court.
We do not propose to express any opinion on question No. 3 for the reason that the amount involved is quite small having regard to the income of the assessee respondent.
The appeals accordingly fail and are dismissed.
No costs.
Appeal dismissed. [/INST] The respondent assessee was a private limited company trading in tractors and earth moving equipment.
During the relevant the assessee pain commission on sales in addition to salary to its directors at a prescribed percentage of the sales effected by the assessee.
The Income Tax Officer treated the commission on sales as perquisites ' and disallowed the same applying section 40 (a) (v) for the year 1971 72 and section 40 (A) (5) for the assessment year 1972 73.
Which are the concerned assessment years herein.
On appeal, the Appellate Assistant Commissioner held that commission on sales cannot betreated as perquisites.
The Tribunal dismissed the Revenue 's appeal.
The question before this court was whether commission on sales (paid in cash) falls within the four corners of section 40 (a) (v) ,Section 40 (A) (5).
Dismissing the appeal, this court.
HELD: 1.
Regarding Section 40 (1) (v) /40 (A) (5) as a whole, the cash payment of the nature concerned in this case does not fall within any of the situations/clauses contemplated by sub section (5).
(92 D) Payment of a certain cash amount by way of commission on sales, directly to an employee cannot be said to fall with the words "where the assessee incurs an expenditure which results directly or indi 87 rectly" in Section 40 (A) (5).
(92 F) Nor can such a payment fall within a provision which speaks of an expenditure or allowance in respect of any assets of the assessee used by the employee DE.
(92 F) </s> |
<s>[INST] Summarize the following judgement: P. (C) Nos.
1189798/92 etc.
From the Judgment and Order dated 28.8.1992 of the Delhi High Court in Civil Writ Petition Nos.
1152 & 1157 of 1992.
V.R. Reddy, Addl.
Solicitor General,, Kapil Sibbal, P.P. Rao, Rama Jois, A. Temton, Dr. Shankar Ghosh K. K. Venugopal, Harish Salve, F.S. Nariman, A.N. Haksar, Shanti Bhushan, K.N Bhat, T.R. Andhyarujina, C.V Subba Rao, P.P. Singh, Mrs. B. Sunita Rao, Sudhir Kulshreshtha, Rohit Tandon, Parijat Sinha, Ms. Sunanda Roy, Ms. section Bhattacharya, B.D. Ahmed, Man Mohan Singh, Gopal Subramanium, D.N. Mishra, A.M. Dittia, P.K. Ganguli, Manoj K. Das.
Amit Prabhat, Tripurary Roy.
K.L. Mehta, section Ganesh, Pratap Venugopal, K.J. John, Pramod Dayal, Ajay K. Jain and D.N Nanjunda Reddy for the appearing parties.
The judgment of the Court was delivered by 137 K. JAYACHANDRA REDDY, J.
By our order dated 14th January, 1993 while disposing of these special leave petitions we gave our conclusions and we proposed to deliver the detailed judgment at a later stage giving all the reasons in support of those conclusions.
We hereby deliver the detailed judgment In our earlier order we stated the relevant facts and the issues involved in a concised form.
However, we think it appropriate and necessary to refer to some of them for a better appreciation of the reasons in their proper perspective.
Every year the Railway Board enters into contracts with the manufacturers for the supply of cast steel bogies which are used in turn for building the wagons.
Cast steel bogies come under a specialised item procured by the Railways from the established sources of proven ability.
There are 12 suppliers in the field who have been regularly supplying these items.
Two new firms Simplex and Beekay also entered the field.
Among them admittedly M/s H.D.C., Mukand and Bharatiya are bigger manufacturers having capacity to manufacture larger quantities.
On 25.10.91 a Iimited tender notice for procurement of 19000 cast steel bogies was issued to the regular suppliers as well is the above two new entrants for the year namely from 1.4.92 to 31.3.93.
The last date for submission of offers to the Ministry of Railways was 27.11.91 by 2.30 P.M. and the tenders were to be opened on the same day at 3 P.M.
It was also stated therein that the price was subject to the price variation clause and the base date for the purpose of escalation was 1.9.91 and that the Railways reserved the right to order additional quantity upto 30% of the ordered quantity during the currency of the contract on the same price and terms and conditions with suitable extensions in delivery period.
The offers were to remain open for a period of 90 days.
On that day the tenders were opened in the presence of all parties.
The price quoted by the three manufacturers i.e. M/s H.D.C., Mukand and Bharatiya was an identical price of Rs. 77,666 per bogie while other tenders quoted between 83,000 and 84.500 per bogies After the tenders were opened and before the same could be finalised, the Government of India announced two major concessions namely reduction of custom duty on the import of steel scrap and dispensation of freight equalisation fund for steel.
The tenders were put up and placed before the Tender Committee of the Railways which considered all the aspects.
The Committee concluded 138 that three of the tenderers namely M/s H.D.C., Mukand and Bharatiya who had quoted identical rates without any cushion for escalation between 1.7.91 and 1.9.91, have apparently formed a cartel.
The Tender Committee also noted that the rates quoted by them were the lowest.
Taking into consideration the reduction of Rs. 1500 as result of the concessions in respect of the reduction of customs duty on the import of steel scrap and dispensation of the freight equalisation fund for steel.
The Tender Committee concluded that the reasonable rate would be Rs. 76,000 per bogie.
On the question of distribution of quantities to the various manufacturers the Tender Committee decided to follow the existing procedure.
The Tender Committee signed these recommendations on 4.2.92 but on the same day the Member (Mechanical) of the Committee received letters from M/s H.D.C. and Mukand.
M/s H.D.C. in its letter stated that in view of the concessions and also on the basis that per Kg.
rate of casting per bogie could be reduced from Rs. 37.50 to Rs. 29 the cost of casting can also be reduced and therefore they would be in a position to supply the bogies at a lesser rate, in case a negotiation meeting is called.
M/s Mukand in its letter also offered to substantially reduce (he prices and they would like to co operate with the Railways and the Government and brings down the prices as low is possible and asked for negotiations.
Though this was post tender correspondence the Department felt that the offers made by M/s H.D.C. and Mukand could be considered.
The whole matter was examined by the Advisor (Finance) in the first instance and by an collaborate note lie observed that the need for encouraging open competition to improve quality and brings down costs his been recommended by the government and if it is intended to continue the existing policy of fixing a rate and distributing the order among all the manufacturers, then negotiations may not he useful as uniform prices offered to all manufacturers have to be sufficient even for the smaller and less economical units and that as any review of the existing policy would take time, the present tender can be decided on the basis of the existing policy.
With this noting the file was immediately sent to the Member (Mechanical), the net higher authority, The, with some observations however recommended the acceptance of the Tender Committee 's recommendations.
The file was then put up to Financial Commissioner.
He noted that the Tender Committee was convinced that the three manufacturers who quoted identical price of Rs. 77,666 had formed a cartel.
He also considered the offers made by M/s H.D.C. and Mukand and observed that these three manufacturers who quoted 139 a cartel price intended to get a larger order on the basis of such negotiated price which would eventually nullify the competition from the other manufacturers and lead to their industrial sickness and subsequently to monopolistic price situation.
He, however, approved the Tender Committee 's recommendations that a counter offer of Rs. 76,000 may he accepted but in the case of M/s H.D.C. a price lower by Rs. 11,000 may be offered as per their letter dated 4.2.92.
He also recommended that the two manufacturers M/s Cimmco and Texmaco may be given orders to the extent of their capacity or quantity offered by them whichever is lower in view of the fact that they are wagon builders and the present formula regarding the distribution of quantities may be applied to all manufacturers except the three who have formed a cartel.
The also recommended some recoveries from these three manufacturers who are alleged to have formed a cartel on the basis of their letters wherein they have quoted prices which were much less than the updated price as on 1.9.91 of Rs. 79,305.
He also made certain other recommendations and finally concluded that the post tender letters may be ignored and that for short term gains the Department can not sacrifice long term healthy competition.
After these recommendations of the Financial Commissioner the file was put up to the approving authority i.e. the Minister for Railways, who in general agreed with the recommendations of the Financial Advisor.
He also noted that these three manufacturers have formed a cartel.
lie also noted that subsequent to the Financial Commissioner 's note, besides M/s 1 1. D. C. and Mukand has also offered to reduce the price by 10% or more vide their letter dated 19.2.92 if called for negotiations.
Taking these circumstances into consideration the Minister ordered that all these three firms may he offered a price lower by Rs. 11,000 with reference to the counter offer recommended by the Tender Committee and the quantities also be suitably adjusted so that the cartel is broken, The Minister also noted that as a result of this a saving of about Rs. 11 crores would be effected.
In his note, the Minister also ordered redistribution of the quantities.
The also ordered that 30% option should straightaway be exercised.
After the approving authority took these decisions, the file went to the Chairman.
Railway Board for implementing the decisions.
The noted that action will be taken as decided by the Minister but added that it results in dual pricing namely one to the three manufacturers and the higher one to the others and therefore the Minister may consider whether they could counter offer the lower price to all the manufacturers as that would result in saving much more.
140 The file was then again sent to and was considered by the Financial Commissioner who noticed this endorsement made by the Chairman, Railway Board.
The however noted that so far all the other firms are concerned it is Rs. 3305 less than the present contract price but it would not be equitable to offer the lower price put forward by the three manufacturers as it Would make the other units unviable and that incidentally the price of Rs. 76,000 now proposed to be counteroffered to the other firms is also in line with the recommendations of the Tender Committee.
The, however, noted that some of the units were sick units and owe a lot of money to the nationalised banks and it would therefore be in the national interest to accept dual pricing Therefore the file was again put up to the approving authority who agreed with the recommendations of the Financial Commissioner and the Tender Committee and directed that the same may be implemented.
In view of this final decision taken by the approving authority a telegram was issued to the three manufacturers giving them a Counter offer of Rs. 65,000 per bogie.
The counter offer was also made to the other nine manufacturers at the rate of Rs 76,000 per bogie namely the price worked out by the Tender Committee.
Soon after the receipt of this telegram dated 18.3.92 M/s H.D.C. and Mukand filed writ petitions in the Delhi high Court challenging the so called discriminatory counteroffer.
M/s Bharatiya also filed a similar petition in Calcutta High Court but the same was withdrawn but another writ petition was filed later in the Delhi High Court.
In the writ petitions filed by M/s H.D.C. and Mukund the High Court stayed the operation of the telegram dated 18.3.92 and issued notice to the Union of India and to the Executive Director and Director of the Railways (Stores) who figured as respondents in those writ petitions.
M/s M. D.C. and Mukand also wrote to the Minister of Railways in reply to the telegram that they were not prepared to accept the counter offer at the rate of ' Rs. 65,000 and instead they offered lo supply the bogies at the rate of Rs. 67,000 per bogie.
The Railways accepted this offer and intimated M/s H.D.C. and Mukand accordingly.
The High Court.
at an interlocutory stage pending the writ petitions.
passed an order on 2.4.92.
directing the Ministry to accept the allocation of bogies recommended by the Tender Committee and to pay a price at the rate of Rs. 67,000 only per bogie and that would be subject to the final decision of the writ petitions.
Being aggrieved by this order, the Railways filed a petition for special leave to appeal No. 5512/92 and this Court while refusing to interfere at that interlocutory stage made the following observations 141 on 28.4.92: "However, we may observe and so direct that during the pendency of the writ petition if any of the suppliers in terms of the package of distribution indicated by the High Court (including the petitioners in the High Court in the writ petition) seek an "on account" payment representing the difference between the sum of Rs. 67,000 indicated as price by the High Court and the sum of Rs. 76,000 contemplated by the Railways; the order of the High Court shall not prohibit the government making such on account payment to such suppliers on each wagon on the condition that the said on account payment of Rs. 9.0000) per bogie should he covered by a bank guarantee for its prompt repayment together with interest at 20% per annum in the event the on account payment cannon( be observed in the price structure that may ultimately come to be determined pursuant to the final decision in the writ petitions.
The special leave petitions are disposed of accordingly.
" Thereafter the High Court took up the writ petitions for final hearings any by the impugned judgment allowed the writ petitions filed by M/s H.D.C. and Mukand and directed that all the suppliers should make the supplies at the rate of Rs. 67,000 per bogie and also set aside the quantity allocation and directed that the same should he considered afresh on a reasonable basis and pending such fresh consideration future supplies should be made on the basis of the recommendations of the Tender Committee.
In the course of the judgment, the High Court also made certain observations to the effect that the decision of the approving authority is arbitrary and that the Government has no justification to offer a higher price than the market price to any supplier to rehabilitate it.
It was further observed that the stand of the Railways that those three manufacturers formed a cartel is based on extraneous considerations.
The learned judges of the High Court also observed that they failed to understand as to why the Railway authorities could 142 not initiate negotiations with those manufacturers who had offered to reduce their offer which could result in saving crores of 'rupees to the Railways.
Aggrieved by this judgment of the High Court the Union of India filed S.L.P. (Civil) Nos.
11897 98/02.
Before the High Court in the two writ petitions filed by M/s H.D.C and Mukand the other manufacturers figured as respondents Nos. 4 to 12 and M/s Bharatiya otherwise known as Besco figured as respondent No. 13.
The other S.L.Ps. are filed by those nine manufacturers.
M/s Bharatiya, respondent No. 13, has not questioned the judgment of the High Court.
As mentioned above M/s Bharatiya filed a separate writ petition No. 1753/ 92 in the Delhi High Court after withdrawing an earlier writ petition filed in the Calcutta High Court.
The same also was disposed of in terms of the judgment in the other two writ petitions Nos. 1152 and 1157/92.
But they have not questioned the same.
Consequently M/s Bharatiya figures as a respondent before us in the SLP filed by the Union of India.
In our earlier order we have already referred to the various Submissions made by the learned counsel on behalf of Union of India and on behalf of the respondents particularly M/s H.D.C. Mukand and Bharatiya and other smaller manufacturers.
After considering the various submissions and issues involved we have given our conclusions in our earlier order which briefly stated are as follows: 1)There is no enough of material to conclude that M/s. H.D.C., Mukand and Bhartiya formed a cartel.
However.
there was scope for enter training suspicion by the Tender Committee that they formed a cartel since all the three of them quoted identical price and the opinion entertained by the concerned authorities including the Minister that these three big manufacturers formed a cartel was not per se malicious or was actuated by any extraneous considerations and the authorities acted in a bonafide manner in taking the stand that the three big manufacturers formed a cartel.
2)The direction of the High Court that the supply of bogie should be at Rs.67000 by every manufacturer can not he sustained and that a fresh consideration of a reasonable price is called for.
The Tender Committee shall reconsider the question of fixation of reasonable price.
While doing so it shall consider the offer of Rs. 67,000 made by 143 M/s H.D.C. and Mukand alongwith the data that would given by them in support of their offer and the percentage of profits available to all the manufacturers and other relevant aspects and then fix a reasonable price at which the manufacturers would be able to supply.
3) Dual pricing under certain circumstances may be reasonable and the stand of the railways to adopt dual pricing under the circumstances is bonafide and not malafide.
M/s H.D.C., Mukand and Bharatiya must be deemed to be in a position to supply at the rate of Rs. 67,000 per bogie and thus they form a distinct category.
The smaller manufacturers belong to a different category and if a different price is fixed for them it is not discriminatory.
4) If the price that to be fixed by the Tender Committee as directed by us happens to be more than Rs. 67,000 than that would be applicable to the smaller manufacturers only and not to M/s H.D.C., Mukand and Bharatiya who on their own commitment have to supply at the rate of Rs. 67,000.
(5) The price thus fixed by the Tender Committee which applies only to the smaller manufacturers shall he deemed to be final and the respective contracts shall be deemed to be concluded so for the price is concerned.
(6) Coming to the allotment of quota of bogies the Tender Committee made recommendations on the basis of the existing practice.
The Minister of Railways in his ultimate decision has made some variations taking into consideration the recommendations of the Financial Commissioner and other authorities.
In making these variations, the Minister accepting the suggestion that a cartel was formed by the three manufacturers reduced the allotment of quota to them by way of reprisal.
Since we are of the view that formation of a cartel is not established, such a reduction of quota can not be justified.
The Minister of Railways as the final authority as be justified in takings a particular decision in the matter of allotment of quota but such decision must be taken on objective basis.
In allotting these quotas the Government is expected to be just and fair to one and all.
7)The three big manufacturers M/s H.D.C.,Mukandand Bharatiya 144 should be allotted the quantities as per the recommendations of the Tender Committee.
However, the quantities finally allotted by the competent authority to the smaller manufacturers need not be disturbed and the railway authorities may make necessary adjustments next year in the matter of allocation of quantities to them takings into consideration the allotments given to them this year; (8)It will be open to the Railways to exercise 30% option, if not already exercised.
(9)Taking all the circumstances and the time factor into consideration the time to complete the supply is extended upto 31.3.1993.
Before we proceed to consider each of these issues and give our reasons, we shall deal with few general submissions regarding the tender system and the economic policy of the Government in the matter of stopping monopolistic tendencies.
Shri K.K. Venugopal, learned counsel appearing for M/s H.D.C. at the outset submitted that in a case of this nature the Government must either by way of public auction or by way of inviting tenders work out (he lowest price and award the contract accordingly, as that would safeguard the interests of the public exchequer.
The further submission in this regard is that the Railways having invited tenders and having further entertained post tender correspondence offering the lower price, should have accepted the price quoted by the three big manufacturers.
Shri Sibal, learned counsel appearing for the Union of India, however, contended that it is a matter of policy decision by the Government and that where the Government realises that the lowest ,)rice offered is not reasonable and realistic, it may for a variety of good and sufficient reasons reject the same.
It is true, as it is today, that the Government in a welfare State has the wide powers in regulating and dispensing of special services like leases, licences.
and contracts etc.
The magnitude and range of such Governmental function is great.
The Government while entering into contracts or issuing quotas is expected not to act like private individual but should act in conformity with certain healthy standards and norms.
Such actions should not be arbitrary, irrational or irrelevant.
In the 145 matter of awarding contracts inviting tenders is considered to be one of the fair ways.
If there are any reservations or restrictions then they should not be arbitrary and must be justifiable on the basis of some policy or valid principles which by themselves are reasonable and not discriminatory.
In the instant case the Railways every year used to enter into contracts with the established manufacturers for the supply of cast steel bogies and there are 12 such suppliers.
On 25.10.91 a limited tender notice for the procurement of steel bogies was issued to these suppliers.
Under Clause 5 of the Tender notice the Railways reserved the right to order additional quantity of 30% of the ordered quantity during the currency of the contract on the same price and term: with suitable extension in delivery period.
Clause 7 is to the effect that the tender will be governed by the IRS conditions of the contract.
In the instructions appended to the Tender notice it is again reiterated that the contracts made under the tender would be governed by the IRS conditions of contract and also the instructions in the invitation of tender.
Clause 9.3 of the instructions lays down that the price is subject to price variation clause and the base date for the purpose of escalation is 1.9.91.
Under Clause 23 it is made clear that the Department does not pledge itself to accept the lowest or any tender and reserves to itself the right of acceptance of the whole or any part of the tender.
Pursuant to this notice and subject to (lie conditions mentioned therein, 12 manufacturers in the field a well as two new manufacturers M/s Simplex and Beekay submitted their offers and they are as follows: NAME OF THE FIRMS PRICE QUOTED FOR 20.3.T AXLE LOAD 1.
Himmat 84,510 2.
Texmaco 83,950 3.
Titaoarh 84,100 4.
BECO Ltd. 83,350 5, Anup 84,980 6.
Sri Ranga 84,600 ,750 146 8.
Bum Standard 83,000 9.
CIMMCO 84,800 10.
Mukand 77,666 II.
Bharatiya 77,666 12.
HDC 77,666 13.
Simplex 78,100 14.
BEEKAY 75,000" These offers were got technically evaluated by the Research, Development and Standard Organisation (RDSO ' for short).
Thereafter a three men Tender Committee comprising the officers of the rank of Joint Secretary designated as Executive Directors in the Railways Board considered the offers.
Since the three big suppliers namely M/s H.D.C., Mukand and Bharatiya quoted an identical price of Rs. 77,666 which was lower than the updated price of the previous contract, the base date of which was 1.9,91, the Tender Committee formed an opinion that they have formed law carte 1.
The offers made by the two new firms, however, were not accepted.
The Tender Committee made their own recommendations and fixed Rs. 76,000 as a reasonable price at which counter offer could be made.
Then as already mentioned there was post tender correspondence and ultimately a dual price was fixed.
In this regard the submission is that having entertained post tender correspondence, the Government either should have accepted the same or rejected the same and in any event the lowest offer should have been accepted.
From a perusal of the proceedings of the Tender Committee as well as the opinion expressed by the Financial Commissioner and the other members of the Board, it is clear that Rs. 76,000 per bogie can be the reasonable price and Rs. 67,000 was not a reasonable price.
It is also clear that the post tender offer at a lower price was made with the hope that they would get the entire or larger quantity allotted.
The stand taken by the Railways is that the three big manufacturers originally formed a cartel and the post tender offers at least by two of them confirmed the same and if these three big manufacturers are allotted entire or larger quantity that would result in monopoly extinguishing the smaller manufacturers.
The question is whether such a stand taken by the Government as a policy, is unfair and arbitrary as to warrant interference by the courts.
147 It must be mentioned at this stage that the validity of the conditions in the tender as such are not questioned.
Consequently the Government had the right to either accept or reject the lowest offer but that of course, if done on a policy, should he on some rational and reasonable grounds.
In Eurasian Equipment and Chemicals Ltd. vs State of West Bengal ; , this court observed as under: "When the Government is trading with the public, " the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions.
The activities of the government have a public element and, therefore, there should be fairness and equality.
The State need not enter into any contract with anyone, hut if it does so, it must so fairly without discrimination and without unfair procedure.
Approving these principles, a Bench of this Court in Ramana Dayaram Shetty vs The International Air port Authority of India and Ors[1979] 3 SCR 10 14, held thus: "This proposition would hold good in all cases of dealing by the Government with the public, where the interest sought to be protected is a privilege.
It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving job so entering into contracts or issuing quotas or licences or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norms which is not arbitrary, irrational or irrelevant.
The power or discretion or the Government in the matter of grant of largess including award of jobs, contracts, quotas, licences etc.
must be con fined and structured by rational, relevant and nondiscriminatory standard or norm and if the Government departs from such standard or norm in any particular case or cases, the action of the Government 148 would be liable to be struck down, unless it can he shown by the Government that the departure %%,as not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory." ln Kasturi Lal Lakshmi Reddy vs State of Jammu and Kashmir and Anr. ; an order awarding contract by the Government to a party was questioned on the ground that it was arbitrary, malafide and not in public interest and the same created monopoly in favour of that party and that the contract was awarded without affording an opportunity to others to compete and the same is not based on any rational or relevant principle and therefore was violative of Article 14 of the Constitution and also the rule of administrative law which inhibits the arbitrary action by the State.
A Bench of this Court while approving the principles laid down in the above cases further observed thus: "Though ordinarily a private individual would be guided by economic considerations of self gain any action taken by him, it is always open to under the law to act contrary to his self interest or to oblige another in entering into a contract or dealing with his property.
But the Government is not free to act is it likes in granting largess such as awarding a contractor selling or leasing out its property.
Whatever be its activity, the Government is still the Government and is, subject to restraints inherent in its position in a democratic society.
The constitutional power conferred on the Government cannot be exercised by it arbitrarily or capriciously or in an unprincipled manner; it has to be exercised for the public good.
Every activity of the Government has a public element in it and it must therefore, be informed with reason and guided by public interest.
Every action taken by the Government must be in public interest; the Government cannot act arbitrarily and without reason and if it does, its action would be liable to be invalidated.
If the Government awards a contract of leases out or 149 otherwise deals with its property or grants any other largess, it would be liable to be tested for its validity on the touch stone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid." Now coming to the test of reasonableness which pervades the constitutional scheme, this Court in several cases particularly with reference to Articles 14, 19 and 21 has considered this concept of reasonableness and has held that the same finds its positive manifestation and expression in the lofty ideal of social and economic justice which inspires and animates the Directive Principles and that Article 14 strikes at arbitrariness in State action.
(vide Maneka Gandhi vs Union of India, [1978] 2 SCR 621 and E.P. Royappa vs State of Tamil Nadu & Anr.
f After referring to these decisions it was further held in Kasturi Lal Lakshmi Reddy 's case (supra) as under: "Any action taken by the Government with a view to giving effect to any one or more of the Directive Principles would ordinarily, subject to any constitutional or legal inhibitions or other over riding consid erations qualify for being regarded as reasonable, while an action which is inconsistent with or runs counter to a Directive Principle would incur the reproach of being unreasonable.
So also the concept of public interest must as far as possible receive its orientation from the Directive Principles.
What according to the founding fathers constitutes the plainest requirement of public interest is set out in the Directive Principles and they embody par excellence the constitutional concept of public interest.
If, therefore, any governmental action is calculated to implement or give effect to a Directive Principle, it would ordinarily, subject to any other overriding considerations be informed with public interest.
Where any government action fails to satisfy the test of reasonableness and public interest discussed above and is found to be wanting in the quality of reasonableness or lacking in the element of public interest, it would be liable to be 150 struck down as invalid.
It must follow as a necessary corollary from this proposition that the Government cannot act in a manner which would benefit a private party at the cost of the State; such an action would be both unreasonable and contrary to public interest.
The Government therefore, cannot, for example give a contract or sell or lease out its property for a consideration less than the highest that can be obtained for it, unless of course there are other considerations which render it reasonable and in public interest t o do so.
Such considerations many that some Directive Principle is sought to be advanced or implemented or that the contract or the property is given not with a view to earning revenue but for the purpose of carrying out a welfare scheme for the benefit of a particular group or secretion of people deserving it or that the person who has offered a higher consideration is not otherwise fit to be given the contract or the property.
We have referred to these considerations only illustratively, for there may be an infinite variety of considerations which may have to be taken into account by the Government in formulating its policies and it is on a total evaluation of various considerations which have weighed with the Government in taking a particular action, that the Court would have to decide whether the action of the Government is reasonable and in public interest." (emphasis supplied) On the question of courts interference in an action taken by the Government, it was further observed as under: "But one basic principle which must guide the Court in arriving at its determination on this question is that there is always a presumption that the Governmental action is reasonable and in public interest and it is for the party challenging its validity to show that it is wanting in reasonableness or is not informed with public interest.
This burden is a heavy one and it has 151 to be discharged to the satisfaction of the Court by proper and adequate material.
The Court cannot lightly assume that the action taken by the Government is unreasonable or without public interest because as we said above, there are a large number of policy considerations which must necessarily weigh with the Government in taking action and therefore the Court would not strike down government action as invalid on this ground, unless it is clearly satisfied that the action is unreasonable or not in public interest.
But where it is so satisfied, it would be the plainest duty of the Court under the Constitution to invalidate the governmental action. 'I his is one of the most important functions of the Court and also one of the most essential for preservation of the rule of law." (emphasis supplied) On the question of the power of the Government in granting largess, it was also observed that: "The second limitation on the discretion of the Government in grant of largess is in regard to the persons to whom such largess may be granted.
It is now well settled as a result of the decision of this Court in Ramanad Shetty vs
International Airport Authority of India & Ors.
(supra) that the Government is not free like an ordinary individual, in selecting the recipients for its largess and it cannot choose to deal with any person it pleases in its absolute and unfettered discretion.
The law is now well established that the Government need not deal with anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure.
where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with some standard or norm which is not arbitrary, irrational or 152 irrelevant.
The governmental action must not be arbitrary or capricious, but must be based on some principle which meets the test of reason and relevance.
This rule was enunciated by the Court as a rule of administrative law and it was also validated by the Court as an emanation flowing directly from the doctrine of equality embodied in article 14." (emphasis supplied) In State of Uttar Pradesh and others vs Vijay Bahadur Singh and others this Court considered the circumstances under which the Government is not always bound to accept the highest bid offered in a public auction under which a contract was to be awarded to fell trees and exploit forest produce and held as under: "It appears to us that the High Court had clearly misdirected itself.
The Conditions of Auction made it perfectly clear that (lie Government was under no obligation to accept the highest bid and that no rights accrued to the bidder merely because his bid happened to he the highest.
Under condition 10 it was expressly provided that the acceptance of bid at the time of auction was entirely provisional and was subject to ratification by the competent authority, namely, the State Government.
Therefore, the Government had the right, for good and sufficient reason, we may say, not to accept the highest bid but even to prefer a tenderer other than the highest bidder.
The High Court was clearly in error in holding that the Government could not refuse to accept the highest bid except on the ground of inadequacy of the bid.
Condition 10 does not so restrict the power of the Government not to accept the bid.
There is no reason why the, power vested in the Government to refuse to accept the highest bid should be confined to inadequacy of bid only.
There may be a variety of good and sufficient reasons, apart from inadequacy of bids, which may impel the Government not to accept the highest bid.
In fact, to give an antithetic illustration, the very enormity of a bid may make 153 it suspect.
It may lead the Government to realise that no bonafide bidder could possibly offer such a bid if he meant to do honest business.
Again the Government may change or refuse its policy from time to time and we see no reason why change of policy by the Govern ment, subsequent to the auction but before its confirmation, may not be a sufficient justification for the refusal to accept the highest bid.
It cannot be dispute that the Government has the right to change its policy from time to time, according to the demands of the time and situation and in the public interest.
If the government has the power to accept or not to accept the highest hid and if the Government has also the power to change its policy from time to time.
it must follow that a change or revision of policy subsequent to the provisional acceptance of the bid but before its final acceptance is a sound enough reason for the Government 's refusal to accept the highest bid at an auction.
that is precisely what has happened here." (emphasis supplied) In State of Orissa and Ors.
vs Harinarayan Jaiswal and Ors.
; it was observed as under: "It is for the Government to decide whether the pi ice offered in an auction sale is adequate.
While accepting or rejecting a bid, it is merely performed and executive function.
The correctness of its conclusion is not open 'to judicial review.
We fail to see how the plea of contravention of article 19 (1) (g) or article 14 can arise in these cases.
The Government 's power to sell the exclusive privileges set out in section 22 was not denied.
It was also not disputed that those privileges could be sold by public auction.
Public auctions are held to get the best possible price.
Once these aspects are recognised, there appears to be no basis for contending that the owner of the privileges in question who had offered to sell then cannot decline to accept the highest bid if he thinks that the price offered is inadequate.
There is no 154 concluded contract till the bid is accepted.
Before there was a concluded contract, it was open to the bidders to withdraw their bids see Union of India and ors.
vs M/s Bhimsen Walaiti Rani ; By merely giving bids, the bidders had not acquired any vested rights.
The fact that the Government was the seller does not change the legal position once its exclusive right to deal with those privileges is conceded.
If the Government is the exclusive owner of those privileges, reliance on article 19 (1) (g) or article 14 becomes irrelevant.
Citizens cannot have any funda mental right to trade or carry on business in the properties or rights belonging to the Government, nor can there he any infringement of article 14, if the Government tries to get the best available price for its valuable rights.
" emphasis supplied) In G.B. Mahajan and others vs Jalgaon Municipal Council and others ; it was observed thus: " The reasonableness ' in administrative law must, therefore, distinguish between proper use and improper abuse of power.
Nor is the test the court 's own standard of 'reasonableness ' as it might conceive it in a given situation.
" In State of Madhay Pradesh & ors vs Nandlal Jaiswal & ors. ; it was observed thus: " We must not forget that in complex economic matters every decision is necessarily empiric and it is based on experimentation or what one may call 'trial and error method ' and, therefore, its validity cannot be tested on any rigid a priori ' considerations or on the application of any straight jacket formula.
The court must while adjudging the constitutional validity of an executive decision relating to economic matters grant a certain measure of freedom or play in the 155 'joints ' to the executive.
xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx The Court cannot strike down a policy decision taken by the State Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical.
The Court can interfere only if the policy decision is patently arbitrary, discriminatory or mala fide.
It is against the back round of these observations and keeping the mind that we must now proceed to deal with the contention of the petitioners based on article 14 of the Constitution.
" In India Cement Ltd. and others vs Union of India and others[1990] 4SCC 356 a question arose whether the fixation of Rs. 100 per tonne of cement as the uniform retention price for the entire industry with the exception of M/s Travancore Cement Ltd. was rational and reasonable.
This Court held as under: "It is.
therefore, clear that fixation of Rs. 100 per tonne as die uniform retention price for the entire industry with the solitary exception of M/s. Travancore Cement Ltd. Kottayam for which justification has 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 die price actually fixed it Rs. 100 per tonne instead of Rs. 104 per tonne claimed by the cement industry.
It is obvious that the fixation of Rs. 100 per tonne being shown to be made on a principle which has not been faulted.
the actual fixation of Rs. 100 instead of Rs. 104 to be received by the industry is not within the domain of permissible judicial review, if the principle of a Uniform retention price for the entire industry cannot be faulted.
(emphasis supplied) The Bench in die above case, after referring to die decision of the Constitution 156 Bench in Shri Sitaram Sugar Co. Lid.
vs Union of India ; , observed thus: " It was pointed out that what is best for the industry and in what manner the policy should be formulated and implemented.
hearing in mind the object of supply and equitable distribution of the commodity at a fair price in the best interest of the general public, is a matter for decision exclusively within the province of the Central Government and such matters do not ordinarily attract the power of judicial review.
It was also held (hit even if some persons are at a disadvantage and have suffered losses on account of the formulation and implementation of the government policy.
that is not by itself ' sufficient ground for interference with the governmental action.
Rejection of the principle of fixation of price unit wise on actual cost basis of ' each unit was reiterated and it was pointed out that such a policy promotes efficiency and provides and incentive to cut down the cost introducing an element of healthy competition among the units.
xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx It is.
therefore.
clear that the principle of fixation of uniform price for the industry is an accepted principle and this has to be done by fixing a 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.
Obviously, such a practice is in larger public interest and also promotes efficiency in the industry providing an incentive to the uneconomic units to achieve efficiency and to reduce their cost.
" Regarding the differential treatment given to M/s Travancore Cement Ltd. this Court held that: 157 The only surviving question for consideration is the argument in Civil Appeal No. 2193 of 1972 for a differential treatment to the appellant, M/s Chettinad cement Limited, on the anology of M/s Travancore Cement Ltd., Kottayam.
In the counter affidavit of Shri G. Ramanathan Under Secretary to the Government of India, the reason for treating.
Travancore Cement Limited differently has been clearly stated.
It has been stated that it is a sub standard unit with a capacity of 50,000 tonnes `per annum only without any scope for expansion while the standard capacity for a unit is two lakh tonnes per annum; so that this unit is not capable of expanding the capacity and it is on the whole an uneconomic unit deserving a special consideration.
No material has been produced by the appellant.
M/s Chettinad Cement Corporation Limited.
to show that it is a similar substandard uni t without any capacity for expansion.
so that it too must continue to be an uneconomic unit like M/s Travancore Cement Limited, Kottayam deserving, a similar treatment.
The counter affidavit.
therefore.
shows a rational basis for classifying M/s Travancore Cement Limited, Kottayam differently as a sub standard and an uneconomic unit without any scope for improvement in comparison to other units.
This argument also is untenable.
" In R.K. Garg vs Union of India, [1981]4 SCC 675, a Constitution Bench of this Court observed as under: " Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude.
than laws touching the civil rights such as freedom of speech religion etc.
It has been said by no less a person than Holmes, J. that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait .jacket formula and this is particularly true in case of legisla 158 (ion dealing with economic matters, where having regard to the nature of the problems required to be dealt with.
greater play in the joints has to he allowed to tile legislature.
The Court should feel more inclined to give judicial deference to legislative judgment in the field of economic regulation then in other areas where fundamental human rights are involved.
Nowhere has this admonition been more felicitously expressed than in Morey vs Doud ; where Frankfurter, J said in his inimitable style: In the utilities, tax and economic regulation cases, there are good reasons for judicial self restraint if not judicial deference to legislative judgment.
The legislature after all has the affirmative responsibility the courts have only the power to destroy not to reconstruct.
When these are added to the complesity of economic regulation, the uncertainty, the liability to error.
the bewildering conflict of the experts, and the number of times the judges have been overruled by events self limitation can be seen to be the path of judicial wisdom and institutional prestige and stability." (emphasis supplied) In Peerless General Finance and Investment Co. Limited and Another vs Reserve Bank of India etc. ; the accent of power of the Courts interfering.
in such economic policy matters was considered and it was held as under: "The function of the Court is to see that lawful authority is not abused but not to appropriate to itself ' the task entrusted to that authority.
It is well settled that a public body invested with statutory powers must take care not exceed or abuse its power.
It must keep within the limits of the authority committed to it.
It must act in good faith and it must act reasonably.
Courts are not to interfere with economic policy which is the function of experts.
It is not the function 159 of the courts to sit in judgment over matters of economic policy and it must necessarily be left to the expert bodies.
In such matters even expert can seriously and doubtlessly differ.
Courts cannot be expected to decide them without even the aid of experts.
" It was further observed thus: " The function of the Court is not to advise in matters relating to financial and economic policies for which bodies like Reserve Bank are fully competent.
The Court can only strike some or entire directions issued by the Reserve Bank in case the Court is satisfied that the directions were wholly unreasonable or violative of any Provisions of the Constitution or any statute.
It would be hazardous and risky for the courts to tread an unknown path and should leave such task to the expert bodies.
This Court has repeatedly said that matters of economic policy ought to be left to the government." At this juncture it is also necessary to consider whether the policy of the Government in the matter of fixation of price and in allotment of the largess from the point of ' view of prohibiting monopolistic tendencies and encouraging healthy competition among the units, is in any manner unreasonable or arbitrary.
As submitted by the learned counsel, the policy of the Government is to promote efficiency in the administration and to provide an incentive to the uneconomic units to achieve efficiency.
The object underlying the C 'MRTP Act ' for short ) is to prevent the concentration of economic power and to provide for a control on monopolies prohibition of monopolistic trade practices and restrictive trade practices.
The Monopolies Inquiry Commission in its report stated that: "There are different manifestations of economic power in different fields of economic activity.
One such manifestation is the achievement by one or more units in an industry of such a dominant position that they are able to control the market by regulating prices 160 or output or eliminating competition.
Another is the adoption by some producers and distributors, even though they do not enjoy such a dominant position.
of practices which restrain competition and thereby deprive the community of the beneficent effects of the rivalry between producers and producers, and distributors and distributors to give the best service.
It is needless to say that such practices must inevitably impede the best utilisation of the nation 's means of production economic power may also manifest itself ' in obtaining control of large areas of economic activity by a few industrialists by diverse means.
Apart from affecting the economy of the country, this often results in the creation of industrial empires, tending to cast their shadows over political democracy and social values." In U.S.A. under the Sherman Act of 1890.
every contract or combination in the form of trust or otherwise or conspiracy in restraint of trade or commerce is declared to be illegal.
By that at every person who monopolised or attempted to monopolise or combined or conspired with any other person or persons to monopolise any part of the trade or commerce was guilty of mis demeanour.
Regarding the constitutionality of the said Act.
a passage in American jurisprudence 2d, vol.
54 pages 668 669 reads thus: 2.
Constitutionality.
The Sherman Act (15 USCSS 1 7) is a constitutional exercise of the commerce power.
Its general language does not render it invalid as an unconstitutional delegation of legislative power to the courts or as an unconstitutionally vague criminal statue.
Its application to a monopolistic association of newspaper publisher does not abridge freedom of the press: nor does its application to the continuance, after its enactment, of a contract made previously subject it to attack as ex post facto legislation.
" 161 In England, the Competition Act, 1980 controls anti competitive practices and if a person in the course of his business pursues a course of conduct which has or is intended to have or it likely to have the effect of restricting, distorting or preventing competition in connection with the production, supply or acquisition of goods is deemed to engage in anti competition practices, which is illegal.
Therefore, the avowed policy of the Government particularly from the point of view of public interest is to prohibit concentration of economic power and to control monopolies so that the ownership and control of the material resources of the Community are so distributed as best to subserve the common good and to ensure that while promoting industrial growth there is reduction in concentration of wealth and that the economic power is brought about to secure social and economic justice.
Bearing the above principles in mind, we shall now proceed to examine the action taken by the Railways in the matter of fixation of the price and distribution of quantities and see whether the same has been done pursuant to a policy and thus reasonable or whether there has been an arbitrary exercise of power.
We have already noted that it is a case of limited tender meant for the 12 manufacturers who have been supplying the railway bogies.
The offers made by the tenders were got technically evaluated by the RDSO and thereafter they were examined by the render Committee as well as by the Railways Board and finally by competent authority.
The assessed capacity of each manufacturer is the one assessed by the RDSO, a wing of the Railways and the same is based on the molten capacity of the manufacturers and other relevant factors.
After fixing the reasonable price, the quantity distribution can be determined based on the assessed actual capacity of the manufacturers, best performance, outstanding orders to be executed and on the average of previous four years ' performance.
It is not in dispute that this formula was evolved in 1983.
Later, to avoid certain inequalities and better utilisation of the installed capacity by larger units and uneconomic ordered quantity and under utilisation of capacity by smaller units, it was felt that in the interest of the economy, an equitable distribution has to he effected.
A perusal of the Tender Committee 's recommendations, the enclorsements made by the members of the Railway Board and the views expressed by the competent authority 162 could show that for the year in question they want to bring about some changes in the policy of distribution pending a permanent policy being evolved.
The 'render Committee in the first instance examined the prices quoted by the tenderers.
The Committee decided that while placing orders, only the RDSO permitted deviations will be allowed and the suppliers have to adhere to rest of the specifications as was being done in the earlier years.
Then coming to the prices, the Tender committee noted that the three big manufacturers quoted identical price in terms by forming a cartel among themselves.
Having applied the price variation formula, the updated price was fixed at Rs. 79,305 as on 1. 9.91.
However, taking into consideration the two concessions is respect of import duty and (fie freight equalisation the Committee ultimately recommended the price of Rs. 76.000.
The Tender Committee also noted that this price is very near to the lowest among the updated price.
Regarding the distribution of quantities the Tender committee recommended that the same may be distributed among the various manufacturers as shown in (he annexure to their recommenda tions.
In recommending such distribution to various manufacturers the Tender committee has taken into consideration the fact that the four wagon builders namely M/s H.D.C. Texmaco, Cimmco and Burn should be given weightage.
The Tender Committee ultimately recommended that a counter offer at the price of Rs. 76,000 for 20.3 T bogies can be made and the quantities can be distributed as indicated in the be annexure.
This was done on 4. 2. 92 and then the post tender correspondence was there %%,hereby two of the three big manufacturers offered to reduce their price if negotiations be held.
Then the file went to the Railway Board.
Advisor (Finance) particularly indicated that a view has to be taken whether a large number of manufacturers should be continued manufacturing these bogies in small quantities as at present or to permit a small number of manufacturers to expand their production at the cost of other prices and that the policy which has been followed by the Railways so far is to encourage a large number of parties to manufacture the bogies, with the idea of generation competition as also by way of encouraging small scale industries.
fie, however, pointed out that since the review of policy would take time, the tender could be decided on the basis of the existing policy.
The Member (Mechanical) agreed with this recommendation.
Then the file went to Financial Commissioner.
He noted that the three big manufacturers have formed a cartel and they have given offer to reduce their price if negotiations are held and their intention apparently is to get a 163 larger share on the basis of such negotiated price which would eventually nullify the competion from the other manufacturers and Subsequently to monopolistic price situation.
Having stated so he recommended that the wagon builders and other smaller manufacturers must he given larger quantities and that the three big manufacturers should be given the balance.
In the last paragraph.
the Financial Commissioner noted thus: " Now, due to the new economic policy, the structural changes are in a flux and as a monopoly buyer it is incumbent on the part of the Railway not to precipitate any crisis by resorting to negotiation on the basis of II DC 's letter at SN 26 but treat carefully and protect smaller firms from being gobbled up.
In other words, for short term gains, we may be sacrificing, long term healthy competition.
1, therefore, advocate that this post tender letter may be ignored as the prices quoted by firms are in the close range or prices updated by Tender Committee for counter offer.
" With these nothings, the file went to the Railway Minister and in his order, he noted that the three big manufacturers have formed a cartel and that under the circumstances all the three of them may be offered a price lower by Rs. 11.000 and the quantities also should be suitably adjusted so that the cartel is broken and he ordered 1795, 2376 and 2500 number of bogies to M/s H. D.C., Mukandand Bharativa respectively.
The Minister further observed that since the present formula suffers from serious blemishes as pointed out by the Financial Commissioner, a judicious distribution of order is called for between the other suppliers and that some of them are sick units and owe a lot of money to the nationalised banks and their cases are pending before BIFR.
and that it would be in the national interest to give them sufficient order so that they are able to rehabilitate themselves and repay the loans.
In this view of the matter, he ordered redistribution of the balance quantities as follows: Bum 500 Cimmco 1200 Texmaco 1200 164 Sri Ranga 1560 Anup TSL 1400 Himmat 1150 BECO 1600" The Minister also ordered that straight away 30% option should be exercised.
The further noted that as a result of this policy, the Railways would be effecting a saving of about Rs. 11 crores.
Then the file with this order went back to the Member (Mechanical) and others for being implemented.
he, however. noted that the Minister for Railways may consider whether the lower price could be counter offered to all the companies.
The Financial Commissioner again noted that dual pricing would be in the national interest and finally the Minister having noted these endorsements of the Member (Mechanical) as well as the Financial Commissioner made an endorsement that if some are allowed to hold monopoly instead of giving protection to smaller units, who have formed a cartel, they may gang up and fight and fritter the smaller ones and that Railways should always demonstrate of its own vision of long term Railway interest and not short terms gains and finally agreed with the recommendations of the Financial commis sioners and also the recommendation of the 'Fender Committee and directed the implementation of the same without further delay.
The above documents would show that a particular policy has been adopted by the Government, though it resulted in a change as compared to the previous one.
As held by the courts, change of policy by it self does not affect the pursuant action provided it is rational and reasonable However, the submission is that the decision taken pursuant to this policy in the matter of fixation of price and distribution of quantities is based on wrong grounds and suffers from the vice of unreasonableness.
S/Shri Nariman, Venugopal and Shanti Bhushan, learned counsel appearing for M/s Mukand, H.D.C. and Bharatiya respectively submitted in this context that the grounds namely that the three big manufacturers formed a cartel and that the post tender price offered by them was predatory are unfounded and that dual pricing and the ultimate allotment of the quantities in a punitive manner are based 165 on a wrong premise and the final decision arrived at is consequently unreasonable and arbitrary.
The further submission is that these manufacturers have a legitimate expectation of being treated in certain ways by the administrative authorities on the basis of practice and policy of the previous years and such a decision, which is punitive and which defeats such legitimate expectation and which is taken without affording an opportunity to these manufacturers to explain, is violative of principles of natural justice.
First we shall consider the submissions regarding the formation of cartel by these big manufacturers, The word "Cartel" has a particular meaning with reference to monopolistic control of the market.
In collins English Dictionary, the meaning of the word "Cartel" is given as under: " cartel I also called: trust, a collusive international association of independent enterprises formed to monopolize production and distribution of a product or service, control prices etc. " In Webster Comprehensive Dictionary, International Edition, the meaning of the word "Cartel" is given thus: "cartel xx 3.
An international combination of independent enterprises in the same branch of production, aiming at a monopolistic control of the market by means of weaking or eliminating competition. xx In Chambers ' English Dictionary the word "Cartel" is defined thus: "Cartel A combination of firms for certain purposes especially to keep up prices and kill competition XX In Black 's Law Dictionary, fifth edition the meaning of the word "Cartel" is given thus: 166 "Cartel A combination of producers of any product joined together to control its production, sale, and price, and to obtain a monopoly in any particular industry or commodity.
Also, an association by agreement of companies or sections of companies having common interests, designed,, to prevent extreme or unfair competition and allocate markets, and to promote the interchange of knowledge resulting from scientific and technical research, exchange of patent rights, and standardization of products.
" In American Jurisprudence 2d Vol.
54 page 677 it is mentioned thus: "A cartel is an association by agreement of companies or sections of companies having common interests, designed to prevent extreme or unfair competition and to allocate markets, and perhaps also to exchange scientific or technical knowledge or patent rights and to standardize products, with competition regulated but not eliminated by substituting computational in quality, efficiency, and service for price cutting.
An international cartel arrangement providing for a worldwide division of a market has been held a per se violation of 15 USC S 1.
An American corporation violates the Sherman Act by entering into agreements with English and French companies to (1) allocate world trade territories among themselves; (2) fix prices on products of one sold in the territory of the others; (3) co operate to protect each other 's markets and eliminate outside competition; and (4) participate in cartels to restrict imports to and exports from the United States. ' In a Dictionary of Modern Legal Usage by Bryian A.Gemer,it is noted thus: "cartlize=to organize into a cartel.
See IZE.
Yet cartel has three quite different meanings; (1) " an 167 agreement between hostile nations" ' (2) "an anticompetitive combination usu.
that fixes commercial prices"; and (3) "a combination of political groups that work toward common goals.
" Modern usage favours sense (2).
" The cartel therefore is an association of producers who by agreement among themselves attempt to control production, sale and prices of the product to obtain a monopoly in any particular industry or commodity.
Analysing the object of formation of a cartel in other words, it amounts to an unfair trade practice which is not in the public interest.
The intention to acquire monopoly power can be spelt out from formation of such a cartel by some of the producers.
However, the determination whether such agreement unreasonably restrains the trade depends on the nature of the agreement and on the surrounding circumstances that give rise to an inference that the parties intended to restrain the trade and monopolise the same.
Dealing with the provi sions of Sherman Anti Trust Act, in National Electrical Contractors Associations, Inc. etal.
vs National Contractors Association etal Federal Reporter 2d Series, 678 page 492 it was observed as under: "We know of no better statement of the rule than that of this court in United States vs Society, of Ind. Gasoline Marketers, 624 F. 2d 461, 465 (4th Cir. 1979) cert.
101 S.Ct.
859, , , where stated: "Since in a price fixing conspiracy the conduct is illegal per se further inquiry on the issues of intent or the anti competitive effect is not required.
The mere existence of a price fixing agreement establishes the defendants ' illegal purpose since the aim and result of every price fixing agreement, if effective, is the elimination of one form of competition.
" It was also observed that: "The critical analysis in determining whether a particular activity constitutes a per se violation is whether the activity on its face seems to be such that it would always or almost always restrict competition and 168 decrease output instead of being designed to increase economic efficiency and make the market more rather than less competitive.
" Matsushita Electric Industrial Co., Ltd. et al vs Zenith Radio Corporation et al ; is a case where American manufacturers of consumer electronic products brought suit against a group of their Japanese competitors in the United States District Court alleging that these competitors had violated Sections 1 and 2 of the Sherman Act and other federal statutes.
It was alleged that the Japanese companies had conspired since 1950 to drive domestic firms from the American Market, by maintaining artificially high prices for these products in Japan while selling them at a loss in the United States.
The District Court after excluding bulk of evidence, finally granted the Japanese companies ' motion for summary judgment dismissing the claims.
The United States Court of Appeal reversed and remanded for further proceeding.
On a certiorari, the United States Supreme Court while considering the standards supplied by the Court of Appeals in evaluating the summary judgment, observed thus: "To survive petitioners motion for summary judgment respondents must establish that there is a genuine issue of material fact as to whether petitioners entered into an illegal conspiracy that caused respondents to.
suffer a cognizable injury.
" It was further observed that: A predatory pricing conspiracy by nature speculative.
Any agreement to price below the competitive level requires the conspirators to forgo profits that free competition would offer them.
The forgone profits may be considered an investment in the future.
For the investment to be rational the conspirators must have a reasonable expectations of recovering, in the form of later monopoly profits, more than the losses suffered.
169 xxxxxxxx xxxxxxxx xxxxxxxxx xxxxxxxx xxxxxxxx xxxxxxxx The alleged conspiracy 's failure to achieve its ends in the two decades of its asserted operation is strong evidence that the conspiracy does not in fact exist.
Since the losses in such a conspiracy accrue before the gains, they must be "repaid" with interest.
And because the alleged losses have accrued over the course of two decades, the conspirators could well require a correspondingly long time to recoup.
Maintaining supra competitive prices turn depends on the continued cooperation of the conspirators, an the inability of other would be competitors to enter the market, and not incidentally on the conspirator; ability to escape antitrustliability for their minimum price fixing cartel.
Each of these factors weighs more heavily as the time needed to recoup losses grows.
If the losses have been substantial as would likely be necessary in order to drive out the competition petitioners would most likely have to sustain their cartel for years simply to break even." (emphasis supplied) In this context, one of the submissions is that the price of Rs. 67,000 offered by these manufacturers during the post tender stage was not predatory and that the view taken by the authorities that such an offer of lower price was predatory one confirming the formation of a cartel, is also unwarranted.
In Matsushita 's case (supra) it was observed that predatory pricing conspiracies are by nature speculative and that the agreement to price below the competition level requires the conspirators to forgo profits that free competition would offer them.
It was also held therein as under: "To survive a motion for a summary judgment, a plaintiff seeking damages for a violation of S 1 of the Sherman Act must present evidence "that tends to 170 exclude the possibility" that the alleged conspirators acted independently.
Thus, respondents here must show that the inference of a conspiracy is reasonable in light of the competing inferences of independent action or collusive action that could not have harmed respondents.
(emphasis supplied) Therefore mere offering of a lower price by itself, though appears to be predatory, can not be a factor for inferring formation of a cartel unless an agreement amounting to conspiracy is also proved.
In webster Comprehensive Dictionary International Edition.
The meaning of the word "Predatory" is given as under: "predatory 1. characterized by or under taken for plun dering.
Addicted to pillaging: 3.
Constituted for living by preying upon others, as a beast or bird; raptorial. " In A Dictionary of Modern Legal Usage by Bryan A. Garner, "predatory" is defined thus: "Predatory preying on other animals.
The word is applied figuratively in the phrase from antitrust law, predatory pricing.
The forms predaceous, predatorial, and predative are needless variants.
The spelling predacious has undergone differentiation and means" devouring; rapacious." In collins English Dictionary, "Predatory" is defined thus: "predatory 1.
another word for predacious (sense 12.
of, involving, or characterized by plundering, robbing, etc. . . xxxx. . . .
In Black 's Law Dictionary, "Predatory intent" is defined asunder: "Predatory intent.
"predatory intent," in purview of Robinson patmen Act, means that alleged price dis 171 criminator must have at least sacrificed present revenues for purpose of driving competitor out of market.
with hope of recouping losses through subsequent higher prices.
International Air Industries, Inc. vs American Excelsior Co., C.A. Tex. ; , 723.
" In The oxford English Dictionary Vol. VIII, "predatory" is defined thus" "Predatory 1.
Of, pertaining to, characterized by, or consisting in plundering, pillaging, or robbery xx 2.
Addicted to, or living by, plunder; plundering, marauding, thieving, in modern use sometimes applied to the criminal classes of great cities. xx 3.
Destructive, consuming, wasteful, deleterious, xx 4.
Of an animal; That preys upon other animals; that is a beast, bird, or other creature of prey; carnivorous.
Also, of its organs of capture, xx We have noticed that monopoly is the power to control prices or exclude competition from any part of the trade or commerce among the producers.
The price fixation is one of the essential factors.
In American jurisprudence.
2d Volume 54, a passage at page 695 reads thus: "The Sherman Act does not out law price uniformity.
An accidental or incidental price uniformity or even pure conscious price parallelism, is not itself unlawful.
Moreover, a competitor 's sole decision to follow price leadership is not a violation of 15 USC S 1.
On the other hand, a price fixing conspiracy does not necessarily involve an express agreement, oral or written.
It is sufficient that a concert of action is contemplated and that the defendants conform to the arrangement.
The fixing of prices by one member of 172 a group pursuant to express delegation,acquiescence, or under standing is just as illegal as the fixing of prices by direct joint action.
A price fixing combination is illegal even though the prices are fixed only by one member and without consultation with the others." (emphasisd supplied) A mere offer of a lower price by itself does not manifest the requisite intent to gain monopoly and in the absence of a specific agreement by way of a concerted action suggesting conspiracy, the formation of a cartel among the producers who offered such lower price can not readily be inferred.
In the instant case, the fact that two of the three big manufacturers entered into post tender correspondence and also offered a lower price of Rs. 67,000 is not dispute.
Though they did not place the necessary material in support of their offer as to how it is viable and workable, they, however, sought to contend before us that the price offered by them is not predatory and is only a reasonable price.
By our earlier order dated 14th January, 1993 we directed the Tender Committee to examine the matter afresh regarding the reasonable price on the basis of the data that may be placed by these big manufacturers in support of their offer of Rs. 67,000.
Therefore no conclusion can be reached definitely that offer of the price of Rs. 67,000 by itself was predatory and the manufacturers who offered such a price consequently formed a cartel.
Therefore, whether in a given case, there was formation of a cartel by some of the manufacturers which amounts to an unfair trade practice, depends upon the available evidence and the surrounding circumstances.
In the instant case, initially the Tender Committee formed the opinion that the three big manufacturers formed a cartel on the ground that the price initially quoted by them was identical and was only a cartel price.
This, in our view, was only a suspicion which of course got strengthened by post tender attitude of the said manufacturers who quoted a much lesser price.
As noticed above it can not positively be concluded on the basis of these two circumstances alone.
In the past these three big manufacturers also offered their own quotations and they were allotted quantities on the basis of the existing practice.
However a mere quotation of identical price and an offer of further reduction by themselves would not entitle them automatically 173 to comer the entire market by way of monopoly since the final allotment of quantities vested in the authorities who in their discretion can distribute the same to all the manufacturers including these three big manufacturers on certain basis.
No doubt there was an apprehension that if such predatory price has to be accepted the smaller manufacturers will not be in a position to compete and may result in elimination of free competition.
But there again the authorities reserved a right to reject such lower price.
Under these circumstances though the attitude of these three big manufacturers gave rise to a suspicion that they formed a cartel but there is not enough of material to conclude that in fact there was such formation of a cartel.
However, such an opinion entertained by the concerned authorities including the Minister was not malicious nor was actuated by any extraneous considerations.
They entertained a reasonable suspicion based on the record and other surrounding circumstances and only acted in a bonafide manner in taking the stand that the three big manufacturers formed a cartel.
S/Shri Nariman, Venugopal and Shanti Bhushan, learned counsel appearing for M/s Mukand, H.D.C. and Bharatiya respectively.
contended that the Railways were bound to follow the rules and standards pertaining to the tender system and on the basis of these provisions and the course of conduct followed by the Railways in the matter of fixation of price and allotment of quota in the past let the manufacturers believe that the same course of conduct would be followed and the manufacturers legitimately expected that they would be treated equally and in a non arbitrary manner and such legitimate expectation is a right guaranteed under Article 14.
In Food Corporation of India vs M/s Kamdhenu Cattle Feed Industries JT Justice J.S. Verma Speaking for the Bench observed as under: "In contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Article 14 of the Constitution of which non arbitrari ness is a significant facet.
There is no unfettered discretion in public law.
A public authority possesses powers only to use them for public good.
This imposes 174 the duty to act fairly and to adopt a procedure which is fairplay in action '.
Due observance of this obligation as a part of good administration raises a reasonable or legitimate expectation in every citizen to be treated fairly in his interaction with the state and its instrumentalities, with this element forming a necessary component of the decision making process in all State actions.
To satisfy this requirement of non arbitrariness in a State action, it is therefore, necessary to consider and give due weight to the reasonable or legitimate expectations of the persons likely to be affected by the decision or else that unfairness in the exercise of the power may amount to an abuse or excess of power apart from affecting the bonafides of the decision in a given case.
The decision so made would be exposed to challenge on the ground of arbitrariness.
Rule of law does not completely eliminate discretion in the exercise of power, as it is unrealistic, but provides for control of its exercise by judicial review.
The mere reasonable or legitimate expectation of a citizen, in such a situation, may not by it self be a distinct enforceable right; but failure to consider and give due weight to it may render the decision arbitrary and this is how the requirement of due consideration of a legitimate expectation forms part of the principle of non arbitrariness, a necessary concomitant of the rule of law.
Every legitimate expectation is a relevant factor requiring due consideration in a fair decision making process.
Whether the expectation of the claimant is reasonable or Legitimate in the context is a question of fact in each case.
Whenever the question arises, it is to be determined not according to the claimant 's perception but in larger public interest wherein other more important considerations, may outweigh what would otherwise have been the legitimate expectation of the claimant.
A bonafide decision of the public authority reached in this manner would 175 satisfy the requirement of non arbitrariness and withstand judicial scrutiny.
The doctrine of legitimate expectation gets assimilated in the rule of law and operates in.
our legal system in this manner and to this extent." (emphasis supplied) In Navjoti coo Group Housing Society etc.
vs Union of India & Others ; ,justice G.N. Ray speaking for the Bench observed as under: "In the aforesaid facts, the Group Housing Societies were entitled to legitimate expectation of following consistent past practice in the matter of allotment, even though they may not have any legal right in private law to receive such treatment.
The existence of legitimate expectation ' may have a number of different consequences and one of such consequences is that the authority ought not to act to defeat the 'legitimate expectation without some overriding reason of public policy to justify its doing so.
In a case of 'legitimate expectation ' if the authority proposes to defeat a person 's 'legitimate expectation ' it should afford him an opportunity to make representations in the matter.
In this connection reference may be made to the discussions on 'legitimate expectation ' it page 151 of volume 1(1) of Halsbury 's Laws of England Fourth Edition (Re issue).
We may also refer to a decision of the House of Lords in Council of civil Service Union and others versus Minister for Civil Service reported in [1985] 3 All England Reporter page 935.
It has been held in the said decision that an aggrieved person was entitled to judicial review if he could show that a decision of the public authority affected him of some benefit or advantage which in the past he had been permitted to enjoy and which he legitimately expected to be permitted to continue to enjoy either until he was given reasons for withdrawal and the opportunity to comment on such reasons.
176 It may be indicated here that the doctrine of 'legitimate expectation imposes in essence a dun, on public authority to act fairly, by taking into consideration all relevant factors relating to such 'legitimate expectation '.
Within the conspectus of fair dealing in case of 'legitimate expectation ', the reasonable opportunities to make representation by the parties likely to be affected by any change of consistent passed policy, come in.
We have not been shown any compelling reasons taken into consideration by the Central Government to make a departure from the existing policy of allotment with reference to seniority in Registration by introducing a new guideline." (emphasis supplied) Relying on these decisions, it was contended that the decision of the Railways in fixing the price and in allotment of the quantities is arbitrary and unreasonable affecting the right to such legitimate expectation.
To appreciate these contentions, it becomes necessary to refer to some of the rules governing these contracts and followed by the Railways, before we examine the impact of the doctrine of 'legitimate expectation '.
The Rules prescribed by the Minister for Railways for entering into contracts lay down certain norms and contains guidelines.
The rules provide for constitution of Tender Committee and the Procedure to be followed in the matter of inviting tenders.
They also provide for negotiations but lays down that selection of contracts by negotiations is an exception rather than a rule and can be resorted to only under certain circumstances.
Regarding splitting of tendered quantity in more than one form, we find some guidelines in Annexure 50 which reads as under: "3.0.
Where warranted, the tendered quantity may be split and tender decided in favour of one or more firms on merits of each case, in consultation with Associate Finance and with the approval of the authority competent to accept the tender having due regard to the following factors: (i) Vital/Critical nature of the items; (ii)Quantity to be procured; (iii)Delivery requirements; (iv)Capacity of the firms in the zone of consideration; (v) Past performance of firms.
xxxxxxx xxxxxxxx xxxxxxxxx 5.0 Splitting should not be done merely with a view to utilising developed capacity of the different sources but should be for valid reasons to be recorded in writing for splitting the tendered quantity.
" Annexure 213 contains the Railway Board letter dated 19.4.90 addressed to General Managers, All Indian Railways and others dealing with the subject of Non acceptance of late/delayed/post/ Tender offers.
The relevant portion reads thus: "2.
Instances have come to notice of the Board where on a strict application of the above instructions even late Tenders submitted by Public Sector firms for highly specialised equipments have been rejected.
3.The matter, has therefore been reconsidered by the Board and it has been decided that where late Tenders from established/reliable suppliers and conferring a substantial financial advantage is to be considered, notwithstanding the general ban, it will be open to the Railways to seek the Board 's approval for the consideration of such Tenders, since this should be a very exceptional situation, such cases should be recommended for consideration of the Board with the personal approval of the General Manager, duty concuffed in by the F.A. & C.A.O. 4.The Railways should not enter into any dialogue with the agency submitting a delayed Tender without obtaining Board 's prior clearance".
178 Now coming to the notice inviting tender in the instant case, we have already noted that the price quoted is subject to price variation clause and the Railways reserved a right to accept the lowest price or accept the whole or any part of the tender of portion of the quantity offered.
The notice however, mentioned that the tenderer is at liberty to tender for the whole or any portion or to state in the tender that the rate quoted shall apply only if the entire quantity is taken from him.
From these provisions it becomes clear that the tenderer can not expect that his entire tender should be accepted in respect of the quantity and that the Railways have a night to accept the tender as a whole or a part of it or portion of the quantity offered.
It is not in dispute that in the past also there were many instances where the Railways as per the procedure followed, arrived at decisions in respect of both price and quantity for good and justifiable reasons.
In the year 1991 the quantities of M/s H.D.C. and Bharatiya were in fact reduce from the allocations made by the Tender Committee which made its recommendations on the basis of certain data.
It has to be noted that the Tender Committee is not a statutory authority and its proposals are recommendatory in nature and have to be considered in the distribution procedure culminating in the decision of the approving authority who as a matter of fact, also can take decisions in respect of price and allotment of quantities taking into consideration various other aspects from the point of view of public interest.
Therefore it is evident that there is no legally fixed procedure regarding fixation of price and particularly regarding allotment giving scope to a legitimate expectation.
However, with this facture background, we shall consider the contention regarding 'legitimate expectation '.
In Halsbury 's Laws of England, Fourth Edition, Volume 1(1) 151 a passage explaining the scope of "legitimate expectations" runs thus: "81.
Legitimate expectations.
A person may have a legitimate expectation of being treated in a certain way by an administrative authority even though he has no legal right in private law to receive such treatment.
The expectation may arise either from a representation or promise made by the authority, including an implied representation, or from consistent past prac tice.
179 The existence of a legitimate expectation may have a number of different consequences '; it may give locus standi to seek leave to apply for `judicial review; it may mean that the authority ought not to act so as to defeat the expectation without some overriding reason of public policy to justify its doing so; or it may mean that, if the authority proposes to defeat a person 's legitimate expectations, it must afford him an opportunity to make representation on the matter.
The courts also distinguish, for example in licensing cases, between original applications, to renew and revocations; a party who has been granted a licence may have legitimate expectation that it will be renewed unless there is some good reason not to do so, and may therefore be entitled to greater procedural protection than a mere applicant for a grant." (emphasis supplied) We find that the concept of legitimate expectation first stepped into the English Law in Schmidt vs Secretary, of State for Home Affairs wherein it was observed that an alien who had been given leave ' to enter the United Kingdom for a limited period had a legitimate expectation of being allowed to stay for the permitted time and if that permission was revoked before the time expires, that alien ought to be given an opportunity of making representations.
Thereafter the concept has been Considered in a number of cases.
In A.G. of Hong Kong vs Ng Yeun shiu, [1983] 2 A.C. 629 Lord Fraser said that "the principle that public authority is bound by its undertakings as to the procedure it will follow, provided they do not conflict with its duty, is applicable to the undertaking given by the government of Hong Kong to the respondent. . that each case would be considered on its merits.
" In Council of Civil Service Unions and others vs Minister for the Civil Service (1984) Vol.
3 All E.R. 359, a question arose whether the decision of the Minister withdrawing the right to trade union member 180 ship without consulting the staff which according to the appellant was his legitimate expectation arising from the existence of a regular practice of consultation was valid.
It was contended that the Minister had a duty to consult the staff as per the existing practice and that though the employee did not have a legal right, he had a legitimate expectation that the existing practice would be followed.
On behalf of the Minister on the basis of the evidence produced, it was contended that the decision not to consult was taken for reasons of national security.
The Court held as under: "An aggrieved person was entitled to invoke judicial review if he showed that a decision of a public authority affected him by depriving him of some benefit or advantage which in the past he had been permitted to enjoy and which he could legitimately expect to be permitted to continue to enjoy either until he was given reasons for its withdrawal and the opportunity to comment on those reasons or because he had received an assurance that it would not be withdrawn before he had been given the opportunity of making representations against the withdrawal.
The appellants legitimate expectation arising from the existence of a regular practice of consultation appellants could reasonably expect to continue gave rise to an implied limitation on the Minister 's exercise of the power contained in article 4 of the 1982 order, namely an obligation to act fairly by consulting the GCHQ staff before withdrawing the benefit of trade union membership.
xxxxxxxx xxxxxxx xxxxxxxx Once the Minister produced evidence that her decision not to consult the staff before withdrawing the right to trade union membership was taken for reasons, of national security, that overrode any right to judicial review which the appellants had arising out of the denial of their legitimate expectation of consultation.
The appeal would therefore be dismissed.
xxxxxxxx xxxxxxxx xxxxxxxx 181 Administrative action is subject to control by judicial review under three heads: (1) illegality where the decision making authority has been guilty of an error of law, e g by purporting to exercise a power it does not possess; (2) irrationality where the decision making authority has acted so unreasonably that no reasonable authority, would have made the decision, (3) procedural impropriety, where the decision making authority has failed in its duty to act fairly.
(emphasis supplied) Therefore the claim based on the principle of legitimate expectation can be sustained and the decision resulting in denial of such expectation can be questioned provided the same is found to be unfair, unreasonable, arbitrary and violative of principles of natural justice.
(vide Food Corporation of India 's case and Navjyoti Coo Group Housing Society 's case (supra).
The learned counsel for these three big manufacturers, however, relied on various decision in Amarjit Singh Ahluwalia vs The State of Punjab & Ors.
; , Ramana Dayaram Shetty 's case and Peerless General Finance and Investment Co. Limited 's case (supra) and contended that failure to follow the existing procedure resulting in denial of a right directly arising out of legitimate expectation is per se arbitrary and unreasonable and therefore illegal and consequently violative of Article 14 of the constitution.
Of late the doctrine of legitimate expectation is being pressed into service in many cases particularly in contractual sphere while canvassing the implications underlying the administrative law.
Since we have not come across any pronouncement.
of this court on this subject explaining the meaning and scope of the doctrine of legitimate expectation, we would like to examine the same a little more elaborately at this stage.
Who is the expectant and what is the nature of the expectation? When does such an expectation become a legitimate one and what is the foundation for the same? What are the duties of the administrative authorities while taking a decision in cases attracting the doctrine of legitimate expectation.
Time is a three fold present: the present as we experience it, the 182 past as a present memory and future as a present expectation.
For legal purposes, the expectation can not be the same as anticipation.
It is different from a wish, a desire or a hope nor can it amount to a claim or demand on the ground of a right.
However earnest and sincere a wish, a desire or a hope may be and however confidently one may look to them to be fulfilled, they by themselves can not amount to an assertable expectation and a mere disappointment does not attract legal consequences.
A pious hope even leading to a moral obligation can not amount to a legitimate expectation.
The legitimacy of an expectation can be inferred only if it is founded on the sanction of law or custom or an established procedure followed in regular and natural sequence.
Again it is distinguishable from a genuine expectation.
Such expectation should be justifiably legitimate and protectable.
Every such legitimate expectation does not by itself fructify into a right and therefore it does not amount to a right in the conventional sense.
It has to be noticed that the concept of legitimate expectation in administrative law has now, undoubtedly, gained sufficient importance.
It is stated that "Legitimate expectation" is the latest recruit to a long list of concepts fashioned by the courts for the review of administrative action and this creation takes its place beside such principles as the rules of natural justice, unreasonableness, the fiduciary duty of local authorities and "in future, perhaps, the principle of proportionality.
" A passage in Administrative Law, Sixth edition by H.W.R. Wade page 424 reads thus: "These are revealing decisions.
They show that the courts now expect government departments to honour their published statements or else to treat the citizen with the fullest personal consideration.
Unfairness in the form of unreasonableness here comes close to unfairness in the form of violation of natural justice, and the doctrine of legitimate expectation can operate in both contexts.
It is obvious, furthermore, that this principle of substantive, as opposed to procedural, fairness may undermine some of the established rules about estoppel and misleading advice, which tend to operate unfairly.
Lord Scarman has stated emphatically that unfairness in the purported exercise of a power can amount to an abuse or excess of power, and this seems likely to develop into an important general doctrine.
" Another passage at page 522 in the above book reads thus: "It was in fact for the purpose of restricting the right to be heard that legitimate expectation was introduced into the law.
It made its first appearance in a case where alien students of 'scientology were refused extension of their entry permits as an act of policy by the Home Secretary, who had announced that no discretionary benefits would be granted to this Sect, The Court of Appeal held that they had no legitimate expectation of extension beyond the permitted time, and so no right to a hearing, though revocation of their permits within that time would have been contrary to legitimate expectation.
Official statements of policy, therefore, may cancel legitimate expectation, just as they may create it, as seen above.
In a different context, where car hire drivers had habitually offended against airport bye laws, with many convictions and unpaid fines, it was held that they had no legitimate expectation of being heard before being banned by the airport authority.
There is some ambiguity in the dicta about legitimate expectation, which may mean either expectation of a fair hearing or expectation of the licence or other benefit which is being sought.
But the result is the same in either case; absence of legitimate expectation will absolve the public authority from affording a hearing.
(emphasis supplied) In some cases a question arose whether the concept of legitimate expectation is an impact only on the procedure or whether it also can have a substantive impact and if so to what extent.
For New South Wales vs Quin (1990) Vol.
64 Australian Law Journal Reports 327 is a case from Australia in which this aspect is dealt with.
In that case the Local Courts Act abolished Courts of Petty Sessions and 184 replaced them by Local Courts.
Section 12 of the Act empowered the Governor to appoint any qualified person to be a magistrate in the new Courts System, Mr. Quin, who had been a Stipendiary Magistrate in charge of a Court of petty Sessions under the old system, applied for, but was refused, an appointment under the new system.
That was challenged.
The challenge was upheld by the appellate court on the ground that the selection committee had taken into account an adverse report on him without giving a notice to him of the contents of the same.
In the appeal by the Attorney General against that order before the High Court it was argued on behalf of Mr. Quin that he had a legitimate expectation that he would be treated in the same way as his former colleagues considering his application on its own merits.
Coming to the nature of the substantive impact of the doctrine, Brennan, J. observed that the doctrine of legitimate expectations ought not to " unlock the gate which shuts the court out of review on the merits," and that the Courts should not trespass "into the forbidden field of the merits" by striking down administrative acts or decisions which failed to fulfill the expectations.
In the same case Mason, C.J. was of the view that if substantive protection is to be accorded to legitimate expectations that would encounter the objection of entailing "curial interference with administrative decisions on the merits by precluding the decision maker from ultimately making the decision which he or she considers most appropriate in the circumstances.
" In R vs Secretary of State for the Home Department.
ex parte Ruddock and others , Taylor, J. after referring to the ratio laid down in some of the above cases held thus: "On these authorities I conclude that the doctrine of legitimate expectation in essence imposes a duty to act fairly.
Whilst most of the cases are concerned, as Lord Roskill said, with a right to be heard, I do not think the doctrine is so confined.
Indeed, in a case where ex hypothesis there is no right to be heard, it may be thought the more important to fair dealing that a promise or undertaking given by a minister as to how he will proceed should be kept.
Of course such promise or undertaking must not conflict with his statutory duty, or her duty as here, in the exercise of a preroga 185 tive power.
I accept the submission of counsel for the Secretary of State that the respondent cannot fetter his discretion.
By declaring a policy he does not preclude any possible need to change it.
But then if the practice has been to publish the current policy, it would be incumbent on him in dealing fairly to publish the new policy, unless again that would conflict with his duties.
Had the criteria here needed changing for national security reasons, no doubt the respondent could have changed them.
Had those reasons prevented him also from publishing the new criteria, no doubt he could have refrained from doing so.
Had he even decided to keep the criteria but depart from them in this single case for national security reasons, no doubt those reasons would have afforded him a defence to judicial review as in the GCHQ case." (emphasis supplied) In Breen vs Amalgamated Engineering Union and Others [1971] 2 Law Reports Queen Bench Division 175, Lord Denning observed as under: "if a man seeks a privilege to which he has no particular claim such as an appointment to some post or other then he can be turned away without a word.
He need not be heard.
No explanation need be given; see the cases cited in Schmidt vs Secretary of State for Home Affairs , 170 171.
But if he is a man whose property is at stake, or who is being deprived of his livelihood, then reasons should be given why he is being turned down, and he should be given a chance to be heard.
I go further If he is a man who has some right or interest, or some legitimate expectation, of which it would not be fair to deprive him without a hearing, or reasons given, then these should he afforded hint, according as the case may demand".
(emphasis supplied) At this stage it is necessary to consider the scope of judicial review when a challenge is made on the basis of the doctrine of legitimate 186 expectation.
In Findlay vs Secretary of State for the Home Department, 19841 3 All E R 801 it was observed as under: "The doctrine of legitimate expectation has an important place in the developing law of judicial review.
It is, however, not necessary to explore the doctrine in this case, it is enough merely to note that a legitimate expectation can provide a sufficient interest to enable one who cannot point to the existence of a substantive right to obtain the leave of the court to apply for judicial review.
These two applicants obtained leave.
But their submission goes further.
It is said that the refusal to accept them from the new policy was an unlawful act on the part of the Secretary of State in that his decision frustrated their expectation.
But what was their legitimate expectation? Given the substance and purpose of the legislative provisions governing parole, the most that a convicted prisoner can legitimately expect is that his case will he examined individually in the light of whatever policy the State sees fit to adopt, provided always that the adopted policy is a lawful exercise of the discretion conferred on him by the statute.
Any other view would entail the conclusion that the unfettered discretion conferred by the Statute on the minister can in some cases be restricted so as to hamper, or even prevent.
changes of policy.
Bearing in mind the complexity of the issues which the Secretary of State has to consider and th e importance of the public interest in the administration of parole, I cannot think that Parliament intended the desecration to be restricted in this way.
" In Council of Civil Service Unions case Lord Diplock observed thus: "To qualify as a subject for judicial review the decision must have consequences which affect some person (or body of persons ) other than the decisions, although it may affect him too.
It must affect such other person either (a) by altering rights or 187 obligations of that person which are enforceable by or against him in private law or (b) by depriving him of some benefit or advantage which either (i) he has in the past been permitted by the decision maker to enjoy and which he can legitimately expect to be permitted to continue to do until there has been communicated to him some rational ground for withdrawing it on which he has been given an opportunity to comment or (ii) lie has received assurance from the decision maker will not be withdrawn without giving him first an opportunity of advancing reasons for contending that they should not be withdrawn.
(1) prefer to continue to call the kind of expectation that qualifies a decision for inclusion in class (b) a 'legitimate expectation ' rather than a 'reasonable expectation in order thereby to indicate that it has consequences to which effect will be given in public law, whereas an expectation or hope that some benefit or advantage would continue to he enjoyed, although it might well be entertained by a 'reasonable ' man, would not necessarily have such consequences.
" In Attorney General for New South Wales case it is observed as under: "Some advocates of judicial intervention would encourage the courts to expand the scope and purpose of judicial review, especially to provide some check on the Executive Government which nowadays exercises enormous powers beyond the capacity of the parliament to supervise effectively.
Such advocacy is misplaced.
If the courts were to assume a jurisdiction to review administrative acts or decisions which are "unfair" in the opinion of the court not to product of procedural fairness, but unfair on the merits the courts would be assuming a jurisdiction to do the very thing which is to be done by the repository of an administrative power, namely, choosing among the courses of action upon which reasonable minds might differ.
188 xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx xxxxxx If judicial review were to trespass on the merits of the exercise of administrative power, it would put its own legitimacy at risk.
The risk must be acknowledged for a reason which Frankfurter J. stated in Trop vs Dulles [ ; at 119: All power is .in
Madison 's phrase of an encroaching nature. .
Judicial power is not immune against this human weakness.
It also must he on guard against encroaching beyond its proper bounds and not he less so since the only restraint upon it is sell restraint.
If the courts were to postulate rules ostensibly related to limitations on administrative power but in reality calculated to open to the gate into the forbidden field of the merits of its exercise, the function of the courts would be exceeded of R vs Nat Bell Liquors Ltd. at 156.
If the courts were to define the destine of legitimate expectations as something less than a legal right and were to protect what would be thus defined by striking down administrative acts or decisions which failed to fulfil the expectations, the courts would be truncating the power which are naturally apt to affect those expectations.
7o strike down the exercise of administrative power solely on the ground of avoiding the disappointment of the legitimate expectations of an individual would be to set the courts adript on a featureless sea of pragmatism.
Moreover the notion of a legitimate expectation (falling short o a legal right) is too nebulous to form a basis for invalidating the exercise of a power when its exercise otherwise accords with law.
The authority of the courts and their salutary capacity judicially to review the exercise of ' administrative power depend in the last analysis on their fidelity to the rule of law, exhibited by the articulation of general principles.
189 To lie within the limits of judicial power the nation of "legitimate expectation " must be restricted to the illumination of what is the legal limitation on the exercise of administrative power tit a particular case.
of course, if a legitimate expectation were to amount to a legal right, the court would define the respective limits of the right and any power which might be exercised to infringe it so as to accommodate in part both the right and the power or so as to accord to one priority over the other (That is a common place of cruial declarations.) but a power which might be so exercised as to affect a legitimate expectation falling short of a legal right cannot be truncated to accommodate the expectation.
So long as the notion of legitimate expectation is seen merely as indicating "the factors and kinds of factors which are relevant to any consideration of what are the things which must be done or afforded" to accord procedural fairness to an applicant for the exercise of an administrative power (see per Mahoney IA in Macrae, at 285), the notion can, with one important proviso, be useful.
but only if, the power is so created that the according of natural justice conditions its exercise, the notion of legitimate expec tation may useful focus attention on the content of natural justice in a particular case; that is, on what must be done to give procedural fairness to a person whose interests might he affected by an exercise of the power.
But if the according of natural justice does not condition the exercise of the power, the notion of legitimate expectation can have no role to play.
If it were otherwise, the notion would become a stalking horse for excesses of judicial review." (emphasis supplied) In this very case, Brennan J. after referring to Schmidt 's case (supra) observed thus: 190 "Again, when a court is decidsing what must be done in order to accord procedural fairness in a particular case it has regard to precisely the same circumstances as those to which the court might refer in considering whether the applicant entertains a legitimate expectation, but the inquiry whether the, applicant entertains a legitimate expectation is superfluous.
Again if an express promise be given or a regular practice be adopted by a public authority, and the promise or practice is the source of a legitimate expectation, the repository is bound to have regard to the promise or practice in exercising the power, and it is unnecessary to inquire whether those factors give rise to a legitimate expectation.
But the Court must stop short of compelling fulfillment of the promise or practice unless the statute so requires or the statute permits the repostitory of the power to hind itself as to the manner of the future exercise of the power.
It follows that the notion of legitimate expectation is not the key which unlocks the treasury of natural justice and it ought not unlock the gate which shuts the court out of review on the merits.
The notion of legitimate expectation wits introduced at a time when the courts were developing the common law to suit modern conditions and were sweeping away the unnecessary archaisms of the prerogative writs, but it should not be used to subvert the principled justification I or curial intervention in the exercise of administrative power." (emphasis supplied) In the same case, Dawsom.
J. observed thus: "It also follows that the required procedure may very according to the dictates of fairness in the particular case.
Thus, in order to succeed.
the respondent must be able to point to something in the circumstances of the case which would make it unfair not to extend to him 191 the procedure which he seeks.
There is no doubt that the respondent had a legitimate expectation of continuing in his position as a stipendiary magistrate such that it should, apart from statute, have been unfair to remove him from that position without according him a hearing.
If the principle of judicial independence expended to a stipendiary magistrate, then, no doubt, that would have strengthened his expectation.
But the respondent was not removed from his position of stipendiary magistrate by administrative decision.
He was removed by a statute which abolished the position of stipendiary magistrate and established the new position of magistrate.
Not only that, the statute, the Local Courts Act.
clearly contemplated that not all the former stipendiary magistrates would be appointed as magistrates pursuant to its terms.
Accordingly it made provision for those who where not so appointed.
It may be possible to deprecate the manner in which the statute removed the respondent from office, but it is not possible to deny its effect.
Any unfairness was the product of the legislation which conferred no right upon the respondent to a procedure other than that which it laid down." (emphasis supplied) On examination of some of these important decisions it is generally agreed that legitimate expectation gives the applicant sufficient locus standi for judicial review and that the doctrine of legitimate expectation is to be confined mostly to right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken.
The doctrine does not give scope to claim relief straightaway from the administrative authorities as no crystallised right as such is involved.
The protection of such legitimate expectation does not require the fulfillment of the expectation where an overriding public interest requires otherwise.
In other words where a person 's legitimate expectation is not fulfilled by taking a particular then decision maker should justify the denial of such expectation by showing some overriding public interest.
Therefore even if substantive protection of such expectation is contemplated that does not grant 192 an absolute right to a particular person.
It simply ensures the circumstances in which that expectation may be denied or restricted.
A case of legitimate expectation would arise when a body by representation or by past practice aroused expectation which it would be within its powers to fulfill.
The protection is limited to that extent and a judicial review can be within those limits.
But as discussed above a person who bases his claim on the doctrine of legitimate expectation, in the first instance, must satisfy that there is a foundation and thus has locus standi to make such a claim.
In considering the same several factors which give rise to such legitimate expectation must be present.
The decision taken by the authority must be found to be arbitrary, unreasonable and not taken in public interest.
If it is a question of policy, even by way of change of old policy, the courts cannot interfere with a decision.
In a given case whether there are such facts and circumstances giving rise to a legitimate expectation, it would primarily be a question of fact.
If these tests are satisfied and if the court is satisfied that a case of legitimate expectation is made out then the next question Would be whether failure to give an opportunity of hearing before the decision affect such legitimate expectation is taken has resulted in failure of ' justice and whether on that ground the decision should he quashed.
If that be so then what should be the relief is again a matter which depends on several factors.
We find in Attorney General for New South wales ' case that the entire case law on the doctrine of legitimate expectation has been considered.
We also find that on an elaborate an erudite discussion it is held that the courts ' jurisdiction to interfere is very much limited and much less in granting any relief in a claim based purely on the ground of 'legitimate expectation '.
In Public Law and Politics edited by Carol Harlow, we find an article by Gabriele Ganz in which the learned author after examining the views expressed in the cases decided by eminent judges to whom we have referred to above, concluded thus: "The confusion and uncertainty at the heart of the concept stems from its origin.
It has grown from two separate roots, natural justice or fairness and estoppel.
, but the stems have become entwined to such an extent that it is impossible to disentangle them.
This makes it that it is very difficult to predict how the hybrid will 193 develop in future.
This could be regarded as giving the concept a healthy flexibility, for the intention behind it is being it has been fashioned to protect the individual against administrative action which is against his interest.
On the other hand, the uncertainty of the concept has led to conflicting decisions and conflicting interpretations in the same decision." However, it is generally accepted and also clear that legitimate expectation beings less than right operate in the field of public and not private law and that to some extent such legitimate expectation ought to be protected though not guaranteed.
Legitimate expectations may come in various forms and owe their existence to different kind of circumstances and it is not possible to give an exhaustive list in the context of vast and fast expansion of the governmental activities.
They shift and change so fast that the start of our list would be obsolete before we reached the middle.
By and large they arise in cases of promotions which are in normal course expected, though not guaranteed by way of a statutory right, in cases of contracts, distribution of largest by the Government and in somewhat similar situations.
For instance in cases of discretionary grant of licences, permits or the like, carries with it a reasonable expectation, though not a legal right to renewal or non revocation, but to summarily disappoint that expectation may be seen as unfair without the expectant person being heard.
But there again the court has to see whether it was done as a policy or in the public interest either by way of G.O., rule or by way of a legislation.
If that be so.
a decision denying a legitimate expectation based on such (,rounds does not qualify for interference unless in a given case, the decision or action taken amounts to an abuse of power.
Therefore the limitation is extremely confined and if the according of natural justice does not condition the exercise of the power, the concept of legitimate expectation can have no role to play and the court must not usurp the discretion of the public authority which is empowered to take the decisions under law and the court is expected to apply and objective standard which leaves to the decising authority the full range of choice which the legislature is presumed to have intended.
Even in a case where the decision is left entirely to the discretion of the deciding authority without any such legal bounds and if the decision is 194 .
taken fairly and objectively, the court will not interfere on the ground of procedural fairness to a person whose interest based on legitimate expectation might be affected.
For instance if an authority who has full discretion to grant a licence and if he prefers an existing licence holder to a new applicant, the decision can not be interfered with on the ground of legitimate expectation entertained by the new applicant applying the principles of natural justice.
It can therefore be seen that legitimate expectation can at the most be one of the grounds which may give rise to judicial review but the granting of relief is very much limited.
It would thus appear that there are stronger reasons as to why the legitimate expectation should not be substantively protected than the reasons as to why it should be protected.
In other words such a legal obligation exists whenever the case supporting the same in terms of legal principles of different sorts, is stronger than the case against it.
As observed in Attornry General for New South Wales ' case "To strike down the exercise of administrative power solely on the ground of avoiding the disappointment of the legitimate expectations of an individual would be to set the courts adrift on a featureless sea of pragmatism.
Moreover, the notion of a legitimate expectation (falling short of a legal right) is too nebulous to form a basis for invalidating the exercise of power when its exercise otherwise accords with law.
" If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminatory unfair or based, gross abuse of power or violation of principles of natural justice, the same can be questioned on the well known grounds attracting Article 14 but a claim biased on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles.
It can be one of the ground to consider but the court must lift the veil and see whether the decision is violative of these principles warranting interference.
It depends very much on the facts and the recognised general principles of administrative law applicable to such facts and the concept of legitimate expectation which is the latest recruit to a long list of concepts fashioned by the courts for the review of administrative action, must be restricted to the general legal limitations applicable and binding the manner of the future exercise of administrative power in a particular case.
It follows that the concept of legitimate expectation is "not the key which unlocks the treasury of natural justice and it ought not to unlock the gates which shuts the court out of review on the merits," particularly when the element of speculation and uncertainty is inherent in that very concept.
As cautioned in Attorney General for 195 New South Wales ' case the courts should restrain themselves and restrict such claims duty to the legal limitations.
It is a well meant caution.
Otherwise a resourceful litigant having vested interests in contracts.
licences etc,. can successfully indulge in getting welfare activities mandated by directive principles thwarted to further his own interests.
The caution, particularly in the changing scenario, becomes all the more important.
In view of our conclusions in respect of the quantities allotted and the price fixed it may not be necessary for us to enter into further discussion on this aspect.
We have already directed 0that the Tender Committee should consider afresh as to what should be the reasonable price and to that extent the price of Rs. 67,000 fixed in respect of smaller manufacturers is set aside and directed to be revised.
So far these three big manufacturers are concerned, we held that on their own commitment they are bound to supply at the rate of Rs. 67,000 per bogie.
So far the quantities are concerned, we held that these three big manufacturers should be allotted the quantities as per the recommendations of the Tender Committee.
However, we considered this aspect to some extent only to show that the decision in respect of price fixation as well as allotment of quantities even though to some extent at variation with the procedure followed during the previous years, was not based on any irrelevant consideration.
The Railways particularly the Financial Commissioner as well as the Minister and initially the Tender Committee formed an opinion that these three big manufacturers formed a cartel and also quoted and unworkable predatory price at the post tender stage.
Therefore from the point of view of preventing monopoly in the public interest the decision in question was taken in a bonafide manner.
However, on a factual basis we held that the alleged formation of cartel was only in the realm of suspicion and in that view the decision was modified, as already indicated.
However, we make it clear that the said modifications by way of judicial review is not on the ground of legitimate expectation and violative of principles of natural justice but on the other ground namely the decision of the authorities was based on wrong assumption of formation of a cartel.
The next submission is that the decision taken by the Railways resulting in reduction of the quantities and making a counter offer of Rs. 65,000 to these three big manufacturers is punitive in nature 196 visiting with civil consequences and such a decision taken without giving an opportunity to these manufacturers is violative of principles of natural justice.
In view of our above mentioned conclusions resulting in modification of the decision of the authorities both in respect of price fixation and in allotment of quantities, there is no necessity to consider this aspect again in detail.
It was next contended that the consideration that some manufacturers are small and others are BIFR companies taken into account by the approving authority for deviating from the age old practice in allocation of quantities is irrelevant and discriminatory and therefore the decision is bad.
It may be mentioned that status of a manufacturers being a BIFR company or a small manufacturers was not taken into account so far as the fixation of the price is concerned and these considerations were deemed relevant only for the purpose of allocation of quantities.
The stand taken by the Railways is that smaller manufacturers should survive from the point of view of arresting monopolistic tendencies and from the point of view of public interest.
The Tender Committee proceedings would indicate that on the basis of certain formulae namely the past performance, capacity etc.
the allotment was being made.
Therefore these can not be said to be irrelevant considerations and as a matter of fact they had been duly given effect to and weightage was given accordingly in respect of allotment of quantities to various manufacturers within the four corners of the limited tender.
The learned counsel, however, contended that the allotment of the quantities to the smaller manufacturers also is not based on any acceptable principle and that some of them are given larger quantities without any justification rendering the decision bad because of arbitrariness.
The proceedings mentioned above particularly the nothings of the Financial commissioner as well as the competent authority would show that some of the smaller manufacturers namely M/s Himmat, Texmaco and Sri Ranga were BIFR companies.
As no price preferential treatment was given to any one of them.
the approving authority considered that enhancement in allocation of quantities was necessary.
Likewise M/s. Cimmco and Texmaco who are wagon builders and whose business in entirely with the Railways were also given some weightage.
We can not say that these are irrelevant considerations for 197 the purpose of arriving at a decision.
In the past also there were such variations based on these circumstances.
In any event for different reasons we have varied this decision and directed that the three big manufacturers should be given allotment as per the recommendations of the Tender Committee.
In our earlier order we have noticed that there has been some departure in respect of one or two smaller manufacturers in allotting the quantities.
We have already indicated that the Railways authorities should in future make a proper consideration of the relevant factors in respect of each tenderer in an objective manner in allotting the quantities.
Now coming to the question of dual pricing, the submission is that in respect of same set of manufacturers, some of them can not be made to supply at a lower price and the others namely smaller manufacturers can not be given advantage to supply at a higher price and such dual pricing is unreasonable and arbitrary.
As already noted, the Tender Committee worked out an upgraded price and taking into other relevant factors like cost of the material etc.
into consideration and applying the formula as was being done in the past and particularly taking into consideration the two concessions in respect of custom and freight fixed Rs. 76,000 as the reasonable price.
This was very close to the price quoted by the three big manufacturers.
But at a post tender stage, they entered into correspondence offering a lower price and ultimately the three big manufacturers committed themselves to supply at the rate of Rs. 67,000 per bogie.
In our earlier order we indicated that these big manufacturers formed a different category namely that they may be in a position to supply at that rate as is evident from their own commitment but to apply the same price which is much lower than the reasonable and workable price fixed by the Tender Committee to other smaller manufacturers would again result in ending the competition between the big and the small which ultimately would result in monopoly of the market by the three big manufacturers.
That is a very important consideration from the point of view of public interest.
However, as already mentioned we directed the 'render Committee to consider the matter afresh an even if it results in dual pricing, it would not be had in the circumstances mentioned above.
198 These are all the reasons in support of our conclusions given in our order dated 14th January, 1993. [/INST] These special leave petitions were disposed of by this Court 's order dated 14.1.1993.By the said order the Court gave its conclusions and certain directions observing that reasons In support thereof would be given at a later stage.
Giving the reasons in support of the conclusions, this Court, HELD: 1.1 The Government in a Welfare State has the wide powers in regulating and dispensing of special services like leases, licences, and contracts etc.
The Government while entering Into contracts or issuing quotas is expected not to act like a private individual but should act in conformity with certain healthy stan 129 dards and norms.
Such actions should not be arbitrary, irrational or irrelevant.
In the matter of awarding contracts, inviting tenders is considered to be one of the fair ways.
If there are any reservations or restrictions then they should not be arbitrary and must be justifiable on the basis of some policy or valid principles which by themselves are reasonable and not discriminatory.
(144 G H, 145 A) Erusian Equipment and Chemicals Ltd. vs State of West Bengal ; , Ramana Dayaram Shety vs The International Airport Authority of India and Ors. ; , and Kasturi Lal Lakshmi Reddy vs State of Jammu and Kashmir and Anr. ; , relied on.
1.2 The concept of reasonableness rinds its positive manifestation and expression in the lofty ideal of social and economic justice which inspires and animates the Directive Principles, and Article 14 strikes at arbitrariness In State action.
(149 C) Maneka Gandhi vs Union of India.
[1978] 2 SCR 621, and E.P. Royappa vs State of Tamil Nadu & Anr. ; , relied on.
1.3 The policy of the Government is to promote efficiency in the administration, to provide an incentive to the uneconomic units to achieve efficiency, to prohibit concentration of economic power and to control monopolies so that the ownership and control of the material resources of the community are so distributed as best to subserve the common good, and to ensure that while promoting industrial growth there is reduction in concentration of wealth and that the economic power is brought about to secure social and economic justice.
(159 F, 161 C) Monopolies Inquiry Commission 's Report, referred to.
American Jurisprudence 2 vol.
p. 668, referred to.
1.4 In view of the conditions in the tender notice, validity whereof was not questioned, the Government had the right to either accept or 130 reject the lowest offer.
From a perusal of the proceedings of the Tender Committee as well as the opinion expressed by the Financial Commissioner and the other members of Railway Board, it is clear that Rs. 76,000 per bogie could be the reasonable price and the post tender offer at a lower price was made with the hope that the three big manufacturers would get the entire or larger quantity allotted, which, if accepted, would result in monopoly extinguishing the smaller manufacturers.
(46 D G) State of Uttar Pradesh and others vs Vijay Bahadur Singh and others [1982]2 SCC365, State of Orissa and Ors.
vs Harinarayan Jaiswal and Ors.
; , G.B. Mahajan and others V. Jalgaon Municipal Council and others ; , State of Madhya Pradesh & ors.
vs Nandial Jaiswal & Ors. ; , Shri Sitaram Sugar Co. Ltd. V. Union of India ; , R.K. Garg vs Union of India ; , and Peerless General Finance and Investment Co. Limited and another etc.
vs Reserve Bank of India etc. , relied on.
2.1 The cartel is an association of producers who by agreement among themselves attempt to control production, sale and prices of the product to obtain a monopoly in any particular, industry or commodity.
It amounts to an unfair trade practice which is not in the public interest.
The intention to acquire monopoly power can be spelt out from formation of such a cartel by some of the producers.(167B C) Collins English Dictionary; Webster comprehensive Dictionary International Edition; chamber 's English Dictionary; Black 's Law Dictionary: A Dictionary of Modern Legal Usage by Bryan A. Garner; American Jurisprudence 2d Vol.
54, page 677 referred to.
2.2 However, the determination whether an agreement unrea sonably restrains the trade depends on the nature of the agreement and on the surrounding circumstances that give rise to an inference that the parties intended to restrain the trade and monopolise the same.
(167 C D) 131 National Electrical contractors Associations, Inc, et, at, National constructors Associations et.
al., Federal Reporter 2d Series, 678 page 492, Matsushita Electric Industrial Co. Ltd., et.
at vs Zenith Radio Corporation et al, 89 L.Ed.
2d 538, referred to.
2.3 Monopoly is the power to control prices or exclude competition from any part of the trade or commerce among the producers.
The price fixation is one of the essential factors.
(171 E) American Jurisprudence 2d Vol.
54, referred to.
2.4 A mere offer of a lower price by itself though may appear to be predatory, does not manifest the requiste intent to gain monopoly and in the absence of a specific agreement by way of a concerted action suggesting conspiracy, the formation of a cartel among the producers who offered such lower price cannot readily be inferred.
(172 B C) Matsushita Electric Industrial Co. Ltd. et.
vs Zenith Radio Corporation et.
; , referred to.
Webster Comprehensive Dictionary, International Edition; A dictionary of Modern Legal Usage by Bryan A. Garner; Collins English Dictionary Black 's Law Dictionary; The oxford English Dictionary Vol.
VIII, referred to.
2.5 The opinion of the Tender Committee that the identical price quoted by the three big manufacturers was a cartel price, was only a suspicion which got strengthened by post tender attitude of the said manufacturers who quoted a much lesser price, and cannot positively be concluded on the basis of these two circumstances alone.
There is not enough material to conclude that in fact there was formation of a cartel.
(173 B C) 2.6 A mere quotation of identical price and an offer of further reduction by themselves could not entitle the said manufacturers automatically to corner the entire market by way of monopoly since the final allotment of quantities vested in the authorities who in their 132 discretion can distribute the same to all the manufacturers including these three big manufacturers on certain basis.
Besides.
the authorities reserved a right to reject a lower price.
(172 F, 173 A B) 2.7 However, the opinion regarding formation of a cartel entertained by the concerned authorities including the Minister was not malicious nor was actuated by any extraneous considerations.
They entertained a reasonable suspicion based on the record and other surrounding circumstances and only acted in a bonafide manner in taking the stand that the three big manufacturers formed a cartel.
(173 C) 3.1 The legitimacy of an expectation can be Inferred only if it is founded on the sanction of law or custom or an established procedure followed in regular and natural sequence.
It Is distinguishable from a genuine expectation.
Such expectation should be justifiably legitimate and protectable.
Every such legitimate expectation does not by itself fructify into a right and therefore it does not amount to a right in the conventional sense, A case of legitimate expectation would arise when a body by representation or by past practice aroused expectation which it would be within its powers to fulfil.
The claim based on the principle of legitimate expectation can be sustained and the decision resulting in denial of such expectation can be quashed provided the same is found to be unfair, unreasonable, arbitracy and violative of principle of natural justice.
(182 C, 192 A) Food Corporation of India vs M/s Kamdhenu Cattle Feed Industries JT , relied on.
Halsbury 's Law of England.
fourth Edition, vol.
1 (1) 151, Administrative Laws of England, Sixth Edition by H.W.R. Wade, page 424, 522, referred to.
Schmidt vs Secretary of State for Home Affairs (1969) 2 Ch.
149;A.G. of Hong Kong vs Ng Yeun Shiu (1983) 2A.C.629;In Council of Civil Service Unions and others vs Minister for the Civil Service (1984) Vol.3 All E.R. 935, Amarjit Singh Ahluwalia vs The State of Punjab & Ors. ; ; Att.
for New South Wales vs Ouin [1990] Vol.
64 Australian Law 133 Journal Reports 327; 'R. vs Secretary of State for the Home Department ex parte Ruddock & Ors.
(1987)2 All E R 518, Breen vs Amalcamated Engineering Union & Ors.
(1971) 2 Law Reports Queen Bench Division 173, referred to.
3.2 Legitimate expectation gives the applicant sufficient locus standi for judicial review and the doctrine of legitimate expectation is to be confined mostly to, right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken.
The doctrine does not give scope to claim relief straightaway from the administrative authorities as no crystalised right as such is involved.
(191 F) Navyoti Coo Group Housing Society etc.
vs Union of India & Others ; ; Findlay vs Secretary of State for the Home Department (1984) 3 All E R801 and Council of Civil Service Unions case Lord diplock 3.3 Legitimate expectation being less then right operate in the field of public and not private law and to some extent ought to be protected thought not guaranteed.
(193 C) 3.4 Legitimate expectations may come in various forms and owe their existence to different kind of circumstances.
By and large they arise in cases of promotions which are in normal course expected, though not guaranteed by way of a statutory right, in cases of contracts, distribution of largess by the Government and in somewhat similar situations.
(193 D) 3.5 Protection of legitimate expectation would not be available where an overriding public interest requires otherwise.
The protection is limited to that extent and a judicial review can be within those limits.
(191 H; 192 A B).
3.6 A person who bases his claim on the doctrine of legitimate expectation, in the first instance, must satisfy that there is a foundation and thus has locus standi to make such a claim.
The decision taken 134 by the authority must be found to be arbitrary, unreasonable and not taken in public interest.
It that be so then what should be the relief is again a matter which depends on several factors.
(192 C D E) 3.7 The courts jurisdiction to interfere is very Much limited and much less in granting any relief in a claim based purely on the ground of 'legitimate expectation '.
A decision denying a legitimate expectation based on a policy or change of an old policy, or in the public interest either by way of G.O., rule or is made by way of a legislation does not qualify for interference unless in a given case, the decision or action taken amounts to an abuse of power.
(193 E F) Att.
Gen. for New South Wales vs Quin [1990] Vol.
64 Australian Law Journal Reports 327, referred to.
Public Law and Politics edited by Carol Harlow, referred to.
3.8 Therefore the limitation is extremely confined and if the according of natural justice does not condition the exercise of the power.
The concept of legitimate expectation can have no role to plan and the Court must not usurp the discretion of the public authority which is empowered to take the decisions under law and the court is expected to apply an objective standard which leaves to the deciding authority the full range of choice which the legislature is presumed to have intended.
Even in a case where the decision is left entirely to the discretion of the deciding authority without any such legal bounds and if the decision is taken fairly and objectively, the court will not interfere on the ground of procedural fairness to a person whose interest based on legitimate expectation might be affected.
(193 G A; 194 A) 3.9 If a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary,discriminatory, unfair or based, gross abuse of power or violation of principles of natural justice, the same can be questioned on ' the well known grounds attracting Article 14 but a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles.
It can be one of the grounds to consider but the court must lift the veil and see whether the decision is violative of these principles warranting interference.
(194 E F) 135 3.10 The concept of legitimate expectation is "not the key which unlocks the treasury of natural justice and it ought not to unlock the gates which shuts the court out of review on the merits," particularly when the element of speculation and uncertainty is inherent in that very concept.
The courts would restrain themselves and restrict such claims duly to the legal limitations.
It is a well meant caution.
Otherwise a resourceful litigant having vested interests in contracts, licences etc.
can successfully indulge In getting welfare activities mandated by directive principles thwarted to further is own interests.
The caution, particularly in the changing scenario, becomes all the more important.
(194 G H; 195 A B) Att.
Gen. for New South Wales vs Quin 1990 Vol.
64 Austraian Law Journal Reports 327, referred to. 3.11 In the instant case, the Rules for entering into contracts lay down certain norms and contain guidelines.
They provide for constitution of Tender Committee and the procedure to be followed in the matter of inviting tenders.
They also provide for negotiations but lay down that selection of contracts by negotiations is an exception rather than a rule and can be resorted to only under certain circumstances.
As per the notice inviting tender, the price quoted is subject to price variation clause and the Railways reserved a right to accept the lowest price or accept the whole or any part or the tender or portion of the quantity offered.
The tenderer cannot expect that his entire tender should be accepted in respect of the quantity.
In the past also there were man ,, instances where the Railways as per the procedure followed, arrived at decisions in respect of both price and quantity for good and justifiable reasons.
(178 A B C) 3.12 There is no legally fixed procedure regarding fixation of price and particularly regarding allotment giving scope to a legitimate expectation.
The Tender Committee is not a statutory authority and its proposals are recommendatory in nature and have to be considered in the distribution procedure culminating in the decision of the approving authority who as a matter of fact, also can take decisions in respect of price and allotment of quantities taking into consideration various other aspects from the point of view of public interest.
(178 D E) 136 4.
The modifications In the decision of the Railways by way of judicial review are not on the ground of legitimate expectation and violation of principles of natural justice but on the other ground namely the decision of the authorities was based on wrong assumption of formation of Cartel.
(195 F G) 5.The status of a manufacturer being a BIFR company or a small manufacturer was not taken Into account so far as the fixation of the price is concerned and these considerations were deemed relevant only for the purpose of allocation of quantities.
The stand taken by the Railways is that smaller manufacturers should survive from the point of view of arresting monopolistic tendencies and from the point of view of public interest.
The Tender Committee proceedings would indicate that on the basis of certain formulae namely the past performance, capacity etc, the allotment was being made.
Therefore, these cannot be said to be irrelevant considerations and as a matter of fact they had been duly given effect to and weightage was given accordingly in respect of allotment of quantities to various manufacturers within the four corners of the limited tender.
(196 C E) </s> |
<s>[INST] Summarize the following judgement: minal Appeal No. 698/85 with 59/86.
From the Judgment and Order dated 30.4.1985 of the Punjab and Haryana High Court in Crl.
A. No. 345 DB of 1984.
R.L. Kohli and Prem Malhotra for the Appellants in Crl.
A. No. 698/85.
O. P. Sharma R.C. Gunbrele, K.R. Gupta, Mrs. Nanita Sharma, Vivek Sharma and.
Kamaljeet Singh for the Appellant in Crl.
A. No. 59/86.
K.C. Bajaj and Ms. Indu Malhotra (NP) for the Respondent.
J One appeal is on behalf of Hari Singh and the other is on behalf of Satbir and Gulbir.
They were put on trial along with 67 Suresh, Vijender and Virender for having committed the murder of Mange Ram on 7th October, 1982.
Virender being a minor his trial was separated so that the said may be conducted by Children Court.
The remaining five accused were convicted for offences under section 302 read with 149, Section 148 and Section 323 read with 149.
Sentence of imprisonment for life was imposed against all the five accused persons under Section 302 read with 149.
Whereas under Section 148 each one of them was sentenced to undergo rigorous imprisonment for one year, and rigorous imprisonment for three months under Section 323 read with 149.
The Sentences were directed to run concurrently.
The High Court dismissed their appeal.
Special Leave Petition (Criminal) No.2160 of 1985 was filed on behalf of accused Hari Singh, Suresh and Vijender.
On 23rd September, 1985 this Court granted special leave to appeal to appellant Hari Singh, but dismissed the said Special Leave Petition so far Suresh and Vijender were concerned.
Leave was granted to appellants Satbir and Gulbir on a separate Special Leave Petition filed on their behalf.
The case of the prosecution is that in the night intervening 6th and 7th October, 1982 Mange Ram (hereinafter referred to as "the deceased") and Ram Kishan PWI6, who is the first cousin of the deceased, were returning after witnessing the Ram Leela.
At that very time Suresh, Satbir, Vijender, Virinder and Gulbir were also returning after the show.
Near the baithak of Jit Ram, the accused persons teased some girls of the village who had also gone to see the Ram Leela.
The deceased and PW 16 objected to the behaviour of the accused persons towards the girls of their own village.
On this it is said that the accused persons abused them which was followed by exchange of abuses from both the sides.
Budhi PW 13 intervened and pacified them, Next day at about 2.30 PM.
the deceased and PW 16 went to their flour mill to bring back their bullocks and fodder cart.
Suresh and Satbir with Pharsas, Hari Singh with a Ballam, Virinder, Vijender and Gulbir with sticks came there.
Suresh abused the deceased and PW16 saying that they would teach them a lesson for abusing them i.e. accused persons on the previous night.
Having said so accused Suresh gave a Pharsa blow from the blunt side.
on the head of the deceased.
Satbir also gave a Pharsa blow from the blunt side, on the head of the deceased.
PW 1 6 raised an alarm Virinder, Vijender and Gulbir gave stick blows to the 68 deceased.
It is further the case of the prosecution that when PW16 tried to intervene Hari, Singh gave a Ballam blow from the blunt side on his head and Vijender gave a stick blow on the left elbow of PW16.
Thereafter an alarm was raised and accused persons fled away from the place of occurrence.
The victim was taken to B.K. Hospital, Faridabad on a tractor.
From there he was referred to A.I.I.M.S., New Delhi, by Dr. O.P. Sethi PW 1.PW 1 also sent information to the Police Post No. 5, Faridabad, at about 4.15 P.M. the victim reached the A.I.I.M.S. At about 7.25 P.M. where he was examined.
Raghbir Singh, A.S.I., PWI7 who had got the information about the occurrence at the Police Station Chhainsa at 5.35 P.M. the same evening from the Police Station, New 'Township, Faridabad, went to the Institute aforesaid and recorded the statement of PWI6 at 8.30 P.M. which was forwarded to the Police Station, Chhainsa, where a case was registered at 11.30 P.M. the same night PW 1 7 took up the investigation and visited the place of occurrence and collected blood stained earth.
The victim died in the Institute the next morning at 7.00 A.M.
The postmortem examination was held by PW 1 5 on 8th October, 1982 at 4.30 P.M.
He found three stitched wounds, one on the right varietal region, second on the middle of the scalp and the third on the left varietal region.
One out of three wounds, was an operational (surgical) wound.
From internal examination, fracture of right occipital bone and right frontal base was found.
He also found contusions on the right thigh, left eye and left fore arm of the victim.
According to the opinion of PWI 5 the injuries found on the deceased had been caused "by application of blunt force" and were sufficient in ordinary course of nature to cause death.
The Pharsas from which according to the prosecution case the aforesaid injuries had been caused, were shown to PW 1 5, the doctor, and he stated as follows: "I have seen the alleged weapon of offence, Pharsa EX.P. 1 and the ante mortem injuries which are noted on the head cannot be inflicted by this weapon.
On the opposite side of Pharsa, there are two projecting devices for holding the Pharsa with Bamboo, having a distance of 15 cm.
from each other.
Even if Pharsa EX.P. 1 is used from any of its two sides (Between iron blade and the two iron projections referred above) 69 even then head injuries mentioned above are not likely to cause.
At this stage another sealed parcel containing a Pharsa EX.P.2 opened at the instance of defence counsel.
It was found containing a Pharsa exhibit P.2 1 have been this Pharsa also.
The distances between two projections holding iron blade with bamboos is about 11.5 cm.
and as such the injuries in question could not be caused by this weapon also, either used iron blunt side or iron any of the two sides, as stated by me with reference to EX.
P. 1 It is correct that the injury No. 2. is a operational (Surgical) wound which correspond with internal examination of head and corresponding piece of bone was absent having a size of 12 cm.
X 10 cm.
" On the person of PWI6 only few superficial injuries were found.
On 12th October, 1982 the aforesaid Dr. O.P. Sethi PWI of B.K. Hospital, Faridabad, examined accused Suresh under the orders of Shri Raj Kumar, HCS, Judicial Magistrate, Faridabad, and found the following injuries on the persons of Suresh: "1.
A diffused and tender swelling over back of left hand all over the wrist joint and lower half of left fore arm.
There were bluish mark of two bruises (abraised, each 1/2" x 1/2" over back fore arm).
Xray were advised for left wrist joint including lower half of the fore arm and the hands.
It was advised for posterior, interior and lateral views.
A partially healed injury 1 " x 1/8" placed at the top of head 5" above the pinna of right ear.
X ray advised for skull in superior view.
A partially healed injury 3/4" x 1/8" at the left half of head 2" behind the interior hair line.
X ray was also advised.
A liniar injury having 3/4" x 1/8" at right half of head, 1 1/2" behind interior hair line.
X ray skull was advised.
A vertical injury mark 2" x 1/2 at the left shin 5" 1/2 above left ankle joint.
" The duration of the time in respect of the injuries aforesaid was three to six days.
PWI stated in the Court that accused Suresh had been medically examined at the request of the Police and a copy of the medical report was also handed over to the Police.
It was urged on behalf of the appellants that on the materials on record the Courts below should have come to the conclusion that prosecution has suppressed the real manner, of occurrence and has disclosed a version of the occurrence which cannot be accepted.
It was pointed out that accused Suresh, Vijender and Virinder are the sons of accused Hari Singh who was aged about 60 years, as such, it was highly improbable on the part of Hari Singh to join his sons for commiting the murder of Mange Ram who had protested the behaviour of the sons of Hari Singh, the previous night with the girls of the village.
From the evidence of Rang Lal PW7 it appears that the flour mill of the deceased and the fields of the accused persons are across the same road.
The tube well of accused Hari Singh is situated adjoining the mill where Hari Singh has also got tile residential unit.
It was urged that in view of the admitted position that the residential unit, tube well are by the side of the flour mill of the deceased there was no question of the accused persons going to the flour mill of the deceased to assault the deceased and PWI6.
The accused persons and the deceased both having their flour mill and residential unit side by side, most probably clashed as a result of a sudden fight in which injuries were caused to the victim as well as to PW16 on the side of the prosecution and on Suresh on the accused side.
It may be mentioned that in the First Information Report, only the name of Suresh, one of the six accused was mentioned in connection with the previous night 's incident saying that he along with four or five boys were coming after seeing the Ram Leela and then they started teasing the girls and thereafter an exchange of abuses took place.
In the First Information Report it was also stated by PWI6 that accused Suresh and Satbir gave Pharsa blows on the 71 head of the deceased.
In the First Information Report PWI6, the informant, did not state that the injuries on the head on the head of the victim were caused by the back side of the Pharsa.
On behalf of the appellants, it was pointed out that this change was introduced after it was found during the postmortem examination that injuries had been caused by application of blunt force ' which was inconsistent with the case of assault on the head of the deceased by Pharsa.
But merely on the ground that PWI6, the informant.
did not mention the name of any other accused in connection with the previous _night incident except Suresh or in the First Information Report having said that Suresh and Satbir gave Pharsas blows on the head of the deceased.
Modified the same in court by saying that they gave one Pharsa blow each by the back side of the Pharsa, his evidence cannot be rejected outright.
But at the same time the case of the prosecution that Hari Singh along with Five accused including a child.
went to the flour mill of the deceased, with an intention to cause the death of the victim, because of the previous night abuses and altercations, also does not appear to be the real version of the occurrence.
If the intention of the accused persons was to commit the murder, then they would not have given blows by the back side of the Pharsa on the head of the deceased.
In all probabilities because of the previous night 's incident, at about 2.30 P.M. a sudden fight took place, in which accused Suresh and Satbir are alleged to have given blows from the back side of the Pharsa on the head of the deceased.
PW 15, the doctor, who held the postmortem examination, has stated that those injuries had been caused "by application of blunt force" and has emphatically repudiated that injuries on the head of the deceased could have been caused by two Pharsas Ex, P. 1 and P2 which had been seized and shown to him during the course of his examination.
The injuries from the back side of the Pharsa can be said to have been caused by "blunt force".
It has been rightly submitted that on basis of the evidence adduced including the evidence of PW 16, the informant, it cannot be said be said that accused persons had an intention to cause such injuries on the victim which may result in his death.
When they caused those injuries by the blunt side of the Pharsa it will be presumed that they had knowledge that those injuries can cause the death, but there was no intention on their part to cause death.
As such the Trial Court and the 72 High Court should not have convicted the appellants under Section 302 read with Section 149.
On behalf of the State an objection was taken that in view of the dismissal of the Special Leave Petition filed on behalf of two accused Suresh and vijender against whom similar allegations had been made, it is not open to this Court now to entertain any plea on behalf of the three appellants because it will be deemed that while dismissing the Special Leave Petition filed on behalf of Suresh and Vijender this Court has affirmed the findings recorded by the Trial court and the High Court in respect of manner of occurrence and participation of the accused persons including the three appellants.
It was also pointed out that if any of the appellant is acquitted or the convictions and sentences imposed against them are altered in any manner it will lead to inconsistency in the different orders passed by this Court.
It is true that system of the justice which is being administered by the Courts, one of the basic principles which has to be kept in view, is that Courts of co ordinate jurisdiction, should have consistent opinions in respect of an identical set of facts or on question of law.
If Courts express different opinions on the identical sets of facts or question of law while exercising the same jurisdiction, then instead of achieving harmony in the judicial system, it will lead to judicial anarchy.
But before any such principle is appliedit must be held that the earlier order passed by this Court dismissing the Special Leave Petition of the coaccused amounts to a judgment or an affirmness of the findings of the High court, about the manner of the occurrence, participation of the different accused persons and the nature of offence committed by them.
Article 136 (1) of the Constitution confers overriding and extensive powers of granting special leave to appeal or rejection thereof in the discretion of this Court.
Article 136 does not confer a right to appeal, it confers only a right to apply for special leave toappeal, which taking all facts and circumstances into consideration may be granted or rejected.
Even in a case where special leave application is rejected, the Order of the High Court does not merge in the Order of this Court, as is the case while exercising the appellate power.
Similarly when Special Leave Petition is entertained against any final or interlocutory 73 order this court does not convert itself in a court of appeals.
It was said in the case of Gain chand V. Kunjbeharilal; , Chandrachud, J (as he was then): "With regard to the first submission it may he pointed out that an application for special leave under Article 136 of the Constitution against a judgement or an order cannot be equated with the ordinary remedy of appeal, as of right, under any provisions of law.
It is an extraordinary right conferred under the constitution, within the discretion of this Court, and such an application for special heave does not come within the contemplation of appeal pending before the Court under Section 13 A (a).
" It is a basic principle of the administration of justice that like cases should be decided alike.
It is a very sound rule and practice otherwise on same question of law or same set of facts different persons approaching a Court can get different orders.
But can the appeal of an accused.
who has been granted special leave to appeal, be dismissed on the ground that the Special Leave Petition filed on behalf of a coaccused with more or less similar charges has already been rejected by this court.
althouhgh this Court is satisfied that either such accused whose appeal is being heard is entitled to acquittal or ought to have been convicted for a different offence with a different sentence.
The doctrine of precedent is not applicable to an order passed by this Court rejecting a Special Leave Petition.
Any such order cannot be held to be stare decisis so that it is a binding on us.
If it is held that as the Special Leave Petition filed on behalf of Suresh and Vijender having been rejected, this Court cannot alter the conviction or sentence passed against the three appellants.
including the acquittal of any one of them.
althogh the Court is satisfied on the materials on record, then what was the purpose, while rejecting the Special Leave Petition of the co accused Suresh and Vijender, to grant leave to appeal so far the present three appellants are concerned? At the same time it need not be impressed that rejection of the Special Leave Petition gives a finality to an order of the High Court, inasmuch as the same accused cannot file more then one Special Leave Petition.
74 But in rare and exceptional cases this Court has exercised power under Article 32 of the Constitution so that there should not he miscarriage of justice and to avoid a direct conflict and confrontation between two orders of this Court.
In the case of Harbans Singh vs State of U. P., ; , two accused persons had been sentenced to death by a common judgment.
Special Leave Petition filed on behalf of one of the accused persons was dismissed.
So far the other accused, who had also been sentenced to death.
is concerned his Special Leave Petition was entertained on question of sentence.
Ultimately his death sentence was commuted to imprisonment for life.
The other accused person whose Special Leave petition had been dismissed filed it petition under Article 32.
His death sentence was also commuted by the Supreme Court.
In that connection it was said: "Since Kashmira Singh 's death sentence was commuted by this Court.
it would be unjust to confirm the death sentence imposed upon the petitioner.
That will involve the Court as well as the authorities concerned in the violation of rudimentary norms governing the administration of justice. " In the well known case of A.R. Antulay vs R.S. Nayak.
AIR 1988 SC 153 1.
it was pointed Out that the Supreme Court is not Powerless to correct its error affairs Court is satisfied that if such power is not exercised it will lead to manifest injustice because no man can suffer for the mistake of the Court.
Again in the case of Pyare Singh vs State of Madhya Pradesh [1992] Supp.
3 SCC 45, this Court in exercise of power under Article 136 of the constitution while altering the convictions and reducing the sentences of the four out of six accused persons who had filed Special leave petitions before this Court.
extended the same benefit and relief to other two accused persons who had not even filed any Special Leave petition against their convictions and sentences because this court felt that if the same benefit of alteration of conviction and modification in sentence is not given to other two convicted accused persons.
it will lead to gross injustice.
75 The mere rejection of the Special Leave Petition of co accused persons cannot seal the fate of the appeals of the appellants which have been entertained after leave having been granted by this Court.
The appellants to whom leave has been granted can urge all questions within the frame work of Article 136 of the Constitution for consideration by this Court and a relief to which such appellants may be entitled cannot be denied to them merely on the ground that Special Leave Petition in respect of co accused persons with more or less similar charges, evidence and convictions has already been rejected.
On materials on record, the prosecution has not been able to prove and establish (hit appellants had the common object or shared the common intention to cause the murder of the victim.
From the evidence of the prosecution itself it appears that the flour mill of the deceased and the residential unit of the accused persons being adjacent to each other, suddenly a fight took place in which the appellant Satbir gave a blow by the back side (wooden part) of the Pharsa, which caused one of the two injuries on the head of the deceased.
It cannot be held that appellant Satbir had an intention to cause the death of the victim.
In the circumstances of 'the case.
It can he said that he had only knowledge that such blow may cause an injury resulting in the death of the victim.
Accordingly he should have been convicted under Section 304, Part 11, of the Penal Code.
So far appellant Gulbir is concerned, according to the prosecution case, he was carrying a stick and he is alleged to have given a stick blow to the deceased on a non vital part of ' the body.
In this background, according, to us, he can he held to have committed the offence on under Section 325 of the Penal code.
As already pointed out according to the prosecution case itself, the appellant Hari Singh, who was aged about 60 years at the time of the occurrence is said to have given a stick (lathi) blow to the informant PW 16.
tie is not alleged to have given any blow to the deceased.
Once it is held that different accused persons neither had any common object nor any common intention which they shared together to commit an offence under Section 302 or alike, the appellant Hari Singh has to he held guilty for an offence only under Section 323 of the Penal Code.
In the result the conviction of the appellants under Section 302 read with Section 149 of the Penal Code is set aside.
The conviction under Sections 148 and 323 read with 149 is also set aside.
The appellant Satbir is convicted for an offence under 76 Section 304 Part 11 and is sentenced to undergo rigorous imprisonment for seven years.
The appellant Gulbir is convicted for an offence under Section 325 of the Penal Code and is sentenced to undergo rigorous imprisonment for three years.
So far the appellant Hari Singh is Concerned, he is convicted for an offence under Section 323 of the Penal Code and is sentence to the period of imprisonment already under gone.
Accordingly the appeals are allowed in part to the extent indicated above.
N. V. K. Appeal allowed. [/INST] The three appellants In the two appeals along with 3 others, were tried for having committed murder.
One of the accused being a minor, his trial was separated so that the same could he conducted by the Children Court.
The case of the prosecution was that on the night intervening 6th and 7th October, 1982 the deceased and PW16.
who was the first cousin of the deceased, were returning after witnessing Ram Leela.
At that time the aforesaid 5 accused were also.
returning from the show and it was alleged that they teased some girls of the village who had also gone to see the Ram LeeLa, and that the deceased and PWI6 ' objected to this behaviour of the accused persons.
On this the accused persons abused them which was followed by exchange of abuses from both the sides.
PW13 intervened and pacified them.
Next day at about 2.30p.m.the deceased and Pw16 went to their flour mill to bring back 62 their bullocks and fodder cart.
Tub of the accused with Pharsas, one with a Ballam, and three others with sticks came there.
One of the accused abused the deceased and Pw16 saying that they would teach them a lesson for abusing them the previous night.
Having said so one of the accused gave a pharsa blow from the blunt side on the head of the deceased.
The other gave a pharsa blow on the head of the deceased.
PW16raIsed an alarm and the remaining accused gave blow to PWI6.
PW16 also got a blow of Ballam from the blunt side on his head.
Thereafter an alarm was raised and all the accused persons fled away from the place of occurrence.
The victim was taken to the local Hospital on a tractor and thereafter he was referred to A.I.I.M.S., New Delhi, where PWI examined him and also sent information to the police post at about 4.15 p.m.
The victim reached the A.I.I.M.S. at about 7.25 p.m. where he was examined.
A.S.I., PW17 who had got the information about the occurrence went to the Institute and the statement was recorded.
PW17 took up the investigation.
The victim died in the Institute the next morning at 7.00 a.m.
The postmortem examination was held by PW15 on 8th October, 1982 at 4.30 p.m. on 12th October, 1982 PWI examined one of the accused Suresh under the orders of judicial Magistrate and he made a report regarding the injuries he had received the duration of the time in respect of the injuries which he stated was 3 to 6 days.
The five accused were put up for trial, and the Session Judge convicted and sentenced all these accused for offences under Section 302 read with 149, Sections 148 and 323 read with Section 149 to imprisonment for life.
The High court having dismissed their appeals, the three appellants filed two appeals to this Court.
In the appeals to this court it was contended on behalf of the appellants that on the materials on record the Courts below should have come to the conclusion that the prosecution had suppressed the real manner of occurrence and had disclosed a version of the occurrence which cannot be accepted.
It was pointed out that the accused Suresh, Vijender and Virender were the sons of accused Hari Sing who was age d about 60 years, and that it was highly improbable on the part of , Hari Singh to join his sons for committing the murder of the deceased 63 Mange Ram who had protested about the behaviour of his sons.
It was submitted that in view of the admitted position that the residential unit, and the tube well being by the side of the flour mill of the deceased there was no question of the accused persons going to the flour mill of the deceased to assault the deceased and PWI6.
It was further submitted that in the First Information Report the name of accused Suresh was mentioned in connection with the previous night 's incident and that he and Satbir gave pharsa blows on the head of the deceased, that PW 16 modified his version of the FIR in court by saying that the injuries on the head of the victim were caused by the back side of the pharsa and that this improvement was introduced after it was found during the postmortem examination that injuries had been caused by application of blunt force which was inconsistent with the case of assault on the head of the deceased by pharsa.
The State raised an objection that in view of the dismissal of the Special Leave Petition of the two accused namely Suresh and Vijender against whom similar allegations had been made, it was not open to this Court to entertain any plea on behalf of the present 3 appellants because it will be deemed that while dismissing the special leave petition this Court had affirmed the findings recorded by the Trial court and the High Court in respect of the manner of occurrence and participation of the accused persons including the 3 appellants.
Allowing the appeals in part, and setting aside the convictions of the appellants under Section 302 read with Section 149 of the Penal Code; under Sections 148 and 323 read with Section 149; this court, HELD: 1.
Appellant Satbir convicted under section 304 Part II and sentenced to undergo rigorous imprisonment for seven years.
Appellant Gulbir convicted for an offence under Section 325 Penal code and sentenced to undergo rigorous imprisonment for three years.
Appellant Hari Singh convicted for an offence under Section 323 of the penal code and sentenced to the period of imprisonment already undergone.
(75 H, 76 A B) 2 (a).
In the system of the justice which is being administered by the Courts.
One of the basic principles which has to be kept in view, is that Courts of coordinate jurisdiction, should have consistent 64 opinions in respect of an identical set of facts or on question of law.
If Courts express different opinions on the identical sets of facts or question of law while exercising the same jurisdiction, then instead of achieving harmony in the judicial system, it will lead to judicial anarchy.
(72 D E) (b) Before any such principle is applied It must be held that the earlier order passed by this Court dismissing the Special Leave Petition of the co accused amounts to a judgement or an affirmance of the findings of the High Court, about the manner of the occurrence, participation of the different accused persons and the nature of offence committed by them.
(72 F) 3.
Article 136 (1) of the constitution confers overriding and extensive powers of granting special leave to appeal or rejection thereof in the discretion of this Court.
Article 136 does not confer a right to appeal, it confers only a right to apply for special leave to appeal, which taking all facts and circumstances into consideration may he granted or rejected.
Even in a case where the special leave application is rejected, the order of the High Court does not merge In the Order of this Court, as is the case while exercising the appellate power.
Similarly, when Special Leave Petition is entertained against any final or interlocutory order this Court does not convert itself to a Court of appeal.
(72 D H) Gian Chand vs Kunjbehanlal ; , referred to.
(76 E) 4.
It is a basic principle of the administration of justice that like cases should be decided alike.
It is a very sound rule and practice otherwise on same question of law or same set of facts different persons approaching a Court can get different orders.
(73 D) 5.
The doctrine of precedent is not applicable to an order passed by this Court rejecting a Special Leave Petition.
Any such order cannot be held to be stare decisis so that it is a binding on the Court.
(73 F) 6.
Rejection of the Special Leave Petition gives a finality to an 65 order of the High Court, Inasmuch as the same accused cannot file more than one Special Leave Petition.
But In rare and exceptional cases this Court has exercised power under Article 32 of the Constitution so that there should not he miscarriage of justice and to avoid a direct conflict and confrontation between two orders of this court.
(73 H, 74 A) Harbans Singh vs State of U. P., ; ; Pyare Singh vs State of Madhya Pradesh, [1992] SUPP 3 SCC 45 and (77 F) A.R. Antulay vs RS.
Nayak.
; , referred to.
(78 C) 7.
The mare rejection of the Special Leave Petition of co accused persons cannot seal the fate of the appeals of the appellants which have been entertained after leave having been granted by this Court.
The appellants to whom leave has been granted can urge all questions within the framework of Article 136 of the Constitution for consideration.
by this Court and a relief to which such appellants may be entitled cannot be denied to them merely on the ground that a Special Leave Petition In respect of co accused persons with more or less similar charges, evidence and convictions has already been rejected.
(75 F G) 8.
On the basis of the evidence of PW16, the informant, it cannot he said that the accused persons had an Intention to cause such injuries son the victim which may result In his death.
When they caused the injuries from the blunt side of the Pharsa it will have to be presumed that they had knowledge that those Injuries can cause the death, but there was no intention on their part to cause death.
As such the Trial Court and the High Court should not have convicted the appellants under Section 302 read with Section 149.
(71 G H) 9.
(a) On the materials on record in the Instant case, the prosecution has not been able to prove and establish that the appellants had the common object or shared the common intention to cause the murder of the victim.
From the evidence of the prosecution Itself It appears that the flour mill of the deceased and the residential unit of the accused persons being adjacent to each other, suddenly a right took place in which the appellant Satbir gave a blow by the back side (wooden part) of the Pharsa, which caused one of the two injuries on 66 the head of the deceased.
It cannot be held that appellant Satbir had an intention to cause the death of the victim.
In such circumstances it can be said that he had only knowledge that such blow may cause an injury resulting in the death of the victim.
He should have, therefore, been convicted under Section 304, Part II, of the Penal Code.
(75 C E) (b) So far as appellant Gulbir is concerned, according to the prosecution case, he was carrying a stick and he is alleged to have given a stick blow to the deceased on a non vital part of the body.
In this background, he can be held to have committed the offence only under Section 325 of the Penal Code.
(75 F) (c) In regard to the appellant Hari Singh, he was aged about 60 years at the time of the occurrence and the prosecution case itself, is that he is said to have given a stick (lathi) blow to the informant PW 16.
He is not alleged to have given any blow to the deceased.
He has, therefore,to be held guilty for an offence only under Section 323 of the Penal Code.
(75 G) </s> |
<s>[INST] Summarize the following judgement: Appeal No. 1944 of 1993.
From the Judgment and Order dated 21.1.1993 of the Kerala High Court in O.P.No. 13371 of 1992.
G. Prakash for the Appellant.
V.R. Reddy, Addl.
Solicitor General, C.V. Subba Rao, B. Parthasarthy and R. Sasiprabhu for the Respondents.
The following Order of the Court was delivered: Leave granted.
Heard counsel for the parties.
Having regard to the broader considerations of equality of opportunity, this Court directed in Dr. Pradip Jain vs Union of India [1984] 3 S.C.C. 654 that a certain percentage of seats in the post graduate medical courses should be made available to the candidates on the basis of All India Competition.
The percentage was later determined at 25%.
In Dr. Dinesh Kumar vs Motilal Nehru College [1986]3 S.C.C. 327 this Court prescribed a schedule for the All India Competitive Examination, which was modified in certain respects in Dr. Dinesh Kumar vs Motilal Nehru College [1987]4 S.C.C. 459.
In subsequent decisions, this Court has been impressing upon the concerned authorities the necessity of adhering to the time frame prescribed in the matter of holding All India Competitive Examination and for making admissions.
According to the system in vogue, a candidate who applies for admission in the All India quota is required to indicate eight medical colleges and six subjects, in the order of preference, to which he seeks admission.
There are severity medical colleges/institutions and forty specialities.
The post graduate courses comprise degree courses as well as diploma courses.
After the results of examinations are published, the admissions are made on the basis of merit cum preference cum eligibility with the aid of a computer.
In the first instance, a list of admissions is issued.
But it so happens that for one or the other reason, many of the candidates in the list do not turn up to join the course.
Hence, a second list is issued and then a third.
But while preparing the second list or the third list, the overall merit cum preference cum eligibility is not again examined, with the result that sometimes 340 a candidate with lesser score gets a better subject than a candidate with higher score.
We may illustrate what we say.
In the first list, a candidate with say 250 marks is allotted a seat in M.S. (General Surgery) and a candidate with 225 marks is allotted a seat in M.S. (Opthalomology).
Now for some reason, the candidate allotted a seat in M.S. (General Surgery) does not join.
That seat falls vacant.
When the second list is taken up, the candidates available will necessarily be those who have secured less than 225 marks.
Since the merit cum preference cum eligibility is not determined overall again, what happens is that a candidate with 220 marks gets M.S. (General Surgery), while the candidate with 225 marks has to continue in M.S. (Opthalomology), though given a choice, he would very muchlike to come into M.S. (General Surgery).
That there have been many such instances, is beyond dispute and has been commented upon by the Kerala High Court in the judgment under appeal.
Besides the above, there is yet another circumstance.
Inspite of promptings from this court, the authorities in charge of holding All India competitive examination have not been able to adhere to the prescribed schedule.
In such a situation, it is bound to happen that issuance of second and third lists delay the process of admission still further.
By the time the second and third lists are communicated, half the course is over.
This aspect has been agitating us while hearing this appeal.
We have, therefore, discussed this matter thoroughly with Sri V.R. Reddy, Additional Solicitor General for the respondents.
He, in turn, discussed the matter with the concerned authorities and has placed before us a modified scheme for allotment of the candidates declared successful in All India post graduate entrance examination for admission to M.D./M.S/Diploma and M.D.S. courses.
We must make it clear that the modification which we are proposing herewith is only with respect to the procedure to be followed in the matter of making admission and is designed to eliminate unequal results, and the delay mentioned above.
In the place of present requirement of a candidate indicating his preference for eight colleges and six subjects, on the basis of which admissions are finalised, we wish to introduce the system of what is called counselling ', which is in vogue in some of the States and is working satisfactorily.
The learned Additional Solicitor General agreed whole heartedly that this would be a definite improvement and would eliminate grievances which are arising from the present system and would also help the authorities to adhere to the time frame prescribed by this Court.
The new system, in short, is this: after the examination is over, the results would be published in the order of merit.
The selection committee will call 150 candidates a day in the order of merit.
A chart will be kept ready and displayed at all relevant places indicating the colleges and subjects wherein the seats are available.
Candidates will be called in the order of merit and asked to indicate his/her choice.
The slot chosen by him/her then gets closed.
This procedure will be gone through 341 until all the seats are filled up.
There would be no second or third list.
Any seats remaining vacant thereafter will be surrendered to the State Government.
But this modification will apply to and come into effect only for and from the admissions for the year 1994.
It will not apply to the admissions currently underway.
In approving the modifications, we have kept in mind the fact that most of the candidates for post graduate admissions are employed and have the means to come to Delhi for a day for counselling.
We, accordingly, approve the modifications, mentioned below, as suggested by the Director General of Health Services, New Delhi.
The All India PG Entrance Examination will be conducted on second Sunday of January.
The candidates will not be required to give any choices at the time of submission of the application forms.
The results will be announced by the third week of February every year.
The merit list will consists of number of candidates equal to the number of seats available for allotment.
A waiting list containing not more than 10% of the merit list will also be declared from amongst the successful candidates who have secured more than 50% marks in the competitive examination.
The allotment by personal appearance will start from the first of March every year and will continue upto 15th March.
In the Bulletin of Information the dates for allotment by personal appearance and the venue at Delhi will be notified.
The time schedule for personal appearance will also be notified alongwith the results in the newspapers.
For personal appearance, the candidates will be called in batches of 150 each day in the order of merit.
The candidates shall have the right to choose any one of the available seats at his/her rank.
The same will be allotted to him/her and the allotment letters will be issued on the next day.
In case a candidate is unable to appear in person on a notified date for personal appearance, he/she can send his/her representative with an authority letter for allotment.
The allotment made to the authorised representative shall be binding on the candidate.
342 9.Each candidate shall be given 15 days time to join the allotted college and course.
The last date of joining shall be 31st March every year.
The allotments made will be firm and final.
The candidates who will not appear for allotment on the notified dates or who will reject the available seats for allotment or those who will not join the allotted course and college by the 3 1st March shall forfeit the claim for a seat under the All India Scheme.
12.All the seats remaining vacant after the allotment shall be deemed to have been surrendered back to the respective States.
In all other respects, the scheme in vogue shall continue to be effective.
Now coming to the relief to be granted to the appellant, we regret, we are not in a position to make any positive direction.
The appellant had appeared for All India competitive examination.
He was not allotted any seat in any college according to the merit cum preference cum eligibility.
His grievance now is that students with lesser marks than him are being admitted to college in Kerala.
He says that he may be given a seat in any subject in any of the colleges in Kerala or for that matter anywhere alse.
We are afraid, we cannot do so at this stage.
After the first, second and third lists pertaining to All India seats were published, the remaining vacant seats have been surrendered to the State Government already.
The State Government has already filled almost all of them.
We cannot withdraw one seat from the State Government, at this stage the course has begun in the month of September, 1992 itself and give it to the appellant.
Even otherwise it is not certain that there are no other candidates (who had appeared in the All India competitive examination) who may have scored higher marks than the appellant.
We cannot also give any direction for his being considered against the 1993 vacancies because he has not appeared for the 1993 examination.
The only observation we can make is this: if, in case, any seat is lying vacant in any of the medical courses in Kerala, the second respondent, Director of Medical Education, Thirvananthapuram shall consider admitting the appellant against such seat relating to the year 1992.
The appeal is disposed of with the above directions and observation.
No costs.
Appeal disposed of. [/INST] The appellant had appeared for All India competitive examination.
He was not allotted any seat in any college according to the merit com preference cum eligibility.
His grievance now is that students with lesser marks than him are being admitted to Colleges in Kerala.
He says that he may be given a seat in any subject in any of the colleges in Kerala or for that matter anywhere else.
After the first, second and third lists pertaining to All India seats were published, the remaining vacant seats have been surrendered to the State Government already.
The State Government had already filled almost all of them.
Disposing of the appeal, this Court, HELD:1.1.
This Court cannot withdraw one seat from the State Government, at this belated stag course has begun in the month of September, 1992 itself and give it to the appellant.
Even otherwise it is not certain that there are no other candidates (who had appeared in the All India competitive examination) who may have scored higher marks than the appellant.
No direction can be given for his being considered against the 1993 vacancies because he has not appeared for the 1993 examination.
If, in case, any seat in lying vacant in any of the medical courses in Kerala, the second respondent, Director of Medical Education Thiruvananthapuram shall consider admitting the appellant against such seat relating to the year 1992.
(342 G) 338 1.02.
The post graduate courses comprise degree courses as well as diploma courses.
After the results of examinations are published, the admissions are made on the basis of merit cum preference cum eligibility with the aid of a computer.
(339 G) 1.03.
According to the system in vogue, a candidate who applies for admission in the All India quota is required to indicate eight medical colleges and six subjects, in the order of preference, to which he seeks admission.
(339 G) 1.04.
In the first instance, a list of admissions is issued.
But it so happens that for one or the other reason, many of the candidates in the list do not turnup to join the course.
Hence, a second list is issued and then a third.
But while preparing the second list or the third list, the overall merit cum preferencecum eligibility is not again examined, with the result that sometimes a candidate with lesser score gets a better subject than a candidate with higher score.
(339 H) 1.05.Inspite of promptings from this court, the authorities in charge of holding All India competitive examination have not been able to adhere to the prescribed schedule.
In such a situation, it is bound to happen that issuance of second and third lists delay the process of admission still further.
By the time the second and third lists are communicated, half the course is over.
(340 D) 1.06.
The new system, in short, is this: after the examination is over, the results would be published in the order of merit.
The selection committee will call 150 candidates a day in the order of merit A chart will be kept ready and displayed at all relevant places indicating the colleges and subjects wherein the seats are available.
Candidates will be called in the order of merit and asked to indicate his/her choice.
The slot chosen by him/her then gets closed.
This procedure will be gone through until all the seats are filled up.
There would be no second or third list.
Any seats remaining vacant thereafter will be surrendered to the State Government.
But this modification will apply to and come into effect only for and from the admissions for the year 1994.
It will not apply to the admissions currently underway.
(340 H, 341 A) 1.07.
In all other respects, ,the scheme in vogue shall continue to be effective.
339 Dr. Pradip Jain v Union of India, ; Dr. Dinesh Kumar Motilal Nehru college, ; and Dr. Dinesh Kumar v Motilal Nehru College, [1987]4 S.C.C.459, referred to. </s> |
<s>[INST] Summarize the following judgement: cement of additional security deposit.
It stands to reason that if there is a revision in the rate of tariff there must he an upward revision in the consumption security deposit since it has direct hearing to the level of supply in consumption of electricityThis being a condition of supply no reason need be given at the timeof upward revision.
[278 C, 277 A C] & CIVILAPPELLATE JURISDICTION: Civil Appeal Nos.
2117 to 2122 of 1993 etc.
From the Judgment and Order dated 28.4.1989 of the Andhra Pradesh High Court in W. P. Nos.
11162/84, 18968/87, 12007/84, 15131/87, 5050/82 and 15746/87.
Altaf Ahmed, V.R. Reddy, Addl.
Solicitor General, Narasimha murthy, K. Parasaran, Anil B. Divan, Harish N. Salve, Soli j. Sorabjee, G. Ramaswamy, P.P. Rao, Gobind Mukhoty, Dr. Shanker Ghosh, Shanti Bhushan, G.L. Sanghi, Pawan Kumar, P.S. Poti, B.M. Patnaik.
Sanjay Parikh, P. Niriop, Kailash Vasdev, section Khaitan, K. K. Khaitan, Darshan Singh, Sushi] Kumar Jain, A.P. Dhamija, section Atreya.
E.C. Agarwal, A. V. Palli.
Atul Sharma, Ms Reena Aggarwal, A. K. Mehta, R. K. Gupta, P.C Kapur, T.V.S.N Chari, B. Reddy, Ms. Pramila, Anil K. Sangal, Ajay K. Tayal.
Koka Raghava.
B. Kanta Rao, Shiv Prakash Pandey, Ms Rekha Pandey.
R.K. Priyokumar Singh, T.V. Ratlinain, K.R. Chowdhary, K. Ram Kumar, Ashok Kr.
Gupta, R.B. Misra , Pradeep Misra, Mrs. Sheil Mohini Seth, Jain Hansaria & Co, R.P. Gupta, Ms. Sarla Chandra, M/s Mitter Mitter & Co. Ms Abha Jain, Ranjit Kumar, M.P. Jha, S.K. Jain, Vinoo Bhagat, Surva Kant, Aruneshwar Gupta, Badridas Sharma, Prabhu Dayal, Sudarshan La] Aneja, R. Venkataramani, Y.P. Rao, D.K Garg, K.C. Agarwals, O.P Khaitan, P.B. Agarwala, Mohinder Rupal, Mrs. Kamakshi Mehllwal, Ms Archna Kau] (For Gagrat & Co. ), Vijay Hansaria, R. section Sodhi , D.A. Dave, Raian Karanjwala, Mrs. Manik Karanjawala, Rajesh mar, Ms. Suruchi Aggarwal, K.J. John, Ms. Deepa Dixit (For 213 Swarup John & Co.), A. T. Patra, S.R. Agarwal, Ms. Bina Gupta, Prashant Bhushan, K. Rajendra Choudhary, Rakesh K. Sharma, Shivi Shamia, Anil K. Chopra, Pallav Sisodia, Ravinder Narain (For JBD & Co. ) Praveen Kumar, Virender Kaushal, Bimal Rao Jad, Ms Malini Poduval, K.K. Lahri and section Sukumaran for the appearing parties.
The judgment of the Court was delivered by MOHAN,J.
Leave granted.
These civil appeals are directed against the judgment of the Division Bench of Andhra Pradesh High Court reported in Southern Steel Ltd. vs A. P. State Electricity Board, Hydrabad AIR 1990 Andhra Pradesh 58.
The facts briefly are as under: The Andhra Pradesh State Electricity Board is constituted under Section 5 of the Electricity Supply Act, 1948 (hereinafter referred to as the Act).
The said board is engaged in generation, distribution and supply of electricity in the State of Andhra Pradesh.
Electric energy is supplied for industrial, commercial, agricultural and domestic purposes.
To such of these industries, using energy about a particular level, it is supplied at a higher voltage.
They are classified as high tension consumers (H.T. consumers).
All the appellants herein belong to that category.
Section 49 of the Act empowers the Board to notify the terms and conditions upon which it will supply electricity to a person.
It is also empowered to frame uniform tariffs in that behalf.
Sub section 2 specifies in fixing the uniform tariff, the Board shall have regard to all or any or the following factors, namely a) the nature of the supply and the purposes for which it is required; b) the coordinated development of the supply and distribution of electricity within the State in the most efficient and economical manner, with particular reference to such development in areas not for the time 214 being served or adequately served by the licensee; c) the simplification and standardisation of methods and rates of charges for such supplies; d) the extension and cheapening of supplies of electricity to sparsely developed areas.
Sub section 3 empowers the Board to enter into a special agreement with any consumer any prescribe different tariffs for Wm.
Under Section 4, an obligation is cast on the Board not to show undue preference to any person while fixing the tarrif and terms and conditions for the supply of electricity.
In all these cases, the appellants are covered by the general terms and conditions notified under Section 49 (1) of the Act.
The terms and conditions were notified by the Board and the B.P.M.S. No. 690 dated 17th of September, 1975.
It is not necessary to refer in detail to the various terms and conditions.
However, what requires to be noticed is the terms and conditions oblige every consumer executing an agreement in the prescribed form, undertaking to abide by the term and conditions prevailing on the date of agreement and also agreed to be bound by the terms and conditions as may be notified from time to time.
It is important to note under Section 25, the Board has unilateral right to vary the term from time to time under clause 25.1.
The terms and conditions for supply of electricity by special or general proceedings.
Condition 32. 1.
provides "the Board shall as far as possible within 15 days after the expiration of each calendar month cause to be delivered to every consumer a bill of charges stating the amounts payable by the consumer towards charges for energy supplied and any other sum in connection with supply of energy by the Board.
" Conditions 32.2.
1. obliges the consumers to pay the amount shown in the bill, within 15 days of the date of the bill in, default 'whereof they are liable to pay "an additional charge of 2% per month or part thereof for the period of delay" in paying the bill.
Condition 32.3 empowers the Board to disconnect the supply in case of default in paying the bill, without prejudice to its right to recover the amount due.
Condition 24.3 also lays down that the consumer shall pay to the Board 215 every month the charges for electrical energy supplied to him during the preceding month at the tariff in force from time to time.
Condition 28 obliges the consumers to deposit an amount equivalent to three months consumption charges with the Board.
It would be appropriate to set out condition No. 28 as far as it is necessary for our purposes, committing what is not relevant as under: 28.Consumption deposits: 28.1 Initial consumption deposit.
The consumer shall deposit with the Board a sum in cash equivalent to estimated three month 's consumption charges.
The consumer coming under the L.T. category 'domestic ' shall however pay at Rs. 30.00 per Kilowatt or part thereof connected load. "Provided that the Board may, in the case of industrial consumers, accept by way of consumption deposit a sum equivalent to two months consumption charges during a period of three years from the date of first release of supply of electricity".
28.1.2In the event of the consumer failing to pay to the Board any sum that may become due for payment to the Board on the dates fixed for payment thereof, the Board may, in addition to and without prejudice to the other rights of the Board, appropriate a part or whole of such deposit towards the sum due from the consumer.
28.2Additional Consumption Deposit All consumers other than those L.T. Domestic consumers whose monthly bills are less than Rs. 500 for a continuous period of six months, shall keep with the Board an amount equivalent to charges for three months demand and energy charges as consumption deposit.
The aduacy of the consumption deposit shall be reviewed by.
the Board usually once in every year and/ or at any time during the year if so warranted dur to upward revision of tariffs, enhancement of the con 216 tracted demand by the consumer charges in the pattern of consumption by the consumer relaxation of power restrictions or such other factors which in the opinion of the Board, warrant review of the, adequacy of the existing consumption deposit.
The review shall take into account the following factors: (i)In the case of consumers where there is no change in the contracted demand, the average consumption for the preceeding twelve months after taking into consideration the quantum and nature of restrictions imposed, if any, during that period shall be the basis.
(ii)in the case of consumers who were sanctioned additional demand and availed it during a part of the period, average recorded consumption for the period of review shall be from the date of utilisation of increased demand to the date of review after taking into consideration the nature and quantum of restrictions imposed, if any during that period.
(iii)The demand shall be contracted demand of the consumer at the time of review.
(iv)The rates, at which the demand or energy charges shall be calculated, will be tariff rates prevailing as on the date of review.
Based on such review, if the consumption deposit of the consumer is found inadequate or has fallen short on account of adjustments made as indicated in clause 28.1.2hereof the consumer shall deposit within 30 days of receipt of notice in this regard such additional amountas may be required by the Board or replenish the required amount as the case may be.
28.3 Interest on consumption deposit: Interest shall be paid by the Board on deposits of more than Rs. 60 made in cash at the rate of 3% per annum or such other 217 rate as may be fixed by the Board from time to time.
Full calender months only shall be taken into account for the purpose of calculating interest and interest shall be calculated to nearest five paisa.
The interest accruing to the credit of the consumer shall be adjusted every year in the month of April in the Electricity Supply bills.
28.4 Disconnection or non payment of consumption deposit: If the consumer does not make payment of amount of consumption deposit or additional consumption deposit or where the deposit is given in Government security or National Saving Certificate Bank guarantee etc.
, he fails to replace them by deposit in cash when so demanded by Board within the notice period of 30 days supply of consumer shall be liable for disconnection.
28.5 "The Consumption Deposit so calculated as per the Clause 28.1 and /or 28.2 above shall not be less than three times the monthly minimum charges, applicable to the consumer under the category to which he belongs".
28.6 "All consumers shall pay the Consumption Deposit or additional consumer deposit within thirty days from the date the demand notice if there be any delay in payment, the consumer shall pay surcharge thereon equal to 1 1/2% per month or such other percentage to be fixed by the Board from time to time, of the demanded amount for each month of delay or part thereof.
This will be without prejudice to the Board 's right to disconnected supply of electricity".
Clause (1) of condition 28 is general in nature.
It applies to all consumers.
(1.2) enables the Board to appropriate a part or whole of the said deposit towards any amount due to the Board and not paid within the prescribed period.
(2) applies to all consumers, except those L.T. Domestic consumers whose monthly bills are less than Rs. 218 .
500 per month for a continuous period of six months.
Such consumers are obliged to keep with the Board an amount equivalent to three months ' demand and energy charges, as consumption deposit.
The deposit is liable to be reviewed by the Board from time to time, having regard to the factors mentioned in the said clause.
(3) prescribes interest which the Board has, to pay on such deposit.
It is 3% per annum.
Clause (4) empowers the Board to disconnect the supply if consumption deposit/ additional consumption deposit is not made, or is not replaced whenever called upon to do so.
Clause (5) prescribes a certain floor below which consumption deposit shall not go.
Clause (6) says that the consumption deposit or additional deposit shall be paid within thirty days of the notice demanding such deposit.
In default, not only interest is payable but the supply also is liable to be disconnected.
The attack before the High Court was that according to Condition No. 32. 1, the bill is served within 15 days of the expiration of each calendar month.
The amount covered by the bill is payable within 15 days of the date of the bill.
The period of 15 days for payment is calculated not from the date of service of the bill but from the date of the bill.
A bill could be served even on the very first day of the succeeding month in which event it will become payable within 15 day of the date of the bill.
In such a situation, it is not correct to say that a consumer goes on availing and enjoying energy for a period of three months without paying for it.
Invariably it does not exceed six weeks or at any rate, two months.
In the event of non payment under Condition No. 32.3, supply of energy can be disconnected without seven days notice as contemplated under Section 24 of the .
Therefore: (1)It was urged that the consumption deposit should in no event exceed two months average consumption charges.
(2)The second attack was the payment of 3% interest by the Board on such consumption deposit is no longer good law in view of the judgment of Supreme Court rendered in M/s Jagdamba Paper Industries (p) Ltd. vs H.S. E. Board, ; , since this Court had taken the 'view that the interest on such deposit should be paid at the same rate as is paid by the schedule bank on fixed deposit.
219 It was generally urged that the Electricity Board being a State; within the meaning of Article 12, it has to act fairly.
Any term of condition will have to answer the test of reasonableness.
On the contrary, if it is arbitrary, it would be violative of Article 14.
The High Court after analysing the object behind Condition No,.
28 relating to the consumption deposit held: The condition requiring the consumer to pay the charges within 15 days from `the date of the bill and on such failure, a right is conferred on the Board to disconnect the supply.
The condition merely refer to the power of the Board.
Existence of power is distinct from exercise of power.
The Board cannot blindly act upon Condition 32.3 and disconnect the supply the moment 15 days time (from the date of the bill) expires.
It has to take a realistic view of the situation.
After all, these industries are engaged in production of goods essential to the community.
A blind and mechanical adherence to Condition 32.3 (instant disconnection) may indeed prove counter productive in larger sense.
It was also not possible for the Board to notice the non payment immediately in view of the large number of consumers and the extensive nature of organisation.
Besides, huge sums are required by the Electricity Board as rotating capital.
It borrows large amounts from organisations like L.I.C. and Banks, on which it pays interest to them.
Hence, it is well entitled to require the consumer to co operate by paying their bills regularly, by furnishing security deposits and by conforming to the terms and conditions of supply.
Under these circumstances, the requirement of three months deposit could not be said to be unreasonable and unjustified.
As regards, the payment of 3 % interest, the High Court was of the view that the decision of this Court in Jagdamba Paper Industries (P) Ltd. (supra) could not be read as a decision of the Supreme Court on the basis of which it could be declared that the earlier Bench decisions of the High Court were no longer binding, Accordingly, it dismissed the writ petitions.
Aggrieved by this decision, the present S.L.Ps. have come to be preferred.
Mr. R.N. Narasimha nmurthy, learned counsel for the appellant 220 after drawing our attention to clauses 28 and 32 would submit that if there is any laxity on the part of the Board in preparing the bill that cannot be a ground to make a consumer to pay three months deposit.
The tariffs of 1974 provided for the payment of bills within 14 days from the date of the bill while the quantum of deposit is three months consumption charges.
Originally, the time for payment was 30 days from the date of the bill.
That has been reduced to 15 days which is a drastic change.
The security deposit is a provision for continued default of the consumer.
The quantum of such a deposit is reckoned on the basis of the lapse of time between the consumption charges that become due after expiry of time required for reading of meter, billing, delivery of the bill to the consumer; grace time allowed and the reasonable time required for disconnecting the consumer 's service connection.
The reduction to 15 days has great relevance on the quantum of deposit as the deposit is intended to cover the defaulted amount by the time of disconnection.
However, considering that the bills of power intensive industries are prepared within 3 days of meter reading and also considering the close monitoring that is feasible in verification of payments of bills of these consumers and the small number of these consumers distributed among the several Circle Offices of the Board, any default is detectable within 20 days of the bill for appropriate action to be taken immediately.
The purpose of consumption deposit is only to safeguard the actual consumption charges that become payable by the time penal action could be initiated.
Even the judgment of the High Court indicates that a time lapse of 37 days from the date of the meter reading without considering the 7 days notice prescribed under Section 24 of the .
The balance time of 23 days to make up for 90 days is provided for the laxity in the Board administrative system which justifiably cannot be passed on to the consumer by way of consumption deposit.
In view of the high stakes involved in the case of power intensive consumers, the Board should evolve a suitable system of payments and must keep the security deposit to the minimum instead of three months.
It is further submitted that the security deposit could be in the form of bank guarantee.
There is no justification to require cash deposit.
As a matter of fact, as noted in M/s Haryana Ice Factory vs Municipal 221 Corporation of Delhi and Another AIR 1986 Delhi 78, the security in the form of Government Bond is permissible.
In Jagdamba Paper Industries Case (supra), paragraph 11 of the judgment deals with rate of interest.
That is a case where 8% was increased to 10% by consent.
If really, it is in the nature of a deposit, there is no Justification as to why bank rate should not be awarded.
It seen from The Chairman Karnataka Electricity Board and Others vs Gadag Mining Co. & Ors. etc.
AIR 1986 Karnataka 252, 10% interest had been awarded.
Mr. Anil B. Divan, learned counsel for the appellant in S.L.P. (c) No. 2564/92 would submit is under: Power intensive units like the appellant 's form a distinct class of consumers.
The Ferro Silicon plant of petitioner No. 1 is a power intensive one where the cost of electricity constitutes about 55% of the price of the ferro silicon produced.
Electricity, thus is the basic raw 'material for this industry.
On an average, the appellant is consuming electricity worth Rs. 1.6 crores per month.
If there was full supply of electricity (without there being a power cut), the monthly bill would be approximately Rs. 4 crores at a present tariff.
The power intensive plant of the appellant maintains a very high load factor of 0.9%.
Ordinary H.T. consumers work at a load factor of only 60% and the units consumed at only 50 per KVA demand.
The HT 111 tariff for power intensive consumers requires a minimum consumption of 403.3 units per KVA demand.
This means more than 8 times that of H.T. consumers.
The Electricity Board has always classified power intensive units as a separate category.
At present, there is a special tariff called HT III tariff with a fist of power intensive industries specified in the tariff notification.
The appellant No. 1 had deposited Rs. 1.07 crores in cash towards the security deposit.
A bank guarantee for Rs. 53.64 lacs had also been furnished.
A further demand of Rs. 96.5 lacs prompted the filing of the writ petition in the High Court.
As per the order of this Court in S.L.P. No. 12077/84 it was directed on 6.2.1987 that a sum of Rs. 1 crore be paid by the 3rd of every month and the balance within 7 days of the 222 presentation of the bill This order came to be modified that Rs.1 Crore was to be paid on the 30th of the month and the balance within one week of the receipt of the bill.
The said arrangement has been working satisfactorily.
There has not been any default in payment of electricity bills.
Therefore, the entire dispute is a theoretical one as to what the quantum of the security deposit can, or ought to be.
A deposit in cash of an amount equal to three months average bills at full supply at the present tariff without any power cut will amount to Rs. 12 cores on the basis of tariff revised in October 1992.
With ever increasing tariffs, the deposit demanded will also keep increasing.
Under these circumstances, the condition requiring three months security deposit is arbitrary and illegal for power intensive consumers.
The paid up share capital of appellant No. 1 is Rs. 3.8 crores.
The gross value of the plant and machinery of the power intensive unit is Rs. 7.94 crores.
The total advances made by the consortium of bankers for working capital is Rs. 4.25 crores.
The total net worth of all the divisions of appellant No. 1 that is Merine products, Sugar & Engineering, Machine Building and the power intensive Ferro Silicon Plant is Rs. 14.6 crores.
The security already furnished namely Rs. 5.7 crores is crippling the Ferro Silicon Plant division.
A demand of three months cash deposit would be in the range of Rs. 12 crores.
It is arbitrary and unjustifiable to require appellant No. 1 to deposit several times its share capital by way of security.
If this demand is enforced strictly, the plant of the appellant will become sick and ultimately, will have to be wound up.
In other States, the provision is not so harsh.
If the security deposit is 'consumption deposit ' and it is for meeting the cost of supply in advance, then the Electricity Board cannot charge penal interest at 2% per month for non payment of bills within the stipulated period.
The deposit, first must be appropriated against the dues and the interest charged only if there is balance due.
The Stand of the Electricity Board is perverse and illegal.
Equally, there can be no question of 'supply on credit ' if deposit is adjusted against consumption all the time.
The consumer has got a right to negotiate.
In The Indian Aluminum Co. vs Karnataka Electricity Board , this Court directed the Electricity Board to adopt a realistic policy.
Here also Condition No. 28 must be altered.
223 There is no power under the Electricity Supply Act to enable the Board to raise revenue or to cover its capital cost etc.
except by way of adjusting tariffs as seen from under Section 59 of the Supply Act, 1948.
Therefore, consumption deposit cannot be used for the purpose of revenue or raising revenue.
In this case, the Electricity Board had not placed any material to give interest only at 3%.
Mr. K. Parasaran, learned counsel appearing in S.L.P. No. 13004/ 89 after referring to the passage occurring at page 66 of Haryana Ice Factory case (supra) submits that the security deposit cannot go to buildup the capital or fixation or tariff.
Under Sections 49 and 59 of the Supply Act, finance is required to be adjusted including the payment of interest.
Demand of three months consumption deposit cannot be resorted to.
In support of his submission, reliance is placed on Hindustan Zinc Ltd. etc.
vs Andhra Pradesh State Electricity Board & Ors. ; Mr. Kailash Vasudev.
learned counsel for appellant in S.L.P. 13004/89 submits that under Section 49 of the Supply Act, it is enjoined upon the Board to adjust its tariffs by keeping the factors detailed in the said Supply Act.
Therefore, the Board cannot have recourse methods not provided under the said Act.
The demand for a deposit to ensure the due payment of the bills for electrical energy consumed amounts to framing an additional tariff.
The Board cannot do indirectly what it cannot do directly.
The Board being 'a state monopoly ' has to act reasonably and not arbitrarily.
The terms and conditions of supply cannot be unfair and oppressive.
Mr. R. Venkataramani, learned counsel in his written submis sions in Writ Petition Nos.
1293/89 & 1353/89 and S.L.P. (c) Nos.
4791 92/90 & 4793 94/90 would urge that Section 49 of the Supply Act is unconstitutional since there are no guidelines for framing the terms and conditions of supply of electricity.
The said Section does not specifically spell out fairness of action.
Clause 28 of the terms and conditions of supply is a clear illustration of arbitrariness and subordinate legislation.
224 The words as the Board thinks fit ought to be interpreted so as to be consistent with the fairness of State action.
They are to be construed as "reasonably thinks fit" as held in Roberts vs Hopwood, and Granite vs Minister of Housing and Local Government, Clause 28 of the terms and conditions of supply relation to fixation of 3% interest and additional charges are vitiated due to non application of mind.
Under clause 28.6 of the terms and conditions, in the event of delay in payment of consumption deposit or additional consumption deposit within the stipulated period, the consumer is obliged to pay surcharge at 18%.
The obligation to pay surcharge and the power of the Board to vary the percentage from time to time would constitute draconian provision.
Money, wherever it is held in deposit could only be used to earn some interest.
Therefore, paying 3% interest on the consumer deposit is not at all justified.
A public institution cannot be allowed to get excessive interest.
In meeting these arguments, the learned Additional Solicitor General submits that under Electricity Supply Act, the finances of the Board are controlled to the minutest detail.
Originally, prior to 1978, Section 59 required the Board as far as practicable and after taking credit for any subvention from the State Government not to carry on its operation on loss.
For this purpose, it was empowered to adjust its charges accordingly from time to time.
Section 59 was amended by Act 23 of 1978.
After the amendment, the Board after taking credit for any subvention from the State Government was required to carry on its operations and to adjust its tariffs so as to ensure that the total revenues in any year after meeting of the expenses left such surplus as state government may specify from time to time.
This Court has taken the view in Kerala State Electricity Board vs S.N. Govinda Prabhu & Bros. & Ors ; that even if the Government had, not prescribed surplus, the Electricity Board could generate surplus.
After the amendment by Act 16 of 1983 which came into force on 225 1.4.1985, the Board was to create a minimum surplus of 3% or such higher percentage as the State Government would specify in this behalf.
It is in this background.
, the matter will have to adjuged.
The reason why three months security deposit is demanded is, for two months, the consumer gets free electricity.
For supply of such electricity, the Board has to borrow and make payment of interest.
If there are no consumer deposits, the tariff shall have to be increased.
That will effect all the consumers.
Interest at 2% is charged in case of default only in order to ensure proper payment.
It is penal in character.
In the judgment under appeal, the High Court held that the burden relating to interest can be reflected either in the tariff or could be set off by calling upon the consumer to make deposit.
In fact, this Court has upheld the tariff revision effected by Andhra Pradesh Electricity Board as seen from Hindustan Zink Ltd. Etc.
v, Andhra Pradesh State Electricity Board & Others ; It cannot be contended that the three months consumption deposit is arbitrary.
This argument ignores the following important factors: i)This is not a security deposit but a consumption deposit.
ii) It in the nature of an advance payment.
iii)In the event of failure to pay, it could be proceeded against as seen from clause 28.1.2.
(iv) Consumption deposit is variable as per clause 28.2 (iv) If therefore, the object of consumption deposit is to ensure proper payment with reference to electricity supply, there is nothing arbitrary or unjustifiable.
The fact that some of the appellants pay large amounts by way of electricity charges will have nothing to do with the nature of deposit.
Merely because it is a power based unit, it cannot be treated separately.
Nor can the appellant make a virtue out of necessity.
The terms of supply relating to consumer deposit must be uniform, therefore, it is not correct to contend that the power based unit must be treated separately.
As regards payment of interest at 3%, electricity supply is made on 226 credit basis.
Therefore, it is a matter of adjustment of Board finances.
Strictly speaking, the consumer deposit is in the nature of fidelity guarantee to ensure proper payment by consumer.
The consumer may not be entitled to interest at all.
However, where the Board has so adjusted finances and pay 3% interest, the Board cannot be defaulted.
Jagdamba Paper Industries case (supra) cannot be said to be a decision as to the rate of interest payable by the Electricity Board.
Upon reading paragraph 11 of the judgment, it will be clear that it proceeded on the consent of the counsel.
RAJASTHAN The writ petitioners applied to appellant Board for the supply of high tention power for their factories.
After the execution of the necessary agreement and furnishing of security deposit, power connections were given.
Subsequently, the Board issued notice requiring the consumers to deposit the enhanced amount of cash security as well as the bank guarantee on the basis of maximum power consumption of three months.
With regard to security deposit, Part 11 of the General Conditions of Supply and Scale of Miscellaneous Charges in Note II stated that no interest will be paid by the Board on the security deposit.
Two contentions were raised in the petitions, (i) Note II providing for no interest was bad in law, (ii) the enhanced security must be calculated not on three months maximum consumption but on the basis of minimum power consumption.
These two contentions found favour with the learned Single Judge.
The Rajasthan Electricity Board filed special appeals while the consumers filed cross appeals.
The Division Bench held as under: i)The Board has power to demand additional security but the average consumption of three months should be taken as the basis for calculating the amount of such security.
ii)The clause relating to non payment of interest was not reasonable.
Interest must be allowed on the entire amount of cash security from the date of the writ petition.
The appeals by the Board were dismissed while cross appeals by the consumers were allowed.
Ag 227 grieved by this judgment, the present S.L.Ps. have come to be preferred by the Rajsthan Electricity Supply Board.
Mr. Soli J. Sorabjee, learned counsel appearing for the appellant argued as follows: There is no legal obligation to pay interest on a deposit made by the consumer with the Board in terms of Clause 20 (a) & (c) of the General Conditions of Supply.
Nor even interest is payable under common law or in equity.
In this connection, the learned counsel draws our attention to Halsbury 's 4th Edition, volume 32 pages 54 55.
There is no legal or equitable obligation to pay interest for detention of monies.
In support of this argument, learned counsel relies on Bengal Nagpur Railway company Ltd. vs RuttanjiRamji, (1937) L.R. 65 I.A. 66 and Union of India vs A.L. Rallia Ram ; , pages 187, 189 190.
There is no contract or agreement which provides for payment of interest.
On the contrary, Clause 9 (b) (ii) of the General Conditions expressly provides that no interest will be paid by the Board on security deposit.
There is no statutory provision which casts an obligation on the Board to pay interest on the security deposit.
The High Court erred in relying on the model form of draft conditions of supply because the said model form is applicable to only licensee as defined under Section 2 (h) of Electricity Act.
It is not applicable to a Board which is not a licencee.
Further, it is not necessary on the part of the Board to adopt model form.
Schedule VI of 1948 Act again cannot be pressed into service as the Board is not a licencee clause 2 (b) (v) of Schedule VI merely specifies interest on security deposit as properly incurred item of expenditure for the purpose of determining the 'clear profit ' of the licencee.
The said clause does not and cannot by itself impose an obligation on the licencee to pay interest on security deposit.
Should interest be paid, then it qualifies as an item of expenditure properly incurred.
The High Court also erred in relying on Section 4 (2) of the .
Section 4 (2) has no application where on account of contractual term or a statutory provision, payment of interest is not permitted.
Section 4 (2) of the merely enlarges the 228 categories of cases mentioned under Section 4 (1).
The said Section cannot override other statutory provisions or a contract between the parties.
The non obstante clause under Section 4 (2) is restricted only to the provisions of Interest Act, 1948.
It is submitted that under the billing practice prevalent with the Rajasthan Electricity Board the consumer has free use of electricity during the period between consumption of electricity and expiry of period after notice.
During this period which varies from 2 to 2 1/2 months, the consumer in effect enjoys a credit facility.
Therefore, if security deposit is demanded for three months, it is neither unreasonable nor arbitrary.
As a matter of fact, the security demanded by the appellant Board is in the form of cash for one month and bank or insurance guarantee for two months.
Therefore, it is all the more reasonable.
In support of this, reliance is placed on Kistna Cement Works Tadepalli vs The Secretary APSEB, Vidyut Soudha AIR 1979 A.P. 291, B.R. Oil Mills, Bharatpur vs Assistant Engineer (D) R.S.E.B., Bharatpur, AIR , .Municipal Corporation for Greater Bombay vs M/s Devidayal Metal Industries, , Haryana Ice Factory vs Municipal Corporation of Delhi, AIR 1986 Delhi 78 and Southern Steel Ltd. vs The A.P. State Electricity Board, Hyderabad, AIR 1990 A.P. 58.
On the question of the constitutionality of the provisions regarding non payment of interest and whether it is violative of Article 14, it is submitted: i)Article 14 does not mandate mathematical exactitude or scientific precision; ii)The mode and period of security should be related to the billing practice prevailing in Rajasthan Electricity Board.
iii)The consumer with open eyes has entered into the agreement and has solemnly undertaken to abide by the condition regarding nonpayment of interest.
He cannot resile from that condition.
There is nothing inherently objectionable, nor is the condition illegal or void as opposed to public policy.
Even assuming, the contract between the consumer and the Board is an adhesion contract it is not necessarily unconscionable.
In this connection, reference is invited to Black 's Law Dictionary, 6th Edition, page 40.
That passege has been cited with 229 approval in Central Inland Water Transport Corpn.
vs Brojo Nath Ganguly.
In such matters, relief is given to the party only if the contract is so unreasonable as to be unconscionable.
In this connection reliance is placed on Gillespie Brothers Ltd. vs Roy Bowles Ltd. at 200 (g), Farmsworth on Contracts, 2nd Edition, 319 & 320 para 4.27.
The rate of interest on security deposit cannot be equated with the rate of interest payable on fixed deposit because the nature and character of a security deposit is basically different from fixed deposit.
This is clearly brought out by the Companies (Acceptance of Deposits) Rules, 1975.
The said Rules expressly exempt security deposit in definition of Rule 2, clause (v) & (vi), In Jagdamba paper Industries case (supra).
the rate of interest was based on a concession by the parties.
The Court had no occasion to decide the rate of interest.
That part of the judgment proceeds sub silentio.
The argument based on surcharge levied for delayed payment is a non sequitur.
If the provision for non payment of interest is valid and not arbitrary, it does not become arbitrary and unconstitutional because surcharge is levied at 2% per month.
In fact, surcharge has not been challenged.
Surcharge is attracted only if the bill is not paid within the due date.
The submissions based on Sections 57 & 59 of the Supply Act in relation to security deposit proceed on a misconception of the nature and character of payment as a security deposit.
The object of security deposit is to secure prompt payment of electricity bills.
They are not intended to finance the Board 's transaction.
Section 57 read with sixth Schedule is meant to ensure a reasonable return.
expression 'charges ' in the Sixth Schedule clearly shows that security deposits are not included within the expression 'charges '.
There is no mutual exclusivity between increase of tariffs and earning interest on security deposits, It is also incorrect to contend that prompt payees of electricity bills are treated on par with the defaulters and thus anequals are treated alike.
The real test is, whether in the general application of law there is any discrimination.
In support of this submission, the learned counsel placed his reliance on: The Collector of Customs, Madras vs Nathella Sampathu Chetty 230 ; , Vivian Joseph Ferreira vs Municipal Corporation of Greater Bombay , B. Banerjee vs Anita Pan [975] 2 774 and Fatehchand Himmatlal vs State of Meharashtra ; The last submission of the learned counsel is that a statutory provision may be struck down as unconstitutional only if it is palpably arbitrary and irrationality is writ large.
Merely because the Court considers a particular provision to be unwise or undesirable, it is never struck down.
The learned counsel fairly concedes that the enhanced security deposit could be calculated only on the average consumption of three months of the previous years.
Mr. Altaf Ahmad, learned counsel supporting the arguments of Mr. Soli J. Sorabjee would urge: In this case, the consumers are those who use H.T. and E. H. T. lines.
Section 49 (3) gives the clue that each Board can have its own scheme.
Section 79 of the Supply Act speaks of the power to make regulation.
Clauses (i) and (j) are relevant because they talk of principles governing the making of arrangements with licensees under Section 47 and other then licensees under Section 49.
The industrial consumers constitute the majority user of the electricity amounting to 49.51 per cent.
the transmission losses for 1992 93 alone are 22 per cent.
Besides, the Board is also purchasing power from other corporations and States.
Therefore, the demand for security deposit is fully justified and there is nothing arbitrary in not providing for interest.
That is what is provided under clause 21 (a) of the agreement in relation to high tension supply.
The consumption deposit cannot be equated to the deposit in a bank and interest could be demanded as of right.
Mr. Kapil Sibal, learned counsel appearing for the Haryana Board which Board has now withdrawn payment of interest, has filed intervention application since the present day position of the Haryana Board is on a par with Rajasthan.
Mr. R.K. Mehta, learned counsel for the intervenor on behalf of 231 the Orissa Electricity Board through his written submissions.urges that it may be that the regulations in the case of Andhra Pradesh, Utter Pradesh and Bihar Provide for payment of interest at a certain rate on the security deposit.
However, the Rajasthan and Orissa regulations provide that no interest shall be payable on the securities furnished by the Board.
In the impugned judgment the Division Bench has not given any cogent or valid reason for striking down Condition No. 20 of the General Conditions of the Rajasthan Electricity Board.
The High Court had failed to appreciate the following factors while quashing the impugned clause of the regulations.
Electricity is an item which cannot be sold and supplied immediately after generation.
For the sale of electricity one has to take meter reading meant for the said purpose and, therefore, the Board sends the bill for particular duration.
It is obvious that the reading of the meter could not be taken at every point of time but only for duration/period.
In the process 2 1/2 months elapse.
The Board does not charge any interest at least for 2 1/2 month from its consumers.
At the same time, the Board needs finance for production, supply and other charges necessary for supply of electricity.
The Board is thus obliged to take loans from various financial institutions.
The consumers who are utilising electricity for 2 1/2 months without making any payment will be unjustifiably enriched at the cost of general public in the absence of security deposit.
Further taking of advance money without interest for Providing other services in the market is a general practice.
Therefore, a similar provision in the general conditions for supply of the Board cannot be treated as arbitrary or unreasonable.
A consumer is not entitled to claim interest on his security deposit having regard to the following considerations.
1.The security deposit is furnished in consideration of the performance of the consumer 's obligation for obtaining the service essential to the life and the well being of community.
The electricity supply is made to that consumer on credit withoutrequiring him to make instant payment.
The billing time taken by the Board is for the benefit and convenience of the consumer as he saves additional expenditure on 232 account of instant or shorter billing time, possibly through electronic devices which will be included in the tariffs.
4.The public revenues Ire blocked in the generation, transmission and distribution of electricity for the performance of supply on which the Board pays interest in so far as they form part of the loans borrowed by the Board for performing the public service.
On the return of the blocked moneys the Board gets no interest from the consumers.
5.The Board needs back its blocked money to carry out service with a reasonable recompense.
6.The Board is not essentially a commercial Organisation to which the consumer furnishes the security deposit to earn interest.
Having entered into a contract with open eyes it is not open to the consumer to say that interest should be paid.
The basis of supply of electricity and the conditions on which it is supplied being statutory, the provisions under the conditions of supply that the Board shall not pay interest on the security deposit has statutory basis and accordingly cannot be struck down as arbitrary on the basis of a commercial transaction governing a bank deposit.
Therefore, it is submitted that regulation 7 of the Orissa State Electricity Board General conditions of Supply Regulations, 1981 providing that no interest would be payable on security deposit is just and reasonable and is not arbitrary or violative of Article 14 of the Constitution.
Mr. Shanti Bhushan, learned counsel opposing the stand of Rajasthan Electricity Board submits that the only question in this special leave petition is whether Electricity Board is obliged to pay interest on the cash security deposits as the Board compels industrial consumers to secure against default in payment of electricity bills.
In the first place, as laid down in Jagdamba Paper Industries (Pvt.) Ltd. vs Haryana State Electricity Board ; this Court has indicated that the security amount should bear the same interest as admissible on fixed deposit of scheduled banks.
The interest rate on 10 per cent was decided not really on the basis of admission but on a positive finding.
Apart from this, this Court has in several other writ petitions ordered interest at 12 per cent.
233 It is submitted that the scheme of Indian Electricity Rules of 1956 and the scheme of the Electricity Supply Act also show that the interest on security deposit is supposed to be payable.
The Board is not entitled to use the deposits to augment its finances.
They are meant only to secure the default in payment of the bills.
Section 59 of the Supply Act indicates that the only condition in which the Board could raise the revenue is by adjustment of its tariff.
Section 49 of the Act makes provision for the sale of electricity by the Board to persons other then licensees under the terms and conditions as the Board thinks fit.
It can be seen from the definitions of the Sixth Schedule to the Supply Act that the scheme was meant to be applicable to licensees.
The place of the licensees has been taken over by the Board.
That is why clause 2 (b) (v) of Schedule VI of the definition of "clear profit" states that the interest on security deposits was to be a part of the expenditure properly incurred by licensees.
Then again, the manner in which the accounts are to be maintained by the licensees also shows that the licensees have to make a provision for payment of interest on security deposits.
The High court is right in relying on Section 4 of the Interest Act.
The contract in the instant case is between a consumer, however, high he might be and a monopolistic public utility company.
It is clearly an adhesion contract.
This Court in Central Inland Water Transport Corporation vs Brojo Nath Ganguly has clearly held that an unreasonable term of an adhesion contract will not be enforced by the Court.
Interest on security deposit is also admissible under equity or common law.
Halsbury 's 4th Edn.
32, paragraph 106 at page 53 defines "interest" as the return or compensation for the use or retention by one person of a sum of money belonging to or owing to another.
The Board is clearly in the position of a trustee in respect of this money since the money is deposited by the consumers in trust with the Board to secure the Board against default in payment of bills.
The deposit of security is like the usufructory mortgage which is provided for in Section 76 of the Transfer of property Act.
Section 76 G & H 234 provide that the mortgagee in a usufructory mortgage would have to keep account of the incomes received from the mortgagee in his use and would have to pay compensation for the benefit derived by the user of the mortgaged property.
The position here is more or less similar.
It is not correct to state that security is an advance payment.
If it is so, it would amount to Board taking three months advance payment from the consumers.
In such a case, the Board cannot disconnect the electricity until the period of three months is over.
But the rules of the Board enable it to disconnect even if the consumer fails to pay his bills on the due date.
Then again, a penal interests is charged in case of default.
If it is in the nature of an advance payment there is no scope for charging 2 1/2 per cent penal interest.
Lastly, it is submitted that even under English Law interest is payable on security for electricity as seen from Halsbury 's Volume 16 paragraph 129: "129.
Giving of security.
Security required under the Schedule to be Electric Lighting (Clauses) Act 1899 to be given to an electricity board (See the Electric Lighting (Clauses) Act 1899, Schedule, sections 25 (2), 27 (2), (3), and paras.
115, 118, ante.) may be by deposit or otherwise, and of an amount agreed or, failing agreement, determined by a magistrates ' court, and that court may deal with the caused of the proceedings and its decision is final and binding on all parties, (bid., Schedule, section 71; Electricity Act 1947, section 57 (2), 1 Sch 4, Part 111) Where security is given by way of deposit the party to whom it is given must pay interest at the rate of 4 per annum an every sop for each period of Six months during which it remains so deposited.
(Electric Lighting (Clauses) Act 1899, Schedule, section 71 proviso; Decimal Currency Act 1969, section 10 (I)." UTTAR PRADESH STATE ELECTRICITY BOARD The question raised before the High Court was as to the rate of 235 interest.
The respondent (U.P.State Electricity Board ) amended the rate of security deposit as Rs. 2 per K.V.A.
On such deposit it paid only 3 per cent interest whereas on late payment of the bills it charged more than 24 per cent surcharge from the consumer.
The appellants preferred writ petitions in so far as they were denied 12 per cent interest on the deposit taken from the consumers.
The Division Bench of the High Court held: "These petitions are dismissed with a direction that in case the Supreme Court decided that the interest at a rate higher that 3% should be paid on such security and additional security deposit, the benefit of the same judgment shall also be extended to the petitioners herein without the necessity of any further proceedings being taken by the petitioners." Hence, the special leave petitions.
Mr. G. Ramaswami learned counsel for the appellants would urge that Jagdamba 's case (supra) has decided that rate of interest.
Therefore, that should govern.
In a number of matters this Court has also ordered interest at 12 per cent.
The same principle should apply to this case as well.
1.Security Deposit is a compulsory levy.
The consumer has no option.
2.Even in contractual matters if the Board, which is a State, does not behave fairly, this Court can always interfere.
3.The Board cannot compel the consumer to make a security deposit without corresponding obligation to pay interest.
Deposit does not contemplate appropriation.
Prior to appropriation, what is the character of the deposit, requires to be determined.
It is not the payment of money by way of 236 advance.
As to the meaning of interest it could be gathered from the case in Riches vs West minister Batik Limited.
1947 Appeal Cases 390 at 400.
In Union of India vs A.L. Rallia Ram ; this Court held that interest is awardable in equity.
A distinction will have to be made between unreasonable and unconscionable.
In Administrative Law mere unreasonableness is enough to set aside a contract while unconscionable relates to private law.
If interest is not paid security deposit cannot be demanded as this will amount to unconscionable bargain.
As to the meaning of unconscionability, Black 's Law Dictionary.
(Fifth Edition) at page 1367 can be usefully referred to: "Basic test of "unconscionability" of contract is whether under circumstances existing at time of making of contract and in light of general commercial background and commercial needs of particular trade or case, clauses involved are so one sided as to oppressor unfairly surprise party.
Division of Triple 7.
Service, Inc. vs Mobil oil Corp., 60 Misc.
2d 720, , 201.
Unconscionability is generally recognized to include an absence of meaningful choice on the part of one of the parties.
to a contract together with contract terms which are unreasonably favorable to the other party.
Gordon vs Crown Central Petroleum Corn., D.C. Ga., 423F. Supp. 58, 61.
Typically the cases in which unconsionablity is found involve gross overall one sidedness or _gross one sidedness of a term disclaiming a warranty, limiting damages.
or granting procedural advantages.
In these cases one sidedness is often coupled with the fact that the imbalance is buried in small print and often couched in language unintelligible to even a person of moderate education.
Often the seller deals with a particularly susceptible clientele.
Kugler vs Romain, 58, N.J. 522, 237 As to the meaning of reasonableness it is stated in G.B Mahajan and Ors.
vs Jalgaon Municipal Council and Ors. ; at 109.
Under English Law relating to electricity supply as seen from Halsbury 's Vol. 16 at paragraph 129 it is clearly stated that interest on security deposit is payable.
Therefore, all the more the reason why here also it must be held to be payable.
Mr. Kapil Sibal, opposing the stand of Mr. G. Ramaswami arguers that there is no order of this Court adjudicating the rights of the Board on the consumer in respect of the validity of consumption security deposit being condition precedent for the supply of electricity by the Board as we II as the liability of the Board to pay interest to the consumer in respect of the consumption security deposit.
In the absence of any such adjudication the question of Board being bound by the previous orders of this Court.
does not arise.
In cases where 12 per cent interest was awarded it was only by way of ad interim measure.
The other orders are also not conclusive on this aspect.
Therefore, the matter will have to be decided afresh in the instant cases.
Far from being a compulsory levy, the consumption security deposit is not only a deposit in cash to safeguard recovery of electricity dues for the energy supplied to the consumer on credit but also a security towards payment or satisfaction of any money (For example, theft), which may become due and payable to the Board by the consumer.
The obligation to pay interest to the consumer proceed on the assumption that the Board is keeping the security deposit and depriving the consumer of tile use of the money which is alleged to be earning interest with the Board.
This assumption is not warranted for the followings reasons: 1, The cycle of billing demonstrates that in the very nature of things the consumer is supplied energy on credit.
The security deposit is hardly sufficient to secure the payment to the Board by the time the formal bill by the Board is raised on the consumer.
2.The consumption security deposit indeed represents only part of he money which is payable to the Board at the end of the billing 238 cycle. ' The said amount can be appropriated at any time towards the payments that are due to the Board and reflected in the formal bill.
3.In the nature of billings cycle it is the Board which has to receive interest on the energy supplied to the consumers on credit.
4.The concept of interest earned on a fixed deposit is alien to the issue.
The liabilities of the consumer increase on a daily basis depending on the level of supply and consumption.
Therefore, the amounts due are liable to be appropriated forthwith.
That is not possible where moneys are placed either on fixed deposit or a savings bank account.
It is incorrect to contend that the amount is lying in trust with the Board.
The amount lying with the Board could also be appropriated for satisfaction of any amount liable to he paid by the consumer for violation of any conditions of supply in the context of wide scale theft of energy and tempering with meters.
Therefore, the security deposit serves not only to secure the interest of the Board but also serves as a deterrent on the consumer in discharging his obligation towards the Board.
Under section 49 the Board is enabled to supply electricity upon such terms and conditions, as it thinks fit under Article 226 of the constitution, the Court is to conduct a limited scrutiny whether by imposing such a condition the Board has not acted as a private trader and there by shd off its public utility character.
Should the Coust come to the conclusion that the Board has not acted as a private trader and tile nature of ' deposit has a rational relationship, the issue will fall outside the scope of judicial purview.
Section 49 must be read alongwith Section 59.
The contention that the Board can achieve a surplus by adjusting its credit does not flow from the language of Section 59.
The requirement of consumption security deposit is a condition of supply.
It has a direct bearing on the operation of the Board.
Hence it is 'per se ' reasonable and constitutional.
If there is a revision in the rate of tariff there has to be an upward revision of the consumption security deposit since it has a direct bearing on the level of supply in consumption of electricity.
In October 239 1986, the tariffs in the State of Uttar Pradesh were adjusted upwards.
The revision in the form of an additional security deposit with interest at the rate of 3 per cent was made in January 1987.
These facts would suggest the rationale in the imposition of additional security deposit.
This being a condition of supply no reasons need be given at the time of upward revision.
Union of India vs A.L Rallia Ran ; relates to the award of interest by an Arbitrator.
The nature of consumption security deposit is such that it represents the moneys of the Board.
There is no relationship of debtor and creditor.
There is no deprivation of property which alone will entail the consequences like payment of interest.
The learned counsel has also filed a tabulated statement to show that the security deposit made by the appellant is 72.42 lakh for all industries while the affairs in electricity come to 965.73 lakh.
A formal chart has been filed based on the figures for August.
September and October 1991 to show that after the third month the consumption charges total to 45.09 lakh.
While security that is offered is 15.95.
The same is the position with reference to other industries as well concerning whom the learned counsel has filed a tabulated statement.
This so to establish how the Electricity Board has supplied electricity on credit to the various consumers and the security deposit is hardly sufficient even for one month 's consumption.
BIHAR SLP 11799 of 1989 The appellant (Bihar Electricity Board) provided 4 per cent interest per annum on security deposit.
When this was questioned in C.W.J.C. No. 3000 of 1987 in the matter of Dhanbad Flour Mills, a Division Bench of the High Court was of the view that an interest at 4 per cent appeared to be unreasonable and directed the Board to examine the question of enhancement of the rate of interest.
Similar directions were issued in another case.
The appellant Board after examining the matter issued a Notification on 27th of May, 1988 and enhanced the rate of simple interest to 5 per cent per annum.
This was because the amount of security deposit was kept in the savings account which earned 5 per cent interest which was passed on the consumer.
The said notification was questioned before the High Court by seeking 240 a writ of mandamus claiming interest at the rate payable on fixed deposit by a nationalised bank in view of the decision by this court in Jagdamba 's case (supra).
By the impugned judgment the High Court directed payment of interest on security deposit at the rate payable on fixed deposit by nationalised banks.
Aggrieved by this judgment the Bihar State Electricity Board has preferred the special leave petition.
Mr. G. L. Sanghi learned counsel appearing for the Bihar Board draws our attention to clause 15.3 of the tariff notification and submits that the consumption security deposit is not only for the supply of energy on credit but also for satisfaction of any money payable by him.
If the consumer does not pay the dues in time the arrears of consumption charges will have to be adjusted against the security deposit.
Therefore, the security deposit can never be kept in bank under fixed deposit.
This is the reason why the amount is kept in savings bank account and whatever interest is earned thereon.
that is passed on to the consumer.
Therefore, the High Court was not right in awarding a higher rate of interest.
In other respect, the learned counsel adopts the argument of the other learned counsel appearing for the various Boards including the contention that Jagdamba 's case (supra) did not lay down the rate of interest.
Normally, in market transaction when any one supplies on credit to a consumer a guarantee is taken for the payment on dues.
Such a guarantee may be in the shape of a bank guarantee, fixed deposit.
Similarly, the Board when it supplies electricity on credit it keeps tile security for the amount of supply of the electricity.
According to Board 's standing order No. 433 dated 31.12.74, dues at any time are not allowed to exceed amount of security deposit and adjustment is to be made against the security deposit after the disconnection of supply.
Therefore, it is not correct to state that the security is not adjusted towards the bill and is kept in tact.
Section 24 of the Electricity Act is the only provision to ensure payment is indicated in Bihar State Electricity Board Patna vs M/s. Green Rubber Industries and other [1990] 1 SCC 731.
In meeting these arguments it is submitted by Mr. M.P. Jha, learned counsel for the respondent that the stand of the Board in 241 making payment of interest at 4/5 per cent is clearly arbitrary.
The security aspect of the Board requirement can easily be satisfied by the board resorting to liquidation of security deposit.
As a matter of fact, the security deposit was never adjusted by the appellant Board.
As a result large amounts were kept without investing them in fixed deposit.
Learned counsel for the respondent relies on the orders issued by this Court and submits that the question of interest is settled by the ruling in Jagdamba 's case (supra).
Section 24 is of no help for payment of a lower percentage of interest.
W.P. No. 578 of 1987 In this writ petition, under Article 32 of the Constitution, the challenge is to the increase of security deposit for L and H power consumers above 100 B.H.P.
It has been increased from Rs. 170 to Rs. 200.
No reason whatever has been assigned for such an increase of security deposit.
That will he bad in law as laid down in Central Inland Water Transport Corporation Limited (supra).
This is the argument of Mr. Gobind Mukhoty. 'This is countered saying that when there is an increase in tariff the security deposit also is liable to be increased.
PUNJAB W.P. NO.
1317 of 1990 In this writ petition, the challenge is to the validity of Sections 49 and 79 of the Supply Act.
According to the respondent (Punjab State, Electricity Board), the writ petition is not maintainable.
A challenge to the imposition of advance consumption of deposit does not involve any fundamental right.
The Punjab State Electricity Board is a licensee of the State of Punjab.
The electrical energy is generated through hydro as well as thermal plants for ultimate sale to consumers.
50% of powers generated through hydro while the remaining through thermal plants which consume coal/oil.
The coal companies and those major suppliers of power plants are demanding cost of coal in advance.
On these advances no interest is payable to the Board.
Therefore, while the Electricity Board is required to make colossal advances to generate electricity and supply to consumers the consumers also use and consume electricity 242 on credit ranging from 2 to 3 months depending upon the category of consumers.
To off set part of the amount that the consumer owes to the Board constantly and also to ensure timely payment of advances by the Board to its suppliers an advance consumption deposit is insisted upon before commencing supply to the consumer.
If this is not so taken the Board will be left with no other option than to increase the tariff.
This advance deposit cannot be termed as a fixed deposit as the amount cannot be utilized against non payment of dues from consumers.
Besides,the consumers can also ask for the refund.
Sections 49(1) and 79 (j) cannot be termed as arbitrary.
In fact, this Court has upheld the validity of Section 49 (1) in Jagdamba 's case (supra).
Lastly, it is submitted that the Board is generating electricity and each unit so generated costs the Board rupee one per unit.
The Board is selling at an average rate of 50 paisa per unit to the consumer which includes the agricultural sector.
Therefore, the amendment to clause 23 of abridged conditions of supply requiring to pay advance consumption deposits is perfectly reasonable.
Mr. P.P. Rao, learned counsel appearing as intervenor on behalf of Calcutta Electricity Supply Corporation supplements the submissions of Mr. Soli J. Sorabjee.
The deposit though called security deposit is really an adjustable advance payment of consumption charges.
The amount is revisable from time to time depending upon the average consumption charges on the basis of actual consumption over a period.
The true nature of transaction in these cases is one of advance for consumption of electricity estimated for a period of three months subject to adjustment /revision, if necessary.
Such an advance is liable to be made good and kept at a stipulated level from month to month.
It is open to the consumer to permit adjustment of the advance in the first instance.
Thereafter, make good the shortfall in consumption charges and the security deposit before actual disconnection of supply which takes at least about three months.
In short, it is in the nature of a running account.
The security deposit does not remain in tact like a fixed deposit but gets depleted day after day depending on the extent of consumption More often than not, the consumption charges and other dues exceed the security deposit.
That necessitates calling for 243 additional advance to make up a shortfall.
In the absence of any usage or contract or any provision of law requiring payment of interest is not payable for wrongful detention of money.
In this case, there is no wrongful detention of even.
Section 4 (2) of the Interest Act has no application to this deposit.
When electricity supply is duly made with a consequential liability to pay for each day 's consumption, the so called security deposit is not a deposit in the real sense for the consumers to claim the benefit of Interest Act.
We will now proceed to consider the correctness of the above submissions with reference to the following aspects: (i) Whether Section 49 is bad for want of guidelines.
(ii)The nature of consumption deposit, irrespective of the nomenclature by which it is called.
(iii)(a) The liability of the Electricity Board to pay interest.
(b) Whether the clause in the terms of supply providing for nonpayment of interest is unconstitutional or arbitrary.
(iv)The demand for additional consumer deposit Whether valid? VALIDITY OF SECTION 49 The law relating to electricity is principally contained in two Acts.
(i)The of 1910 (hereinafter referred to as the "Electricity Act"). 'Ms provides for grant of licences in relation to supply of electricity and the projects of undertakings.
It also provides for supply of electricity including the protective clauses.
(ii)The of 1948 (hereinafter referred to as the "Supply Act") provides for constitution of State Electricity Boards, the powers and duties of such Boards.
Certain important 244 provisions of the Act may now be seen.
Section 2 is interpretation Section, Under Section 2 (2) the Board means a State Electricity Board constituted under Section 5.
Under Section 2 (10) states that regulation means regulations made by the Board under Section 79.
Section 5 deals with the constitution and composition of State Electricity Board.
Section 49 is the provision for sale of electricity by the Board to persons other than the licensees.
Sub section (1) of the said Section commences with the words "Subject to the provisions of this Act and of Regulations".
This means if there are any provisions regulating the Board in the matter of supplying electricity to any persons not being a licensee then the supply by the Board will he subject to all those provisions.
It has been so laid down in Mysore State Electricity Board vs Bangalore Woollen, Cotton and Silk Mills Ltd., 28 at page 1136: "The expression "Subject to the provisions of this Act" merely that if there are any provisions regulating the Board in the matter of supplying electricity to any person not being a licensee, then the supply by the Board will be subject to those provisions.
No provision has been brought to our notice which regulates the Board in the matter of the charges which it may fix for the supply of electricity." This Court had occasion to deal with the scope of the said Section and Section 59.
In Hindustan Zinc Ltd. vs Andhra Pradesh State Electricity, Board ; at pages 317 319 it has been observed thus: "Section 49 makes provision for the sale of electricity by the Board to persons other than licensees.
Sub 245 section (1) starts with the words "Subject to the provisions of this Act and of regulations, if any, made in this behalf '.
This means that the provision made therein is subject to other provisions of the Supply Act and the regulations.
It then proceeds to say that the Board may supply electricity to any person not being a licensee upon 'such terms and conditions as the Board thinks fit and may for the purposes of such supply frame 'uniform tariffs '.
Sub section (2) then enumerates several factors which the Board is required to 'have regard to ' in fixing the uniform tariffs.
The meaning of the expression have regard to is well settled, it means that the factors specifically enumerated shall be taken into account while performing the exercise which in this case is fixation of the uniform tariffs.
Ordinarily, therefore, uniform tariffs are required to be framed by the Board for making such supply.
Sub section (3) then proceeds to say that nothing in the earlier enacted provisions shall derogate from the power of the Board, "if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person", having regard to the geographical position of any area, the nature of the supply and purpose for which supply is required an d any other relevant factors '.
Sub section (4) then says that in fixing the tariffs and terms and conditions for the supply of electricity, 'the Board shall not show undue preference to any person.
, In other word, subsection (4) provides against any unreasonable dis crimination in fixing the tariffs and terms and conditions for supply of electricity.
The power of fixation of tariffs in the Board is provided in this manner by Section 49 of the Supply Act which requires the fixation of uniform tariffs ordinarily having regard particularly to the specified factors and enables fixation of such tariffs for any person having regard to the factors expressly stated and any other relevant factors, providing further that no unreasonable or undue preference shall be shown to any person by the Board in exercise of its powers of fixin the tariffs.
246 The next important provision is Section 59 of the Supply Act.
For appreciating the argument based on Section 59, it is necessary to bear in mind the distinction in Section 59 as it stood prior to 1978, as amended by Act 23 of 1978 and finally as amended by Act 16 of 1983, quoted earlier.
Prior to 1978, Section 59 required the Board, as far as practicable and after taking credit for any subventions from the State Government under Section 63, not to carry on its operations under this Act at a loss and for this purpose, it was empowered to adjust its charges accordingly from time to time.
Under the provision as it then existed, the main thrust was to avoid the Board incurring any loss and for that purpose, it could adjust its charges accordingly from time to time.
Section 59 as amended by Act 23 of 1978 required the Board, after taking credit for any subventions from the State Government under Section 63, to carry on its operations under this Act and to adjust its tariffs so as to ensure that the total revenues in any year after meeting all expenses properly chargeable to revenue including those specified,left such surplus as the State Government specified from time to time.
The shift was, therefore, towards having a surplus.
as the State Government specified from time to time.
Sub section (2) then provided guidelines for the State Government in specifying the surplus under sub section (1) and mentioned the factors to which regard was to be had for this purpose.
The effect of the amendment made in Section 59 by Act 16 of 1983, which came into effect from April 1, 1985, was to provide for a minimum surplus, of three per cent or such higher percentage as the State Government is to specify in this behalf.
In other words, prior to 1978 amendment, the requirement from the Board was towards ensuring a surplus as specified by the State Government, and after the 1983 amendment the Board is required to ensure a surplus of at least three per cent unless the State Government specifies a higher.
sur 247 plus.
This is the scheme of Section 59 and it is Section 59 as amended by 1978 Act but prior to its amendment by the 1983 Act, with which we are concerned in the present case.
It cannot be doubted that Section 59 requiring the Board to adjust its tariffs for the purpose of Board 's finance is to be read along with Section 49 which provides specifically for fixation of tariffs and the manner in which that exercise has to be performed while dealing with any question relating the revision of tariffs.
into force from April 1, 1985, is that the Board entitled to adjust its tariffs to ensure generating a surplus of not less than three per cent even without such specification by the State Government and when the State Government specifies a higher surplus, then the Board must ensure generating the higher specified surplus.
This is, of course, subject to the accepted norm of the Board acting in consonance with its public utility character and not entirely with a profit motive like that of a private trader.
The pre 1978 concept of the Board 's functioning to merely avoid any loss is replaced by the shift after 1978 amendment towards the positive approach of requiring a surplus to be gener ated, the quantum of Surplus being specified by the State Government, with a minimum of three per cent surplus in the absence of the specification by the government of a higher surplus, after the 1983 amendment.
This construction made of Section 59, as it stood at different times in Govinda prabhu case ; indicated earlier cannot be faulted in any manner.
In Govinda Prabhu case the same argument which is advanced before us was expressly rejected.
We are of the same view.
" The next Section is Section 79 which talks of power to make 248 regulations.
Clause (j) deals with the principles governing the supply of electricity by the Board to persons other than the licensees under Section 49.
In accordance with this, each of the Boards has framed regulations.
All consumers are required to execute agreements governing the supply of energy.
The attack against Section 49 is that it does not contain any norm of guideline with regard to framing of terms and conditions for the supply of electricity and in particular, the demand of payment of interest on the amounts due to the Board.
Further, the principle of fairness of action has not been explicitly set out so as to make it a visible guide.
The words occurring in the Section "as the Board thinks fit" must be construed as "reasonably thinks fit".
We are unable to countenance this argument.
A careful reading of Section 49 clearly discloses as was noted in Hindustan Zinc Ltd. vs A.P.S.E.B. ; at 317 sub section (1) of the said section starts with the words "Subject to the provisions of the Act and all regulations, if any, made in this behalf '.
Therefore, the Board has to conform to the various provisions of the Act and the regulations.
Section 49 contains two powers: 1.
To prescribe terms and conditions of supply; and 2. fix the tariff.
No guidelines are required in this regard.
In Jagdamba Paper Industries Pvt. Ltd. vs Haryana State Electricity Board ; at 513 14 it was pointed out as follows: "We are of the view that the Board has been conferred statutory power under Section 49 (1) of the Act to determine the conditions on the basis of which supply is to be made.
This Court in Bisra Stone Lime Company Ltd. vs Orissa State Electricity Board ; , took the view that enhancement of rates by way of surcharge was well within the power of the Board to fix or revise the rates of tariff under the provisions of the Act.
What applied to the tariff would equally apply to the security, that being a condition in 249 the contract of supply.
Each of the petitioning consumers had agreed to furnish security in cash for payment of energy bills at the time of entering into their respective supply agreements.
There was no challenge in these writ petitions that the demand of security at the time of entering into supply agreements has to be struck down as being without jurisdiction.
Section 49 (1) of the Act clearly indicates that the Board may supply electricity to any person upon such terms and conditions as the Board thinks fit.
In exercise of this power the Board had initially introduced the condition regarding security and each of the petitioners had accepted the term." (Emphasis supplied) Where, therefore, under Section 49 read with Section 79 (j) regulations are made, the validity of the regulations could be examined by the Court, whether they are reasonable or not.
In Southern Steel Ltd. Hyderabad vs The Andhra Pradesh State Electricity Board AIR 1990 Andhra Pradesh 58 at 66 67, it was observed: "Before we proceed to deal with the rival contentions, it would be appropriate to notice the scope of judicial scrutiny by this Court in such matters.
Acting under article 226 of the Constitution, this Court does not sit as an appellate authority over the Electricity Board.
Indeed, the Act has not chosen to provide an appeal against the terms and conditions under S.49.
The jurisdiction exercised by this Court under article 226 is supervisory in nature.
It is to ensure the observance of fundamental right the rule of law, and to keep the authorities within their bounds.
Undoubtedly, the Electricity Board is a 'State ' within the meaning of article 12 and hence it is subject to Parts III and IV of the Constitution.
The scope of enquiry, therefore, would be to examine whether the power conferred 250 upon the Board by S.49 of the Act has been exercised so unreasonably and arbitrarily that interference by this Court is called for.
For the purpose of this enquiry it is not necessary for us to go into the question whether the terms and conditions notified under S.49 are statutory, in nature or not.
We shall proceed on the assumption that they are not statutory.
We shall also proceed on the assumption that the terms and conditions notified under section 49 ought to be reasonable, in the sense that they must be related to the object and purpose for which they are issued.
We are equally aware that the power under section 49 cannot be allowed to be used for oblique purposes, or for purposes unrelated to the one sought to be achieved by a given condition.
" In M/s Mills, Bharatpurv Assistant Engineer(D) R.S.E .B. ,Bharatpur AIR at 109, it was observed: "Where demand for deposit of cash security for one month 's estimated consumption charges and bank security equal to two months estimated charges as contemplated by Regulation 20 read with the Schedule theret o was made by the Electricity Board from a consumer of high tension electricity, the demand could not be said to be unreasonable and the consumer would not be entitled to continuation of the energy under Sec.
24 of the Electricity Act on his failure to deposit such security, even if no agreement had been entered.
into between the consumer and the Board after the commencement of high tension supply.
Once the supply for electricity had commenced the consumer was bound by the terms and conditions of supply contained in the Regulations.
Further, in such a case, merely because the Board did not encase or could not encash a small portion of the security deposited in the form of National Saving Certificates before coming into force of the Regulations, it could 251 not be said that the demand of cash security in the form of Bank guarantee by the Board under the Regulations was unreasonable.
furthermore, the demand of security from the consumer which was in accordance with the Regulations framed by the Board could not be said to be unreasonable merely because no interest is paid on the cash security deposited by the consumer.
" In other words, the terms and conditions notified under Section 49 must relate to the object and purpose for which they are issued.
Certainly, that power cannot be exercised for a collateral purpose.
In this view, we hold Section 49 as valid.
NATURE OF CONSUMPTION SECURITY DEPOSIT Each of the Electricity Boards before us is a State within the mening the meaning of Article l2 the Constitution of India.
The Boards are different from licensees.
(Emphasis supplied) Each of the Board has framed the tern is and conditions of supply.
One such condition relates to security deposits.
Such a deposit varies from Board to Board.
For example, under the terms and conditions notified by Andhra Pradesh Electricity Board under Condition No. 28. 1.1 the consumer is required to deposit with the Board a sum in cash equivalent to estimated three months consumption charges.
In the case or Rajasthan, the security is in the form of cash for one month and bank or insurance guarantee for two months.
The legislative Sanction behing the power of the Board to direct a consumer to furnish security may be examined.
It has already been seen that the Supply Act is complementary to the Electricity Act, 1910.
Section 26 of the supply Act states that the Board shall have all the powers and obligations of a licensee under the Electricity Act.
And this shall be deemed to be a licence of the Board for the purpose of the Act.
Under the regulations framed by the Board in exercise of powers of Section 49 read with Section 79 (j) the consumer is only entitled and the Board has an obligation to supply energy to the consumer upon such terms and conditions as laid down in the regulations.
If, therefore, the regulations prescribed a security deposit that will have to be complied with.
It also requires to be noticed under clause (6) of Schedule II of 252 the Electricity Act that the requisition for supply of energy by the Board is to be made under proviso (a) after a written contract is duly executed with sufficient security.
This, together with the regulations stated above, could be enough to clothe it with legal sanction.
In cases where regulations have not been made Rule 27 of the Rules made under the Electricity Act enables the adoption of model form of draft conditions of supply.
Annexure VI in clause 14 states that the licensee may require any consumer to deposit security for the payment of his monthly bills for energy supplied and for the value of the meter and other apparatus installed in his premises.
Thus, the Board has the power to make regulations to demand security from the consumers.
The next question will be: what is the object in demanding security? The deposit though called security deposit is really an adjustable advance payment of consumption charges.
The payment is in terms of the agreement interpreting the conditions of supply.
This security deposit is revisable from time to time on the basis of average consumption charges depending upon the actual consumption over a period.
This is the position under the terms of supply of energy with reference to all the Boards.
As a matter of fact, electricity is supplied in anticipation of payment.
In almost every case it takes nearly 2 1/2 months for the recovery of the amount before action for disconnection could be taken.
We will give one illustration as is in the case of Rajasthan.
The following.is the billing cycle: (a) Consumption period 30 days (b) Period consumed after taking the meter readings to issue bills.
10 days (c) Period allowed for payment 17 days (d) Notice for disconnecting 253 supply if consumer fails to deposit energy bill in 7 days time.
(e) Period taken in actual disconnection after expiry of notice.
10 days Total: 74 days In practice, some time is also taken between the period allowed for payment and the notice of disconnection.
At the same time, there is no obligation that the consumer must use only a particular quantum of electricity.
He could even consume more than the average consumption.
The Board after 2 1/2 months recovers amount for the electricity supplied by it.
It could charge late surcharge in case of high tension tariff after the expiry of the said period.
Thus, it will be clear that the true nature of the transaction in these cases is one of advance payment of charges for consumption of electricity estimated for a period of approximately three months.
Such an advance is liable to be made good and kept at the stipulated level from month to month.
It is open to the consumer to permit adjustment of the advance in the first instance.
Thereafter, he could make good the shortfall in consumption charges and the security deposit before actual disconnection.
Actually speaking, it is only after three months the disconnection takes place.
Hence, it is like a running current account.
The cycle of billing by the Board demonstrates that in the very nature of things, the consumer is supplied energy on credit.
The compulsory deposit in the context of billing cycle is hardly adequate to secure payments to the Board by the time the formal bill by the Board is raised on the consumer.
In one sense, the consumption security deposit represents only a part of the money which is payable to the Board on the bill being raised against the consumer.
Thus, the Board secures itself by resorting to such deposit to cover part of the liability.
For supply of electricity the Board needs finance for production, supply and other charges necessary for supply of electricity.
For this purpose, it takes loans from various financial institutions.
This is best 254 illustrated if one looks at the transactions of Punjab Electricity Board where electric energy is generated through hydro as well as thermal plants for ultimate sale to the consumers of the total power generated about 50 per cent is through hydro plants.
The remaining energy is generated through thermal power plants which are operated on coal/ oil.
Due to limited hydro resources within the State of Punjab the dependency on power on thermal plants is on the increase.
The present requirement for working of thermal plants is more than 52 lakh tonnes of coal per annum.
In addition, 60 thousand kolo litre of furnace oil is required.
The coal companies/Coal India Limited together with major suppliers of power plant like M/s. BHEL demand cost of coal/ spares/projects in advance for the supply of material.
The Board is also required to purchase power from Central projects N.T.P.C., N.H.P.C. in order to meet the demand for power by the consumers.
For purchase of such power again advance payment are made by the Board.
On such advances the Board is not paid any interest.
The effect is, the Board is obliged to bear the liability of hundreds of crores of rupees per annum.
It has no option but to pay the charges and deposits in order to keep the power available at a level to meet with the demand of the consumers.
It is the case of the Board that it has opened letters of credit by making advance deposits in favour of National Thermal Power Corporation and the suppliers.
Coal India Limited has also asked the Board to open revolving letters of credit in favour of Coal companies/Coal India Limited.
Despatch of coal is only against the letter of credit.
From the above, it is clear that while the Electricity Board is required to make colossal advances to generate electricity and supply to consumers, the consumers use and consume electricity on credit ranging from 2 to 3 months depending upon the category of consumers.
To off set part of the amount the consumer owes to the Board continually to ensure timely payment of bills by the Board to its suppliers, the advance consumption deposit is required to be kept with the Board before commencing supply to the consumer.
The clauses in the contract in relation to conditions of supply of electric energy enable the Board to adjust the bill against such deposits.
Therefore, this is not a case of mere deposit of money as in commercial transaction.
In demanding security deposit it is open to the Court to take note of pilferage as laid down in Ashok Soap Factory vs Municipal Corporation of Delhi J.T. at page 137: 255 ". .
The variation in the electricity consumed by different consumers indicated that the charge of pilferage of electricity and gross under utilisation or consumption of electricity compared to the sanctioned load was not without foundation. .
The meaning of he term "deposit" is given in Corpus Juris Secundum, Vol.
quoted in Davidson vs U.S., CCA.Pa., , 752 as follows: "In the sense of an Act.
A deposit has been described as a mere incident of custody, and, in its ordinary signification, implies something more than mere possession, negatives all idea of loan with contemplation of use for profit, and has been defined as an act by which a person receives the property of another, binding himself to preserve it and return it in kind; the act of one person giving to another, with his consent the possession of personal property to keep for the use and benefit of the first or of a third party.
It may mean a permanent disposition of the thing placed or deposited, or a mere temporary disposition or placing of the thing.
In these circumstances, we conclude that the object of security deposit is to ensure proper payment of bills.
Three months ' security deposit cannot be characterised either unreasonable or arbitrary.
This Court had occasion to point out in Jagdamba Paper industries Pvt.
(supra) at paragraph 10 which reads as under: "We agree however, on the facts placed that the stand of the Board that a demand equal to the energy bill of two months or a little more is not unreasonable.
Once we reach the conclusion that the Board has the power to unilaterally revise the conditions of supply, it must follow that the demand of higher additional security for payment of energy bills is unassailable, provided 256 that the power is not exercised arbitrarily or unreasonably." Several High Court decisions also had taken this view as seen from K.C Works vs Secretary APSEB.
Vidyut Soudha AIR 1979 Andhra Pradesh 291 at 294: "The reasonableness of such a requirement is explained by the Board in its counter in W.P. No. 2359/ 75 out of which W.A. No. 156 of 1977 arises.
In the counter it was stated as follows: "The consumer is billed for such month separately.
The consumers electricity consumption during the month is billed at the end of the succeeding month and 30 days time is given to him for payment of the bill.
If he does not pay the bill his supply is liable to be disconnected after giving one week 's notice under Section 24 of the .
Meanwhile he will be consuming the power.
So by the time the supply is disconnected to a defaulting consumer the would have consumer energy for 3 months.
The Board 's interest requires that there should be some protection by way of security of advance payment in respect of the consumption of this three months period.
" This is how the Board sought to explain the reasonableness of the requirement of security representing three months average consumption charges.
Nobody can say that this is unreasonable.
For three months a consumer can go on consuming electrical power without paying any charges.
It is therefore, eminently reasonable for the Board to require the consumer to furnish security for three months charges.
Therefore, we are satisfied that the requirement of security for three months consumption charges is reasonable.
" At page 295 it was observed thus: 257 "As a matter of fact it may be that the writ appellant and the writ petitioner before us are prompt in paying their electrical dues.
but the Board alees with lakhs and lakhs of consumers and it should have a uniform policy in demanding security.
It cannot make a dis tinction or discrimination from one consumer to another.
That is why a uniform policy has been laid down by incorporating it in the conditions aforesaid.
For these reasons we are satisfied that the requirement of security for three months average consumption charges by way of cash deposit is reasonable.
" In Municipal Corporation for Greater Bombay vs M/s D.M Industries at 256 it was observed thus: "This brings us to the last argument advanced by Mr. Hidayatullah that Clause 12 of the draft agreement is arbitrary and unreasonable.
The argument was that the power to impose conditions cannot be exercised to impose unreasonable conditions and it must also be ascertained whether the condition achieves the object for which it is imposed.
On principle, the proposition is undisputable.
Clause 12 which can be described as unreasonable and whether this Clause has no nexus with the object of the Act and the Rules.
The argument ,appears to be that if the object of security is to secure payment of bills, then insistence on cash deposits would be unreasonable because the object could also be served by furnishing of any security and it is said that the consumer was willing to furnish a bank guarantee.
In addition, it is urged that the period of.
consumption for which these security is required should not exceed two months and, therefore, the determination of three months is arbitrary.
" In Haryana Ice Factory vs Municipal Corporation of Delhi AIR 1986 Delhi 78, It was held thus: "Also, the demand of the security was corelated to the 258 consumption Pattern of the consumers and to cover the energy charges from the date of its consumption till the date of ultimate disconnection as a result of non payment of the changes due.
The court cannot enter into mathematical calculations to come to a conclusion that in stead of three months it should be 21/2 months.
The fixing of the period of security equal to energy consumption of three months is reasonable.
It may be that the Haryana Electricity Board has fixed the period of security deposit equal to the amount of energy consumed for a period of two months but that would depend upon the billing cycle adopted by the Haryana State Electricity Board.
" In Southern Steel Ltd. Hvderabad V. The A.P. State Electricity Board AIR 1 990 Andhra Pradesh 58 at pages 68 69 it was observed: "It is also stated by the Board that huge sums are required by it as rotating capital; that it borrows large amounts from organisations like L.I.C. and Banks; that it pays interest to them, and that in such circumstances it is well entitled to require the consumer to co operate by paying their bills regularly, by giving security deposits, and by conforming to the terms and conditions of supply.
It is argued that this consideration was also one of the bases of condition No. 28.
We do not think it necessary to express any opinion on this question, though the truth of the matter cannot be denied.
There are two views upon the matter.
The petitioners say that the interest burden should be reflected in the tariffs, while the Board says that interest burden can be reflected in consumption deposits, and not necessarily in tariffs.
All that can say is that there no hard and fast rule in this behalf.
The interest burden can be reflected either in tariffs, or can be sought to be set off by calling upon the consumers to make deposits.
In this case, however.
It is unnecessary to go into this aspect, since the requirement of three months deposit, in our opinion, cannot be said to be unreasonable and unjustified having regard to the facts mentioned above.
It cannot be said that the said condition is so unreasonable and.
arbitrary as to call for interference by this Court under article 259 226 of the Constitution.
We reiterate that even if this court comes to the conclusion that the deposit should not be 3 months, but 2 months 7 days, or 2 1/2 months, it would not be entitled to interfere in the matter, not being an appellate authority.
It cannot substitute its own opinion for the opinion of the Board.
It can interfere only when the exercise of power is shown to be arbitrary, and unrelated to the object sought to be achieved.
" We are in agreement with the above extracts.
The liability of Electricity Board to pay interest on Security Deposit: Now, we come to the crucial question as to whether interest is payable on security deposit or advance consumption deposit.
We will examine from the following angle: (a) The scheme of Electricity Acts.
(b) Schedule VI of the Supply Act.
(c) (d) Equity or Common Law.
(a & 6) Scheme of Electricity Acts & Schedule VI of Supply Act: It is the submission of Mr. Shanti Bhushan, learned counsel appearing for the respondent against Rajasthan Electricity Board that the scheme of the Electricity Act and Supply Act together with the rules suggest the payment of interest.
The Board is 'not entitled to utilize the security deposits for augmenting its finances as they are meant to secure the Board against default in payment of the bills.
The correctness of this argument may now be seen: There is no statutory provision which casts an obligation on the Board to pay interest on security deposit.
However, reliance is placed on model form of draft conditions of supply as is found in Annexure VI, traceable to Role 27 of Indian Electricity Rules, 1956.
Clause 14 relating to security deposit of the said Annexure reads: 260 ".
Interest at the rate of per cent per annum will be paid by the licensee on deposits exceeding Rs. 251/ ".
(Emphasis supplied) The model form is applicable only to a licensee as defined in Section 2 (4) of the Electricity Act.
Though Rule 27 prescribes a model form it is not compulsory,even for a lincesee to adopt the model condition of supply.
This is because Rule 27 itself Stipulates the model conditions of supply contained in Annexure VI, may with such variations as the circumstances of each case require, be adopted by the licensee.
" Therefore, there is an option available to adopt with such modifications.
In such a case, the adoption of the model form becomes permissive.
In this connection, Section 26 of the Supply Act, to which we have made a reference earlier, must be looked at.
Though the Board is to have powers and obligations of a licensee under the Electricity Act, the second proviso to this Section assumes importance.
It reads: "Provided further that the provisions of Clause VI of the Schedule to that Act shall apply to the Board in respect of that area only where distribution mains have been laid by the Board and the supply of energy through any of them has commenced." Second proviso of the Supply Act leads us to Schedule VI.
This Schedule has been framed in exercise of powers under Sections 57 and 57A.
In defining "clear profit" paragraph (2) of clause XVII, Item (v) makes a reference, as interest of security deposits which is a part of expenditure properly incurred by the licensee.
From this it is impossible to hold that this clause imposes an obligation on the licensee to pay interest on security deposits.
All that would mean is, if interest is paid then it qualifies as an item of expenditure properly incurred.
This is the position with regard to licensee.
But this cannot apply to the Board, which as stated above, is not a licensee.
For the same reason Item L 1 (c) of Form IV of the Electricity Rules relating to interest paid and accrued on consumers ' security deposits is of no avail because that relates to the manner of keeping accounts by the licensee, not being applicable to a Board.
261 In the above premises, it follows that there is nothing to indicate under the scheme of the Electricity Act or Schedule VI of the Supply Act that interest must be paid on the security deposit.
(c) : applicability.
As regards the applicability of , we find that the Division Bench of Rajasthan High Court has erred in holding that it is applicable.
Section 4(2) (g) of the of 1978 reads as under: "Notwithstanding the aforesaid and without prejudice to the generality of the provisions of sub section (1), the Court shall in each of the following cases allow interest from the dates specified below to the date of institution of the proceedings at such rate as the Court may consider reasonable, unless the court is satisfied that there are special reasons why interest should not be allowed namely: (a)Where money or other property has been deposited as security for the performance of an obligation imposed by law or contract from the date of the deposit.
" This section has no application to a case where on account of a contractual term or a statutory provision payment of interest is not permitted, A careful reading of Section 4(2) of the would disclose that it merely enlarges the category of cases mentioned in Section 4(1).
Even otherwise, there is nothing to indicate that section 4(2) could override other statutory provisions or a contract between the parties.
No doubt, Section 4(2) contains a non obstante clause.
But such a clause is restricted to the provisions of and cannot extend to other laws or a contract between the parties.
Accordingly we overrule the judgment of Rajasthan High Court which holds the is applicable.
262 The deposit made cannot be equated to a fixed deposit.
It has already bee In seen that in the case of daily supply of electricity, there is a consequential liability to pay for each day 's consumption of electricity.
To ensure that payment, the security deposit is furnished.
Hence ' it cannot be equated to a deposit at all.
It is in the nature of a running current account.
(d) Position in Equity or Common Law If this be the position, could interest be claimed either on equity or common law? The argument on behalf of the consumers is, if money belonging to any person is used by someone else he is oblilsed to pay interest for the period of its user.
Halsbury 's Volume 32 (page 53 para 106) defines "interest" as "the return or compensation for the use or retention by one person of a sum of money belonging or owed to another".
Therefore, it is contended that the Board is clearly in the position of a trustee in respect of this money since the money is deposited by the consumer in trust with the Board to secure the Board against default in payment of interest.
The object of the deposit is to secure the payment of consumption charges.
These charges may very depending upon the daily consumption, depending on the level of supply.
The amount due by way of consumption charges would also be liable to be appropriated.
Therefore, it is incorrect to state that the Board is a trustee.
The relationship between the Board and consumer is not that of a trustee and a beneficiary but a depositor and deposited.
This is not even a case of a constructive trust under Section 90 of the Indian Trust Act, since no advantage is gained by the Electricity Board in derogation of the rights of the consumer in, view of what we have observed above.
Strictly speaking, the word "interest" would apply only to two cases where there is a relationship of debtor and creditor.
A lender of money who allows the borrower to use certain funds deprives himself of the use of those funds.
He does so because he charges interest which may be described as a kind of rent for the use of the funds.
For example, a bank or a lender lending out money on payment of interest, In this case, as already noted, there is no relationship of debtor and creditor.
We may now refer to Halsbury 's Vol.
32 para 108: 26 "108.
When interest is payable at common law.
At common law interest is payable (1) where there is an express agreement to pay interest; (2) where an agreement to pay interest can be implied from the course of dealing between the parties or from the nature of the transaction or a custom or usage of the trade or profession concerned; (3) in certain cases by way of damages for breach of a contract (other than a contract merely to pay money) where the contract, if performed, would to the knowledge of the parties have entitled the plaintiff to receive interest.
Except in the cases mentioned, debts do not carry interest at common law.
" Consumption security deposit does not fall under any of categories mentioned above.
Para 109 says: "Equitable right to interest.
In equity interest may be recovered in certain cases where a particular relationship exists between the creditor and the debtor, such a mortgagor and mortgagee, obligor and obliged on a bond, personal representative and beneficiary, prin cipal and surety, vendor and purchaser, principal and agent, solicitor and client, trustee and beneficiary, or where the debtor is in a fiduciary position to the creditor, Interest is also allowed on pecuniary legacies not paid within a certain time, on the dissolution of a partnership, on the arrears of an annuity where there has been misconduct or improper delay in payment, or in the case of money obtained or retained by fraud.
It may also be allowed where the defendant ought to have done something which would have entitled the plaintiff to interest at common law, or has Wrongfully prevented the plaintiff from doing something which have so entitled him." This Paragraph is also inapplicable to the present case.
264 Even a case of wrongful detention of money cannot arise.
In Bengal Nagpur Railway vs
RuttanjiRamji AIR 1938 PC67 the question arose whether interest was payable on damages on account of wrongful detention of money.
It was held: "The however contains a proviso that "interest shall be payable in all cases in which it is now payable by law.
" This proviso applies to cases in which the Court of equity exercises jurisdiction to allow interest: As observed by Lord Tomlin in Maine and New Brunswick Electrical Power Co. Ltd. vs Hart, 1: "In order to invoke a rule of equity, it is necessary in the first instance to establish the existence of a state of circumstances which attracts the equitable jurisdiction, as for example, non performance of a contract of which equity can give specific performance." "The present case does not however attract the equitable jurisdiction of the Court and cannot come within the purview of the proviso.
" The very passage was noted by this Court in Union of India vs A.L. Rallia Ram ; at 188 189.
The argument of Mr. G., Ramaswami, learned counsel, that the deposit does not contemplate appropriation is not correct because in the nature of contract it is liable to be appropriated for the satisfaction of any amount liable to be paid by the consumer to the Board for violation of any conditions of supply in the context of wide scale theft of energy, tempering with the meters and such other methods adopted by the consumers.
Therefore, the said consumption security deposit serves not only to secure the interest of the Board for any such violation but should serve as a, deterrent on the consumer in discharging his obligations towards the Board.
Mr. G. Ramaswami would rely on Riches vs Westminster Batik Limited 1947 Appeal Cases 390 at 400.
265 That is a case which arose under Income Tax Act.
That has no application to this case.
What came up for consideration in A.L Rallia Ram 's case (supra) was the power of the Board to award interest.
Hence, that case has no application.
Accordingly, it is held that the claim for interest cannot be legally founded either on common law or equity.
As is rightly contended by Mr. Kapil Sibal, learned counsel and the other learned counsel appearing for the various Boards, it is the Board which should be entitled to receive interest on energy supplied to the consumers on credit as the consumers enjoy a credit facility as noted already.
We are also unable to accept the argument advanced on behalf of consumers that because the Electricity Boards charge interest on belated payments, interest must be paid on security deposit.
Interest on belated payments is by way of penalty.
That has no bearing, Clause providing for non payment of interest: Whether unrea sonable? While the terms and conditions of supply of Andhra Pradesh, Uttar Pradesh and Bihar provide for payment of interest at certain rate, in the case of Rajasthan and Orissa the Boards have clearly stipulated that no interest shall be payable on the securities furnished to the Board.
Whether that clause could be considered unconstitutional or arbitrary? In examining the constitutionality of this provision, in that it is violative of Article 14 of the Constitution of India, the following factors have to be borne in mind: 1.Article 14 does not mandate mathematical exactitude or scientific precision.
2.The mode and the period of security vis a vis the billing practice must form the consideration.
3.The consumer with open eyes has entered into the agreement and solemnly undertaken to abide by the conditions regarding nonpayment of interest.
He cannot resile from the condition because there is nothing inherently objectionable about such a condition nor is such a condition per se illegal or void as opposed to public policy.
It is not uncommon in commercial transaction, such a provision is entered into.
266 The argument that the Board is monopolistic in character and therefore, the consumers have no other option but to enter into contract appears to be misconceived.
The Board under Section 49 of the Supply Act is entitled, apart from framing uniform tariff, to insist upon such terms and conditions as the Board thinks fit.
This has also been so stated in.
Jagdamba case (Supra).
The consumption security deposit whether or not it carries interest is a condition precedent for the supply of electric energy.
We are clearly of the view that the scrutiny by the Court in determining the unconstitutionality of a provision not providing for interest must be tested on the following touchstone: In imposing such a condition has the Board acted as a private trader and thereby shed off its public utility character '? By referring to Hindustan Zinc Ltd. (supra) we have earlier pointed out the interrelationship between Sections 49 and 59 as noted by this Court.
We are therefore.
of the view that in imposing such a condition the Board has not acted as a private trader.
The nature of deposit has a rational relationship to the object which is incorporated as a condition of supply.
Some of the learned counsel appearing for the consumers would draw our attention to Section 59 of the Supply Act as well.
Under the said section the Board is obligated to carry on its operation as to ensure that it generates a surplus of 3 per cent or as specified by the State Government.
The Board is obligated to adjust its tariffs for ensuring such surplus.
The condition of supply requiring a consumption security deposit has a direct bearing on the operations of the Board which are to be conducted in such a manner as to ensure a surplus.
The language in Section 59 of the Supply Act is "carry, on its operations under this Act and adjust its tariffs.
" The language of the said section is not by adjusting tariff.
Therefore, the argument that the only manner in which the Board can achieve a surplus is to adjust its tariffs does not flow from the language of Section 59.
So read, in the context of the insistence of a security deposit which has direct bearing on the operations of the Board is per se reasonable and constitutional.
We will assume, for a moment, that the contract is an adhesion contract.
But still, it is not unconscionable.
267 In Central Inland Water Transport Corporation vs Brojo Nath Ganguly at 208 "adhesion contract" is defined quoting Black 's Law Dictionary, Fifth Edition, at page 38, as follows: "Adhesion contract.
Standardized contract form offered to consumers of goods and services on essentially 'take it or leave it ' basis without affording consumer realistic opportunity to bargain and under such condition that consumer cannot obtain desired product or services except by acquiescing in forth contract.
Distinctive feature of adhesion contract is that weaker party has no realistic choice as to its terms is.
Not every such contract is unconscionable." With reference to these contracts the Court offered relief to the parties against such a clause if it is so unreasonable as to be unconscionable.
As a matter of fact at page 21 1, paragraph 83 of Central Inland Water Transport Corporation vs Brojo Nath Ganguly it stated thus: "Yet another theory which had made its emergence in recent years in the sphere of the law of contracts is the test of reasonableness or fairness of a clause in a contract where there is inequality of bargaining power.
Lord Denning, MR, appears to have been the pro pounder, and perhaps the originator at least in England, of this theory.
In Gillespie Brothers & Co. Ltd. vs Roy Bowled Transport Ltd. , 416 where the question was whether an indemnity clause in a contract, on its true construction, relieved the indemnifier from liability arising to the identified from his own negligence, Lord Denning said (at pages 415 416): The time may come when this process of 'construing ' the contract can be pursued no further.
The words are too clear to permit of it.
Are the courts then powerless? Are they to permit the party to enforce his unreasonable clause, even when it is so unreasonable, 268 or applied so unreasonably, as to be unconscionable? When it gets to this point, I would say, as I said many year ago:. 'there is the vigilance of the common law which, while allowing freedom of contract, watches to see that it is not abused ' John Lee & Son (Grantham) Ltd. vs Railway Executive , 584.
It will not allow a party to exempt himself from his liability at common law when it would be quite unconscionable for him to do so.
(emphasis supplied,)" Farms worth on Contracts, 2nd Edn. 319, 320 para 4.27 states: "4.27 Precursors of Unionscionability.
Courts of equity did not share the reluctance of common law courts to police bargains for substantive unfairness.
Though mere "inadequacy of consideration" alone was not a ground for with holding equitable relief, a contract that was "inequitable" or "unconscionable" one that was so unfair as to "shock the conscience of the court ' would not be enforced in equity.
In one such case, a man promised to give a 20 percent interest in all property that he might later acquire in Alaska in return for the Promisee 's payment of $1,000 and his cancellation of an $11,225 debt of questionable collectability.
When the promiser acquired property worth over $ 750,000, the promises sought specific Performance.
The court refused to grant it.
Though the fairness of the bargain was to be judged as of the time that the bargain was made, in equity as at common law, here the "inadequacy of consideration" for the promise sought to be enforced was "so gross as to render the contrast unconscionable." In dealing with the validity of the agreement containing a clause 269 relating to minimum guarantee this Court had occasion to observed in Bihar State Electricity, Board vs Green Rubber Industries [1990] 1 SCC 731 at page 740 as follows: "It is true that the agreement is in a standard form of contract.
The standard clauses of this contract have been settled over the years and have been widely adopted because experience shows that they facilitate the supply of electric energy.
Lord Diplock has observed: "If fairness or reasonableness were relevant to their enforceability the fact that they are widely used by parties whose bargaining power is fairly matched would arise a strong presumption." That their terms are fair and reasonable.
Schroeder(A.) Music Publishing Co. Ltd. vs Macaulayr ,624.
in such contracts a standard form enables the supplier to say: "If you want these goods or services at all, these are the only terms on which they are available.
Take it or leave it.
"It is a type of contract on which the conditions are fixed by one of the parties in advance and are open to acceptance by anyone.
The contract, which frequently contains many conditions is presented for acceptance and is not open to discussion.
It is settled law that a person who signs a document which contains contractual terms is normally bound by them even though he has not read them, even though he is ignorant of the precise legal effect.
" In the light of the above discussion we hold that the clause not providing for interest is neither arbitrary nor palpably unreasonable, nor even unconscionable.
In holding so we have regard to the following: 1.The consumer made the security deposit in consideration of the performance of Ms obligation for obtaining the service which is essential to Wm.
2.The electricity supply is made to the consumers on credit as has been noted above.
270 3.
The billing time taken by the Board is to the advantage of the consumer.
4.Public revenues are blocked in generation, transmission and distribution of electricity for the purpose of supply.
The Board pays interest on the loans borrowed by the Board.
This is in order to perform public service.
On those payment made by the Board it gets no interest from the consumers.
5.The Board needs back its blocked money to carry out public service with reasonable recompense.
6.The Board is not essentially a commercial Organisation to which the consumer has fumished the security to earn interest thereon.
Weshould also observe that the rate of interest on security deposit cannotbe equated with the rate of interest on the fixed deposit.
First of all, if the consumption charges are to be appropriated the moneys accrued by way of deposits cannot be held in fixed deposits.
Nor all deposits need carry interest in every transaction.
Secondly, the nature and character of the security deposit is essentially different from fixed deposit.
It is worthwhile, in this connection, to refer to Companies Acceptance of Deposits) Rules, 1975.
In Rule 2 it is stated: "2.
Definitions.
In these Rules, unless the context otherwise requires. (a) (b) "deposit" means any deposit of money with, and includes any amount borrowed by, a company, but does not include (i) (ii) (iii) 271 (iv). . . (v) any amount received from an employee of the company by way of security deposit; (vi) any amount received by way of security or as an advance from any purchasing agent, selling agent, or other agents in the course of or for the purposes of the business of the company or any advance received against orders for the supply of goods or properties or for the rendering of any service;. .
We may add that merely because the English Acts provide for interest, it is not necessary the same should be adopted here as well.
Thus, we hold that the Division Bench of the Rajasthan High Court erred in striking down Condition No. 20 of the General Conditions of the Rajasthan Electricity Board as violative of Article 14 of the Constitution of India.
Has this Court decided the question of rate of interest in jagdamba Paper Industries (Pvt.) Ltd. vs Haryana State Electricity Board ; In that case the following two points were raised as seen from paragraph 3 at page 51 1: 1.The enhancement made in the security amount towards the meter is without any justification.
The enhancement of security deposit was not warranted.
On the question of interest in paragraph 11 at page 515 in Jagdamba 's case (supra) it is stated thus: "On the security amount interest at the rate of 4 per cent was initially payable.
The same has already been enhanced to 8 per cent per annum.
Since the amount is held as security, we indicated to the counsel for the Board that security amount should bear the same 272 interest as admissible on fixed deposits of Scheduled Banks for a term of years and we suggested keeping the present rate of interest in view that it should be enhanced to 10 per cent.
Board 's counsel has now agreed that steps would be taken to enhance the present rate of interest of 8 percent to 10 percent 'with effect from October 1, 1983.
" It requires to be carefully noted that the question of interest on security was not raised before the Court.
Therefore, the Court had no occasion to decide this issue of interest.
That part of the judgment, as rightly contended by Mr. Soli J. Sorabeejee, learned counsel, is sub silentio.
However, the learned counsel for the consumers pressed into service the various orders passed by this Court in relation to interest and urged that it is concluded by those orders.
We are unable to accept his argument.
All the orders have their root in Interlocutory Application No.1 of 1989 in Writ petition No. 578 of 1987.
That order is extracted in full: "We have heard counsel for the parties.
Mr. Gopal Subramaniam ' counsel for the State Electricity Board on instructions states that the initial deposit which has been made by the consumer petitioner, to the tune of Rs. 10,07,378.81 was intended as security for pay ment of energy dues.
In terms of our order of 5th May. 1988.
the petitioner would be entitled to the interest on that amount from the date of the deposit at the rate of 12% per annum.
Mr. Gobind Mukhoty, counsel for the petitioner now agrees to deposit the balance amount of Rs. 691,621 minus the interest which is said to be the additional security and while making the deposit of the additional amount, the petitioner is entitled to deduct the interest already accrued on the deposit of Rs. 10,07,378.81 from the date of the deposit at the rate of 12% per annum.
The balance amount after deduction of the interest shall be deposited in two equal quarterly instalments, the first being due by 15.10.89.
273 The application for directions is disposed of accordingly.
" Based on this, in Writ Petition No. 613 of 1990 it was stated thus: "In view of the order made by this Court in the connected matters on September 7, 1989, after hearing parties in Writ Petition No. 578/87 on the amount deposited by the consumer as security, interest at the rate of 12% would be admissible.
The Writ petition is disposed of accordingly.
" Two other orders remain to be seen.
One rendered in W.P. 5582 of 1989 which was disposed of by consent and the other in W.P.No.576 of 1990 where the writ petition was disposed of in the following manner: "If the Electricity Board has been directed to allow interest at the rate of 12% per annum on the security deposited with the Board by the petitioners similarly situated, the claims of the petitioners should similarly be dealt with by the Board.
The Writ Petition is disposed of.
" On careful examination of the above orders, we do not think the Court ever intended to adjudicate upon the rate of interest or render a decision on that question.
Therefore, it cannot be contended that the disposal of Writ Petition No. 613 of 1990, though by a Bench of 3 judges would be binding on us because, as pointed out above.
It was entirely based on Interlocutory order.
We are of the view that we are free to decide the question on its merits.
The argument of Mr. Anil Divan, learned counsel that unequals are treated equals has no basis.
It may be that the consumers of electricity, where it is raw material, would be prompt in their payment .in their own interest.
On that basis, it cannot be contended that they 274 cannot be treated in the same way as defaulters.
The test, in our considered opinion, is whether in the general application of law there is any discrimination.
Merely because some of the consumers are prompt those related cases cannot render the provision constitutional.
We may usefully refer to the following cases: The Collector of Customs, Madras vs Nathella ; at 829 30 it was observed? "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 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.
" In Vivian Joseph vs Municipal Corporation, Bombay, ; at 276 77 it was observed: "The levy of the cess under section 27 of the Act is not based on the principle of quid pro quo.
Its object is not to repair all residential premises, but to preserve and prolong their lives in order to avert the dilema caused by the acute shortage of residential accommodation on the one hand, and the reluctance and/or inability of the owners to carry out repairs resulting from the Rent Act, on the other and to establish an agency so that structural repairs to buildings in dangerous or ruinous 275 conditions can be carried out.
The finances for these objects are provided from a fund from the impugned cess and contributions by the State and the Corporation.
The contention that some of the buildings falling in categories B and C would not need structural repairs throughout the life of the Act or that such repairs would carried out in buildings not cared for by defaulting landlords, takes no notice of the fact that the primary object of the Act is not to repair all buildings subject to cess but to prevent the annually recurrent mischief of house collages and the human tragedy and deprivations they cause.
The cess being thus levied to prevent such disasters, there is no question of unequal treatment between one class of owners and another.
The classification of buildings into three categories is based, as already stated, on their age and the construction current during the periods of their erection.
It is,therefore, based on an intelligible differentia and is closely related to the objects of the legislation.
There is, therefore no question of unequals being treated as equals, as each building of the Board and has to be structurally repaired if the need were to arise." In B. Banerjee vs Anita Pan, ; at 787 88 it was observed: "Moreover, what is the evil corrected by the Amendment Act? The influx of a transferee class of evictors of tenants and institution of litigation to eject and rack rent or re build to make larger profits.
Apparently, the inflow of such suits must have been swelling slowly over the years and when the stream became a flood the Legislature rushed with an amending bill.
Had it made the law merely prospective these who had in numbers, already gone to Court and induced legislative intention would have escaped the inhibition.
This would defeat the object and so the application of 276 the additional than to pending actions could not be called unreasonable.
To omit to do so would have been unreasonable folly.
The question is whether those cases which were filed several years ago should have been carved out of the category of transferees hit by the act? Where do you draw the line? When did the evil assume proportions? These are best left to legislative wisdom and not court 's commensense although there may be grievances for some innocent transferees.
If this be the paradigm of judicial review of constitutionality, we have to ignore exceptional cases which suffer misfortune unwittingly.
The law is made for the bulk of 'the community to produce social justice and isolated instances of unintended injury are inevitable martyre for the common good since God Himself has failed to make perfect laws and perfect justice, Freaks have to be accepted by the victims rightly or wrongly as froensic fate" In Fatelichand Himmatlal vs State of Maharashtra, ; at 851 it was observed: "May be, some stray money lender,. may be good souls and to stigmatize the lovely and unlovely is simplistic betise.
But the legislature cannot easily make meticulous exceptions and has to proceed on broad categorisations, not singular individualisations.
so viewed pragmatics overrule punctilious and unconscionable money lenders fall into a defined group.
Nor have the creditors placed material before the Court to contradict the presumption which must be made in favour of the legislative judgment.
After all, the law makers representatives of the people, are expected to know the socioeconomic conditions and customers.
Since nice distinctions to suit every kindly creditor is beyond the law making process, we have to uphold the grouping as reasonable and the restrictions as justified in the circumstances of, the case.
In this 277 branch, there are no finalities.
" The attack on additional consumer deposit is that no reasons have been adduced for additional demand.
It stands to reason that if there is a revision in the rate of tariff there must be an upward revision in the consumption security deposit since it has direct bearing to the level of supply in consumption of electricity.
For example,in the State of Uttar Pradesh, the tariffs were adjusted upwards in October 1986.
The revision in the form of an additional security deposit with interest at the rate of 3 per cent was made in January 1987.
These facts indicate the rationale in the demand of additional security deposit.
As stated above, this being a condition of supply, no reason need be given at the time of upward revision.
Therefore.
we reject the argument of Mr. Govind Mukhoty, learned counsel in this regard.
In view of the above finding, upholding the clause relating to nonpayment of interest, for example, Rajasthan and Orissa, what is to happen to such of those cases where interest is provided like Andhra Pradesh, Utter Pradesh and Bihar? In all those cases wherever the electricity boards have framed a provision for payment of interest after adjusting its finances at a stated rate they cannot be allowed to delete such a clause.
The provision for interest has been made by the various Boards having regard to the overall budgetary and financial position.
Further, keeping in view the quantum and made of security deposit and billing and recovery practice.
Nor again, could the Board withhold payment of interest on the basis of this judgment.
However, if there is any change in the circumstances affecting the budgetary and financial position, the Board can examine the case and decide the future course of action.
But any change resulting in non payment or reduction of interest will have to be justified by cogent reasons and materials having a bearing on the financial position of each Board and facts and circumstances of each case.
We also add that not withstanding Jagdamba 's case (supra) as on today, Haryana Electricity Board has dispensed with payment of interest.
We make it clear by this judgment that we are not deciding the validity of such provision since the matter is stated to be pending.
Inconclusion, We hold: 278 (1) Section, 49 of the Supply Act is valid.
(2) The nature of consumption deposit is to secure prompt payment and is intended for appropriation.
(3)There is no liability on the Electricity Board either tinder the statute or common law or equity to pay interest.
(4)Conditions and the terms of supply providing for non payment of interest is not so unconscionable as to shock the conscience of the Court.
(5)No reason need be given for.
enhancement of additional security deposit.
Accordingly we uphold the judgment of Andhra Pradesh High Court and reverse the judgment of Rajasthan High Court.
In the result, the following cased filed against Andhra Pradesh Electricity Board are dismissed: S.L.P. (c) Nos.
13004/89, 14995/89,14629/89,14899/89,15739/ 89,15817/89,7475/90,6374/90,9661 65/90,5461/90,6371/00,5294/ 90, 6779/90, 5492/90, 5921/90, 5559/90, 4793 94/90, 4791 91/90, 6375/90.
6570/90, 12270/90, 9926/90, 11548/90, 2600/90, 6372.73/90, 6035 44/90, 6505/90,6374/90, 6094/00, 6765 68/90,6462/90, 5306 08/90, 9132/00, 12424/90, 6370/90, C.A. No. 1779/90, S.L.P. (c) Nos.
17465/91, 17679/91, 17865 66/91, 20125/91, 19532/91, 18043/91, 19586 93/91, 19597 600, 20076/91, 21/92, 649/92, 2564/92,5782 83/92,8336/92,9124 25/92,9488/92,12318/92,12506/ 92, 12610/92, 12805/92, 12804/92, 12814/92, 14439/92, 14449/92, 14555/92, 1739 43&43A/92, 13593/92, C.A. No. 2409/92, W.P. (c) Nos.
603/92,455/92, 3558/83, 566/92, 1353/89, 48/92, 362/92, 1293/ 89, 6770/90.
The Transfer Petition (c) No. 366/92 filed by the Andhra Pradesh Electricity Board is allowed.
279 The following cases filled by Rajasthan State Electricity Board are allowed: C.A. Nos.
4714/91 &4028 43/91,S1,P(c) Nos.446/92.703/92, 12941/90.
433 36/92, 439 42/92, ( '.A. Nos.
5342/92.
1187 88/92, 4512/92, 45 10/92.
4511/92, 2800/92.
1204/92, 406 436/92, section L. P. (c) No. 20/92,46/02.47/92,50/92,53/02,449 452/92,494/02,516/92,48/92.49/92.51/02.52/92,54/92,55/92,43 45/92,56 72/92,428 432/92, 443 444/92,453 457/92,503 08/92.
512 14/92.530 33/92,14450/92.
The following cases filed by the Bihar Electricity Board are allowed: SLP(c) Nos.
11799/89, 1856/90, 8318/92, 16028/92.
The following, cases against Uttar Pradesh Electricity Board are dismissed.
W.P. (c) Nos, 513/87, 804/87, 1144/87.
743/87, 531/87, 725/87.
739/87, 526/91.
576/87, 577/87, 801/87, 833/87.
769/87, 676/87, 578, 87, 728/87, 762/87.
818/87, 526/87, 744/87.
742/87.
540/87, 1238/87, 738/87.684/87, S.L.P. (c) Nos, 2952 56/1987, 15885/91, & 12902/9 1.
The W.P. (c) No. 1317/90 filed against Punjab Electricity Board is dismissed.
All the I.A.s are allowed.
However, there shall he no order as to costs.
T. N. A. Petitions disposed of. [/INST] Under the General Terms and Conditions for supply of electricity notified by the Andhra Pradesh State Electricity Board, under Section 49(1) of the , the consumers were obliged to keep with the Electricity Board an amount equivalent to three month 's demand and energy charges as consumption deposit on which Interest at the rate of 3% per annum was payable by the Board.
In the event of delay in payment of consumption deposit within the stipulated period not only surcharge was payable by consumer but also the supply was liable to be disconnected.
Various petitions were riled before Andhra Pradesh High Court challenging the validity of terms and conditions contending that the consumption deposit should In no event exceed two months average consumption charges and that In view of the judgment of Supreme Court In M/s. Jagdamba Paper Industries vs H.S.E.B. Board, [1983] 4 S.C.C. 508, the Board was liable to pay Interest at the game rate as Is paid by a Scheduled Bank on fixed deposit.
The High Court dismissed the petitions.
In appeals to this Court, It was contended on behalf of the consumers that: (1) Section 49 of the is ,unconstitutional since there are no guidelines for framing the terms and conditions of supply of electricity; (2) in view of the fact that in case of power intensive consumers the cost of Electricity is very high the condition requiring 3 months ' security deposit is arbitrary and illegal for power intensive consumers; and (3) there is no power under the Electricity Supply Act to enable the Board to raise revenue or to cover its capital cost etc.
except by way of adjusting tariffs as seen from under Section 59 of the Supply Act, 1948.
Therefore, consumption deposit cannot be used for the purpose of revenue or raising revenue.
On behalf of the Electricity Board it was contended that: (1) In view of the fact that the object of consumption deposit (which is In the nature of advance payment and not a security deposit) Is to ensure prompt payment of electricity supply, It cannot be contended that 3 201 month 's consumption deposit Is arbitrary; (2)the fact that some of the consumers pay large amounts by way of electricity charges has nothing to do with the nature of deposit.
Merely because a unit Is power based it cannot be treated separately for the terms of supply relating to consumer deposit must be uniform.
In the case of Rajasthan Electricity Board the General Conditions expressly provided that no Interest will be paid by the Electricity Board on security deposit.
Futher, the Electricity Board issued notices requiring the consumers to deposit the enhanced amount of cash security as well as bank guarantee on the basis of maximum power consumption.
The consumers flied petitions In the Rajasthan High Court contending that provision for no Interest was bad In law and that the enhanced security deposit must he calculated not on three months maximum consumption but on the basis of minimum power consumption.
A Single Judge of the High Court allowed the petitions.
On appeal, the Division Bench held that the clause relating to nonpayment of interest was not reasonable.
Relying on Section 4 of the as well as on the Model Form of draft conditions contained In Schedule VI of the 1948 Act, the Division Bench held that interest was payable on the security deposit.
In appeals to this Court, it was contended on behalf of the Rajasthan State Electricity Board that: (1) there is no statutory provision which casts an obligation on the Board to pay Interest on the security deposit; nor even Interest is payable under common law or in equity; (2) the High Court erred In relying on the Model Form conditions as well as on the ; (3) the security deposit for three months is neither unreasonable nor arbitrary; (4) even if the contract between the Board and consumer is adhesion contract, it is not necessarily unconsciable; (5) in Jagdamba Paper Industries case the right of Interest was based on the concession of parties and the Court had no occasion to decide the rate or interest.
On behalf of the consumers it was contended that: (1)the scheme of the Electricity Act and Supply Act together with the Rules suggest the payment of interest; (2) since the money is deposited but the consumers with the Board to secure the Board against default In payment of bills, the Board Is in the position of a trustee in respect of 202 this money; (3) even under English Law, interest was payable on security for electricity.
For the intervenor on behalf of the Electricity Board of Orissa, it was submitted that Regulation 7 of the Orissa State Electricity Board General Conditions of Supply Regulations 1981 providing that no interest would be payable on security deposit is just and reasonable and is not arbitrary or violative of Article 14 of the Constitution.
The Uttar Pradesh State Electricity Board was also paving 3% interest on consumption deposit.
The consumers preferred writ petitions before the Allahabad High Court claiming 12% interest ,but the same were dismissed.
In appeals to this Court it was contended on behalf of the consumers that in a number of matters this Court has also ordered interest at the rate of 12% on security deposit and the same principle should apply to this case; (2) if interest is not paid, security deposit cannot be demanded as this will amount to unconscionable bargain; and (3) the security deposit does not contemplate appropriation.
On behalf of the Electricity Board it was contended that: (1) in cases where 12 per cent interest was awarded it was only by way of ad interim measure.
Therefore, orders are not conclusive on this aspect; (2) under Article 226 of the Constitution, the court is to conduct a limited scrutiny whether by imposing a condition the Board has not acted as a private trader and thereby shed off its public utility character.
If the Court comes to the conclusion that the Board has not acted as a private trader and the nature of deposit has a rational relationship, the issue will fall outside the scope of judicial purview.
The Bihar State Electricity Board was paying 5 % interest on the security deposit.
The consumers claimed interest at the rate payable on fixed deposit by a nationalised bank and the High Court allowed the same.
The Electricity Board filed petition in this court contending that the High Court erred in awarding a higher rate of interest.
On behalf of the consumers it was contended that the increase in security deposit without assigning any reason was had in law.
203 In the connected writ petition, the challenge is to the validity of Sections 49 and 79 of the Supply Act.
According to the Punjab State Electricity Board, while the Electricity Board is required to make colossal advances to generate electricity and supply to consumers the consumers also use and consume electricity on credit ranging from 2 to 3 months depending upon the category of consumers.
To off set part of the amount that the consumer owes to the Board constantly and also to ensure timely payment of advances by the Board to its suppliers an advance consumption deposit is insisted upon before commencing supply to the consumer.
If this is not so taken the Board will be left with no other option than to increase the tariff.
Thus advance deposit cannot be termed as a fixed deposit as the amount cannot be utilised against nonpayment of dues from consumers.
Besides, the consumers can also ask for the refund.
Therefore, Sections 49(1) and 79 (j) cannot be termed as arbitrary.
It was also contended on behalf of the Punjab State Electricity Board that the amendment to clause 23 of abridged conditions of supply requiring consumers to pay advance consumption deposits is perfectly reasonable.
For the intervenor on behalf of Calcutta Electricity Supply Corporation, it was submitted that the deposit though called security deposit is really an adjustable advance payment of consumption charges.
The amount is revisable from time to time depending upon the average consumption charges on the basis of actual consumption over a period.
In short, it is in the nature of a running account.
The security deposit does not remain in tact like a fixed deposit but gets depleted day after day depending on the extent of consumption.
More often than not.
the consumption charges and other dues exceed the security deposit.
That necessitates calling for additional advance to make up a shortfall.
In the absence of any usage or contract or an,*, provision of law requiring payment of interest is not payable for wrongful detention of money.
In this case, there is no wrongful detention [of even.] Section 4(2) of the has no application to this deposit.
204 Disposing the petitions, this Court, HELD:1.
Section 49 of the is valid Sub section(1) of the said section starts with the words "Subject to the provisions of the Act and all regulations, if any, made in this behalf".
Therefore, the Board has to conform to the various provisions of the Act and the regulations.
Section 49 contains two powers; (1) to prescribe terms and conditions of supply; and (2) fix the tariff.
No guidelines are required in this regard.
[278A 248CE] Hindustan Zinc Ltd. vs A.P.S.E.B., ; ; Mysore State Electricity Bought vs Bangalore Woolen Cotton and Sill Mills Ltd. A.I.R. 1963S.C. 1128, Jagdamba Paper Industries Pvt. Ltd. vs Haryana State Electricity Board, ; , referred to.
Roberts vs Hopwood, ; Pyx Granite vs Minister of Housing and Local Government, , cited.
1.1.Where regulations are made under Section 49 read with Section 79 (j), the validity of the regulations could be examined by the court, whether they are reasonable or not.
[249 D] Southern Steel Ltd., Hyderabad vs The Andhra, Pradesh State Electricity Board, A.I.R. 1990 Andhra Pradesh 58, and M/s. B.R. Oil Mills.
Bharatpur vs Assistant Engineer (D) R.S.E.B. Bharatpur, A.I.R , referred to.
1.2The terms and conditions notified under Section 49 must relate to the object and purpose for which they are issued.
Certainly, that power cannot be exercised for a collateral purpose.
In this Section 49 is valid.
[251 C] 2.The nature of consumption deposit is to secure prompt payment and is intended for appropriation.
The deposit though called security deposit is really an adjustable advance payment of consumption charges.
The payment is in terms of the agreement interpreting the conditions of supply.
This security deposit is revisable from time to time on the basis of average consumption charges depending upon the actual consumption over a period.
This is the position under the 205 terms of supply of energy with reference to all the Boards.
[278 A, 252 D E] 2.1The cycle of Billing by the Board demonstrates that in the very nature of things, the consumer is supplied energy on credit.
The compulsory deposit in the context of billing cycle is hardly adequate to secure payments to the Board by the time the formal hill by the Board is raised on the consumer.
In one sense, the consumption security deposit represents only a part of the money which is payable to the Board on the bill being raised against the consumer.
Thus, the Board secures itself by resorting to such deposit to cover part of the liability.
[253 F G] 2.2The deposit made cannot be equated to a fixed deposit.
In the case of daily supply of electricity, there is a consequential liability to pay for each day 's consumption of electricity.
To ensure that payment the security deposit is furnished.
Hence, it cannot he equated to a deposit at all.
It is in the nature of a running current account.
[262 A] 2.3The argument that the deposit does not contemplate appro priation is not correct because in the nature of contract it is liable to be appropriated for the satisfaction of any amount liable to be paid by the consumer to the Board for violation of an), conditions of supply in the context of wide scale theft of energy tempering with the meters and such other methods adopted by the consumers.
Therefore, the said consumption security deposit serves not only too secure the interest of the Board for any such violation but should serve as a deterrent on the consumer in discharging his obligations towards the Board.
[264 F 6) Union of India vs A.L. Rallia Ram, ; ; Riches vs West minister Bank Ltd. 1947 Appeal Cases 390, held inapplicable.
2.4While the Electricity Board is required to make colossal advances to generate electricity and supply to consumers, the consumers use and consume electricity on credit ranging from 2 to 3 months depending upon the category of consumers.
To off set part of the amount the consumer owes to the Board continually to ensure 206 timely payment of bills by the Board to its suppliers, the advance consumption deposit is required to he kept with the Board before commencing supply to the consumer.
The clauses in the contract in relation to conditions of supply of electric energy enable the Board to adjust the bill against such deposits.
Therefore, this is not a case of mere deposit of money as in commercial transaction.
In demanding security deposit, it is open to the court to take note of pilferage.
[254 F H] Ashok Soap Factory vs Municipal Corporation of Delhi, J.T. , referred to.
Corpus Juris Secundum, Vol.26A,p.194,Davidson vs U.S., C.C.A. Pa., , 752, referred to.
2.5Three month 's security deposit cannot be characterised either unreasonable or arbitrary.
1255 F] Jagdama Paper Industries P. Ltd. vs Haryana State Electricity Board, [1993] 4S.C.C.508; K.C. Works vs Secretary A.P.S.E.B., Vidyut Soudha, A.I.R. 1979 Andhra Pradesh 291; Municipal Corporation for Greater Bombay vs M/s D.M. Industries, ; Haryana Ice Factory vs Municipal Corporation of Delhi, A.I.R. 1986 Delhi 78, referred to.
Southern Steel Ltd., Hyderabad vs The A.P. State Electricity Board, A.I.R. 1990 Andhra Pradesh 58, approved.
Indian Aluminium Company vs Karnataka Electricity Board ; , cited.
2.6Under the regulations framed by the Board in exercise of powers of Section 49 read with Section 79 (j) the consumer is only entitled and the Board has an obligation to supply energy to the consumer upon such terms and conditions as laid down in the regulations.
If, therefore.
the regulations prescribed a security deposit that will have to be complied with.
In cases where regulations have not been made Rule 27 of the Rules made under the Electricity Act enables the adoption of model form of draft conditions of supply.
207 Annexure VI in clause 14 states that the licensee may require any consumer to deposit security for the payment of his monthly bills for energy supplied and for the value of the meter and other apparatus installed in his premises.
Thus, the Board has the power to make regulations to demand security from the consumers.
[251F H, 252A B] 2.7Under Section 59 the Board is obligated to carry on its operation as to ensure that it generates a surplus of 3 per cent or as specified by the State Government.
The Board is obligated to adjust its tariffs for ensuring such surplus.
The condition of supply requiring a consumption security deposit has a direct bearing on the operations of the Board which are to be conducted in such a manner as to ensure a surplus.
The language in Section 59 of the Supply Act is "carry on its operations under this Act and adjust its tariffs.
" The language of the said Section is not by adjusting tariff.
Therefore, the argument that the only manner in which the Board can achieve a surplus is to adjust its tariffs does not flow from the language of Section 59.
So read, in the context of the insistence of a security deposit which has direct bearing on the operations of the Board is per se reasonable and constitutional.
[266 E 6] Kerla State Electricity Boaed vs S.N. Govinda Prabhu & Bros. 3.There is no liability on the Electricity Board either under the statute or common law or equity to pay interest on security deposit.
[278 B] 3.1There is no statutory provision which casts an obligation on the Board to pay interest on security deposit.
Model form of draft conditions of supply containing Clause 14 relating to interest on security deposit) as found in Annexure VI.
traceable to Rule 27 of Indian Electricity Rules, 1956, is applicable only to a licensee as defined in Section 2 (4) of the Electricity Act.
Even for a licensee it is not compulsory to adopt the model condition of supply.
These is an option available to adopt the model conditions of supply with such modifications as the circumstances of each case require.
[259G H, 260 A C] 208 3.2Schedule VI has been framed in exercise of powers under Sections 57 and 57A.
In defining "clear profit" paragraph (2)of clause XVII, Item (v) makes a reference, as interest on security deposits which is a part of expenditure properly incurred by the licensee.
From this, it is impossible to hold that this clause imposes an obligation on the licensee to pay interest on security deposits, All that would when is, if interest, is paid then it qualifies as an item of expenditure properly incurred.
This is the position with regard to licensee.
But this cannot apply to the Board, which is not a licensee.
For the same reason Item L 1 (c) of Form IV of the Electricity Rules relating to interest paid and accrued on consumers ' security deposits is of no avail because that relates to the manner of keeping accounts by the licensee, not being applicable to a Board.
Therefore, there is nothing to indicate under the scheme of the Electricity Act or Schedule VI of the Supply Act that interest must be paid on the security deposit.
Accordingly the Division Bench of Rajasthan High Court has erred in holding that is applicable.
[260 F H, 261 A B] 3.3Section 4(2) of the has no application to a case where on account of a contractual term or a statutory provision payment of interest is not permitted.
A careful reading of Section 4(2) would disclose that it merely enlarges the category of cases mentioned in Section 4(1).
Even otherwise, there is nothing to indicate that Section 4(2) could override other statutory provisions or a contract between the parties.
No doubt, Section 4(2) contains a non obstante clause.
But, such a clause is restricted to the provisions of and cannot extend to other laws or a contract between the parties.
[261 F 6] Civil Special Appeal No. 83 of 1987, decided on 30th July, 1991 by a Division Bench of the Rajasthan High Court, overruled.
3.4The word 'interest ' would apply only to cases where there is a relationship of debtor and creditor.
A lender of money who allows the borrower to use certain funds deprives himself of the use of those funds.
He does so because he charges interest which may be described as a kind of rent for the use of the funds.
For example, a bank or a lender lending out money on payment of interest.
In this case, there is no relationship of debtor and creditor.
Accordingly, the claim for 209 interest cannot be legally founded either on common law or equity.
[262 G, 265 A] Halshury 's Vol.
32 para 108: (Discussing cases where interest is payable under common law) para 109 (Discussing cases where there is equitable rights to interest), held inapplicable.
Bengal Nogpur Railway vs Ruttanji Ramji, A.I.R. 1939 P.C. 67, referred to.
3.5The object of the deposit is to secure the payment of consumption charges.
These charges may vary depending upon the daily consumption, depending on the level of supply .The amount due by way of consumption charges would also be liable to he appropriated.
Therefore, it is incorrect to state that the Board is a trustee.
The relationship between the Board and consumer is not that of a trustee and a beneficiary but a depositor and deposits.
This is not event case of a constructive trust under Section 90 of the Indian Trust Act, since no advantage is gained by the Electricity Board in derogation of the rights of the consumer.
1262 D F] 4.The clause not providing for interest on security deposit is neither arbitrary nor palpably unreasonable not even unconscionable for the following reasons: (a)The consumer made the security deposit in consideration of the performance of his obligation for obtaining the service which is essential to him.
(b The electricity supply is made to the consumers on credit.
(c)The billing time taken by the Board is to the advantage of the consumer.
(d)Public revenues are blocked in generation, transmission and distribution of electricity for the purpose of supply.
The Board pays interest on the loans borrowed by the Board.
This is in order to perform 210 public service.
On those payments made by the Board it gets no interest from the consumers.
(e) The Board needs back its blocked money to carry out public service with reasonable recompense.
(f) The Board is not essentially a commercial organisation to which the consumer has furnished the secu rity to earn interest thereon.
[269 F H, 270 A C] 4.1The argument that the Board is monopolistic in character and therefore, the consumers have no other option but to enter contract appears to be misconceived.
The consumption security deposit whether or not it carries interest is a condition precedent for the supply of electric energy.
The scrutiny by the Court In determining the uncon stitutionality of a provision not providing for interest must be tested on the touchstone whether in imposing such a condition the Board has acted as a private trader and thereby shed off Its public utility character? In imposing such a condition the Board has not acted as a private trader.
The nature of deposit has a rational relationship to the object which is Incorporated a condition of supply.
[266 A D,] Jagdamba Paper Industries (Pvt. ) Ltd. vs Haryana State Electric in Board; , , referred to.
4.2Assuming that the contract Is an adhesion contract, still it is not unconscionable.
Conditions and the terms of supply providing for non payment of interest is not so unconscionable as to shock the conscience of the Court.
[266 H] Central Inland Water Transport Corporation vs Brojo Nath Ganguly ; Bihar State Electricity Board vs Green Rubber Industries, [1990] 1 S.C.C. 731, referred to.
Farmsworth on Contracts, 2nd Edn.
319.320, para 4.27, referred to.
Gillespie Brothers Ltd. vs Roy Bowles Ltd. (1973) 1 A. E. R. 193; 211 G.B Mahajan and Ors.
vs Jalalgaon Municipal Council and Ors.
; cited.
4.3In Jagdamba Papers the question of Interest on security was not raised before the Court.
Therefore, the Court had no occasion to decide this issue of interest.
That part of the judgment is sub silentio.
[271 E, 272 A C] Jagdamba Paper Industries (Pvt.) Ltd. vs Haryana State Electricity.
Board, ; , explained and held inapplicable.
4.4This Court never Intended to adjudicate upon the rate of interest or render a decision on that question.
Therefore, it cannot be contended that the disposal of the Writ Petition though by a Bench of 3 Judges would be binding on a Bench of two Judges because it was entirely based on interlocutory order.
Therefore, this Court is free to decide the question on Its merits.
[273 F 6] 4.5The Division Bench of the Rajasthan High Court erred in striking down condition No. 20 of the General Conditions of the Rajasthan Electricity Board as violative of Article 14 of the Constitution of India.
[271 D] 4.6The rate of interest on security deposit cannot be equated with the rate of interest on the fixed deposit.
Firstly, if the consumption charges are to be appropriated the moneys accrued by way of deposits cannot be held in fixed deposits.
Nor all deposits need carry Interest In every transaction.
Secondly, the nature and character of the security deposit is essentially different from fixed deposit.
[270 D E] 5.It may be that the consumers of electricity, where it is raw material, would be prompt in their payment in their own interest.
On that basis, it cannot be contended that they cannot be treated in the same way as defaulters.
The test, in Court 's considered opinion, is whether in the general application of law there is any discrimination.
Merely because some of the consumers are prompt those isolated cases cannot render the provision unconstitutional.
[273 H, 274 Al 212 The Collector of Customs Madras v, Nathella Sampathu Chetty; , ; Vivian Joseph vs Municipal Corporation.
Bonmbay ; , Fatehchand Himmatlal vs State of Maharashtra, [1977]2 S.C.R. 828 and; B. Banerjee vs Anita Pam, [1975]2 S.C.R. 774, referred to. </s> |
<s>[INST] Summarize the following judgement: Appeal Nos.
2621 22 of 1977.
From the Judgment and Order dated 9.11.1976 of the Calcutta High Court in Civil Rule Nos.
1817 and 1818 of 1972.
P.S. Poti and Rathin Das for the Appellant Dr. Shankar Ghosh for the Respondent.
The Judgment of the Court was delivered by SAWANT, J.
On 18th December, 1970, the Assistant Settlement Officer, Diamond Harbour, initiated proceedings under Section 44 [2a] of the West Bengal Estate Acquisition Act, 1953 [the 'Act '] for revising the finally published record of rights in respect of Khatians Nos. 10, 11 of Mouza Haradhanpore and Khatians Nos 6,7,13,15 and 24 of Mouza Kailpara within his jurisdiction.
According to him, incorrect entries were made in favour of the respondent in the record of rights in respect of the said Khatians based on the purchases made by the respondent in auction sales of the Khatians in execution of the decrees for arrears of rent.
Two different cases Case No. 156/70 and No. 22/70 were respectively initiated in regard to the two properties.
In both these cases, in the record of rights, the name of the respondent auction purchaser was entered as raiyat on the basis of the said sales.
These sales were effected on 6th November, 1954 and 3rd December, 1954 respectively.
The sales were admittedly of the rights of the raiyats, and hence the Assistant Settlement Officer took proceedings for revision of the record of rights taking the view that such rent execution sales effected after 1st June, 1954 would be invalid under Section 5B of the Act.
By his orders dated 8th January, 1971 and 27th January, 1971 respectively passed in the two cases, he directed the correction of the record of rights by substituting the names of the original raiyats for the auction purchaser.
The auction purchaser preferred appeals before the Tribunal appointed for the purpose under Section 44[3] of the Act being E.A. Nos. 86 and 87 of 1971.
The Tribunal allowed the appeals and set aside the orders of the Assistant Settlement Officer holding that Section 5B of the Act had no application to raiyati interest.
Against the decision of the appellate authority, the appellant State of West Bengal approached the High Court by way of a writ petition under Article 227 of the Constitution.
The Division Bench before which the matters came, referred them to a Special Bench since questions of public importance relating to the interpretation of the provisions of Section 5B of the Act were involved.
The Special Bench 348 held, that (i) the effective date in section 5B in respect of sales of raiyati and underraiyati holdings under the relevant statutes mentioned therein is 1st June, 1954 as provided therein; [ii] Section 5B does not operate as a bar to the execution of decree for arrears of rent as money decree against raiyati or under raiyati interests and Section 168A [1] of the Bengal Tenancy Act is impliedly repealed by the vesting of the interests of the intermediary which include raiyats and under raiyats] in the State.
In this view of the provisions of the Act, the High Court held that the initiation of the proceedings by the Assistant Settlement Officer Under Section 44 [2a] was without jurisdiction, and confirmed the order of the appellate authority.
It is this order which is questioned before us.
In order to appreciate the answer to the question raised before us, it is necessary to have a brief glance at the relevant provisions of the Act.
As its preamble shows, the Act has been placed on the statute book to provide for the acquisition of estates, of the rights of intermediaries therein and also certain rights of raiyats and under raiyats and of the rights of certain other persons in the lands comprised in the estates.
Section 2 (i) of the Act defines "intermidiary" as follows: "intermediary" means a proprietor, tenure holder, under tenureholder or any other intermediary above a raiyat or a non agricultural tenant and includes a service tenure holder and, in relation to mines and minerals, includes a lessee and a sub lessee".
By virtue of Section 2 (p), the "tenure holder" and "raiyat" as defined under the Bengal Tenancy Act, 1885 [hereinafter referred to as to the Tenancy Act '] are to be read in the present Act.
They are defined under Section 5 (1) & (2) of the Tenancy Act as follows: "5.
Meaning of Tenure holder and Raiyat.
(1) "Tenure holder" means primarily a person who has acquired from a proprietor or from another tenure holder a right to hold land for the purpose of collecting rents or bringing it under cultivation by establishing tenants on it, and includes also the successors in interest of persons who have acquired such a right.
(2) "Raiyat" means primarily a person who has acquired a right to hold land for the purpose cultivating it by himself, or by members of his family or by servants or labourers or with the aid of partners, 349 and includes also the successors in interest of persons who have acquired such a right.
Explanation Coming back to the present Act, Chapter II of the Act deals with the ,.acquisition of estates and of the rights of intermediaries therein" and consists of Sections 4 to 13.
For our purpose, the relevant sections are Sections 4,5,5A and 5B. Sub sections (1) and (2) of Section 4 read as follows: "4.
Notification vesting estates and rights of intermediaries.
(1) The State Government may from time to time by notification declare that with effect from the date mentioned in the notification, all estates and rights of every intermediary in each such estate situated in any district or part of a district specified in the notification, shall vest in the State free from all incumbrances.
(2) The date mentioned in every such Notification shall be the commencement of an agricultural year; and the notifications shall be issued so as to ensure that the whole area to which this Act extends, vests in the State on or before the 1st day of Baisakh of the Bengali year 1362.
" Section 5 refers to the effect of notification published under Section 4 and states that on or from the date of vesting, among other things, the estates and the rights of intermediaries in the estates to which the declaration applies, shall vest in the State free from all incumbrances.
It further states that in particular and without prejudice to the generality of the provisions, everyone of the following rights which may be owned by an intermediary shall vest in the State.
Among the rights so mentioned are the rights in sub soil, in mines and minerals, in hats, bazaars, ferries etc.
Clause (c) of Sub section (1) of the said section then states as follows: "5.
Effect of notification.
(1) Upon the due publication of a notification under section 4, on and from the date of vesting [a] [b] 350 (c) Subject to the provisions of sub section (3) of section 6, every non agricultural tenant holding any land under an intermediary, and until the provisions of Chapter VI are given effect to, every raiyat holding any land under an intermediary, shall hold the same directly under the State, as if the State had been the intermediary, and on the same terms and conditions as immediately before the date of vesting: x x x x x x XI ' Section 5A places restrictions on certain transfers.
Sub sections (1) and (2) thereof read as follows: "5A. Restrictions on certain transfers.
(1) The State Government may after the date of vesting enquire into any case of transfer of any land by an intermediary made between the 5th day of May, 1953 and the date of vesting, if in its opinion there are primafacie reasons for believing that such transfer was not bonafide.
(2) If after such enquiry the State Government finds that such transfer was not bonafide, it shall make an order to that effect and thereupon the transfer shall stand cancelled as from the date on which it was made or purported to have been made;" Then comes Section 5B which without its proviso with which we are not concerned, reads as follows: "5B. Estate or tenure not liable to be sold under Act XI of 1859, Cooch Behar Act V of 1897, Bengal Regulation VIII of 1819 and Act VIII of 1885.
On and from the 1st day of June, 1954, no estate, tenure or under tenure shall be liable to be sold under the Bengal Land Revenue Sales Act, 1859 or the Cooch Behar Revenue Sales Act, 1897 or the Bengal Patni Taluks Regulation, 1819 or the Bengal Tenancy Act, 1885, as the case may be, and any sale which took place on or after that day under any of those acts or that Regulation shall be deemed to have been void and of no effect:" We are not concerned in the present case with Chapter IIl which deals with "assessment and payment of compensation" for the estates of the intermediaries acquired; Chapter IV which relates to "mines and minerals" and which has overriding effect over other provisions of the Act and Chapter V which relates to 351 the "preparation of the record of rights".
Chapter VI deals with the "acquisition of rights of raiyats and under raiyats".
As it stood at the relevant time, it consisted of Sections 49 and 52, which were newly inserted in place of the old Sections 49 and 52 retrospectively by the Amending Act 35 of 1955.
The same amending Act deleted Sections 50 and 5 1.
Section 49 reads as follows: "49.
When this Chapter is to come into force.
The provisions of this Chapter shall come into force on such date and in such district or part of a district as the State Government may, by notification in the Official Gazette, appoint and for this purpose different dates may be appointed for different districts or parts of districts".
Section 52 without its proviso, is as follows: "52.
Application of Chapters 11, III, V and VII to raiyats and underraiyats.
On the issue of a notification under section 49 the provision of Chapters 11, III, V and VII shall, with such modifications as may be necessary, apply mutatis mutandis to raiyats and under raiyats as if such raiyats and under raiyats were intermediaries and the land held by them were estates and a person holding under a raiyat or an under raiyat were a raiyat foe the purposes of clauses (c) and (d) of section 5:" It is on record that by notification No. 6804 L. Ref dated 9th April, 1956 published in Calcutta Gazette Extraordinary of the same day, Part , Chapter VI came into force in all the districts of West Bengal with effect from the 10th April, 1956.
It is clear from the aforesaid provisions of the Act that when notifications are issued under Section 4, all estates and rights of every intermediary in each such estate, vest in the State, free from all incumbrances.
The notifications under that Section have to be issued so as to ensure that the whole area to which the Act extends vests in the State on or before 15th April, 1955 which corresponds to the 1st day of the Baisakh to the Bengali year 1362 mentioned therein.
When Chapter VI of the Act comes into force by virtue of the notification issued under Section 49, Section 52 which falls under that Chapter makes the provisions of Chapter II, among others, applicable also to the raiyats and the under raiyats as if such raiyat and under raiyat were intermediaries and the lands held by them were estates.
In other words, Sections 4, 5, 5A and 5B, among others, of Chapter II become applicable to the raiyati and the under raiyati interests on the issuance of such 352 notification.
In the present case, as stated above, the notification under Section 49 was brought into force w.e.f.
10th April, 1956.
It was not given retrospective effect from 15th April, 1955.
The effect of this notification was that by virtue of Section 4 the intermediary interests stood vested in the State at the latest from 15th April, 1955 while the raiyati and the under raiyati interests stood vested in the State with effect from 10th April, 1956.
The restriction on transfer of the said interests, however, came into effect retrospectively on or from 1st June, 1954 by virtue of Section 5B, since that date is mentioned in the Section itself.
Hence there cannot be any dispute that no estate, tenure or under tenure including raiyati and under raiyati interests could be sold under the statutes mentioned in section 5B including the Tenancy Act with which we are concerned, on and after 1st June, J954 and a sale after that date under any of those statutes would be void and have no effect under that Section.
Admittedly, the present auction sales were held in execution of the decrees for the arrears of rent under the Tenancy Act and took place on 6th November and 3rd December, 1954 respectively.
What came to be sold under the said sales were the raiyati interests of the judgment debtors, and the respondents were entered in the record of rights as raiyats in place of the original raiyats on the basis of the said sales.
The High Court has rightly held that the effective date in Section 5B for prohibition of the sales of raiyati and under raiyati holdings under the statutes mentioned therein, is 1st January, 1954 as is provided therein.
This conclusion of the High Court is not challenged before us.
However, the High Court has further held that Section 5B does not operate as a bar against the sale of raiyati or underraiyati interests if the execution of the rent decree is treated as an execution of money decree under the Code of Civil Procedure [hereinafter referred to as the 'Code '.
According to the High Court, the sale made pursuant to the execution of the money decree under the Code even though for rent, and of the raiyati or underraiyati interest holder, would not be a sale under the statutes mentioned in Section 5B including the Tenancy Act.
It is this conclusion of the High Court which is under challenge before us.
In order to arrive at the said conclusion, the High Court has reasoned that Section 5B only declares void, sales of tenures of holdings under the statutes mentioned therein but does not prohibit the sales under the Code.
According to the High Court, the Section has no concern with other sales since the tenure or holding was transferable and inheritable under the provisions of the Tenancy Act and other connected regulations till the estates vested in the State w.e.f. 15th April, 1955 by notification issued under Section 49 of the Act.
353 6.
We are afraid that the interpretation placed by the High Court ignores some obvious provisions of law.
In the first place, it, is not correct to say that the sale or transfer of the holding or tenure, was permissible till the estates vested in the State.
Section 5A of the Act applies to the case of transfer of any land by an intermediary, made between the 5th May, 1953 and the date of vesting.
Under that section, the legislature has given power to the.
State Government to make an inquiry into the question whether such a transfer was bonafide or not, and if the State Government came to the conclusion that the transfer was not bonafide, consequences stated in the said section followed.
It cannot be suggested that the voluntary transfers of the tenure or under tenures or raiyati or under raiyati interests in the estates, the sale of which is prohibited under the relevant statutes mentioned in Section 5B, is not covered by Section 5A of the Act.
Secondly, the Tenancy Act is a piece of legislation which amends and consolidates certain enactments relating to the law of landlord and tenant.
Under section 3 [6] of that Act "landlord" is defined as "a person immediately under whom a tenant holds, and includes the Government" while under Section 3 [17] of that Act "tenant" is defined as "a person who holds land under another person, and is, or but for a special contract would be, liable to pay rent for that land to that person".
The classes of tenants mentioned under Section 4 of that Act include [i] tenure holders, including under tenure holders, [ii] raiyats, and [iii] under raiyats.
The said Act further exclusively governs the relations between the landlord and the tenant as is evident from the provisions of that Act.
It 'is not necessary to refer to all the said provisions.
Suffice it to say that the matters relating to the fixation, payment and enhancement of rent, the grounds of ejectment of the tenant and the procedure for their ejectment, transfer and surrender of tenancies, improvements on land, record of rights, the occupancy and non occupancy rights, the judicial procedure to be followed in suits between landlord and tenant, the sale of interests in land for arrears under a decree, the restrictions on the exclusion of the provisions of the Act by agreement between the landlord and the tenant, the limitation for suits to be filed under the Act, the penalties for illegal interference with the produce of the land, damages, for denial of landlord 's title, and even matters relating to the agents and representatives of landlords are all subjects regulated by the said Act.
We are concerned in the present case with regard to the suit for the arrears of rent and with the execution of the decree obtained in such suit.
Chapter XIII which contains Sections 143 to 158 relates to the "judicial procedure" to be followed in suits between the landlord and the tenant.
Section 143 gives power to the High Court to make rules from time to time with the approval of the State Government consistent with the said act declaring that any portion of the Code shall not apply to suits between landlord and tenant as such or to any specified classes of such suits, or shall apply to them subject to modifications specified in the rules made 354 by the High Court.
Subject to any rules so made and subject also to the other provisions of the said Act, the Code applies to all suits between the landlord and the tenant.
Section 144 confers jurisdiction on the suits under the Act on the civil courts which would have jurisdiction to entertain a suit for the possession of the tenure or holding in connection with which the suit is brought.
The section also makes clear that no suit between landlord and tenant under the Act shall be instituted in any court other than such court.
Section 145 specifies the persons who can be recognised agents of the landlord, and the manner in which they are to be authorised by the landlord to be his agents, and notwithstanding anything contained in the said Act, every such agent is empowered to verify the pleadings on behalf of the landlord without the permission of the Court.
Section 146 ordains that the particulars of the suits between the landlord and the tenant should be entered in a special register to be kept by each civil court in such form as the State Government may prescribe in this behalf instead of in the register of civil suits prescribed by the court.
Section 146A makes a special provision for joint and several liability for rent of co sharer tenants notwithstanding anything contained in the Contract Act.
Section 146B likewise lays down a special procedure in rent suits against co sharer tenants notwithstanding anything contained in the Limitation Act.
Section 147 prevents a landlord from instituting successive rent suits against a raiyat except under circumstances mentioned therein.
Section 147A prevents the Court from wholly or partly adjusting by agreement or compromise, any suit between landlord and tenant unless the agreement can be enforced under the said Act, viz., the Tenancy Act.
This provision again is made notwithstanding anything contained in this behalf under the Code.
Section 148 then lays down a special procedure to be followed in rent suits.
It states in clause [a] thereof that Sections 68 to 72 of the Civil Procedure Code and rules 1 to 13 of Order XI, rule 83 of Order XXI and Rule 2 of Order XLVIII in Schedule 1 of the said Code and Schedule III thereof shall not apply to such suit.
Clause [b] thereof states that the plaint in such suit shall contain in addition to the particulars specified in the code, certain additional particulars which are mentioned therein.
Clauses [c] and [d] require further particulars in such plaints in certain situations mentioned therein.
Clause [e] thereof states that the summons shall be for the final disposal of the suit unless the court is of opinion that it should be for the settlement of issues only.
Clause [f] lays down a special mode of service of summons if the High Court by rule so directs and also permits the Court to presume service of summons in certain circumstances.
Clauses [g] and [h] similarly relate to the special procedure of summons in such suits.
Clause [i] requires leave of the Court to file a written statement.
Clause [i] makes the rules for recording the evidence of witnesses contained in rule 13 of Order XVIII in Schedule 1 to the Civil Procedure Code applicable in the trial of such suits, whether 355 an appeal is allowed or not.
Sub clause (j) of Clause [k] permits a Court to issue a special summons under certain circumstances notwithstanding anything contained in the Code and Sub clause (ia) thereof, and also provides for the procedure for effecting the service of the special summons and Sub clause (ii) provides for the consequences for the non appearance of the defendants in answer to such special summon.
Clause [m] permits the Court to order execution of oral application of the decree holder unless the decree is for ejectment for arrears.
Clause [n] requires the Court not to insist on a fresh vakalatnama or to file a copy of the decree for the purpose of executing the decree notwithstanding any thing contained in the Code.
Likewise, notwithstanding anything contained in the Code.
Clause [o] prohibits an application for the execution of a decree for arrears by an assignee of the decree unless the landlord 's interest in the land is vested in such assignee.
Section 148A permits a co sharer landlord to sue for rent in respect of his share in the tenure.
Section 149 requires the defendant to deposit the amount in Court once he admits that money is due from him even though he pleads that it is not due to the plaintiff but to a third person.
Section 150 likewise requires the defendant to deposit the admitted amount due to the landlord notwithstanding the defendant 's plea that the plaintiff s claim is in excess of the amount due.
Section 153 then provides for appeals in rent suits and while doing so, lays down conditions under which the appeal will lie and will not lie.
Section 153A lays down special conditions under which an application to set aside decree, or for review of the judgment won Id lie.
Section 154 provides for the dates from which the decree for enhancement of rent would take effect.
Then comes Section 155 which provides for relief against forfeiture under certain circumstances and Section 156 lays down the rights of ejected raiyats and under raiyats in respect of crops and land prepared for sowing.
Section 157 lays down special power of the Court to fix fair rent as alternative to ejectment.
Section 158 gives power to the Court to determine incidence of tenancy on the application either of the landlord or tenant.
Chapter XIV of the Act provides for "Sale for arrears under Decree".
We are directly concerned with the said Chapter.
Section 159 thereof details "general powers of purchaser as to avoidance of incumbrances".
Section 160 mentions the "protected in terests" within the meaning of the said Chapter.
Section 161 gives a special meaning of "incumbrance" and "registered and notified incumbrance" for the purpose of the said Chapter.
Section 162 gives the particulars of the statement which a decree holder has to produce when he makes an application for attachment and sale of the tenure or 356 holding in execution of the decree.
Section 163 makes special provision for a combined order of attachment and proclamation of sale to be issued notwithstanding anything contained in the code on the subject.
Section 164 provides for the sale of tenure or holding subject to "registered and notified incumbrance" and the effect thereof.
Section 165 is another special provision which provides for sale of tenure or holding with power to avoid all incumbrances and states the effect thereof.
Likewise, Section 166 makes provision for sale of occupancy holdings with power to avoid all incumbrances and for the effect thereof.
Section 167 gives procedure for annulling incumbrances under Sections 164, 165 or 166.
Section 168A with which we are directly concerned in the present case then states as follows: "168A. Attachment and sale of tenure or holding for arrears of rent due thereon, and liability of purchasers thereof.
[1] Notwithstanding anything contained elsewhere in this Act, or in any other law, or in any contract [a] decree for arrears of rent due in respect of a tenure or holding, whether having the effect of a rent decree or money decree,or a certificate for such arrears signed under the Bengal Public Demands Recovery Act, 1913, shall not be executed by the attachment and sale of any movable or immovable property other than the entire tenure or holding to which the decree or certificate relates: Provided that the provisions of this clause shall not apply if, in any manner other than by surrender of the tenure or holding, the term of the tenancy expires before an application is made for the execution of such a decree or certificate; [b] The purchaser at a sale referred to in clause (a) shall be liable to pay to the decree holder or certificate holder the deficiency, if any, between the purchase price and the amount due under the decree or certificate together with the costs incurred in bringing the tenure or holding to sale and any rent which may have become payable to the decree holder between the date of the institution of the suit and the date of the confirmation of the sale.
[2] In any proceeding pending on the date of the commencement of the Bengal Tenancy (Amendment) Act, 1940, in execution of a decree or certificate to which the provisions of sub section (1) apply, if there has been attached any immovable property of the 357 judgment debtor other than the entire tenure or holding to which the decree or certificate relates, and if the property so attached has not been sold, the Court or Certificate officer as the case may be shall, on the application of the judgment debtor, direct that, on payment by the judgment debtor, of the costs of the attachment, the property so attached shall be released.
[3] A sale referred to in clause (a) of sub section (1) shall not be confirmed until the purchaser has deposited with the Court or Certificate officer, as the case may be, the sum referred to in clause (b) of that sub section.
" We will revert to this section soon.
Section 169 provides for special rules for disposal of the sale proceeds instead of the rules contained in the Code.
Similarly, Section 170 provides for circumstances under which tenancy of holding is to be released from attachment notwithstanding the provisions of the Code in that behalf.
Section 173 enables a decree holder to bid for the purchase of the tenure or holding in an auction sale without the permission of the Court which is against the provisions of the Code.
Section 174 provides for application to set aside the sale and makes the relevant provisions of the Code inapplicable in certain circumstances.
Section 174A provides for the circumstances under which sale shall become absolute or shall be set aside and purchase money will be returned.
It is also necessary to refer to Section 178 in Chapter XV of the Act which expressly provides for restrictions on the exclusion of the Act by agreement between the parties.
Sub section [c], in particular of that section, states that nothing in any contract between a landlord and a tenant made before or after the passing of the said Act shall entitle a landlord to eject a tenant otherwise than in accordance with the provisions of the said Act.
Section 184 provides for special limitation in suits, appeals and applications filed under that Act and Section 185 makes certain provisions of the Limitation Act inapplicable to such suits.
Section 186 provides for penalties for illegal interference with produce.
Section 186A provides for damages for denial of landlord 's title.
Section 187 gives landlord power to act through agents.
These are all the provisions which are necessary for us to notice.
It will be apparent from the said provisions that the Act is a self contained Code governing the relations between the landlord and the tenant, for resolution of their disputes, for the suits to be filed by them, for the procedure to be followed in such suits and the conditions on which decrees may be passed in such suits, for the execution and 358 satisfaction of the said decrees.
The Act incorporates certain provisions of the Code in toto while others with modification.
At the same time, it makes still other provisions inapplicable to the proceedings in the suit filed under it.
The Act by implication prevents any suit between landlord and tenant to be filed otherwise than under its provisions.
Thus all proceedings in the suit filed under the Act from its inception to the satisfaction of the decree are to be governed by its provisions and the provisions of the Code are applicable to such proceedings only to the extent and subject to the conditions stated therein.
The Code as such is not applicable to the proceedings or to any part of it and hence no part of the proceedings can be prosecuted under the Code.
It is thus clear that even if simple money decree is obtained for the arrears of rent, no interest of the tenant can be brought to sale in execution of such decree except under the provisions of the Act.
In other words, no such interest can be sold under the Code an independently of the Act.
Secondly, if any doubt in that behalf was left, it is removed by the provisions of Section 168A.
The said section which is reproduced above begins with the non obstante clause which excludes all other provisions of the Tenancy Act itself as well as of any other law and the provisions of any contract as well.
Clause [a] of that section states that a decree for arrears of rent whether having the effect of a rent decree or a money decree or even a certificate for such arrears under the Bengal Public Demands Recovery Act, 1930 shall not be executed by the attachment and sale of any movable or immovable property other than the entire tenure or holding to which the decree or certificate relates.
That provision will not apply only if the term of the tenure has expired before an application is made for the execution of such decree or certificate.
What is further, when the entire tenure or holding is purchased in execution of a decree for arrears of rent in respect thereof, Clause [b] of sub section [1] of that section provides that the purchaser shall pay to the decree holder or certificate holder, as the case may be, the deficiency, if any, between the purchase price and the amount due under the decree or the certificate, together with the cost incurred for the auction sale and also the rent which may have become due between the date of the institution of the suit and the date of the confirmation of the sale.
This provision is inconsistent with the provisions of the Code.
The High Court has held that the said Section 168A [1] stands impliedly repealed by the vesting in the State of the interests of the intermediary which include raiyati and under raiyati interests and attract the proviso thereunder leaving the decree holder free to execute his decree as money decree in view of Section 5B of the Act, against any other property of the judgment debtor, tenureholder or tenant.
There is no doubt that after the intermediary interests vest in the State, they cannot be brought to sale and the remedy of the decree holder is to proceed against other property of the judgment debtor, if any.
In that event, Section 168A would not come in the picture.
359 However, the High Court has gone further and observed as follows: "In Bithika Maity 's case, it was correctly decided that the effective date in section 5B in respect of raiyati and under raiyati holdings is also the first day of June 1954.
The decision however failed to take notice that the impugned sale therein held on September 10, 1954 could be treated a,,; a sale under the Code of Civil Procedure as a sale in execution of a money decree.
This aspect of the case was not taken in consideration possibly because the case was heard exparte.
We are accordingly unable to approve the decision that all sales between the first day of June 1954 to the vesting of raiyati interest are to be deemed as being under the Statutes mentioned therein and hence to be declared void as was summarily held by it.
On the contrary, such sales though deemed as invalid and of no effect under the aforesaid acts, are to be treated and will have the effect of sales under the Code of Civil Procedure in execution of money decrees, if otherwise valid.
Accordingly accepting Mr. Mitra 's contention, we hold that the name of the opposite party being auction purchaser of the right, title and interest of the judgment debtor was validly recorded as raiyat in respect of the disputed holdings in the finally published record of rights in place and stead of defaulting judgment debtors who held the sake [sic] holdings.
" It is difficult to appreciate these observations which are self contradictory.
There is a conflict of view on the question as to when the raiyati and the underraiyati interests vested in the State, viz., whether on 15th April, 1955 when Section 4 became applicable to them by virtue of the retrospective operation of Sections 49 and 52 or on 10th April 1956 when the notification under Section 49 was issued.
It is not necessary for us to go into that question on the facts of the present case nor was the question debated before us.
Hence we would refrain from expressing any opinion on the point there is, however, no dispute before us that the sales even of raiyati and under raiyati interests effected after 1st June, 1954 were invalid under Section 5B of the Act.
Hence, the sales of the raiyati interest in the present case effected on 6th November, 1954 and 3rd December, 1954 were obviously invalid.
After 15th April, 1955 or 10th April, 1956, as the case may be, (according to the conflicting views of the High Court), when the raiyati and under raiyati interests came to be vested in the State, no sale could have been held of those interests, and the decree holder would have been required to proceed against the other properties of the judgment debtor.
However, admittedly in the present case it is the raiyati interests of the judgment debtor in the land in question which were sold.
Hence, the sales were void.
The High Court has reasoned that the sales can be treated as 360 being pursuant to a money decree and, therefore, under the Code and independently of the Tenancy Act.
The High Court unfortunately missed the vital fact that whether, it is a money decree or a rent decree, the entire raiyati interests of the judgement debtor in the land in question had to be sold under the said Section 168A, but could not be sold in view of the bar imposed by Section 5B of the Act.
The bar cannot be overcome by treating the sale under the Code to circumvent the provisions of the Tenancy Act and in particular of Section 168A of that Act.
We have already pointed out that the decree pursuant to the suit under the Tenancy Act cannot be executed except under the provisions of that Act.
There cannot, therefore, be a sale of the property in question pursuant to such decree under the provisions of the Code.
What is further, the intention of the legislature in enacting Section 5B was to prevent sales of the intermediary interests after 1.6.1954.
In view of the provisions of the Tenancy Act, the said interests could be sold only under and in accordance with the provisions of that Act.
The sale of such interests in the land pursuant to a decree for arrears of rent in respect of that land could not therefore be made under the Code.
Admittedly in the present case, the raiyati interests were sold after 1.6.1954 in execution of the decree for arrears of rent in respect of the land in question.
Hence the proceedings initiated by the Assistant Settlement Officer to revise the entries in the record of rights made in favour of the auction purchaser and the orders passed by him on January 8 and 27, 1971 recording the name of the former raiyats as raiyats with possession of the lands and deleting the names of the auction purchaser, were valid.
We, therefore, set aside the impugned decision of the High Court and restore that of the Assistant Settlement Officer.
The appeals are allowed accordingly.
In the circumstances of the case, there will be no order as to costs.
RP Appeals allowed. [/INST] The name of the respondent auction purchaser was entered as raiyat in respect of certain lands on the basis of auction sales dated 6.11.1954 and 3 12 1954 in execution of the decree for arrears of rent in respect thereof.
In 1970 the Assistant Settlement Officer initiated proceedings under section 44(2a) of the West Bengal Estate Acquisition Act, 1953 for revision of the record of rights in respect of the lands, taking the view that the rent execution sales being effected after 1.6.1954 were invalid under section 5B of the Act.
Accordingly, he ordered correction of the record of rights by substituting the names of the original raiyats for the auction purchaser.
The respondent filed appeals which were allowed by the appellate authority holding that section 5B of the Act had no application to raiyati interests.
The State filed writ petition under Article 227 of the Constitution before the 344 High Court.
The Special Bench of the High Court, confirming the decision of the appellate authority, held that the effective date in section 5B of the Act in respect of sale of raiyati and under raiyati holdings under the relevant statutes mentioned therein was 1.6.1954; that section 5B did not operate as a bar to execution of decree for arrears of rent as a money decree against raiyati or under raiyati interests, and section 168A (1) of the Bengal Tenancy Act, 1885 was impliedly repealed by the vesting of the interests of the intermediary including raiyats and under raiyats in the State; and that the initiation of the proceedings unders.
44(2a)of the Act was without jurisdiction.
The State filled the appeals by special leave.
The State challenged the judgment of the High Court on the ground that the High Court was not right in holding thats.
5B of the Act would not operate as a bar against the sale of raiyati or under raiyati interests if the execution of the rent decree is treated as an execution of money decree under the Code of Civil Procedure; and that the sale made pursuant to the execution of the money decree under the Code even though for rent, and of the raiyati or under raiyati interest holder, would not he a sale under the statutes men tioned in section 5B including the Tenancy Act.
Allowing the appeals, this Court, HELD:1.1 The proceedings initiated by the Assistant Settlement Officer to revise the entries in the record of rights made in favour of the respondent auction purchaser and the orders passed by him recording the names of the former raiyats as raiyats with possession of the lands and deleting the name of the auction purchaser, were valid as the raiyati interests were sold after 1.6.
1954 in execution of the decree for arrears of rent in respect of the lands in question.
(360 C E) 1.2By virtue of the notification issued under section 49, section 52 makes the provisions of sections 4, 5, 5A and 5B, among others, of Chapter 11 of the Act applicable to the raiyati and the under raiyati interests on the issuance of such notification.
(351 H) 1.3In the instant case the Notification No. 680 dated 9.4.1956 issued under section 49 was brought into force with effect from 10.4.1956.
It was not given retrospective effect from 15.4.1955.
The effect of this notification was that by 345 virtue of section 4 the intermediary interests stood vested in the State at the latest from 15.4.1955 while the raiyati and under raiyati interests stood vested in the State with effect from 10.4.1956.
The restriction on transfer of the said interests, however, came into effect retrospectively on or from 1.6.1954 by virtue of section 5B, since that date is mentioned in the section itself.
(352 AB) 1.4.
In view of section 5B of the Act, no estate, tenure or under tenure including raiyati and under raiyati interests could be sold under the statutes mentioned in s 5B including the Tenancy Act on and after 1.6.1954 and a sale after that date under any of those statutes would he void and have no effect under that section.
(352 C) 1.5 The present auction sales being of raiyati interests and effected on 6.11.1954and 3.12.1954 in execution of the decrees for the arrears of rent under the Tenancy Act were obviously invalid.
(352 D) 2.1 The decree pursuant to the suit under the Tenancy Act cannot he executed except under the provisions of that Act.
There cannot, therefore, be sale of the property in question pursuant to such decree under the provisions of the Code of Civil Procedure.
(358 B) 2.2 The intention of the legislature in enacting section 5B was to prevent sales of the intermediary interests after 1.6.1954.
In view of the provisions of the Tenancy Act, the said interests could be sold only under and in accordance with the provisions of that Act.
The sale of such interests in the land pursuant to a decree for arrears of rent in respect of that land could not therefore, he made under the Code of Civil Procedure.
(360 D) 2.3 The Bengal Tenancy Act, 1885 is a self contained code governing the relations between the landlord and the tenant and for resolution of their disputes.
The Act incorporates certain provisions of the Code of Civil Procedure in toto while others with modification.
The Tenancy Act by implication prevents any suit between landlord and tenant to be filed otherwise than under its provisions.
All proceedings in the suit filed under the Bengal Tenancy Act from its inception to the satisfaction of the decree are to be governed by its provisions and the provisions of the Code are applicable to such proceedings only to the extent and subject to the conditions stated therein.
The Code as such is not applicable to the proceedings or to any part of it and hence no part of the proceedings can be prosecuted under the Code.
Even if simple money decree is obtained for the arrears of rent, no interest of 346 the tenant can he brought to sale in execution of such decree except under Abe provisions of the Tenancy Act.
In other words, no such interest can be sold under the Code and independently of the Tenancy Act.
(357 H, 358 A C) 2.4 Besides, Section 168A of the Tenancy Act removes the doubt, if any, and provides the procedure for attachment and sale of tenure or holding for arrears of rent due thereon, and liability of purchasers thereof.
The nonobstante clause of the Section excludes all other provisions of the Tenancy Act itself as well as of any other law and the provisions of any contract as well.
Clause (a) of the Section states that a decree for arrears of rent whether having the effect of a rent decree or a money decree or even a certificate for such arrears under the Bengal public Demands Recovery Act, 1930 shall not be executed by the attachment and sale of any movable or immovable property other than the entire tenure or holding to which the decree or certificate relates.
That provision will not apply only if the term of the tenure has expired before an application is made for the execution of such decree or certificate.
When the entire tenure or holding is purchased in execution of a decree for arrears of rent in respect thereof, clause (b) of section 168A (1) provides that the purchaser shall pay to the decree holder the deficiency, if any, between the purchase price and the amount due under the decree together with the cost incurred for the auction sale and also the rent which may have become due between the date of the institution of the suit and the date of confirmation of the sale.
This provision in inconsistent with the provisions of the Code.
(358 C F) 2.5 The High Court was not right in holding that the sales can be treated as being pursuant to a money decree and, therefore, under the Code and independently of the Tenancy Act.
The High Court unfortunately missed the vital fact that whether it is a money decree or rent decree, the entire raiyati interests of the judgement debtor in the land in question had to be sold under Section 168A of the Tenant Act but could not be sold in view of the bar imposed by Section 5B of the Act.
The bar cannot be over come by treating the sale under the Code to circumvent the provisions of the Tenancy Act and in particular of Section 168A of that Act.
(359 H, 360 A B) 2.6 After the intermediary interests vest in the State, they cannot be brought to sale and the remedy of the decree holder is to proceed against other property of the judgment debtor if any.
In that event, Section 168A would not come in the picture.
(358 G H) </s> |
<s>[INST] Summarize the following judgement: Appeal No. 3908 (NT)/ 1983.
From the Judgment and Order dated 20.11.1979 of the Madras High Court in Tax Case No. 330 of 1976.
A. Raghuvir and Ms. A. Subhashini for the Appellant.
T.A. Ramachandran and Mrs. Janaki Ramachandran for the Respondent.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
This appeal is preferred against the Judgment of the Madras High Court answering the question referred to it in the affirmative i.e., in favour of the assessee and against the Revenue.
The question referred under section 256 (1) of the Income tax Act reads as follows: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the total sum of Rs. 22.000 received by the assessee from the Indian Oil Corporation and All India Highway Motor Rally should not be brought to tax?" The assessment year concerned is 1974 75.
The assessee, G.R. Karthikeyan, assessed as an individual, was having income from various sources including salary and business income.
During the accounting year relevant to the said assessment year, he participated in the All India Highway Motor Rally.
He was awarded the first prize of Rs. 20,000 by the Indian Oil Corporation and another Sum of Rs. 2,000 by the All India Highway Motor Rally.
The Rally was organised jointly by the Automobile Association of Eastern India and the Indian Oil Corporation and was supported by several Regional Automobile Associations as well as Federation of Indian Motor Sports Clubs and the Federation of Indian Automobile Associations.
The rally was restricted to private motorcars, the length of the rally route was approximately 6,956 kms.
One could start either from Delhi, Calcutta, Madras or Bombay, proceed anti clock wise and arrive at the starting point.
The rally was designed to test endurance driving and the reliability of the 331 automobiles.
One had to drive his vehicle observing the traffic regulations at different places as also the regulations prescribed by the Rally Committee.
Prizes were awarded on the basis of overall classification.
The method of ascertaining the first prize was based on a system of penalty points for various violations.
The competitor with the least penalty points was adjudged the first prize winner.
On the above basis, the assessee won the first prize and received a total sum of Rs. 22,000.
The Income Tax Officer included the same in the income of the respon dent assessee relying upon the definition of 'income ' in clause (24) of section 2.
On appeal, the Appellate Assistant Commissioner held that inasmuch as the rally was not a race, the amount received cannot be treated as income within the meaning of section 2 (24) (ix).
An appeal preferred by the Revenue was dismissed by the Tribunal.
The Tribunal recorded the following findings: (a)That the said rally was not a race.
It was predominantly a test of skill and endurance as well as of reliability of the vehicle.
(b) That the rally was also not a 'game ' within the meaning of section 2(24) (ix).
(c) That the receipt in question was casual in nature.
It was nevertheless not an income receipt and hence fell outside the provisions of section 10 (3) of the Act.
At the instance of the Revenue, the question aforementioned was stated for the opinion of the Madras High Court.
The High Court held in favour of the assessee on the following reasoning: (a) The expression 'winnings ' occuring at the inception of sub clause (ix) in section 2(24) is distinct and different from the expression 'winning '.
The expression 'winnings ' has acquired a connotation of its own.
It means money won by gambling or betting.
The expression 'winnings ' controls the meaning of several expressions occurring in the sub clause.
In this view of the matter, the sub clause cannot take in the receipt concerned herein which was received by the assessee by participating in a race which involved skill in driving the vehicle.
The rally was not a race.
In other words the said receipt does not represent 'winnings '.
(b) A perusal of the memorandum explaining the provisions of the Finance Bill,.
1 972, which inserted the said sub clause in section 2(24), also shows that the idea behind the sub clause was to rope in windfalls from lotteries, races and card games etc.
332 (c) Section 74 (A) which too was introduced by the Finance Act, 1972 supports the said view.
Section 74 (A) provides that any loss resulting from any of the sources mentioned therein can be set off against the income received from that source alone.
The sources referred to in the said section are the very same sources mentioned in sub clause (ix) of section 2(24) namely lotteries, crossword puzzles, races including horse races, card games etc.
The correctness of the view taken by the High Court is questioned herein.
The definition of 'income ' in section 2(24) is an inclusive definition.
The Parliament has been adding to the definition by adding sub clause (s) from time to time.
Sub clause (ix) which was inserted by the Finance Act, 1972 reads as follows: "(ix) any winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever;" We may notice at this stage a provision in section IO.
Section 10 occurs in chapter HI which carries the heading "Incomes which do not form part of total income".
Section 10 in so far as is relevant reads thus: " 10, Incomes not included in total income: In computing the total income of a previous year of any person, any income failing within any of the following clauses shall not be included: (d) any receipts which are of a casual and non recurring nature, not being winnings from lotteries, to the extent such receipts do not exceed one thousand rupees in the aggregate".
(The clause has been amended by Finance Act, 1986 but we are not concerned with it.
Similarly it is not necessary to notice the proviso to the said clause.) It is not easy to define income.
The definition in the Act is an inclusive one.
As said by Lord Wright in Kamakshya Narayan Singh vs C.I.T. P. C. "income. . . is a word difficult and perhaps impossible to define in any precise general formula.
It is a word of the broadest connotation".
In Gopal Saran Narain Singh vs Commissioner of Income Tax 3.I.T.R. 237 P.C., the Privy Council pointed out that "anything than can properly be described as income is taxable under the Act unless expressly exempted." This Court had to deal with the ambit of the expression 'income 'in Navin Chandra Mafatlal vs C.I T.Bombay 26 I.T.R. (S.C.) 333 The Indian Income tax and Excess Profits Tax (Amendment) Act, 1947 had inserted section 12 (B) in the Indian Income tax Act, 1922.
Section 12(B) imposed a tax on capital gains.
The validity of the said Amendment was questioned on the ground that tax on capital gains is not a tax on 'income 'within the meaning of entry 54 of list 1, nor is it a tax on the capital value of the assets of individuals and companies within the meaning of entry 55, of list 1 of the seventh schedule to the Government of India Act, 1935.
The Bombay High Court repelled the attack.
The matter was brought to this Court.
After rejecting the argument on behalf of the assessee that the word 'income ' has acquired, by legislative practice, a restricted meaning and after affirming that the entries in the seventh schedule should receive the most liberal construction the Court observed thus: "What.
then, is the ordinary, natural and grammatical meaning of the word "income"? According to the dictionary it means "a thing that comes in." (See Oxford Dictionary, Vol.
V,p. 162; Stroud, vol.
II, pp.
14 16).
In the United States of America and, in Australia both of which also are English speaking countries the word "income is understood in a wide sense so as to include a capital gain.
Reference may be made to 'Eisner vs Macomber '; , ; 'Merchants ' Loan and Trust Co. vs 'Smietanka '[1920] ; ( L) and 'United States of America vs Stewart ', ; and 'Resch vs Federal Commissioner of Taxation '; , In each of these cases very wide meaning was ascribed to the word "income" as its natural meaning.
The relevant observations of learned Judges deciding those cases which have been quoted in the judgment of Tendolkar J. quite clearly indicate that such wide meaning was put upon the word "income" not because of any particular legislative practice either in the United States or in the Commonwealth of Australia but because such was the normal concept and connotation of the ordinary English word "income".
Its natural meaning embraces any profit or gain which is actually received.
This is in consonance with the observations of Lord Wright to which reference has already been made.
The argument founded on an assumed legislative practice being thus out of the way, there can be no difficulty in applying its natural and grammatical meaning to the ordinary English word "income '.
As already observed, the word should be given its widest connota 334 tion in view of the fact that it occurs in a legislative head conferring legislative power.
Since the definition of income in section 2(24) is an inclusive one, its ambit, in our opinion, should be the same as that of the word income occurring in entry 82 of list 1 of the Seventh Schedule to the Constitution (corresponding to entry 54 of list 1 of the Seventh Schedule to the Government of India Act).
In Bhagwandas Jain vs Union of India S.C. The challenge was to the validity of section 23(2) of the Act which provided that where the property consists of house in the occupation of the owner for the purpose of his own residence, the annual value of such house shall first be determined in the same manner as if the property had been let and further be reduced by one half of the amount so determined or Rs. 1,800 whichever is less.
The contention of the assessee was that he was not deriving any monetary benefit by residing in his own house and, therefore, no tax can be levied on him on the ground that he is deriving income from that house.
It was contended that the word income means realisation of monetary benefit and that in the absence of any such realisation by the assessee, the conclusion of any amount by way of notional income under section 23(2) of the Act in the chargeable income was impermissible and outside the scope of entry 82 of list 1 of the Seventh Schedule to the Constitution.
The said contention was rejected affirming that the expression income is of the widest amplitude and that it includes not merely what is received or what comes in by exploiting the use of the property but also that which can be converted into income.
Sub clause (ix) of section 2(24) refers to lotteries, crossword puzzles, races including horse races, card games, other games of any sort and gambling or ' betting of any form or nature whatsoever.
All crossword puzzles are not of a gambling nature.
Some are; some are not.
See State of Bombay vs R.M.D. Chamarbaugwala A.I.R. 1957 S.C.699.Even in card games there are some games which are games of skill without an element of gamble (See State of Andhra Pradesh vs
K. Satyanarayan[1968] 2 S.C.R. 515.
The words other games of any sort" are of wide amplitude.
Their meaning is not confined to games of a gambling nature alone.
It thus appears that sub clause (ix) is not confined to mere gambling or betting activities.
But, says the High Court, the meaning of all.
the aforesaid words is controlled by the word 'winnings ' occurring at the inception of the subclause.
The High Court says, relying upon certain material, that the expression winnings ' has come to acquire a particular meaning viz, receipts from activities of a gambling or betting nature alone.
Assuming that the High Court is right in its interpretation of the expression 'winnings ', does it follow that merely because 335 winnings from gambling/betting activities are included within the ambit of income,the monies received from non gambling and non betting activities are not so included? What is the implication flowing from insertion of clause (ix)? If the monies which are not earned in the true sense of the word constitute income why do moneies earned by skill and toil not constitute income? Would it not look odd.
if one is to say that monies received from games and races of gambling nature represent income but not those received from games and races of non gambling nature? The rally in question was a contest, if not a race.
The respondent assessee entered the contest to win it and to win the first prize.
What he got was a return ' for his skill and endurance.
Then why is it not income which expression must be construed in its widest sense.
Further, even if a receipt does not fall within subclause (ix), or for that matter, any of the sub clauses in section 2(24), it may yet constitute income.
To say otherwise, would mean reading the several clauses in section 2(24) as exhaustive of the meaning of 'income ' when the Statute expressly says that it is inclusive.
It would be a wrong approach to try to place a given receipt under one or the other sub clauses in section 2(24) and if it does not fall under any of the sub clauses, to say that it does not constitute income.
Even if a receipt does not fall within the ambit of any of the sub clauses in section 2(24), it may still be income if it partakes of the nature of the income.
The idea behind providing inclusive definition in section 2(24) is not to limit its meaning but to widen its net.
This Court has repeatedly said that the word 'income ' is of widest amplitude, and that it must be given its natural and grammatical meaning.
Judging from the above standpoint, the receipt concerned herein is also income.
May be it is causal in nature but it is income nevertheless.
That even the casual income is 'income ' is evident from section 10 (3).
Section 10 seeks to exempt certain 'incomes ' from being included in the total income '.
A casual receipt which should mean, in the context, casual income is liable to be included in the total income if it is in excess of Rs. 1,000, by virtue of clause (3) of section 10.
Even though it is a clause exempting a particular receipt/income to a limited extent, it is yet relevant on the meaning of the expression 'income '.
In our respectful opinion, the High Court, having found that the receipt in question does not fall within sub clause (ix) of section 2(24), erred in concluding that it does not constitute income.
The High Court has read the several sub clauses in section 2(24) as exhaustive of the definition of income when in fact it is not so.
In this connection it is relevant to notice the finding of the Tribunal.
It found that the receipt in question was casual in nature but it opined it was nevertheless not an income receipt and fell outside the provision of section 10 (3) of the Act.
We have found it difficult to follow the logic behind the argument.
For the above reasons we hold that the receipt in question herein does 336 constitute 'income ' as defined in clause (24) of section 2 of the Act.
The appeal is accordingly allowed and the question referred by the Tribunal under section 256(1) of the Act is answered in the negative i.e., in favour of the Revenue and against the assessee.
There shall be no order as to costs.
Appeal allowed. [/INST] The assessee participated in an All India Highway Motor Car Rally and on being declared a winner, received an amount of Rs. 22,000 as prize money.
The Income tax officer included the prize money in his income for the relevant assessment year relying upon the definition of 'income 'in clause (24) of Section 2 of Income Tax Act.
On an appeal preferred by the respondent assessee the Appellate Assistant Commissioner held that as the Rally was not a race, the prize money cannot be treated as income within the meaning of section 2(24) (ix).
The Tribunal on an appeal by the Revenue, held that the Rally was not a race and as it was a test of skill and endurance, it was not a 'game ' within the meaning of Sec. 2 (24) (ix).
As the prize money received was casual in nature it fell outside Sec.
10(3) of the Act.
The High Court on a reference at the instance of the Revenue,upholding the findings of the Tribunal,observed that the expression 'winnings ' cannotes money won by betting or gambling and therefore the prize money not represent 'winnings '.
Inasmuch as the amount in question was obtained by participating in a rally which involved skill in driving the vehicle, it held, it cannot he included in the assessee 's income, also because it fell outside the preview of s.10 (3).
Allowing the Appeal, the Court, HELD:1.
The expression 'income ' must be construed in its widest sense.
The definition of 'income ' is an inclusive one.
Even if a receipt does not fall within sub clause (ix) or any of the sub clauses of Sec.2(24) of the Act it may yet constitute income.
Hence the prize money received by the respondent 329 assessee constitutes 'income ' as defined in clause (24) of Section 2 of the Act.
(335 C) 2.The High Court erred in reading several sub clauses in Sec.
2(24) as exhaustive when the statute expressly says that the definition is inclusive.
Even if a receipt does not fall within the ambit of any of the sub clauses in Sec.
2(24) it may still he income if it partakes of the nature of income.
The idea behind providing inclusive definition in Sec.
2(24) is not to limit its meaning but to widen its net.
This Court has repeatedly said that the word 'income ' is of widest amplitude and that it must he given its natural and grammatical meaning.
(335 D) Kamakshya Narayan Singh vs C.LT P.C., Navin Chandra Mafatlal vs C.I.T, Bombay 26 ITR (SC)and Bhagwan Das Jain vs Union of India SC, followed.
Gopal SaranNarain Singh vs Commissioner of Income Tax, 3ITR237 P.C., referred to.
3.If the monies which are not earned in the true sense of the word Constitute income, it is difficult to appreciate why do monies earned by skill and to not constitute income? The Rally was a contest, if not a race.
The Respondent assessee entered the contest to win it.
The Prize money which he got in return for winning the contest was a reward for his skill and endurance.
It does constitute his income which expression must be construed in its widest sense.
(335 B) 4.The sub clause (ix) of Sec.
2(24), is not confined to games of gambling nature alone.
Some of them are games of skill.
State of Bombay vs R.M. D. Chamarbaugwala ; ; and Stale of Andhra Pradesh vs K. Satyanarayan ; , followed.
5.As the definition of income in Sec.
2(24) is an inclusive one, its ambit should be the same as that of the word 'income ' occurring in Entry 82 of list 1 of the Seventh Schedule of the Constitution of India.
(334 B) 6.Even casual income is 'income 'as is evident from Sec.
10(3).
A casual receipt which should mean in the context, casual income is liable to be included in the total income, if it is in excess of Rs. 1,000 by virtue of clause (3) 330 of Sec. 10.
The Tribunal erred in its finding that the prize money fell outside the purview of Sec.
10 (3) inspite of holding that the receipt in question was casual in nature.
(335 E) </s> |
<s>[INST] Summarize the following judgement: ial Leave Petition (C) Nos.
4304 06 of 1993.
From the Judgment and Order dated 18.12.1992 of the Calcutta High Court in Appeal from Original Order Nos.
and 106 of 1991.
Panchugopal Bose in person for the Petitioner.
D.P. Gupta, Solicitor General, A.K Sil and G. joshi for the Respondent.
The Judgment of Court was delivered by K. RAMASWAMY.
J.: These three Special Leave Petitions arise out of Arbitration Agreement said to be executed by the petitioner on May 27, 1978 which provided that the petitioner had to execute the work within 9 months.
It is 363 his claim that while executing the work he sent the bills on July 12, 1979 but payment was not made.
For the first time he sent notice on Nov. 28, 1989 to the respondent for reference to the arbitration.
On receipt thereof, the respondent filed an arbitration suits in the Calcutta High Court under sections 5, 12 and 33 of the for short the Act.
The learned Single Judge held that the claim was hopelessly barred by limitations There was no proof that the petitioner had sent any claim in July, 1979.
Since the Claim was made long after 10 years the arbitration cannot be proceeded with.
Accordingly finding that it to be an exceptional case for interference, the learned Single Judge cancelled the arbitration clause 68 of the contract in matter Nos. 1326, 1364 and 1365/90 dated November 23. 1990.
On further appeals the division bench by its order dated December 18, 1992 in Appeal Nos 104/90 etc.
dismissed the appeals.
Thus these special leave petitions.
The contention of the petitioner appearing in person is that Clause 68 of the Contract provides for appointment of an arbitrator and when the petitioner has legally invoked clause 68 and issued notice to the respondent, the respondent is duty bound to appoint an arbitrator and on its failure it is open to him to approach the Court for appropriate remedy under section 8 of the Act for appointment of an arbitrator.
The High Court scuttled this procedure in exercising the power under section 5 of the Act which is illegal and ultra vires.
He further contented that Section 5 has no application to the facts of this case.
We have heard also Shri D.P. Gupta, the learned Solicitor General for the respondent.
The question for consideration is whether the High Court was justified in permitting the respondent to rescind the contract of Arbitration provided in Clause 68 of the Contract.
Undoubtedly, Clause 68 provides reference to arbitration of all or any of the disputes or differences enumerated therein that have arisen between the parties, at the instance of either party to the contract.
It empowers either party to issue notice calling upon the Engineer to refer the dispute or difference for arbitration.
In this case, as found by the High Court that though the petitioner was said to have made the claim for payment for the first time in July 12, 1979.
Though there is no proof in that behalf, and the respondent claimed that the petitioner had abandoned the contract, even assuming that any claim was as a fact made in July.
1979 and payment was not made, the petitioner had not taken follow up action thereafter for well over 10 years.
It was open to him to avail Clause 68 of the contract seeking reference to the arbitration.
No such action was taken till November 28, 1989 Immediately on receipt of the notice, the respondent invoked the jurisdiction of the Calcutta High Court under sections 5 and 12 at 330 of the Act.
Section 5 provides thus: 364 "The authority of an appointed arbitrator or umpire shall not be revocable except with the leave of the Court, unless a contrary intention is expressed in the arbitration agreement".
Therefore, Section 5 postulates that there must be an order of appointing an arbitrator or umpire and thereafter the same cannot be revoked except with the leave of the Court, unless a contrary intention is expressed in the agreement.
Exfacie it would appear that appointment of an arbitrator is a condition to avail the remedy under s.5.
Section 12 accords consequential power which postulates that the power of the Court where Arbitrator is removed or his authority revoked.
Subsection (2) says that: "Where the authority of an arbitrator or arbitrators or an umpire is revoked by leave of the Court, or where the Court removes an umpire who has entered on the reference or a sole arbitrator or all the arbitrators, the Court may, on the application of any party to the arbitration agreement, either (b)order that the arbitration agreement shall cease to have effect with respect to the difference referred." Therefore, by a conjoint reading of sections 5 and 12 (2) (b) it is clear that the court has been given power in given circumstances to grant leave to a contracting party to have the arbitrator or umpire removed and the arbitration agreement entered into with other contracting part revoked.
Where the Court grants such authority consequentially arbitration agreement shall cease to have effect with respect to the difference or dispute.
It flows therefrom that there exist implied power vested in the court permitting a party to avail the remedy under sections 5 & 12 to rescind the arbitration agreement.
In all cases it is not a condition precedent that there should in the first instance be an order appointing an arbitrator or he should enter upon reference for adjudication.
In given circumstances and the factual background the court may be justified to exercise the power under ss.5 and 12.
The question then is under what circumstances such power would be exercised.
This Court in M/s Amarch and Lalit Kumar vs Shree Ambica Jute Mills Ltd. ; at 969 held thus: "In exercising its discretion cautiously and sparingly the Court has no doubt (kept) these circumstances in view, and consider that the parties should not be relieved from a tribunal they have chosen because they fear that the arbitrator 's decision may go against them.
The grounds on which leave to revoke may be given have been put under five heads: 365 1.
Excess or refusal of jurisdiction by arbitrator; 2.
Misconduct of arbitrator; 3.
Disqualification of arbitrator; 4.
Charges of Fraud; and 5.
Exceptional cases.
Thus it could be seen that the Court has the power and jurisdiction under sections 5 and 12 to grant leave to the applicant in exceptional circumstances to revoke the contract of arbitration.
The court should exercise the power sparingly, cautiously and with circumspection to permit a party to the contract of a arbitration voluntarily entered into to relieve the party from dispute or difference and to order that the arbitration agreement shall cease to have effect in respect of the dispute or difference.
In this case we have seen that even assuming that the petitioner had putforward his claim in July, 1979 and the respondent had not acted thereon till November 28, 1989 for long 10 years he did not move his little finger to approach the Engineer and later the Court.
For the first time on November 28, 1989 he issued notice to the respondent to refer the case for arbitration.
Clause 68 of the Contract provides that when any disputes or differences has arisen he should approach the Engineer in the first instance seeking reference of it to an arbitration and if the Engineer refuses to act upon or omits to refer the dispute to the arbitration within 15 days from the date of the receipt of notice, then it is open to him to approach a Civil Court for reference to the arbitration.
On his own showing cause of arbitration has arisen in July, 1979, the petitioner did not take any action from then.
On the other hand when notice was issued in November, 1989 the respondent immediately approached the Court and sought its leave to rescind the agreement explaining the circumstances.
The Court exercised the jurisdiction in permitting the respondent to revoke the arbitration agreement.
The question then is whether it is justified? Section 37 (1) of the Act provides that all the provisions of the Indian Limitation Act, 1908 (since amended Act came into force in 1963) shall apply to arbitrations as they apply to the proceedings in court.
Sub section (2), employing non obstenti clause, says that notwithstanding any term in an arbitration agreement to the effect that no cause of action shall accrue in respect of any matter required by the agreement to be referred until an award is made under the agreement, a cause of action shall, for the purpose of limitation, be deemed to have accrued in respect of any such matter at the time when it would have accrued but for that term in the agreement.
Sub section (3) thereof states that for the purposes of this section and of the Indian Limitation Act, 1908 an arbitration shall be 366 deemed to be commenced when one party to the arbitration agreement serves on the other party thereto a notice requiring the appointment of an arbitrator, or where the arbitration agreement provides that the reference shall be to a person named or designated in the agreement, requiring that the difference be submitted to the person so named or designated.
Sub sections (4) and (5) are omitted as being not material.
It would, therefore, be clear that the provisions of the Limitation Act would apply to arbitrations and notwithstanding any term in the contract to the contrary, cause of arbitration for the purpose of limitation shall be deemed to have accrued to the party in respect of any such matter at the time when it should have accrued but for the. contract.
Cause of arbitration shall be deemed to have commenced when one party serves the notice on the other party requiring the appointment of an arbitrator.
The question is when the cause of arbitration arises in the absence of issuance of a notice or omits to issue for long time or contract to the contrary? It is stated in Robertson 's History that honest men dread arbitration more than they dread law suits.
The arbitrations differ from legal proceedings proper only in the choice of tribunal and all ordinary defences legally permissible are available to the Parties.
Parties to an arbitration may voluntarily determine among themselves the procedure to be followed including the constitution of the arbitral tribunal to adjudicate the dispute or differences arising from the contract including the power of the arbitrator.
They could also contract restricting the limitation for adjudication.
Subject to the above section 37 of the Act regulates the limitation for the arbitration proceedings.
In Ram Dutt Ramkissendass vs Sassoon (E.D) & Co. 1929 (56) Indian Appeals 128, the Privy Council held that although, it is indisputable that, in a modern arbitration, the principles of equity must be applied just as they would now be applied in a court of law, since upon a special case for the opinion of the court under Sec. 7 if the or the Judicature Act, 1925, s.94 (replacing sec.
19 of the ), the court is, and has long been, bound to apply equitable rules and relief.
It is difficult to see how the equitable view of the applicability of Limitation Act, 1908, to a case of debt can be excluded in a legal arbitration.
Although the Limitation Act does not in terms apply to arbitrations, they (their Lordships of the Judicial Committee) think that in mercantile reference of the kind in question it is an implied term of the contract that the arbitrator must decide the dispute according to the existing law of contract, and that every defence which would have been open in a court of law can be equally proponed for the arbitrator 's decision unless the parties have agreed which is not suggested here to exclude that defence.
Were it otherwise, a claim for breach of contract containing a reference cause could be brought at any time, it might be 20 or 30 years after the cause of action had arisen, although the legislature has prescribed a limit of three years for the enforcement of such a claim in any application that 367 might be made to the law courts.
This ratio was approved by House of Lords in Naamlooze Vennootschap Handels En Transport Maatschappij "Vulcaan ' vs A/S J. Ludwig Mowinckels Rederi [1938]2 All E.R. 152, Lord Maugham, L.C. speaking for the unanimous Court held that in considering whether the Limitation Act would apply to arbitration (pre statutory arbitrations), it was held that this seems to be a good reason for holding that there may well be cases where the object of both parties to the arbitration might be to determine whether a sum was due, though possible or certainly not recoverable by legal Proceedings.
We are, however, here concerned with an arbitration in which legal rights are being advanced or denied If the defence of the statute is to be deemed in admissible, it would seem that the claims of one party or the other might be put forward long after the persons who could give useful evidence had died and the most relevant documents had been destroyed If the legal defence were to be excluded, it was in this agreement that one would expect to find such a provision The matter does not rest cause we have to consider how far the suggested elimination of defences available at law or in equity must logically be held to extent in other arbitrations.
If the party defending may not rely on the Statute of Limitations, can he rely on the Statute of Frauds, or the Act partially replacing it? Could he rely in a commercial arbitration on the Garming Act? A number of like questions might be asked It is indisputable that, in a modem arbitration, the principles of equity must be applied just as they would now be applied in a court of law.
In the concluding findings it is said thus: "In the circumstances of this case as above stated, it is, I think, impossible to come to the conclusion that there was an implied agreement between the parties to exclude any defence under any Statute of Limitations.
In the absence of such an implied agreement, the Limitation Act was open to the respondents, and the consequence must follow that the arbitrator was acting rightly in admitting the defence under the statute".
In Pegler vs Railway Executive 1948 Appeal Cases 332 at 338, House of Lords held that just as in the case of actions the claim is not to be brought after the expiration of a specified number of years from the date on which the cause of action accrued, so in the case of arbitrations, the claim is not, to be put forward after the expiration of the specified number of years from the date when the claim accrued.
While accepting the interpretation put up by Atkinson, J. as he then was in the judgment under appeal, learned Law Lords accepted the conclusion of Atkinson, in the Language thus: "the cause of arbitration" corresponding to "the cause of action" in litigation "treating a ' cause of arbitration in the same way as a cause of action would be treated if the proceeding were in a court of law.
368 In West Riding of Yorkshirs Country Council vs Huddersfield Corporation , the Queens Bench Division, Lord Goddard, C. J. (as he then was) held that the Limitation Act applies to arbitrations as it applies to actions in the High Court and the making, after a claim has become statute barred, of a submission of it to arbitration, does not prevent the statute of limitation being pleaded.
Russell on Arbitration, 19th Edition, reiterates the above proposition.
At page 4 it was further stated that the parties to an arbitration agreement may provide therein, if they wish, that an arbitration must be commenced within a shorter period than that allowed by statute; but the court then has power to enlarge the time so agreed.
The period of limitation for commencing an arbitration runs from the date on which the cause of arbitration accrued, that is to say, from the date when the claimant first acquired either a right of action or a right to require that an arbitration takes place upon the dispute concerned.
Therefore, the period of limitation for the commencement of an arbitration runs from the date on which, had there been no arbitration clause, the cause of action would have accrued.
Just as in the case of civil actions the claim is not to be brought after the expiration of a specified number of years from the date on which the cause of action accrued, so in the case of arbitrations, the claim is not to be put forward after the expiration of the specified number of years from the date when the claim accrued.
In Russell on Arbitration, at pages 72 and 73 it is stated thus: "Disputes under a contract may also be removed, in effect, from the jurisdiction of the court, by including an arbitration clause in the contract, providing that any arbitration under it must be commenced within a certain time or not at all, and going on to provide that if an arbitration is not so commenced the claim concerned shall be barred.
Such provisions are not necessarily found together.
Thus the contract may limit the time for arbitration without barring the claim depriving a party who is out of time of his right to claim arbitration but leaving open a right of action in the courts.
Or it may make compliance with a time limit a condition of any claim without limiting the operation of the arbitration clause, leaving aparty who is out of time with the right to claim arbitration but so that it is a defence in the arbitration that the claim is out of time and barred.
369 Nor, since the provisions concerned are essentially separate, is there anything to prevent the party relying on the limitation clause waiving his objection to arbitration whilst still relying on the clause as barring the claim.
" At page 80 it is stated thus: "An extension of time is not automatic and it is only granted if "undue hardship" would otherwise be caused.
Not all hardship, however, is "undue hardship," , it may be proper that hardship caused to aparty by his own default should be borne by him and not transferred to the other party by allowing a claim to be reopened after it has become barred.
The mere fact that a claim was barred could not be held to be "undue hardship.
" The Law of Arbitration by Justice Bachawat in Chapter XXXVII at p.549 it is stated that just as in the case of actions the claim is not to be brought after the expiration of a specified number of years from the date when the claim accrues, as also in the case of arbitrations, the claim is not to be put forward after the expiration of a specified number of years from the date when the claim accrues.
For the purpose of section 37 (1) 'action ' and cause of action ' in the Limitation Act should be construed as arbitration and cause of arbitration.
The cause of arbitration, therefore, arises when the claimant becomes entitled to raise the question, i.e. when the claimant acquires the right to require arbitration.
The limitation would run from the date when cause of arbitration would have accrued, but for the agreement.
Arbitration implies to charter out timous commencement of arbitration availing the arbitral agreement, as soon as difference or dispute has arisen.
Delay defeats justice and equity aid the promptitude and resultant consequences.
Defaulting party should bear the hardship and should not transmit the hardship to the other party, after the claim in the cause of arbitration was allowed to be barred.
The question, therefore, as posed earlier is whether the court would be justified to permit a contracting party to rescind the contract or the court can revoke, the authority to refer the disputes or differences to arbitration.
Justice Bachawat in his Law of Arbitration, at p. 552 stated that "in an appropriate case leave should be given to revoke the authority of the arbitrator '.
It was also stated that an ordinary submission without special stipulation limiting or conditioning the functions of the arbitrator carried with it the implication that the arbitrator should give effect to all legal defences such as that of limitation.
Accordingly the arbitrator was entitled 370 and bound to apply the law of limitation.
Section 3 of the Limitation Act applied by way of analogy to arbitration proceedings, and like interpretation was given to section 14 of the Limitation Act, The Proceedings before the arbitration are like civil proceedings before the court within the meaning of section 14 of the Limitation Act, By consent the parties have substituted the arbitrator for a court of law to arbiter their disputes or differences.
It is, therefore, open to the parties to plead in the proceedings before him of limitation as a defence.
In Mustiu and Boyd 's Commercial Arbitration (1982 Edition) under the heading "Hopeless Claim" in Chapter 31 at page 436 it is stated thus: "There is no undoubtedly jurisdiction to interfere by way of injunction to prevent the respondent from being harassed by claim which can never lead to valid award for example in cases where claim is brought in respect of the alleged Arbitration agreement which does not really exist or which has ceased to exist.
So also where the dispute lies outside the scope of Arbitration agreement".
The case on hand is clearly and undoubtedly hopelessly barred claim as the petitioner by his conduct slept over his right for more than 10 years.
Statutory arbitrations stand apart.
In these circumstances it is an exceptional case and the courts below have justifiably exercised their discretionary power, and jurisdiction under sections 5 and 12(2) (b) to permit the respondent to rescind the arbitration agreement and declared that the arbitration agreement shall cease to have effect with respect to the difference or dispute referred to in the notice of the petitioner and relieved the parties from the arbitration agreement.
The Special Leave Petitions are accordingly dismissed without costs.
U.R Appeal dismissed. [/INST] On May 27, 1978, the petitioner entered into an arbitration agreement under which he had to execute a certain work within 9 months.
He averred that he had sent his bills on July 12, 1979, but payment was not made.
On November 28, 1989, for the first time he sent a notice to the respondent for reference to arbitration.
The respondent approached the High Court under Ss. 5,12 and 33 of the .
A learned Single Judge held that the claim was hopelessly barred by limitation, and cancelled the arbitration agreement.
A Division Bench dismissed the Appeal.
On appeal, this Court addressed itself to 2 questions: Whether the High Court could permit a party to rescind an arbitration agreement; and whether delay can be a ground for rescinding such agreement.
Dismissing the appeal, this Court, HELD:1.
The Court has the power and jurisdiction under Ss. 5 and 12 to grant leave to the applicant in exceptional circumstances to revoke the contract of arbitration.
The Court should exercise the power sparingly, cautiously and with circumspection in permitting a party to rescind an arbitration agreement he had entered into voluntarily.
(365 B) 2.By virtue of section 37 of the , the provisions of the Limitation Act would apply to arbitrations, notwithstanding any term in the contract to the contrary.
(366 B) 3.The period of limitation for the commencement of an arbitration runs from the date on which, had there been no arbitration clause, the cause of 362 action would have accrued, just as in the case of actions the claim is not to be brought after the expiration of a specified number of years from the date on which the cause of action accrued, so in the case of arbitrations, the claim is not to be put forward after the expiration of the specified number of years from the date when the claim accrued.
(368 D E) Ram Dutt Ramkissen dass vs
Sassoon(E.D.)&Co.(1929)(56)1A 128(PC); Naamlooze Vennootschap Handels En Transport Maatschappij ' Vulcan ' vs A/S J. Ludwig Mowinckels Rederi [1 938] 2 All ER 152; Pegler vs Railway Executive at 338 and; West Riding of Yorkshire Country Council Huddersfield Corporation [1957] 1 AR ER 669 and Russell on Arbitrations; Justice Bachawat Law of Arbitration, applied.
Delay defeats justice: Defaulting party should hear the hardship and should not transmit the hardship to the other party, after the claim in the cause of arbitration was allowed to he barred.
(369 F ) Mustiu and Boyd 's Commercial Arbitration (1982 edn.), referred to.
The claim in the case on hand is undoubtedly hope lessly barred by limitation as the petitioner by his conduct slept over his right for more than 10 years.
The High Court justifiably exercised the discretionary power and jurisdiction under Ss. 5 and 12 (2) (b) in permitting the respondent to rescind the agreement.
(370 E) </s> |
<s>[INST] Summarize the following judgement: Appeal No. 236 of 1954.
Appeal from the judgment and order dated October 9,1953, of the Patna High Court in Misc.
Judicial Case No. 181 of 1953.
Mahabir Prasad, Advocate General for the State of Bihar, Bhagwat Prasad and section P. Varma, for the appellants.
P. R. Das, A. C. Roy and R. R. Biswas, for the respondent.
April 15.
The Judgment of the Court was delivered by 79 615 section K. DAS, J.
This is an appeal from the judgment and order of the High Court of Patna dated October 9, 1953, in Miscellaneous Judicial Case No. 181 of 1953 of that Court.
It relates to a temple commonly known as the Baidyanath temple situate in the town of Deoghar within the limits of Santal Parganas in the State of Bihar.
For the purposes of this appeal it will be necessary to refer to some earlier litigation about this temple.
The history 'of this temple, it is not disputed, goes back to remote antiquity.
According to Hindu tradition referred to in the Siva Purana and Padma Purana, extracts from which, with translations, are given by Dr. Rajendra Lal Mitra in his paper on the Temples of Deoghar (see Journal of the Asiatic Society of Bengal, Part 1, 1883, quoted in the Bihar District Gazetteer relating to Santal Parganas, 1938 edition ' pp. 373 376), the origin of the temple is traced to the Treta Yuga, which was the second age of the world by Hindu mythology.
Side by side with Hindu tradition, there is a Santal tradition of the origin of the temple given by Sir William Hunter (see the Annals of Rural Bengal, p. 191 ; Satistical Account of Bengal, Vol.
XIV,, p. 323).
But these materials afford no evidence as to when and by whom the idol was established or the temple was built.
The temple sheltering the " lingam " and dedicated to Mahadeva stands in a stone paved quadrangular courtyard.
The courtyard contains eleven other temples, smaller in size and of less importance than that of Baidyanath.
Pilgrims visit the temples in large numbers and make offerings of flowers and money in silver or gold; rich people offer horses, cattle, palanquins, gold ornaments and other valuables and sometimes, rent free land in support of the daily worship.
There is a high or chief priest (Sardar Panda) who it appears used to pay a fixed rent to the Rajas of Birbhum during the Muhammadan regime, and the administration of the temple was then left entirely in the hands of the high priest.
It may be here stated that about 300 families of " pandas ", who belong to a branch of Maithil Brahmins, were attached to the 627 temple and earned their livelihood by assisting pilgrims in performing the various ceremonies connected with the worship of the God.
When the British rule began, it was decided to take over the management of the temple, and with this object an establishment of priests, collectors and watchmen was organised in 1787 at Government expense.
The revenue soon fell off, as the chief priest beset the avenues to the tem ples with emissaries, who induced the pilgrims to make their offerings before approaching the shrine.
(See the District Gazetteer, ibid, p. 383).
In 1791 Government relinquished its claim to a share of the offerings and entrusted the management of the temple to the head priest on his executing an agreement to keep the temples in repair and to perform all the usual ceremonies.
This agreement was entered into by Ram Dutt (the ancestor of the present respondent), then high priest of the temple and Mr, Keating who was then Collector of the district.
According to Mr. Keating the income of the temple in 1791 consisted of the offerings of the proceeds of 32 villages and 108 bighas of land which he estimated at Rs. 2,000 a year; some years later the total income was estimated at Rs. 25,000 a year.
Under the system introduced by the agreement of 1791, the mismanagement of the temple was a source of constant complaint; the temple and " ghats " were frequently out of repair and the high priest was charged with alienating villages from the temple and treating his situation as a means of enriching himself and his family.
On the death of the high priest in 1820 a dispute over the succession arose between an uncle and a nephew.
The nephew Nityanand was eventually appointed, but neglected to carry out the terms of his appointment.
Finally, Nityanand was charged with malversation of the funds and the uncle Sarbanand was appointed in his stead in 1823.
There was a faction which was opposed to Sarbanand 's retention in office and asked for Government interference in the internal management of the temple.
In 1835 Government declined all interference in the matter and the parties were left to have recourse to the established courts of law.
Sarbanand 628 died in 1837 and Iswaranund Ojha, son of Sarbanand Ojha, was subsequently elected Sardar Panda.
Iswaranund was succeeded by his grand son, Sailajanund Ojha.
There were, however, frequent disputes between the high priest and the " pandas " regarding the control of the temple and in 1897 a suit was filed under section 539 (now section 92) of the Code of Civil Procedure in the Court of the District Judge of Burdwan.
This was Suit No. 18 of 1897 which was decided by the learned Additional District Judge of Burdwan by his judgment dated July 4, 1901.
Sailajanund Ojha was dismissed by the order of the court, as he by his conduct and behavior and by causing loss to the Debutter properties rendered himself unfit and disqualified to hold the post of Sardar Panda and trustee of the temple of Baidyanath.
It was further ordered by the learned Additional District Judge in the decree granted by him that some fit person be elected as Sardar Panda by the " pandas " of the temple and that the affairs of the temple be managed under a scheme which was framed by the learned Additional District Judge and formed a part of the decree.
Under this scheme three persons were to be appointed to look after the temple and its properties and for a proper administration of the same.
One of these three persons was to be elected from amongst the descendants of Ram Dutt Jha.
After this Umesbanund Dutt Jha, second son of Iswaranund Ojha, was elected Sardar Panda.
On the death of Umeshanund Dutt Jha, Bhabapritananda Ojha, who was the petitioner in the High Court and is now respondent before us, was appointed Sardar Panda.
Bhabapritananda is the grand son of Sailajanund Ojha, and we.
shall hereinafter refer to him as the respondent.
The scheme which was framed as a result of the decision in Civil Suit No. 18 of 1897 was confirmed by the Calcutta High Court and the decision of the High Court is reported in Shailajananda Dut Jha vs Umeshanunda Dut Jha (1).
This scheme was modified in a subsequent litigation in 1909, when one of the members of the committee applied to the District Judge (1) (19O5) 2 C.L.J. 460.
629 for a modification of the scheme.
The application was first dismissed, but the matter was taken to the Calcutta High Court, and on September 8, 1910, that Court on the authority of the decision of the Judicial Committee in Prayag Doss vs Tirumala (1) and with the consent of counsel on both sides, directed the insertion of two clauses in the decree ; by one of these clauses, liberty was reserved to any person interested to apply to the District Court of Burdwan with reference to the carrying out of the directions of the scheme and by the other clause, liberty was reserved to any person interested to apply from time to time to the Calcutta High Court for any modification of the scheme that might appear necessary or convenient.
Under these two clauses the members of the committee subsequently applied to the District Judge of Burdwan that certain directions might be given to the high priest ; the high priest opposed the application on the ground that it was in essence an application for modification of the scheme and could be entertained only by the High Court.
The learned District Judge overruled this objection.
The matter was again taken to the Calcutta High Court and that Court directed (1) that the committee must prepare ail annual budget of the income and expenditure; (2) that provision must be made for quarterly audit and annual inspection of the accounts; (3) that provision should be made for joint control of the temple funds after they have been realised ; (4) that there must be no undue interference on the part of the committee with the high priest in the internal management of the temple; and (5) that no one who has any pecuniary interest in the temple properties or is a creditor of the endowment should serve on the committee.
The High Court further directed that clauses embodying the aforesaid five directions should be inserted in the scheme.
This decision of the High Court is reported in Umeshananda Dutta Jha vs Sir Ravaneswar Prasad Singh (2).
We now come to more recent events which gave rise to Miscellaneous Judicial Case No. 181 of 1953 in the (1) (196) I.L.R. (2) 630 Patna High Court.
The Bihar Hindu Religious Trusts Act, 1950 (Bihar I of 1951), hereinafter referred to as the Act, received the President 's assent on February 21, 1951, and came into force on August 15. 1951.
This Act established the Bihar State Board of Religious Trusts to discharge the functions assigned to the Board by the Act.
Sometime in August 1952 the President of the Bihar State Board of Religious Trusts acting under section 59 of the Act asked the respondent to furnish a statement in respect of the Baidyanath temple and the.
properties appertaining thereto.
The respondent wrote back to say that the administration of the temple and its properties was in the hands of a committee constituted under a scheme made by the District Judge of Burdwan and approved by the Calcutta High Court, and these Courts being outside the jurisdiction of the Bihar Legislature, the Act did not apply to the temple and the respondent was not in a position to carry out the directions of the President of the Bihar State Board of Religious Trusts which might be in conflict with those of the Calcutta High Court.
The Board, however, proceeded to assess and demand payment of Rs. 1,684 6 6 as fee payable by the respondent in respect of the Baidyanath temple to it under section 70 of the Act.
The respondent then made an application under article 226 of the Constitution to the High Court of Patna, which application gave rise to Miscellaneous Judicial Case No. 181 of 1953.
On various grounds stated therein, the respondent con.
tended that the Act was ultra vires the Bihar Legislature ; he further contended that even if intra vires, the Act properly construed did not apply to the Baidyanath temple and the properties appertaining thereto by reason of the circumstance that the said temple and its properties were administered under a scheme made by the court of the District Judge of Burdwan and approved by the Calcutta High Court both of which are situate outside the territorial 'limits of Bihar.
The State of Bihar, the Bihar State Board of Reli.
gious Trusts and the President thereof, now appellants before us, contested the application.
Relying on the 631 principles (1) that there should be as far as possible no conflict or clash of jurisdiction between two equally competent authorities and (2) that no intention to exceed its own jurisdiction can be imputed to the Bihar Legislature and of two possible constructions of the Act, the one that would make it intra vires should be preferred, the High Court came to the conclusion that the expression " religious trust " as defined in section 2 (1) of the Act must be construed not in the plain and grammatical sense but must be cut down so as to exclude such religious trusts as are administered under a scheme made by a court situate outside the territorial limits of Bihar and, therefore, the Act did not apply to the Baidyanath temple and the President of the Bihar State Board of Religious Trusts constituted under the Act had no jurisdiction to take any proceedings against the respondent under the provisions of the Act.
Accordingly, the High Court allowed the application of the respondent, quashed the proceedings taken against him by the Bihar State Board of Religious Trusts, and issued a writ prohibiting the said Board from taking any further proceedings against the respondent under any of the provisions of the Act.
The State of Bihar, the Bihar State Board of Religious Trusts and its President obtained a certificate under article 132 of the Constitution from the High Court and the present appeal has been filed by them in pursuance of that certificate.
We shall hereinafter refer to them compendiously as the appellants.
We have had before us a number of appeals in which the validity of the Act has been challenged on several grounds and in some of these appeals, further questions were raised as to the application of the Act to private religious trusts and even to public trusts some properties of which are situate outside the State of Bihar.
These appeals we put in four categories.
They have been heard one after another and though we are delivering judgment in each category separate ly, it has been made clear that the reasons for the decision on points which are common to all or some of the appeals need not be repeated in each judgment.
In Civil Appeals Nos. 225, 226, 228, 229 and 248 of 632 1955 (1), which fall in the first category, we have con sidered the questions if the Act is bad on the ground that its several provisions infringe the appellants ' fundamental rights guaranteed under article 14, article 19 (1) (f), and/or articles 25, 26 and 27 of the Constitution, or on the ground that it imposes an unauthorised tax.
We have given reasons for our conclusion that the Act is not bad on any of the aforesaid grounds.
These reasons we do not wish to repeat here; they govern the present appeal also in so far as the Act is challenged on the self same grounds.
In Civil Appeal No. 343 of 1955 (2), which is in the second category, we have dealt at length with the definition clause of the expression " religious trust " in the context of other provisions of the Act, and have come to the conclusion that the Act does not apply to private trusts.
In the appeal under consideration in this judgment the admitted position is that the Baidyanath temple is a public trust; so it was held in the earlier litigation to which we have already referred and the scheme was formulated on that footing in Suit No. 18 of 1897.
In Civil Appeal No. 230 of 1955 (3), which is the third category, we have considered the question if the Act suffers from the vice of extra territoriality by reason of the provisions in section 3, which says that the Act shall apply to all religious trusts, whether created before or after the commencement of the Act, any part of the property of which is situate in the State of Bihar.
We have held therein that two conditions must be fulfilled for the application of the Act (a) the religious trust or institution itself must be in Bihar and (b) part of its property must be situated in the State of Bihar.
Those two conditions are fulfilled in this case; the Baidyanath temple is in Bihar and it is admitted that the properties belonging to the temple lie mainly in Bihar though there are some properties in the districts of Burdwan, Murshidabad and Birbhum in the present State of West Bengal.
Now, we come to the points which have been (1) Mahant Moti Das vs section P. Sahi, see p. 563, ante.
(2) Mahant Ram Saroop Dasji vs section P. Sahi, see P. 583, ante.
(3) State of Bihar vs Charusila Dasi, see p. 601, ante.
633 specially raised in this appeal, which is in the fourth or last category.
On behalf of the appellants it has been very strongly contended that the High Court was in error in relying on the doctrine of comity of jurisdictions and cutting down the scope of the Act on such a doctrine.
It has been submitted that the doctrine of comity of jurisdictions has no application to the facts of the present case and there is no possibility of any conflict or clash of jurisdiction between two equally competent authorities.
It is pointed out that item 28 of the Concurrent List in the Seventh Schedule to the Constitution of India is " Charities and charitable institutions, charitable and religious endowments and religious institutions ".
It is argued that the Bihar Legislature has, therefore, full legislative competence to enact the statute in question, and it has been submitted that if the Act does not suffer from the vice of extra territoriality, then it is good and all courts must obey it.
Under section 4 (5) of the Act, section 92 of the Code of Civil Procedure, 1908, has ceased to apply to any religious trust as defined in the Act ; therefore, no action under section 92, Code of Civil Procedure, can be taken, after the commencement of the Act, in respect of religious trusty in Bihar which are governed by the Act and there can be no question of any conflict of jurisdiction in respect of such trusts as between the Bihar State Board of Religious Trusts and a court in.
Bihar on one side and the courts outside the State of Bihar on the other.
On these submissions, learned counsel for the appellants has argued that the real question for decision is if the Act or any of its provisions suffer from the vice of extra territoriality and if that question is answered in favour of the appellants, then the High Court was in error in cutting down the scope and ambit of the Act by invoking the doctrine of comity of Jurisdictions.
At this stage it is convenient to set out in brief the argument which Mr. P. R. Das, learned counsel for the respondent, has advanced in support of the judgment of the High Court.
In one part of its judgment, the High Court has referred to the principle that every 80 634 statute should be so interpreted and applied, in so far as its language admits, as not to be inconsistent with the comity of nations or with the established rules of international law, and has referred to certain decisions in support of that principle.
Mr. P. R. Das has frankly conceded before us that no question of any inconsistency with, ' the comity of nations or with the established rules of international law arises in the present case and he does not contend that the Act or any of its provisions violate any established rule of international law.
Therefore, it is unnecessary to consider this part of the judgment of the High Court.
Before us Mr. P. R. Das has developed his argument in the following way.
He has first submitted that Suit No. 18 of 1897 which was instituted in the court of the District Judge of Burdwan in respect of the Baidyanath temple and its properties is still pending and the administration of the temple and its properties is being carried on by a committee appointed under a scheme made by the District Judge of Burdwan and later approved and modified by the Calcutta High Court; therefore, the District Judge of Burdwan and the Calcutta High Court are in full seizin of the trust and its properties, and the Bihar Legislature cannot take away or interfere with the jurisdiction of either the District Judge of Burdwan or the Calcutta High Court.
In this connection he has referred to cl. 39 of the Letters Patent of the Patna High Court, particularly to item (a) of the first proviso thereto.
That clause is in these terms: " And We do further ordain that the jurisdiction of the High Court of Judicature at Fort William in Bengal in any matter in which jurisdiction is by these presents given to the High Court of Judicature at Patna ' shall cease from the date of the publication of these presents, and that all proceedings pending in the former Court on that date in reference to any such matter shall be transferred to the latter Court: Provided, first, that the High Court of Judicature at Fort William in Bengal shall continue to exercise jurisdiction (a) in all proceedings pending in that Court on 635 the date of the publication of these presents in which any decree or order, ' other than an order of an interlocutory nature, has been passed or made by that Court, or in which the validity of any such decree or order is directly in question; and (b) in all proceedings (not being proceedings referred to in paragraph (a) of this clause) pending in presents under the 13th, 15th, 22nd, 23rd, 24th, 25th, presents under the 13th, 15th, 22nd, 23rd, 24th, 25th, 26th, 27th, 28th, 29th, 32nd, 33rd, 34th or 35th clause of the Letters Patent bearing date at Westminster the Twenty eighth day of December, in the year of Our Lord One thousand eight hundred and sixty five, relating to that Court; and (c) in, all proceedings instituted in that Court, on or after the date of the publication of these presents, with reference to any decree or order passed or made by that Court: Provided, secondly, that, if any question arises as to whether any case is covered by the first proviso to this clause, the matter shall be referred to the Chief Justice of the High Court of Judicature at Fort William in Bengal and his decision shall be final ".
His argument is that the scheme made by the District Judge of Burdwan and later approved by the Calcutta High Court can be modified only by the Calcutta High Court and that High Court continues to exercise jurisdiction in respect of the scheme under item (a) of the first proviso to clause 39 referred to above, and cl.
41 of the Letters Patent does not empower the Bihar Legislature to amend any of the clauses of the Letters Patent.
He has also submitted that on February 9, 1917, the Calcutta High Court decided that any application for enforcement of the scheme would lie to the District Judge of Burdwan and not to the Deputy Commissioner of Dumka.
It may be stated here that Burdwan is in the State of West Bengal and Dumka in the State of Bihar.
Mr. P. R. Das has contended that in so far as the provisions of the Act interfere with the jurisdiction of courts outside Bihar, they have extra territorial operation and must be held to be bad 636 on that ground; because under article 245 of the Constitution, the Bihar Legislature may make laws for the whole or any part of the State of Bihar, but it cannot make any law which will have extra territorial operation.
He has drawn our attention to the provisions of sections 3, 4 (5) and 28 of the Act, and has laid particular emphasis on the provisions of section 29 of the Act, which provisions, according to him, have extra territorial operation.
Having set out in some detail the arguments which have been advanced before us on behalf of the appellants and the respondent, we proceed now to consider them on merits.
We agree with learned counsel for the parties that no question arises in this case of any conflict or inconsistency with the doctrine of comity of nations or with any established rule of international law.
The question which really arises for decision is if any of the provisions of the Act have extra territorial operation.
This question has two aspects.
First, there is section 3 which says inter alia that the Act shall apply to all religious trusts, any part of the property of which is situated in the State of Bihar.
The argument is that the Bihar Legislature has no power to legislate about trust property which is outside the territorial limits of Bihar and section 3 of the Act in so far as it seeks to operate on trust property outside Bihar makes the Act bad on the ground of extra territorial operation.
This part of the argument has been fully dealt with and rejected in the decision relating to the Charusila Trust, Civil Appeal No. 230 of 1955 (1).
The second facet of the argument is what Mr. P. R. Das has specially emphasised before us in this appeal.
His argument in substance is that the Act by some of its provisions seeks to interfere with the jurisdiction of courts which are outside Bihar, and this in effect is the vice of extra territorial operation from which, according to him, the Act suffers.
We are unable to agree with him in this contention.
Section 3 we have already referred to.
Sub section (5) of section 4 states inter alia that section 92 of the Code of Civil Procedure, 1908, shall not apply to any religious trust (1) State of Bihar vs Charusila Dasi, see p. 601, ante.
637 in the State of Bihar as defined in the Act.
We have considered the effect of this sub section in the decision relating to the Charusila Trust (ibid) and have held that the Act applies when the trust itself, temple or deity or math, is situate in Bihar and also some of its property is in Bihar.
We have pointed out therein that the trust being situatedin Bihar, that State has legislative power over it and over its trustees and their servants or agents who must be in Bihar to administer the trust ; therefore, there is really no question of the Act having extra territorial operation.
In our opinion, this reasoning is equally valid in respect of the argument of Mr. P. R. Das.
If, as we have held, it is open to the Bihar Legislature to legislate in respect of relgious trusts situate in Bihar, then that Legislature can make a law which says, as in sub section
(5) of section 4 of the Act, that section 92 of the Code of Civil Procedure shall not apply to any religious trust in the State of Bihar.
If sub section
(5) of section 4 of the Act is valid as we hold it is, then no question really arises of interfering with the jurisdiction of the District Judge of Burdwan or of the Calcutta High Court in respect of the Baidyanath temple, inasmuch as those courts exercised that jurisdiction under section 92, Code of Civil Procedure, which no longer applies to the Baidyanath temple and the properties appertaining thereto, after the commencement of the Act.
It is true that the Act does put an end to the jurisdiction under section 92, Code of Civil Procedure, of all courts with regard to religious trusts situate in Bihar, but that it does by taking these trusts out of the purview of section 92.
In other words, the Act does not take away the jurisdiction of any court outside Bihar but takes the religious trusts in Bihar out of the operation of section 92 so that a court outside Bihar in exercise of its jurisdiction under section 92 will decline to deal with a religious trust situate in Bihar just as it will decline to entertain a suit under that section regarding a private trust of religious or charitable nature.
Civil Procedure, including all matters included in the Code of Civil Procedure at the commencement of the Constitution, is item 13 of the Concurrent List.
It has not been disputed before us that it is open to the Bihar 638 Legislature to amend the Code of Civil Procedure while legislating in respect of religious endowments and religious institutions in Bihar, and the President 's assent having beep received to the Act, the law made by the Bihar Legislature shall prevail in that State, under.
article 254(2) of the Constitution, in respect of all religious trusts situate in Bihar.
In this view of the matter, it is unnecessary to consider the further questions if Suit No. 18 of 1897 is still pending, the proper scope and effect of cl. 39 of the Letters Patent of the Patna High Court, and which authority can amend the Letters Patent.
Even if Suit No. 18 of 1897 is deemed to be still pending, though we do not so decide, any further action under the scheme in respect of the Baidyanath temple and its properties can be taken either by the District Judge of Burdwan or the Calcutta High Court only if the jurisdiction under section 92, Civil Procedure Code, is still preserved in respect of it.
If that jurisdiction has come to an end in respect of the Baidyanath temple and its properties, then no question of any conflict of jurisdiction between two equally competent authorities arises at all, apart altogether from the more debatable question as to whether the Bihar Legislature on one side and the courts in Bengal on the other can be said at all to be equally competent authorities in respect of a religious trust situate in Bihar.
The question really boils down to this.
Is the Act bad on the ground of extra territorial operation, because it takes certain religious trusts situate in Bihar out of the purview.
of section 92, Code of Civil Procedure ? If the answer to this question is in the negative, then all the hurdles created by the argument of Mr. P. R. Das must disappear; because if the Act is good, it must be bindingonall courts and no question of any conflict of jurisdiction can arise. Learned counsel for the respondent has made a pointed reference to sections 28 and 29 of the Act. Section 28 deals with the general powers and duties of the Board.
We have examined these powers and duties in our decision in connected Civil Appeals Nos.
225, 226, 228, 229 and 248 of 1955 (1) and have held that (1) Mahant Moti Das vs S.P. Sahi, see P. 563, ante.
639 there is nothing in these powers and duties which can be said to have extra territorial operation.
Our attention has been drawn to el.
(j) of section 28 (2) which empowers the Board to sanction on the application of a trustee or any other person interested in the religious B trust the conversion of any property of such trust into another property, if the Board is satisfied that such conversion is beneficial for the said trust.
We have pointed out that these powers and duties are really for the fulfillment of the trust and they do not in any way contravene the rights of the trustees.
Section 29 states : " 29(1).
Where the supervision of a religious trust is vested in any committee or association appointed by the founder or by a competent Court or authority, such committee or association shall continue to function under the general superintendence and control of the Board, unless superseded by the Board under subsection (2).
(2) The Board may supersede any committee or association referred to in sub section (1) which in the opinion of the Board, is not discharging its funetions satisfactorily and, if the Board does so, any decree or order of a Court or authority by which such committee or association was constituted shall be deemed to have been modified accordingly: Provided that before making any order under this sub section, the Board shall communicate to the committee or association concerned the grounds on which they propose to supersede it, fix a reasonable period for the committee or association to show cause against the proposal and consider its explanations and objections, if any.
(3) Such committee or association or any other person interested in the religious trust may, within thirty days of any order of the Board under sub section (2), make an application to the District Judge for varying, modifying or setting aside such order, but, subject to the decision of the District Judge on any such application, the order of the Board shall be final and binding upon the applicant and every person interested in such trust.
640 (4) Where such committee or association has been superseded under sub section (2), the Board may make such arrangements as may be necessary for the administration of the religious trust concerned.
" It has been argued that section 29 in terms gives the Bihar State Board of Religious Trusts power to interfere with a committee appointed by the founder or by a competent court or authority.
The argument is that the Bihar State Board of Religious Trusts can now interfere with the committee appointed under the scheme made by the District Judge of Burdwan and approved by the Calcutta High Court, and can even supersede it.
The answer to this argument is the same as that given before.
Either the Act is bad on the ground of extra territorial operation or it is not.
If the Act is bad on the ground of extra territorial operation, then there is good reason for cutting down the scope and ambit of section 29 of the Act so that it will apply only to committees appointed by a competent court or authority in Bihar.
If, however, ' in respect of a religious trust in Bihar, the Bihar Legislature can amend the Civil Procedure Code and take the trust out of the purview of section 92, Civil Procedure Code, then there is no good reason why the ambit of section 29 should be out down in the manner suggested by the High Court.
It is true that the legislation of a State is primarily territorial and the general rule is that extra territorium jus dicenti impune non paretur.
There is, however, no departure from that general rule when the trust itself is in Bihar and in legislating about that trust, the legislature lays down what should be done to fulfil the objects of the trust and for that purpose puts an end to an old jurisdiction in the sense explained above and creates a new one in its place.
The doctrine of territorial nexus which arises in this connection has been commented on before us at great length by, learned counsel for the respondent.
That doctrine *and the decisions bearing on it we have considered at some length in our decision relating to the Charusila Trust, Civil Appeal No. 230 of 1955.
We do not wish to repeat what we have said therein.
641 The conclusion at which we have arrived is that the Act and its several provisions do not suffer from the vice of extra territoriality in the sense suggested by B learned counsel for the respondent and there is no such conflict of jurisdiction as learned counsel for the respondent has suggested.
Accordingly, the Act is good and applies to the Baidyanath temple and the properties a pertaining thereto.
The result, therefore, is that the appeal succeeds and is allowed with costs.
The judgment and order of the High Court dated October 9, 1953, are set aside and the petition under article 226 of the Constitution made by the respondent must stand dismissed with costs.
Appeal allowed. [/INST] In respect of an ancient temple situate in the State of Bihar, disputes arose in I897 between the high priest and the " pandas " regarding the control of the temple which ultimately led to a suit being filed under section 539 (now section 92) Of the Code of Civil Procedure, in the Court of the District judge of Burdwan and a decree was passed by the Additional District judge, under which a scheme was framed for the proper management of the temple.
The decree was confirmed by the Calcutta High Court and the scheme itself was later modified from time to time by the said High Court.
After the coming into force of the Bihar Hindu Religious Trusts Act, 1950, the President of the Bihar State Board of Religious Trusts, acting under section 59 of the Act, served a notice on the respondent, who had been appointed Sardar Panda for the temple under the scheme, asking him to furnish a statement in respect of the temple and the properties appertaining thereto.
The respondent made an application under article 226 of the Constitution to the High Court of Patna challenging the validity of the action taken against him on the grounds (1) that the Bihar 625 Hindu Religious Trusts Act, 1950, was ultra vires the Bihar Legislature, (2) that the Bihar Legislature did not have legislative competence to deal with the temple in question as some of the properties appertaining to the temple were situate outside Bihar, and (3) that, in any case, the Act did not apply to the temple by reason of the fact that the temple and its properties were administered under a scheme made by the Court of the District Judge of Burdwan and approved by the Calcutta High Court both of which were situate outside the territorial limits of Bihar, as otherwise the Act by some of its provisions would seek to interfere with the jurisdiction of courts which are outside Bihar and thereby get extra territorial operation.
Held: (1) that the Bihar Hindu Religious Trusts Act, 1950, is intra vires the Bihar State Legislature Mahant Moti Das vs section P. Sahi, [1959] SUPP.
2 S.C.R. 563 followed.
(2) that it is competent to the Bihar Legislature to legislate in respect of religious trusts situate in Bihar though some of the properties belonging to the trust may be outside Bihar; State of Bihay vs Charusila Dasi, [1959] SUPP.
2 S.C.R. 601 followed.
(3) that the provision of law in sub section
(5) of section 4 Of the Act by which section 92 Of the Code of Civil Procedure shall not apply to any religious trust in the State of Bihar, is valid; and (4) that as under section 4(5) Of the Act religious trusts in Bihar are taken out of the purview of section 92 Of the Code of Civil Procedure, the jurisdiction of the District judge of Burdwan or the Calcutta High Court to deal with the temple in question under section 92 comes to an end; consequently the Act and its several provisions do not suffer from the vice of extra territoriality and the Act applies to the temple in question and the properties appertaining thereto. </s> |
<s>[INST] Summarize the following judgement: APPEAL NOS. 2107 1 1993.
From the Judgment and Order dated 9.3.1992 of the Punjab and Haryana High Court in Civil Writ Petition Nos.13587, 13588, 13926 of 1991 and L.P.A. No. II 8 of 1992.
Dipankar Prasad Gupta, Solicitor General, N.N. Goswami and H.K. Puri for the Appellants.
Ranjit Kumar, Deepak Sibal, Ms. Binu Tamta and Tarun Aggarwal for the Respondents.
The Judgment of the Court was delivered by MOHAN, J.
Leave granted.
All these appeals raise the identical issue as to the interpretation of the Regulations relating to Diploma in Homeopathic Course.
Hence, they are dealt with under one and the same judgment.
We will refer to the facts of C.W.P. No. 13587/91 which will be enough for appreciating the issues involved.
The respondents joints the Homeopathic Medical College, Chandigarh in the year 1987 to secure a diploma in Homeopathic Medicine and Surgery (hereinafter referred to as 'DHMS ').
The said course is of a duration of four years.
It is divided into 3 1/2 years of academic study and six months of internship.
The course of study, their duration and the scheme of examination are regulated by the Homeopathy (Diploma Course) DHMS Regulations, 1983 (hereinafter called the 'Regulations ').
These Regulations have been framed by the Central Council of Homeopathy under Section 20 of the Homeopathy Central Council Act, 1973.
Part VI of the Regulations deals with examination.
Regulations 8 to 10 occurring in part VI are relevant for our purpose.
Regulation 8 talks of first First D.H.M.S. examination.
That examination has to be held at the end of 12 months of the Course.
Regulation 9 deals with second D.H.M.S. examination to be held at the end of second year.
Regulation 10deals with 3rd D.H.M.S examination, 11/2years subsequent to the passing of the second D.H.M.S. examination.
The respondents appeared in the first year D.H.M.S. annual examination in 312 June, 1988.
Since, they did not get required percentage of pass marks two or more subjects, they had to re appear.
They were permitted to join the 2nd year class after June, 1988.
Under the interim orders of the High Court made in C.W.P.No 437510/1990, they appeared in the examination.
The respondents simultaneously took their third chance for the first year D.H.M.S. examination and finally,cleared all the papers.
They also got re appeared in one or more subjects in the 2nd year D.H.M.S. examination and accordingly, took supplementary examination in June, 1990.
They were declared 'pass ' in that examination.
The respondents joined the third year D.H.M.S. examination and completed the course of study.
In view of that, the Principal of the college in August, 1991 recommended and forwarded their examination forms for the third year Examination to the appellant namely, the Council of Homeopathic System of Medicines, Punjab.
The appellant declined to permit the respondents to take the examination since they had not completed one year course of study between passing the first D.H.M.S. examination and appearing in the second one; hence, they were not eligible to appear in the third year examination.
In other words, the examination has not been passed in accordance with the scheme prescribed under Regulations 8 & 9.
It was under these circumstances, the writ petitions came to be preferred before the High Court of Punjab & Haryana in C.W.P. No. 13587/91 praying for a direction to permit them to take third year D.H.M.S. examination commencing from 3.9. 1991.
The writ petition came up before a Division Bench.
By judgment dated 9.3.1992 allowing that writ petition on the reasoning that if the minimum course of study as provided by Regulations 9 and 10 if held to be mandatory, such a provision would be liable to be struck down in view of the decision of the Court in C.W.P. No. 2307/88, Gurinder Pal Singh vs Punjabi University & Ors. which in turn has followed Single Judge decision reported in Harinder Kaur Chandok (Minor) vs The Punjab School Education Board through its Secretory It is the correctness of this judgment, which has been questioned in all these appeals.
The learned Solicitor General took us through Regulations at length.
Part II deals with course of study.
Regulation 3 states that a Diploma Course in Homeopathy shall be spread over a period of four years.
Those four years include six months compulsory internship after the passing of the final year diploma examination.
When we look at Regulations 8 to 10, three concepts emerge from them: 313 i) Subjects; ii) Time; ii) Marks.
The duration of the examination is, first year: 12 months, Second Year: 12 months; and third year: 18 months.
Regulation 8 states that a candidate may be admitted to the first D.H.M.S. examination.
Similarly, Regulation 9 also states that a candidate shall be admitted to the second D.H.M.S. examination.
Identical language is used under Regulation 10 for Third D.H.M.S. examination.
The submission of the learned Solicitor General is, admission to these examinations is entirely different from 'admission to a course '.
With reference to admission to each of the examination, First, Second and Third year, the respective Regulations 8,9 & 10 prescribe the eligibility.
Unless and until, that eligibility is possessed, admission to an examination is impossible.
The High Court has taken a view that since the duration of the Course is four years, this Regulation must be so construed as to fit in within those four years.
This is wrong.
Regulation 11 talks of re admission to an examination.
That Regulation has nothing to do with the eligibility prescribed under Regulation 8 to 10.
In other words, Regulation 11 cannot control the operation of these Regulations.
Regulation 11 (iv) talks of supplementary examination.
In that supplementary examination, it is open to a candidate to pass in a subject or subjects in which he has failed.
When he so passes, Clause (v) of that Regulation states that he shall be declared to have passed at the examination as a whole.
Even thereafter, if he fails in the subject or subjects at the supplementary examination and he has to appear in the examination in the failed subject or subjects at the next annual examination, Clause (vi) prescribes: i) Production of a certification; ii) In addition, if he had put a necessary attendance, a further course of study in the subject or subjects in which he had failed, the minimum number of chances as per this clause are only four.
If he fails to complete the subjects within these four chances, he will have to prosecute a further course of study in all the subjects of all parts for one year, in other words, he has to start the course afresh and appear for examination in all the 314 subjects.
Thus, it will be clear that all these Regulations talk of re admission to an examination in Order to enable the failed Candidate to undergo supplementary and subsequent examinations.
On completion of subject in any one of those examinations within the four chances, he is declared to have passed the whole examination.
On this count, it is incorrect to hold that passing in the supplementary examination relates back to the original examination.
A careful reading of Regulation 9 requires the satisfaction of the following conditions for appearing in the Second Year D.H.M.S. examination: i) The candidate had passed the First D.H.M.S. examination at the end of one year previously.
This means, there must be a gap of one year between the passing of First year examination and appearing in the Second year examination; ii) Subsequent to the passing of the examination, must have attended the courses of instruction for a period of at least one year.
Therefore, a candidate who fails in the first year examination in a subject or subjects, if he passes any supplementary examination cannot take the Second year examination at the next academic year.
This is because, one year duration had not elapsed between the passing of First year examination in the supplementary examination and taking the Second year examination.
Worse is a case where a candidate passes the First Year examination at the third or fourth attempt.
The High Court has gone wrong in its construction on Regulation 11 that if a candidate passes a supplementary examination, the insistence of one year would require the candidate to wait for one more year.
Therefore, he would inevitably have to study for the next year course from the next academic session.
No doubt, the candidate who passes the supplementary examination will have to sit idle till the next academic session.
That is his own making.
On that score, the attempted harmonious construction by the High Court cannot be supported.
The learned Solicitor General finally submits that none of the Regulations indicate 'a carry forward scheme ' of the subjects.
On the contrary, it is a case of detention every year.
Accordingly, he submits that the Civil Appeals deserve to be allowed.
Mr. Ranjit Kumar, learned counsel in opposition to this, would urge that the interpretation placed by the High court on Regulations 8 to 10 is collect.
Otherwise, no useful purpose would be served by conducting a supplementary examination.
Equally, four chances afforded to the candidate could be rendered nugatory if the interpretation as stated by the learned solicitor General is accepted.
315 Regulation 11 has to be read along with Regulations 8 to 10.
It is not correct to argue that Regulation 11 has nothing to do with admission to an examination.
As a matter of fact, declaration of result of supplementary examination of First D.H.M.S. examination was made on 31.10.1989.
The next annual examination was held in January, 1990 within 2 1/2 months.
The respondents passed the course of First and Second D.H.M.S. examinations.
The result of Second Year D.H.M.S. supplementary examination was declared in January, 1991.
In view of such an inordinate delay in the conduct of examinations, the appellant cannot contend that one year period must elapse between First and Second D.H.M.S. examinations and that the Regulations should have been strictly obeyed.
The Regulations do not say that after First D.H.M.S. examination, a student cannot study for Second D.H.M.S. course and sit for examination provisionally.
The declaration of result for the Second D.H.M.S. course takes place only after he had cleared the First D.H.M.S examination.
As rightly held by the High Court, the word 'supplementary '.
denotes supplementing to or in continuation of the annual examination.
Where , therefore, provisional admission is given for the Second Year D.H.M.S, course, the failure to complete he First D.H.M.S. examination should not be put against the respondent.
If the Regulations are so literally interpreted, that will lead to absurdity.
It will run counter to the object of providing a supplementary examination.
This interpretion is holding the field for a long time.
This was the reason why in Jaininder Mohan and Others vs The council of Homeopathic System of Medicine.Punjab (1992) 1 I.L.R. Punjab 159, the court took a view that passing in the supplementary examination will relate back to the date of annual examination.
Otherwise, as rightly pointed out by the High Court, anamolous results would follow.
In so far as the respondents have completed the examination, equities must weigh in their favour as laid down by this Court in A. Sudha vs University, of Mysore and another ; , Chandigarh Administration & Ors.v Manpreet Singh & Ors. ; , Shirish Govind Prabhudesai vs State of Maharashtra The learned counsel also relies on Orissa Homeopathic Regulations and contends that carry forward is permitted in similar Homeopathic Regulations.
In order to appreciate the respective contentions, we have to analyse the relevant Regulations relating to the Diploma Course in Homeopathy as contained Homeopathy (Diploma course) DHMS Regulations, 1983.
These Regulations are statutory in character in so far as they have come to be framed in exercise of powers conferred under Clauses (i) , (j) & (k) of Section 33 and sub section (1) of Section 316 20 of Homeopathy Central Council Act.
Under Section 20, the Central Council may prescribe the minimum standards of education in Homeopathy required for granting recognised medical qualifications by Universities, Boards and Medical Institutions in India.
Section 33 speaks of powers to make Regulations.
The relevant clauses are (i), (j) & (k).
They are to the following effect. "(i) The courses and period of study of practical training to be undertaken, the subjects of examination and the standards of proficiency therein to be obtained, in any University, Board or Medical institution for grant of recognised medical qualification; (j)the standards of staff, equipment, accommodation, training and other facilities for education in Homeopathy; (k)The conduct of professional examinations, qualifications of examiners and the conditions of admissions to such examinations;" Therefore, the Central council constituted under Section 3 of the Act has power to make Regulations under Section 33 (k) regarding the conditions of admission to the examination.
The very object of this Act is to prescribe minimum standards for admission, duration of course of training, details of curriculum and syllabus of study and the title of degree or diploma.
Since they very from State to State and even from Institute to Institute within a same State, it had become necessary to constitute a Central Council.
The Advisory Committee prescribed a course of four years.
Accordingly, in Regulation 3(i), it is provided that a Diploma Course in Homeopathy shall comprise a course of study, spread over a period of four years.
This includes the compulsory internship of six months duration after passing the final Diploma examination The Regulations contain eligibility to admission, the curriculum, the syllabus etc.in the various parts.
Part VI deals with examination.
Regulation 8 talks of First D.H.M.S. examination.
It is stated in clause (i) : "A candidate may be admitted to the First D.H.M.S. examination provided that he has regularly attended the following course of instruction, theoretical and practical for a period of not less than 12 months at a Homeopathy College to the satisfaction of the head of the college".
317 From the above, it is clear for admission to the First D.H.M.S. examination: i)a student must have regularly attended the courses of instruction, theoretical and practical; ii) for a period of not less than 12 months; iii) to the satisfaction of the head of the College.
As regards the Second D.H.M.S. examination, Regulation 9 takes care.
That states in Clause (i) : "No candidate shall be admitted to the Second D.H.M.S examination unless: a) he has passed First D.H.M.S. examination at the end of one year previously, and b) he has regularly attended the following courses of instruction both theoretical and practical in the subjects of examination for a period of at least one year subsequent to his passing First D.H.M.S. examination from a recognised Homeopathic College to the satisfaction of the head of the college.
" Here again, eligibility for admission to Second D.H.M.S. examination is based on two conditions: i) A student has passed his First D.H.M.S. examination at the end of one year previously.
This means one year must elapse between the passing of the First year examination and taking of Second Year Examination.
ii) Subsequent to the passing the First year a) he must have regularly attended the courses both theoretical and practical; (b) for a period of at least one year; (c) to the satisfaction of the head of the College.
Thus, unless and until, these two conditions are satisfied, a student is 318 ineligible for admission to the Second D.H.M.S. examination.
Clause (iii) states that the Second D.H.M.S. examination shall be held at the end of two years of D.H.M.S. course.
The Third D.H.M.S. course is provided for under Regulation 10.
That reads as follows: "No candidate shall be admitted to the Third D.H.M.S. examination unless: (a) he has passed the second D.H.M.S. examination at the end of 1 1/2 years previously, and (b) has regularly attended the following courses of instructions both theoretical and practical in subjects of examination for a period of at least 11/2 years subsequent to his passing the Second D.H.M.S examination in a recognised Homeopathic College to the satisfaction of the head of the College.
" Here again, the conditions for eligibility for admission to Third D.H.m.s examination are: i) After passing the Second D.H.M.S. examination,one and a half years must have elapsed before taking the Third D.H.M.S examination.
ii) Subsequent to the passing of the Second D.H.M.S. examination: a) he must have regularly attended the courses both theoretical and practical" b) for a period of 11/2 years; c) to the satisfaction of the college.
Thus, it will be clear that the pattern of the examination is as rightly urged by the learned Solicitor General : 12 months for First D.H.M.S. examination, 12 months for Second D.H.M.S. examination and 18 months for Third D.H.M.S examination.
These put together with six months of compulsory internship, make up the four years prescribed for the Course in Regulation 3.
One thing that carefully requires to be noticed is that all the three Regulations 319 8 to 10 speak of admission to an examination, First, Second and Third year respectively.
This is entirely different from admission to a course we find great force in this submission of the learned Solicitor General.
The course of study may consist of four years, but that has nothing to do with the scheme of examination.
Now, we come to Regulation 11.
That requires to be reproduced in full: "(i) Every candidate for admission to an examination shall send to the authority concerned his application in the prescribed form with the examination fee at least 21 days before the date fixed for the commencement of the examination.
(ii)As soon as possible after the examination the examining body shall publish a list of successful candidates arranged in the following manner: (a)the names and roll numbers of the first ten candidates in order of merit, and (b) the roll number of others arranged serially.
(iii)Every candidate shall on passing the examination receive a certificate in the form prescribed by the examining body concerned.
(iv) A candidate who appears at the examination but fails to pass in a subject or subjects may be admitted to supplementary examination in the subject or subjects of that part of the examination in which he has failed to be held ordinarily after six weeks from the publication of result of the first examination on payment of the prescribed fee along with an application in the prescribed form.
(v) If a candidate obtains pass marks in the subject or subjects at the supplementary examination or the subsequent examination, he shall be declared to have passed at the examination as a whole, (vi) If such a candidate fails to pass in the subject or subjects at the supplementary examination in the subject or subjects concerned, he may appear in that subject or subjects at the next annual examination on production of a certification in addition to the certificate required under the regulations, to the effect that he had attended to the satisfaction of the Principle,a further course of study for a period 320 of next academic year in the subject or subjects in which he had failed, provided that all the parts of the examination shall be completed within four chances including the supplementary one, to be counted from the date when the complete examination becomes due for the first time.
(vii)If a candidate fails to pass in all the subjects within the prescribed four chances, he shall be required to prosecute a further course of study in all the subjects of all parts for one year to the satisfaction of the head of the college and appear for examination in all the subjects.
Provided that if a student appearing for the Third D.H.M.S. Hom.examination has only one subject to pass at the end or prescribed chances, he shall be allowed to appear at the next examination in that particular subject and shall complete the examination with this special chance.
(viii)All examinations shall be held on such dates, time and places as the examining body may determine.
(ix) The examining body may under exceptional circumstances partially or wholly cancel any examination conducted by it under intimation to the Central Council of Homeopathy and arrange for conducting reexamination in those subjects within a period of thirty days from the date of such cancellation."
This Regulation deals with results and readmission to an examination.
A close reading of the above brings out the following: In clause (iv) as to what is to happen in the event of a candidate failing to pass in a subject or subjects is spoken to.
He may be admitted to the supplementary examination.
Such a supplementary examination is to ordinarily take place after six weeks from the publication of result of First Examination.
Supposing he passes in that subject or 'subjects in the supplementary examination he is declared to have passed at the examination as a whole.
This should obviously be so; because once he completes all the subjects, he has to necessarily be declared to have passed.
Merely on this language, "declared to have passed at the examination as a whole", we are unable to understand as to how the 321 "doctrine of relation back" could ever be invoked.
The invocation of such a doctrine leads to strange results.
When a candidate completes the subjects only in the supplementary examination, then alone, he passes the examination.
It is that pass which is declared.
If the "doctrine of relation back" is applied, it would have the effect of deeming to have passed in the annual examination, held at the end of 12 months, which on the face of it is untrue.
With this, we pass on to clause (vi) which deals with the stage where the candidate had failed in the First Annual Examination in a subject or subjects and he had not passed in that subject or subjects in the supplementary examination also.
The next annual examination arrives.
The appearance in that examination is conditioned upon production of two certificates: i)A certificate required under the Regulations to the effect that he had attended to the satisfaction of the Principle; ii)A certificate to the effect that he had undergone a further course of study for a period of next academic year in subject of subjects in which he had failed.
Whatever it is, a candidate has to complete all the subjects within four chances.
Should he fail to do so, he will have to undergo the course in all subjects for one yea, unless of course, he gets the exemption as stated in proviso to Clause (vii).
Nowhere do, we find in Regulation 11 system of carry forward '.
On the contrary, it is detention every year.
The High Court was moved by the fact that if a candidate were to pass in supplementary examination after passing the examination, he will have to remain at home till the next annual examination.
So, he is allowed to undergo a course for next academic year provisionally.
On this line of reasoning, clause (iv) & (vi) of Regulation II are sought to be "harmoniously construed '.
We are unable to accept this line of reasoning or the so called harmonious construction because it does violence to the language of the Regulation.
It clearly violates the mandatory requirements of Regulation 9.
It has already been noted as to what those requirements are.
To repeat: i) The lapse of one year period between the passing of First D.H.M.S. examination and taking the Second D.H.M.S. examination.
ii) Subsequent to the passing of the First D.H.M.S. examination to undergo the course of study for one year.
Therefore, if a candidate passes in the supplementary examination, the requirement of one year cannot be enforced.
Worse still is 322 a case of a student who passes only at the next annual examination.
Could he be allowed to take the Second D.H.M.S. examination without even completing the First?
Should he by chance pass the Second D.H.M.S. and not complete the First, since he is still one more chance to take this examination, what is to happen? The situation is absurd.
The same principle should apply to Regulation 10 where the lapse is one and half years.
The word 'supplement ' is defined in Oxford Dictionary, Seventh Edition, page 1072: "think added to remedy deficiencies; part added to book etc, with further information, or to periodical for treatment of particular matter(s) of an angle,(Math.)its deficiency from 180(of.COMPLEMENT); hence Al, ARY, (mem) adjs.(supplementay benefit).
[ME,f.L. sup (plementum f plere fill; see ment]" Therefore,the adjective 'supplementary ' means and examination to makeup the deficiencies.
it stands to reason only when deficiencies are made up, the whole becomes complete.
On this score to say that passing the supplementary examination would relate back to the annual examination will be totally incorrect.
What counts is when the whole is made up.
From that time of making up one year or one and half years must elapse for second or Third D.H.M.S. examinations as the case Amy be.
The stand of the appellants counsel as seen from letter dated 12.12.1989 is as follows: "From: Dr. P.L. Verma, Secretary, Central Council of Homeopathy, 10, Community Centre, Basant Lok, Vasant Vihar, New Delhi 110037.
TO The Chairman, The Council, Homoeopathic Systems of Medicine, 3027 28, Sector 22 D, Chandigarh.
323 Sub:Enforcement of D.H.M.S (Diploma Course) Regulation 1983 w.e.f.1983 84 Academic Sessions students demand for grant of provisional promotion with reappearance in only one subject to the next higher class even beyond supplementary examination even prior to his passing the lower class examination as a whole.
With reference to your letter No. CHSM PV 134 /89/1253 dated 29/ 30 November, 1989 on the subject noted above.
I am to say that the question of permitting to appear simultaneously for two examinations i.e. lower reappear subjects and complete subjects of the next higher class does not arise as no candidate has to be admitted to the Second D.H.M.S. examination unless he had passed the first D.H.M.S. examination at the end of one year previously and has regularly, attended the course for one year.
Similarly, no candidate shall be admitted to the Third D.H.M. section examination unless he has passed the second D.H.M.S. examination 1 1/2 years previously and has also attended the course for a period of 1 1/2 years subsequent to his passing of the Second D.H.M.S. Examination.
COUNCIL OF HOMOEOPATHIC SYSTEM OF MEDICINE 3027 28, Sector 22 D CHANDIGARH (UT) No. CHCH PV 9134/89/AT 198 200 Dated 5.2.90 Copy forwarded to the Principal, Lord Mahaveera Homeopathic Medical College, Ludhiana/Abohar/Chandigarh for information and necessary action.
This may please be notified for information of all the students under intimation to the undersigned.
The above guidelines/directions of the Central Council may please be strictly followed and observed in respect of matters indicated therein.
sd/ (R.K. Sharma) Registrar, No.CHMS/PV/134/89/AI 201 210 Dated 5.2.90.
" This stand in our opinion is correct.
If a student were to sit idle at home after passing the supplementary 324 examination that is his own making.
To avoid such a situation, the Regulation cannot be construed causing violence to the language.
These Regulations are plain enough and are susceptible only to literary interpretation.
In 'Maxwell on the Interpretation of Statutes ' 12th Edition, it is stated at page 29 as under: "Where the language is plain and admits of but one meaning, the task of interpretation can hardly be said to arise.
"The decision in this case," said Lord Morris of Borth y Gest in a revenue case, "calls for a full and fair application of particular statutory language to particular facts as found.
The desirability or the undesirability of one conclusion as compared with another cannot furnish a guide in reaching a decision." (Shop and Store Developments Ltd. vs I.R.C. (1967) 1 A.C. 472).
Where, by the use of clear and unequivocal language capable of only one meaning, anything is enacted by the legislature, it must be enforced however harsh or absurd or contrary to common sense the result may be.(Cartledge vs E. Jopling & Sons, Ltd.)
The interpretation of a statue is not to be collected from any notions which may be entertained by the court as to what is just and expedient: (Gwynne vs Burnell Words are not to be construed, contrary to their meaning, as embracing or excluding cases merely because no good reason appears why they should not be embraced or excluded.
(Whitehead vs James Stott Ltd. The duty of the court is to expound the law as it stands, and to "leave the remedy (if one be resolved upon) to others." (Sutters vs Briggs We construe the Regulations as they stand without introducing any element of ambiguity or absurdity.
The manner in which the respondents have passed the examination is set out in the following tabulated statement: "C.W.P. No. 13926 of 1991 Miss Kamaljit & eight others of L.M. Homoeopathic Medical College, Ludhiana.
1st prof.Annual/88 Supp/88 Annual/89 Respondent No. Re appear Re appear Pass 325 1, Miss Kamaljit in 3 in 2 Contd.d/o Sawam subjects subjects Singh (Admitted in 1987) Resp.2, Re appear pass Sh.Narinder in 2 Contd Kumar s/o subjects Satya Pal Goyal (Admitted in 1987) Resp.No. 3 Shri Re appear pass Contd.Mohd Ramzan in 3 Thind s/o SH. subjects Moh. Yousaf (Admitted in 1987) Resp No.4 Shri Re appears Re appears pass " Naresh Kumar in 3 subjects in 2 subjects Resp.No.5 Shri Re appear Re appear pass " Jaininder Mohan in 2 in 1 s/o Shri Sham Lal subjects subject (Admitted in 1987) Resp.No. 6 Shri Re appear Re appear pass " Kulbir Singh s/o in 3 in 2 Sh.
Tattan Singh subjects subjects (Admitted in 1987) Res.No. 7 Re appear pass " Narinder Singh in1 s/o Sh.Sant subject Singh (Admitted in 1987) Res.
No. 8 Inderjit Mehta d/o Anant Ram Mehta (Admitted in 1987) Resp.No. 9 Fail Re appear pass
Tejvinder Singh, in1 s/o Jaswant Singh (Admitted in 1987) 326 Continued Part IInd Prof. (CWP No. 481of 1991)
3rd Prof. (CWP No: 13926/91) Suppl./89 Annual/90 Suppl/91 Re appear Re appear Re appear Allowed to appear in 3 in 3 in1 as per court subjects subjects subject order dt.6.9.91 by the Principal of L. Homoeopathic Medical College.
Re appear Re appear pass As per court in 3 in1 order dt.6.9.91 subjects subject (without court order)
Re appear Re appear pass Not appeared in 4 in 1 subjects subject
Re appear Re appear pass As per court in 3 in1 orderdt 6.9.91 Fail
Re appear pass As per court in 2 order subjects dt.6.9.91 Re appear Re appear pass
As per court in 1 pass Order subject dt.6.9.91 Re appear Re appear pass Allowed to in 2 in 2 appear as subjects subjects per Court order dt.6.9.91"
Mr. Ranjit Kumar pleads before us that equities must weigh in favour of students.
With reference to that plea, we hold that he students who had completed the whole course, attended all the courses of study for the three sessions of 12 months, 12 months and 18 months respectively and had passed all the examinations in all the subjects, though not in the sequential order required by the 327 regulations, it appears to us that the submission of the counsel for the respondents that they being required to go through the courses all over again and take the examinations after attending the courses afresh, might lead to hardship and might require consideration.
In the words of Anne Sophie Swetchine: "The world has no sympathy with any but positive griefs; it will pity you for what you lose, but never for what you lack.
We think that their cases may perhaps have to be examined from the point of these equities by the Council of Homeopathic System of Medicines.
The candidates who, as on today, have attended all the courses and have passed all the examinations might make an appropriate representation to the Council of Homeopathic System of Medicines (the appellant) to consider their cases.
The representation shall be filed within a period of four weeks from today.
The Council of Homeopathic System of Medicines (the appellant) will take appropriate decision within one month thereafter.
The Council in doing so shall bear in mind all the relevant circumstances, including, perhaps the spirit of the corresponding regulations under the Bihar Act, in which such sequential purpose is not insisted upon. [/INST] The respondents appeared in the first year D.H.MS (Diploma in Homeopathic Medicine and Surgery) annual examination in june,1988.They had to re appear as they did not get the required percentage of pass marks in two or more subjects.
They were permitted to join the second year class after June, 1988.
Under the interim orders of the High Court, they appeared in the second year annual examination.
Simultaneously, the respondents appeared in the first year D.H.MS.
examination and cleared all the papers.
After re appearing in one or more subjects in the second year Supplementary examination in June, 1990, they were declared passed in the 2nd year D.H.M.S. examination.
The respondents joined the third year D.H.M.S. course and completed the course of study.
When their examination forms were forwarded to the appellant Council, they declined to permit the respondents to appear in the 3rd year D.H.M.S. annual examination, because they did not complete one year course of study between passing the first D.H.M.S. examination and appearing in the second year course.
The respondents preferred a writ petition before the High Court to direct the appellants to permit them to appear in the third year DHMS examination, commencing from 3.9.1991.
Following the view taken in the decision of the Court in C.W.P. No 2307/ 88.
Gurinder pal Singh vs Punjabi University & Ors., which was followed in Harinder Kaur Chandok (Minor) v The Punjab School, Education Board through its Secretary, , the High court allowed the writ petition of the respondents.
Against that order of the High Court, the appeal (C.A.No. 2107/93) was filed by special leave.
The appellants submitted that the High Court was wrong in its construction on regulation 11 of the Homeopathy (Diploma Course) DHMS Regulations, 1983; that if a candidate passed on supplementary examination, he would have to wait till the next academic session; that none of the Regulations indicated carry forward scheme of the subjects, but on the contrary,it was a case of detention every year.
The respondents urged that the interpretation placed by the High Courts on Regulations 8 to 10 was correct; that four chances afforded to the 308 candidate could be rendered nugatory, if the interpretation as stated by the appellants was accepted; that the Regulations did not say that after First D.H.M.S. examination, a student could not study for Second D.H.M.S. course and sit for examination provisionally; that the declaration of result for the Second D.H.M.S. course took place only after a student cleared the First D.H.M.S. examination; that if the Regulations were literally interpreted, that would lead to absurdity and it would run counter to the object of providing a supplementary examination.
As the other appeals (C.A.Nos.
2108 10/93) contained identical issue, all the appeals were heard and decided together.
Allowing, the appeals, this Court, HELD:1.1.
The Regulations 8 10 of the Homeopathy (Diploma Course) DHMS Regulations, 1983 are plain enough and are susceptible only to literary interpretation.
Maxwell:Interpretation of Statutes, 12th Edition, Page 29, referred to.
1.2.For admission to the First D.H.M.S. examination: i)a student must have regularly attended the courses of instruction, theoretical and practical; ii) for a period of not less than 12 months; iii) to the satisfaction of the head of the College.
(317 B) 1.3.
Eligibility for admission to Second D.H.M.S. examination is based on two conditions: i) A student has passed his First D.H.M.S. examination at the end of one year previously.
This means one year must elapse between the passing of the First year examination and taking of Second Year Examination.
ii) Subsequent to the passing the First year 309 a) he must have regularly attended the courses both theoretical and practical; b) for a period of at least one year; c) to the satisfaction of the head of the College.
(317 F G) Thus, unless and until, these two conditions are satisfied, a student is ineligible for admission to the Second D.H.M.S. examination.
(317 H, 318 A) 1.4 The conditions for eligibility for admission to Third D.H.M.S examination are: i) After passing the Second D.H.M.S examination, one and a half years must have elapsed before taking the Third D.H.M.S. examination.
ii) Subsequent to the passing of the Second D.H.M.S. examination: a) he must have regularly attended the courses both theoretical an practical; b) for a period of 11/2 years; c) to the satisfaction of the college.
(318 F G) 1.5.
Mandatory requirements of Regulation 9 are; i) The lapse of one year period between the passing of First D.H.M.S. examination and taking the Second D.H.M.S. examination.
ii) Subsequent to the passing of the First D.H.M.S. examination to undergo the course of study for one year.
(321 G) 1.6.
Therefore, if a candidate passes in the supplementary examination, the requirement of one year cannot be enforced.
Worse still is a case of a student who passes only at the next annual examination.
Could he he allowed to take the Second D.H.M.S. examination without even completing the First? Should he by chance pass the Second D.H.M.S. and not complete the First, since he has still one more chance to take this examination, what is to happen? 310 The situation is absurd.
The same principle should apply to Regulation 10 where the lapse is one and half years.
(321 H, 322 A) 1.7.The pattern of the examination is: 12 months for First D.H.M.S. examination, 12 months for Second D.H.M.S. examination and 18 months for Third D.H.M.S examination.
These put together with six months of compulsory internship, make up the four years prescribed for the Course in Regulation 3.
(318 G) 1.8.When a candidate completes the subjects only in the supplementary examination, then alone, he passes the examination.
It is that pass which is declared.
If the "doctrine of relation back" is applied, it would have the effect of deeming to have passed in the annual examination, held at the end of 12 months, which on the face of it, is untrue.
(321 A) 1.9.Whatever it is, a candidate has to complete all the subjects within four chances.
Should he fail to do so, he will have to undergo the course in all subjects for one year unless of course, he gets the exemption as stated in proviso to Clause (vii).
In Regulation 11 there is no 'system of carry forward '.
On the contrary, it is detention every year.
Harmonious construction violates the mandatory requirements of Regulation 9.
(321 E F) 1.10.If a student were to sit idle at home after passing the supplementary examination that is his own making.
To avoid such a situation, the Regulation cannot be construed causing violence to the language.
(323 H, 324 A) 1.11.The candidates who, as on the day of Judgment of these appeals, have attended all the courses and have passed all the examinations might make an appropriate representation to the Council of Homeopathic System of Medicines (The appellant) to consider their cases.
The representation shall be filed within a period of four weeks.
The Council of Homiopathic System of Medicines (the appellant) will take appropriate decision.
(327 C) 2.
The adjective 'supplementary ' means an examination to make up the deficiencies.
Thus, it stands to reason only when deficiencies are made up, the whole becomes complete.
(322 D) Oxford Dictionary, Seventh Edition, page 1072, referred to.
(322 B) </s> |
<s>[INST] Summarize the following judgement: Appeal No. 4474 of 1992.
From the Judgment and order dated 28.7.1992 of the Andhra Pradesh High Court in W.P. No. 9315 of 1992.
WITH WRIT PETITION (CIVIL) NO. 763 OF 1992.
(Under Article 32 of the Constitution of India) A.K. Ganguli, Rakesh K. Khanna for R.P. Singh for the Appellant/ Petitioners.
C. Sitaramiah, Ms. Pushpa Reddy and Mrs. T.V.S. Narasimhachari for the Respondents.
J. CIVIL APPEAL NO.
4474 OF 1992.
The appellant is engaged in the manufacture and sale of products like cast iron pipes, man hole covers, bends etc.
For the assessment year 1989 90, the Commercial Tax Officer, Narayanguda Circle, Hyderabad levied sales tax upon the turn over relating to said products treating them as general goods.
He overruled the petitioner 's contention that the said products are declared goods liable to tax at the rate of 4% only.
The assessees ' appeal preferred before the Appellate Deputy Commissioner is still pending.
Evidently because no stay was granted pending the said appeal, a notice was issued to the appellant calling upon him to pay the tax assessed, against which notice he preferred a writ petition, being W.P. No. 9315 of 1992, in the High Court of Andhra Pradesh.
His main contention in the writ petition was that by virtue of G.O.Ms.
No. 383 Revenue (S) Department dated 17.4.1985, his products are 'declared goods ' and are, therefore, liable to tax only @4%.
The Division Bench of the High Court dismissed the writ petition following its earlier decision in Deccan Engineers vs State of Andhra Pradesh (reported in 1991, Vol.
12 A.P. Sales Tax Generals, 138: 84 STC 92).
In Deccan Engineers, it was held by the A.P. High Court that the expression ' cast iron ' in item(2)(i)of the Third Schedule to the Andhra Pradesh General Sales Tax Act does not include cast iron pipes, man hole covers and bends etc.
In this appeal, the correctness of the said view is questioned.
Third Schedule to the Andhra Pradesh General Sales Tax Act pertains to 436 "declared goods in respect of which a single point tax only is leviable under section 6".
Section 6 was enacted by the A.P. Legislature.to accord with sections 14 and 15 of the .
Item(2) of the third Schedule to the A.P. Act reads as follows: THIRD SCHEDULE (As amended upto 15th August 1987) Declared goods in respect of which a single point tax only is leviable under Section 6.
Description of goods Points of levy Rate of Tax (1) (2) (3) (4) (1) . . . . (2) Iron and steel, that is do *4 do to say; (3002) (i) pig iron and cast iron including ingot moulds, bottom plates, iron scrap, cast iron scrap, runner scrap and iron skill scrap; (ii) steel sends (ingots, slabs, blooms and billets of all qualities, shapes and sizes); (iii)skelp bars, tin bars, sheet bars, hoe bars and sleeper bars; (iv) steel bars (rounds, rods, squares, flats, octagons and hexagons; plain and ribbed or twisted; in coil form as well as straight length); (v) steel structurals (angles, joints, channels, tees, sheet pilling sections.
Z sections or any other rolled sections); (vi) sheets, hoops, strips and skelp, both black and galvanised, hot and cold rolled, plain and corrugated in all qualities, in straight lengths and in coil form, as rolled and in revitted condition; (vii)plates both plain and chequered in all qualities; (viii)discs, rings, forgoings and steel castings; (ix) tool, alloy and special steels of any of the above categories; (x) steel melting scrap in all forms including steel skull, turnings and borings, (xi) steel tubes, both welded and seamless, of all diameters and lengths,including tube fittings; (xii)tin plates, both not dipped and electrolytic and tin free plates; (xiii)fish plate bars, bearing plate bars,crossing sleeper bars, fish plates, bearing plates, crossing sleepers and pressed steel sleepers, rails heavy and light crane rails; (xiv)wheels, tyres, axles and wheel sets; (xv) wire rods and wires rolled, drawn, galvanised, aluminised, tinned or coated such as by copper; (xvi)defectives, rejects, cuttings or end pieces of any of the above categories.
Item (2) of the Third Schedule to the A.P. Act is an exact replica of item (iv) of section 14 of the .
According to section 15 of the Central Act, 'declared goods ' cannot be taxed at a rate exceeding 4% or at more than one stage.
The pracise question that was considered in Deccan Engineering (followed in the judgment under appeal) was whether the 'cast iron castings ' manufactured by the petitioner in that case are cast iron 'within the meaning of item (2) (i) of the Third Schedule to the A.P. Act/ Item (iv) (i) of section 14 of the C.S.T. Act.
At this stage, it is necessary to a certain precisely what does 'cast iron ' mean and how are the products of the appellant manufactured. 'Cast iron ' is defined in the Concise Oxford Dictionary as "a hard alloy of iron, carbon and silicon cast in a mould".
According to New Lexicon Webster 's dictionary of English language, the word ,cast iron ' means "an iron carbon alloy produced in a blast furnace.
It contains upto 4% carbon, and is more brittle, but more easily fused, than steel.
" According to Van Nostrand 's Scientific encyclopedia, 'cast iron ' is "primarily the product of remelting and casting pig iron".
(Interestingly, the expression 'cast iron ' with a hyphen between 'cast ' and 'iron ' has been defined separately as meaning "made of cast iron".
So far as item (iv) of section 14 is concerned, the official publication spells the expression cast iron ' without a hyphen.
Though an authorised publication of the A.P. Act is not placed before us, we presume that the printing of the said expression in the private publication placed before us represents the correct rendering it is without a hyphen.) That 'cast iron ' is different from 'cast iron 438 castings ' is brought out in the following extract from the Judgment in 'Deccan Engineering ', which is equally true in the case of the appellant as well: .LM15 "The assessee manufacturers and sells various goods mentioned earlier made from cast iron which has suffered sales tax.
The controversy is whether these several goods sold by the petitioners continue to be the same declared goods covered by the aforesaid entry or are different commercial commodity liable to levy of State Sales Tax.
The case of the Revenue is that, items sold by the petitioner are, therefore, exigible to tax as a distinct commercial commodity.
It is contended by the learned counsel for the assessee that the relevant entry in section 14 of the Central Act also IIIrd Schedule of the State Act speak of cast iron including ingots, moulds and bottom plates, iron scrap etc.
which indicates that any casting made out of cast iron also should be treated as included in the entry because of the word used 'including ' in the entry.
It is further contended that the Government of India in their letters have clarified that cast iron castings are covered by cast iron and the State Government has also issued the aforesaid G.O. subsequently under Section 42(2) of the State Act clarifying that the cast iron castings are covered within the term cast iron.
" It is thus clear that 'cast iron ' is different from 'cast iron castings ' manufactured by the appellant. 'Cast iron ' is purchased by the appellant and from that ' cast iron ', he manufactures several goods, like manhole covers, bends, cast iron pipes, etc.
In other words, 'cast iron ' used in item (iv) of section 14 of the Central Act is the material out of which the petitioner 's products are manufactured.
Position remains the same, even if the appellant purchases iron and mixes it with carbon and silicon thereby deriving 'cast iron ' and then pours it into different moulds.
In sum, 1 cast iron ' is different from the cast iron pipes, manhole covers, bends etc, manufactured and sold by the appellant.
It cannot be denied, in such a situation that the products manufactured by the appellant are, in commercial parlance, different and distinct goods from the cast iron.
Indeed this aspect is not seriously disputed by Shri Ganguli, the learned counsel for the appellant.
His case is entirely based upon certain clarifications and circulars issued both by the Central and State Governments and in particular upon an order issued by the Andhra Pradesh Government under section 42(2) of the A.P. Act namely viz., G.O. Ms. No. 383 dated 17.4.1985.
It is, therefore, necessary to refer to them.
The earliest clarification is the one contained in the latter dated 28th February, 1977 from the Department of Revenue and Banking (Revenue Wing) 439 Government of India addressed to the Finance/Revenue Secretaries of all State Governments and Union Tarritories.
It reads thus: "Subject:Clarification as to whether the term ' Cast Iron ' mentioned in section 14(iv) (i) of the would cover cast Iron casting.
In continuation of the marginally noted communications and with reference to this Department 's letter No. 24/3n3 ST.
20.11.1973, I am directed to say that the question whether the expression 'cast iron ' used in Section (iv) (i) of the will include ' Cast iron casting ' has been re examined in consultation with the Directorate General of Technical Development, Chief Chemist and the Ministry of Law, Justice & Company Affairs.
This Department has been advised that the existing expression 'cast iron ' in the aforesaid section will cover 'cast iron casting also Yours faithfully, Sd/ Deputy Secretary,to the Govt.
of India.
" Pursuant to the above clarification by the Central Government, the Commissioner of Commercial Taxes, Government of Andhra Pradesh intimated all the Deputy commissioners of commercial Taxes of the State that "Cast Iron Pipes and specials should be subjected to tax as falling under "Cast Iron" liable to tax @4% at the point of first sale in the State under entry 2 of the III Schedule of A.P.G.S.T. Act.
" To the same effect is another clarification issued by the Commissioner of Commercial Taxes, Government of Andhra Pradesh to his subordinate officials on 12.3.1982.
The next clarification from the Government of India was on 3 1st January, 1984.
It appears that the Government of Haryana had written to the Central Government stating that 'cast iron castings ' cannot be treated as declared goods and requested the Ministry of Finance, Government of India to examine the same.
It was in reply to the said query that the letter dated 3 1st January, 1984 was written by the Government of India, Ministry of Finance, Department of Revenue to the Financial Commissioner and Secretary, Government of Haryana, Excise and Taxation Department.
The letter says that the matter has been considered carefully by the Department in consultation with the Ministry of Law and the Director 440 General of Technical Development.
It set out the opinion of the Ministry of Law as also the opinion of the Director General of technical Development.
The latter 's opinion reads: "Cast iron is an alloy iron of Carbon silicon and other alloying elements if required i.e. Cast Iron Castings are covered under the term Cast Iron '.
It may also be clarified that ' cast Iron ' include Gray Iron, Chilled Malleable and Nodular Iron.
Ingot Moulds and Bottom Plates are nothing but Cast Iron Castings".
After setting out the said two opinions, the Government of India expressed its opinion in the following words: "In accordance with the above advice, cast iron castings are covered under the term "Cast Iron. . . .
State Government may kindly bring this position to the notice of Sales Tax authorities of the State.
If considered necessary this may be placed before the Committee of Commissioners of Sales Tax Commercial Tax set up under this Ministry 's letter No. Receipt of this letter may please be acknowledged.
Copies of this letter were communicated to all the State Governments and Admissions of Union Territories.
On 20th July, 1984 the Government of Andhra Pradesh, Revenue (S) Department issued a memorandum referring to the aforesaid letter of the Central Government dated 31st January, 1984 and reaffirming that " 'Cast Iron Castings ' are covered within the item Cast Iron including ingot ' in sub item (i) of item No. 2 of the Third Schedule to the Andhra Pradesh General Sales Tax Act".
On the same day the Principal Secretary,to the Government, Revenue Department addressed a letter to the Secretary, Andhra Pradesh Small Scale Industries Association, Vijayawada informing the Association that "a clarification has been issued to the Commissioner of Commercial Taxes to the effect that "cast iron castings" are covered within the term "cast iron including ingot" in sub item (i) of item No. 2 of the Third Schedule to the Andhra Pradesh General Sales Tax Act, 1957.
" On 27th March, 1984, however, the Commissioner of commercial Taxes, Government of Andhra Pradesh addressed a letter to all his subordinate officers stating that the question whether 'cast iron castings ' fall within the expression, 441 `cast iron ' is pending before the High Court of Andhra Pradesh and, therefore, the collection of arrears of tax due on 'raw castings ' is stayed for a period of one year.
At the end of one year, he said, the matter will be reexamined.
On 17th April, 1985 the Government of Andhra Pradesh issued a clarification contained in G.O.Ms.
No. 383 under sub section (2) of section 42 of the A.P. Act.
It will be appropriate to set out the G.O. in full: "GOVERNMENT OF ANDHRA PRADESH ABSTRACT Andhra Pradesh General Sales Tax Act, 1957 Levy, of Sales Tat on 'Cast Iron Casting ' Clarification issued.
REVENUE (S) DEPARTMENT.
G. O. Ms. No. 383.
Dated 17.04.1985 Read the followings: 1.
2216/SI/83 4.
20.7.84, 2.
No. 2216/83 4, dt.
20.7.84 addressed to Secretary A.P. Small Scale Industries Association, Vijayawada 3.
From the CCT 's Ref.
D.O.FE.Lr.
III (3) /1490/84, dt.
24.7.1984.
Government Memo 3166/SI/84 4, dt.
13.11.1984.
From the CCT.D.O. on CCT 'section Ref.
LI/(i) /1063/82 6.
Memo No. 3166/SI/84 5, dt.
22.2.1985.
From the commissioner of Commercial Taxes, Ref.
A3/LI/1093/82 dt.
19.3.1983.
ORDER: The Andhra Pradesh Small Scale Industries Association Vijayawada requested the Government to clarify whether 'cast iron ' and 'cast iron castings ' are one and the same commercial commodity.
442 2.
This matter was examined at length by the Government of India in consultation with Ministry of Law, (Department of legal Affairs) and Director General of Techinical Development.
The Ministry of Finance, Department of Revenue, Government of India clarified, in their letter F.No.
24/10/80/ ST.
dt. 31.1.1984.
to the effect that "cast iron castings" are covered within the term "cast iron".
Government have examined in detail the legal aspects of the issue and observe that the term "cast iron including ingot, moulds, bottom plates" as in sub item (i) of item 2 in the Third Schedule to the Andhra Pradesh Central Sales Tax covers "cast iron casting" and as such "cast iron castings" is not a different commercial commodity from the commodity "cast iron including ingot, moulds, bottom plates.
Under sub section (2) of section 42 of the Andhra Pradesh General Seles Tax Act, 1957 the Government hereby clarify that the "cast castings" are covered within the term "cast iron including ingot, moulds, bottom plates" occurred in sub item (i) of item 2 of this Third Schedule to the Andhra Pradesh General Sales Tax Act, 1957.
(emphasis added) (BY ORDER IN THE NAME OF THE GOVERNOR OF ANDHRA PRADESH) C.R. NAIR, PRINCIPAL SECRETARY TO GOVERNMENT." Section 42 of the A.P. Act confers upon the State Government the power to remove difficulties.
Sub section (i) confers the said power to meet the problems arising from transition from the previous Sales Tax Act to the present Sales Tax Act.
An order under sub section (1) is required to be published in the A.P. Gazette.
Sub section (2) is general in nature.
An order under sub section (2) is not required to be published in the A.P. Gazette.
Section 42 reads: "42 Power to remove difficulties: (1) If any difficulty arises in giving effect to the provisions of this Act in consequence of the transition to the said provisions from the 443 corresponding provisions of the Acts in force immediately before the commencement of this Act, the State Government may, by order in the Andhra Pradesh Gazettle, make such provisions as appear to them to be neccessary or expedient for removing the difficulty.
(2) If any difficulty arises in giving effect to the provisions of this Act (otherwise than in relation to the transition from the provisions of the corresponding Act in force before the commencement of this Act), the State Government may, by order make such provisions, not inconsistent with the purposes of this Act, as appear to them to be necessary or expedient for removing the difficulty.
" An order issued under section 42, is undoubtedly statutory in character.
A word about the validity of section 42 of the A.P.Act.
Section 37 of the Payment of Bonus Act conferred a similar power upon the Central Government; it further declared that any such order would be final.
It was truck down by a Constitution Bench of this Court in Jalan Trading Co. vs Mill Mazdoor Sabha ; as amounting to excessive delegation of legislative power.
However.
in a subsequent decision in Gammon India Limited etc.
vs Union of India & Ors. etc.
; , it has been explained by another Constitution Bench that the decision in Jalan Trading was influenced by the words occuring at the end of section 37 of the Payment of Bonus Act to the effect that the direction of the Government issued thereunder was final.
Inasmuch as the said words are not there in section 34 of the , it was held, section 34 cannot be said to suffer from the vice of excessive delegation of legislative power.
It is meant "for giving effect to the provisions of the Act," it was held.
Sub section (2) of section 42 of the A.P. Act does no doubt not contain the aforesaid offending words, and can not therefore be characterised as invalid.
Yet, it must be remembered that the said power can be exercised "for giving effect to the provisions of the Act", and not in derogation thereof.
As we shall presently indicate it is necessary to bear this limitation in mind while examining the effect of G.O.Ms. 3,83.
So far as clarifications kirculars issued by the Central Government and/or State Government are concerned, they represent merely their understanding of the statutory provisions.
They are not binding upon the Courts.
IT is true that those clarifications and circulars were communicated to the concerned dealers but even so nothing prevents the State from recovering the tax, if in truth such tax was leviable according to law.
, There can be no estoppel against the statute.
the understanding of the Government, whether in favour or against the assessee, is 444 nothing more than its understanding and opinion.
It is doubtful whether such clarifications and circulars bind the quasi judicial functioning of the authorities under the Act.
While acting in quasi judicial capacity, they are bound by law and not by any administrative instructions, opinions, clarifications or circulars.
Law is what is declared by this Court and the High Court to wit, it is for this Court and the High Court to declare what does a particular provision of statute say, and not for the executive.
of course, the Parliament/Legislature never speaks or explains what does a provision enacted by it mean.
(See Sanjeev Coke Manufacturing Company vs Mls.
Bharat Coking Coal Ltd. and another; , Now coming to G.O. Ms. 383, it is undoubtedly of a statutorily characterbut, as explained hereinbefore the power under section 42 cannot be utilised for altering the provisions of the Act but only for giving effect to the provisions of the Act.
Since the goods manufactured by the appellant are different and distinct goods from cast iron, their sale attracts the levy created by the Act.
In such a case, the government can not say, in exercise of its power under section 42 (2) that the levy created by the Act shall not be effective or operative.
In other words, the said power cannot be utilised for dispensing with the levy created by the Act, over a class of goods or a class of persons, as the case may be.
For doing that, the power of exemption conferred by section 9 of the A.P. Act has to be exercised.
Though it is not argued before us, we tried to see the possibility but we find it difficult to relate the order in G.O. Ms. 383 to the power of the Government under section 9, apart from the fact that the nature and character of the power under section 42 is different from the one conferred by Section 9.
As exemption under section 9 has to be granted not only by a notification, it is also required to be published in the Andhra Pradesh Gazette.
It is not suggested, nor is it brought to our notice, that G.O. Ms. 383 was published in the Andhra Pradesh Gazette.
This does not, however, preclude the Government of Andhra Pradesh from exercising the said power of exemption, in accordance with law, if it is so advised.
We need express no opinion on that score.
The learned counsel for the appellant brought to our notice that the very same Division Bench which rendered the decision in Deccan Engineers had rendered another decision in Tax Revision Case No. 93 of 1990 (The State of A.P. vs Pratap Steel) applying G.O. Ms. 383 and giving relief to the dealer.
It is argued that the Division Bench ought to have taken the same view in Deccan Engineers as well.
We have perused the decision in Pratap Steel.
It is a short judgment dismissing the Revision applying G.O.Ms. 383.
It does not appear that the matter was argued in the manner it was in Deccan Engineers.
The said argument, therefore, cannot advance the case of the appellant.
445 In this view of the matter in is not necessary for us to go into the question wether the word including in section 14 (iv) (i) of and item (2) (i) of the Third Schedule to the A.P. Act has the effect of making the said subclause exhaustive or otherwise.
Accordingly, we bold that the cast iron castings manufactured by the appellants do not fall within the expression 'cast iron ' in Entry 2(i) of the Third Schedule of the Andhra Pradesh General Sales Tax Act or within Section 14 (iv)(i) of the .
The appeal accordingly fails and is dismissed.
No order as to costs.
W. P. No.763 OF 1992 This writ petition preferred under Article 32 of the Constitution is directed against the notices issued by the assessing authority proposing to reopen the assessments of the petitioner/appellant with respect to earlier assessment years and also seeking to apply the principle of Deccan Engineers to the pending assessments.
For the reasons stated hereinabove this writ petition fails and is accordingly dismissed.
No costs.
G.S.B. Appeal and petition dismissed. [/INST] Section 6 of Andhra Pradesh General Sales Tax Act, 1957 provides a single point tax @ 4 % on declared goods, mentioned in the Third Schedule to that Act.
Item (2) of the Third Schedule describes the articles made of Iron & steel which fall in the category of 'declared goods '; sub item (i) of Item (2) pertains to "pig iron and cast iron including ingot moulds, bottom plates, iron scrap, cast iron scrap, runner scrap and iron skill scrap". 'Cast iron ' is defined in the Concise Oxford Dictionary as "a hard alloy of iron, carbon and silicon cast in a mould".
On February 28,1977 the Department of Revenue & Banking (Revenue Wing) Government of India issued a letter to all Finance/ Revenue Secretaries of all State Governments and Union Territories, explaining the term 'Cast Iron ' mentioned in section 14 (iv) (i) of the .
This letter said to have been issued in consultation with the Directorate General of Technical Development,_Chief Chemist and the Ministry of Law, Justice & Company Affairs, extended the scope of the expression 'cast iron ' to "cover 'cast iron casting ' also".
Based on similar clarifications, the Department of Revenue (S) Department of the Government of Andhra Pradesh issued a clarificatory order under section 42(2) of the Act vide GOMs No. 383 dated April 17,1985 extending the scope of the expression 'cast iron ' to include "cast iron castings".
This order was also published in the State 's official Gazette.
Section 42 (2) of A.P. General Sales Tax Act empowers the State Government to make, by an order, such provisions as appear to them necessary & expedient to remove difficulty in the implementation of this Act, provided that these are not inconsistent with the provisions of the Act.
The appellant manufactures and sells products like cast iron pipes,man 434 hole covers, etc.
He claims that read with the above clarificatory orders, he is liable to pay only 4% sales Tax under Section 6 of the A.P. General Sales Tax ct But, for the assessment year 1989 90 the Commercial Tax Officer C.T.O.) Narayanaguda Circle, Hyderabad levied Sales Tax on the said products at the rate applicable to general goods.
The C.T.O. having overruled the appellant 's contentions, the.
latter appealed to the Appellate Deputy Commissioner.
During the pendency of appeal a notice was issued to the appellant calling upon him to pay the tax assessed, since no stay has been granted in appeal.
Against this notice the appellant filed a writ petition No. 9315 of 1992 in the High Court of Andhra Pradesh.
The Division Bench of the High Court rejected the appellant 's main contention that his products were covered by Item (2) (i)of the Third Schedule to the A.P. General Sales Tax Act, and dismissed the writ petition.
Vide Civil Appeal No. 4474 of 1992 (with Writ Petition(Civil) No. 763 of 1992).
The appellant questions before this Court the above view of the High Court.
Rejecting the appellant 's contentions and upholding the judgment and order of the High Court, this Court, HELD: Law is what is declared by this Court and the High Court.
An executive authority can, at best, only opine its own understanding of the statute; such opinion is not binding upon the quasi judicial functioning of the authorities under the Act.
(444 B) Sanjeev Coke Manufacturing Company vs M/s Bharat Cooking Coal lid.
and another; , , referred to.
The Government cannot use the powers, conferred by section 42 (2) of the A.P. General Sales Tax Act, to dispense with a levy created by the Act.
(444D) The Van Nostrand 's Scientific Encyclopaedia treats 'cast iron ' 'and cast iron ' (with a hyphen) as two different words.
The Act speaks of 'cast iron ' (that is without a hyphen between the two words) (437 G H) Hence, the expression 'castiron 'in Item (2) (i) of A.P. General Sales Tax Act does not include the products cast iron pipes, man hole covers, bends etc.
(437 F) Deccan Engineers vs State of Andhra Pradesh.
1991 Vo. 12 A.P. Sales Tax Journal 138 referred to. </s> |
<s>[INST] Summarize the following judgement: l Appeal Nos.
335 342/1982.
From the Judgment and Order dated 18.8.1981 of the Punjab and Haryana High Court in Regular First Appeal Nos.
2605, 2604,2606,2610,306,308, 10 and 11 of 1980.
D.V. Sehgal, L.R. Singh and Yunus Malik for the Appellants.
Ranjit Kumar and G.K. Bansal (NP) for the Respondents.
J.: By Notification published in the Haryana State Gazette on October 12,1976, under section4(1) of Land Acquisition Act 1 of 1894 for short 'the Act ', the respondent Union Territory of Chandigarh acquired a total extent of 70.09 acres of land situated in Manimajra near Chandigarh for a public purpose, namely, to set up Brick Kilns therein.
The lands comprised in different Khasra numbers within H.B. No. 375, out of which 63.09 acres are Abi cultivated lands, the rest are Barani (rainfed land) and, ghair munkin (waste land) bouldars, trenches etc.
By award dated January II, 1977, the Collector fixed a sum of Rs. 23,600 as market value of Abi, Rs. 17,000 per acre to Barani and Rs. 12,000 to Ghair Munkin lands.
On reference under section 18, the Civil Court enhanced the compensation to Rs. 33,600 per acre to Abi lands and no enhancement to other categories with solatium at 15 per cent and interest at 6 percent per annum on the 374 enhanced compensation from the date of taking possession till date of payment.
On appeal the learned Single Judge in R.F.A. No. 2605 of 1980 etc, by judgment dated August 18, 1981 confirmed the same.
Thus these appeals by special leave.
As common questions of law arise for decision, they are disposed of by common judgment.
Appellants ' contentions is that the acquired lands possessed of potential value for residential and commercial purposes and there is no justification for classification of the lands and all the lands are entitled to parity to determine the market value.
By notification dated June 30, 1976 in the same village under the same H.B. No. 375, 54.37 acres were acquired for construction of Motor Market Complex.
The Collector and the Civil Court awarded the same market values as were fixed in these appeals but the learned Single judge denied parity of market value to these lands while enhancing the market value at Rs. 75,000 per acre to the similar lands in belting No. 2 and awarded @Rs. 3, 72,200 to the lands abutting the main road upto a depth of 140 feet in other case.
Therein the Single Judge relied upon exhibit P28 of the year 1972 in which 17 marlas of land was sold @Rs. 75,000 per acre, Having relied upon the same and having enhanced the market value, the same yardstick should have been applied in awarding market value to the lands under acquisition.
The learned counsel also placed strong reliance on 6 mutation entries which would show that the market value of the lands ranges between Rs. 1,16,000 to 1,60,000 per acre and the appellants, therefore, are entitled to compensation at least @ Rs. 75,000 as claimed by them.
He also contended that having found that the lands are possessed of potential value being similar to the lands in other appeal, the appellants are entitled to parity in determination of the market value as well.
The Haryana Govt, acquired by notification dated January 8,1971 vast extent of lands in Judian Village for Mansa Housing and Commercial Complex and thereunder Abi/irrigated lands were awarded at a sum of Rs. 28,800 per acre which was confirmed by the High Court.
After five years the notification was issued on October 12, 1976, the Court should have taken note of steady rise in prices and have suitably enhanced the market value.
Since no one was appearing for the respondent, we sent for Mr. Ranjit Kumar, the previous standing counsel for the Union Territory, Chandigarh and requested him to assist the court.
Accordingly he has meticulously analysed the entire evidence and rendered valuable assistance.
He contended that the lands are situated beyond railway line on North West and 1/2 k.m.
to the motor market on the other side of the road.
The lands are nearer to Sukhna Choe (lake) at a distance of one furlong.
The mutation record is not admissible as none, connected with the sale transactions, were examined to prove the documents; the grounds for sales, comparative advantages and their respective situation.
The motor market is situated in a developed area on the Eastern side of the road and the lands in these cases are 375 located away from those lands.
Shri Ranjit also contended that lands in Judian Village for Mansa Housing and Commercial Complex were nearer to abadi possessing better amenities and they do not afford any comparable grounds.
He contended that the lands for canalisation of Sukhna Choe was acquired by notification dated March 21, 1972 and the Reference Court upheld the award of the Collector at Rs. 15,525 for Abi lands which was confirmed by the High Court.
The location being very near to the lands under requisition, they offer reasonable base to fix market value.
Notification was issued under s.6 of the Punjab New Capital (Perefery) Control Act, 1952, freezing development of the lands situated within a radious of 10 miles from Chandigarh boundary for any residential and commercial purposes.
Therefore, they are not possessed of any potential value.
The learned Judge on the same day decided both the cases upholding the award of the Civil Court in these cases while enhancing the market value in motor market cases relied on by the appellants.
He was aware of the location and differential value between two types of land.
Therefore, he was not inclined to enhance the market value of the land under acquisition.
The first question that arises for consideration is whether the High Court has committed any legal error in affirming the market value determined by the Reference Court.
The Dist, Judge, Chandigarh in L.P.J. No. 105/70 and batch, found that the total extent of the land acquired is 70.09 acres, 560 Kanal 15 mawla, out of which 63.91 (51 i Kanal) 6 Marla are Abi land and 4.22 (33 Kanal 15 Marla) is Barani land and the rest are Ghair Munkin lands.
It is admitted by the witnesses that the acquired land is nearer to the railway track and also situated at a distance of 1 1/2 k.m.
from timber and motor market.
They are situated in wide area with the population of about 3000 3500.
There are about 200 shops situated in Manimazra town.
The acquired land is towards north western side of Manimazra.
The railway line is 2 to 3 furlong from Manimaira on the northwestern side.
They are also situated near the boundary of Chandigarh and one furlong from Sukhna Choe.
It was also admitted that part of the land is situated in Sector 26.
Thus it could be seen that the lands are situated very near to Chandigarh.
Neither the appellants nor the Land Acquisition Officer had examined witnesses in proof of the sale transactions referred in mutation entries exhibit P4 to P8 on behalf of the appellants and R1 and R2 on behalf of the respondent.
It is settled law that claimant is entitled to just and reasonable compensation and under section 23 to determine the market value of the lands the prevailing prices as on the date of the publication of the notification under section 4(1), the sale transaction of the same lands or sales of lands situated in the neighbourhood would furnish as evidence of comparable sales.
The price which a hypothetical willing vendor might reasonably expects to obtain from a willing purchaser would form the basis to fix the market 376 value.
It would be possible to have reliable evidence when sale transactions are proved by either the vendor or the vendee and if either of them was not available, the attesting witness who had personal knowledge of the transaction is to be examined by producing either the original sale deed or certified copies thereof as evidence.
Under section 5 1A of the Act as amended in 1984 the certified copies have been permitted to be brought on record as evidence of sale transaction recorded therein.
The examination of the witnesses is to find that the sale transactions are bonafide and genuine transactions between willing vendor and willing vendee as reasonable prudent men and the price mentioned is not throw away price at arms length or depressed sales or brought into existence to inflate market value ,of the lands under acquisition and the sales are accommodating one.
Equally it must be brought on record the comparative nature of the lands covered under the sale deed and the acquired lands whether adjacent or actual distance or possessed of similar advantages and whether transactions themselves are genuine and bonafide trans actions.
This proposition of law, since settled law, in fairness, has not been disputed across the bar.
The contention is that at the relevant time it was not being insisted upon.
Therefore, none of the witnesses were called to prove the sale deeds or to prove the sale transactions.
Therefore , when evidence of potential value is available, the same could be considered.
We find merit in the contention.
At one time we thought of remanding the cases but we find that it would be needless prologation and the complexion on ground by now would have been completely changed.
In view of the above settled legal position and the circumstances, the documentary evidence of sale transactions or in the mutation entries on either side are clearly not admissible and therefore, they cannot be looked into, and are accordingly excluded from consideration.
The only question, therefore, is whether the lands are possessed of potential value and whether the same treatment could be meted out to Abi and Barani lands.
Ghair Munkin land stands on a different footing and, therefore, they cannot be equated with the Abi and Barani lands.
The situation of the lands as extracted here in before clearly shows that the lands are situated very close to developed Chandigarh planned city and are very near to Sukhna Lake and are also nearer to railway track.
They are situated within the freezed zone for future potential development of the city.
Thereby, it is clear that though the acquisition was for establishment of Brick Kilns, by its very nature may not immediately be capable of being used for residential or commercial purposes, but certainly possessed of potential value for future development as residential and commercial purposes.
Then what would be the reasonable market value prevailing as on the date of notification.
As rightly contended by Shri Ranjit Kumar that there is a distinction between the lands acquired for motor market or Mansa Housing Complex on one hand and the lands under acquisition on the other hand, though the lands are Abi 377 lands.
The acquired lands are situated on the western side of Manimazra Panchkula road and the motor market was situated on the other side of the road.
Therefore, the market value of the land acquired for motor market do not tender any assistance as comparable prices.
Obviously for that reason the same learned Single Judge while deciding both the appeals on the same day declined to enhance the market value to these lands while he awarded to lands in 2nd belt at Rs. 75,000 per acre.
We have no information whether any appeal was filed against that judgment.
But certainly the facts of these cases would assist us to assess a fair and reasonable compensation in fixing the market value though an amount of guess work is involved.
We are conscious of the fact that it should not be founded on feats of imagination hedged with undue emphasis of compulsory deprivation of the possession of the land of the appellants, for the exercise of State 's power of eminent domain, statutory solatium is the premium the state pays.
Therefore, the approach should be pragmatic to recompense the appellants to secure alternative lands or to invest in profitable business for rehabilitation.
It is seen that the Reference Court awarded a sum of Rs.33,600 per acre to Abi land.
There is a steady rise in prices as reflected in the judgment in the other appeals relied on by the learned counsel for appellants.
The High Court also recorded a.finding in that behalf in those appeals.
The lands are situated in the same H.B. No. 375, though at different places and distance having future potential development.
Considering the totality of the facts and circumstances we find that market value @ Rs. 42,000 per acre would be just and fair.
This value should be for Abi and for Barani lands at Rs. 38,000 per acre and the market value to ghair munkin land at Rs. 12,000 per acre awarded by the Civil Court is confirmed.
The appellants are entitle to Solatium and interest on the enhanced market value at 15 per cent and 6 per cent respectively from the date of taking possession till the date of payment as the award and the order of the Civil Court are prior to the periods mentioned in the Amendment Act 1984 came into force.
In the circumstances parties are directed to bear their own costs.
G.N. Appeals Partly allowed. [/INST] The Respondents acquired some lands for setting up Brick Kilns.
The lands consisted of Abi (cultivated land), Barani (rainfed land) and ghair munkin (waste land) and the Collector fixed the compensation @ at Rs. 23,600, Rs. 17,000 and Rs. 12,000 per acre of the respective lands.
On a reference the Civil Court enhanced the compensation to Rs.33,600 per acre for Abi lands.
No enhancement was allowed in respect of the other categories of land.
It however allowed solatium at 15 % and interest at 6 % p.a. on the enhanced compensation.
On appeal, a Single Judge of the High Court confirmed the same.
These appeals were filed against the said Judgment of the High Court.
The appellants contended that the acquired lands had the potential value for residential and commercial purposes and there was no justification for classification of the lands and all the lands shall be treated at party in determination of market value; that in a similar case, the market value was enhanced to Rs. 75,000 per acre and in view of the fact that certain mutation entries showed a market value of similar lands ranging from Rs. 1,16,000 to Rs. 1,60,000, per acre the appellants claimed for compensation of at least at Rs. 75,000 per acre.
On behalf of the Respondents it was contended that the mutation record was not admissible as no one connected with the sale transactions was examined to prove the documents, the ground for sales, comparative advantages and their respective situation; that the lands possessed comparable or better amenities and whether the lands are very near to the lands under 372 acquisition.
The compensation awarded by the Collector at the rate of Rs. 15,525 per acre was upheld by the Reference Court, and this offered ' a reasonable base to fix the market value of the lands under acquisition.
Partly allowing the appeals, this Court, HELD: 1.
Neither the appellants nor the Land Acquisition Officer had examined witnesses in proof of the sale transactions referred in the mutation entries.
It is settled law that a claimant is entitled to just and reasonable compensation under section 23, To determine the market value of the lands, it is necessary to examine witnesses to prove the prevailing prices as on the date of publication of the notification under section 4(1).
The sale transaction of the same Lands or sales of lands situated in the neighbourhood possessed of same or similar advantages would furnish as evidence of comparable sales.
It would be possible to have reliable evidence when sale transactions are proved by either the vendor or the vendee and if either of them was not available, the attesting witness who had personal knowledge of the transactions is to be examined by producing either the original sale deed or certified copies thereof as evidence.
Since at the relevant time it was not being insisted upon, none of the witnesses were called to prove the sale deeds or to prove the sale transactions.
Thus, the documentary evidence of sale transactions or the mutation entries on either side are clearly not admissible and therefore, they cannot be looked into, and are accordingly excluded from consideration.
(375 GH, 376 (H E) 2.
The situation of the lands dearly shows that the lands are situated very dose to developed Chandigarh planned city and are very near to Sukha Lake and the railway track.
They are situated within the freezed zone for future potential development of the city.
Though the acquisition was for establishment of Brick Kilns, by its very nature the lands may not immediately be capable of being used for residential or commercial purposes, but certainly possessed of potential value for future development as residential and commercial purposes.
There is a distinction between the lands acquired for Motor Market or Mansa Housing Complex on the one hand and the lands under acquisition on the other hand, though the lands are Abi lands going by the situation of the lands, the market value of the land acquired for motor market do not render any assistance as a comparable price.
This would be of assistance to assess a fair and reasonable compensation in fixing the market value though an amount of guess work is involved.
This Court is conscious of the fact that it should not be founded on feats of imagination hedged with 373 undue emphasis of compulsory deprivation of the possession of the lands of the appellant.
For the exercise of State 's power of eminent domain statutory solatium is the premium the State pays.
Therefore, the approach should he pragmatic to recompense the appellants to secure alternative lands or to invest in profitable business for rehabilitation.
It is seen that the Reference Court awarded a sum of Rs. 33,600 per acre to Abi land.
No doubt there is a steady rise in prices of lands.
Considering the totality of the facts and circumstances, the market value @ Rs. 42,000 per acre would be just and fair for Abi lands and at Rs. 38,000 per acre for Barani lands.
The market value of ghair munkin land at Rs. 12,000 per acre awarded by the Civil Court is confirmed.
The appellants are entitled to solatium and interest on the inhanced market value at 15 per cent and 6 per cent respectively from the date of taking possession till the date of payment as the award and the order of the Civil Court are prior to the periods mentioned in the Amendment Act 1984 came into force,.
(376G,H, 371 A F)) </s> |
<s>[INST] Summarize the following judgement: Appeal No. 2348 of 1993.
From the Judgment and Order dated 13.7.1992 of the Central Administrative Tribunal, Guahati in O.A. No. 33/91.
Ms. K. Amareswari, B.P. Sarathy and C.V. Subba Rao for the Appellants.
P.K. Goswami, Kailash Vasdev, Ms. Lira Goswami and Ms. Alpana Poddar for the Respondent.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
Heard counsel for the parties.
Leave granted.
Respondent is a Garden Curator in the Office of the Scientist SE, Botanical Survey of India, Eastern Circle, Shillong.
By order dated January 29, 1991 he was transferred from Shillong to Pauri (Uttar Pradesh) by the Senior Administrative Officer, office of the Director, Botanical Survey of India, (Ministry of Environment and Forests, Government of India).
As many as 19 persons were transferred under the said order including the respondent.
The respondent has been working in Shillong since the year 1979.
The respondent approached the Gauhati Bench of the Central Administrative Tribunal (Original Application No. 33 of 1991) questioning the order of his transfer.
He submitted that his wife is also employed at Shillong in and off ice of the Central Government, that his children are studying at Shillong and further that he himself had suffered back bone fracture injuries some time ago.
He submitted that the guidelines contained in Government of India O.M. dated 3.4.1986 have not been kept in mind while ordering his transfer.
tie complained that some other officials who have been serving at Shillong for a longer period, have been allowed to continue at Shillong.
He attributed 'mischief ' to his Controller Officer, Shri B.M. Wadhwa (third respondent in the O.M.).
In the counter affidavit filed by the respondents, they submitted that the transfer was ordered on administrative grounds and is unexceptionable.
The learned Single Member of the Central Administrative Tribunal quashed the order of transfer on the following reasoning: the decisions of the Courts establish that the power of transfer is not an unfettered one but is circumscribed by various circulars/guidelines contained in the administrative instructions issued 430 by the Government.
An order of transfer can be interdicted if it is discriminatory.
The said principles are applicable to the case of the respondent.
Further "in the matter of considering transfer of an individual officer, the Office Memorandum dated 3.4.1986, educational dislocation of the children and health ground, if all present, deserve special consideration not to pass the order." Having said so the learned Member recorded the following finding: "In view of the above facts and circumstances and findings it is held unhesitatingly that the transfer order No. BSI.
80/5/80 Estt.
dated 29.1.1991 in respect of applicant S.L.Abbas was malafide and liable to be quashed.
" The Union of India has preferred this appeal.
An order of transfer is an incident of Government Service.
Fundamental Rule 11 says that "the whole time of a Government servant is at the disposal of the Government which pays him and he may be employed in any manner required by proper authority".
Fundemental Rule 15 says that "the President may transfer a government servant from one post to another".
That the respondent is liable to transfer anywhere in India is not in dispute.
It is not the case of the respondent that order of his transfer is vitiated by mala fides on the part of the authority making the order, though the Tribunal does say so merely because certain guidelines issued by the Central Government are not followed, with which finding we shall deal later.
The respondent attributed"mischief"to his immediate superior who had nothing to do with his transfer.
All he says is that he should not be transferred because his wife is working at shillong, his children are studying there and also because his health had suffered a set back some time ago.
He relies upon certain executive instructions issued by the Government in that behalf.
Those instructions are in the nature of guidelines.
They do not have statutory force.
Who should be transferred where, is a matter for the appropriate authority to decide.
Unless the order of transfer is vitiated by malafides or is made in violation of any statutory provisions, the Court cannot interfere with it.
While ordering the transfer, there is no doubt, the authority must keep in mind the guidelines issued by the Government on the subject.
Similarly if a person makes any representation with respect to his transfer, the appropriate authority must consider the same having regard to the exigencies of administration.
The guidelines say that as far as possible, husband and wife must be posted at the same place.
The said guideline however does not confer upon the government employee a legally enforceable right.
The jurisdication of the Central Administrative Tribunal is akin to the jurisdiction of the High Court under Article 226 of the constitution of India in service matters.
This is evident from a persual of Article 323 A of the constitution.
The constraints and norms which the High Court observes while exercising the 431 said jurisdiction apply equally to the Tribunal created under Article 323 A. (We find it all the more surprising that the learned Single Member who passed the impugned order is a former Judge of the High Court and is thus aware of the norms and constraints of the writ jurisdiction.) The Administrative Tribunal is not an Appellate Authority sitting in judgment over the orders of transfer.
It cannot substitute its own judgment for that of the authority competent to transfer.
In this case the Tribunal has clearly exceeded its jurisdiction in interfering with the order of transfer.
The order of the Tribunal reads as if it were sitting in appeal over the order of transfer made by the Senior Administrative Officer (competent authority).
Shri Goswami, learned counsel for the respondent relies upon the decision of this Court in Bank of India vs Jagjit Singh Mehta [1992] 1 S.C.C.306 rendered by a Bench of which one of us (J.S. VermaJ.) was a member.
On a perusal of the judgment, we do not think it supports the respondent in any manner.
It is observed therein: "There can be no doubt that ordinarily and as far as practicable the husband and wife who are both employed should be posted at the same station even if their employers be different.
The desirability of such a course is obvious.
However, this does not mean that their place of posting should invariably be one of their choice, even though their preference may be taken into account while making the decision in accordance with the administrative needs.
In the case of all India services, the hardship resulting from the two being posted at different stations may be unavoidable at times particularly when they belong to different services and one of them cannot be transferred to the place of the other 's posting.
While choosing the career and a particular service, the couple have to bear in mind this factor and be prepared to face such a hardship if the administrative needs and transfer policy do not permit the posting of both at one place without sacrifice of the requirements of the administration and needs of other employees.
In such a case the couple have to make their choice at the threshold between career prospects and family life.
After giving preference to the career prospects by accepting such a promotion or any appointment in an all India service with the incident of transfer to any place in India, subordinating the need of the couple living together at one station, 'they cannot as of right claim to be relieved of the ordinary incidents of all India service and avoid transfer to a different place on the ground that the spouses thereby would be posted at different places. . . . . . . .
No doubt 432 the guidelines requires the two spouses to he posted at one pi" as far as practicable, but that does not enable any spouse to claim such a posting as of right if the departmental authorities do not consider it feasible.
The only thing required is that the departmental authorities should consider this aspect along with the exigencies of administration and enable the two spouses to live together at one station if it is possible without any detriment to the administrative needs and the claim of other employees." (emphasis added) The said observations in fact tend to negative the respondent 's contentions instead of supporting them.
The judgment also does not support the Respondents ' contention that if such an order is questioned in a Court or the Tribunal, the authority is obliged to justify the transfer by adducing the reasons therefor.
It does not also say that the Court or the Tribunal can quash the order of transfer, if any of the administrative instructions/guidelines are not followed, much less can it be charactrised as malafide for that reason.
To reiterate, the order of transfer can be questioned in a court or Tribunal only where it is passed malafide or where it is made in violation of the statutory provisions.
For the above reasons, the appeal is allowed.
The judgment under appeal is set aside.
There shall be no order as to costs.
N.P.V. Appeal Allowed. [/INST] The respondent, a Central Government employee, who was transferred from one place to another, challenged the order of transfer on the grounds that: his wife was also employed at the same place in a Central Government office; his children were also studying there; he himself had suffered backbone fracture injuries some time ago; the guidelines contained in Government of India O.M. dated 3.4.1986 had not been kept in mind while ordering his transfer; some other officials, who had been serving at the same place for a longer period than the respondent had been allowed to continue and his transfer was due to the mischief of his Controlling Officer.
In the counter affidavit filed by the appellants, it was submitted that the transfer was ordered on administrative grounds and was unexceptionable.
, A Single Member of the Central Administrative Tribunal quashed the order of transfer on the ground that the power of transfer was not an unfettered one, but was circumscribed by various circulars/ guidelines contained in the administrative instructions issued by the Government and an order of transfer could be interdicted if it was discriminatory, that in the matter of considering transfer of an individual officer, the Office Memorandum dated 3.4.1986, educational dislocation of the children and health ground,if present deserved special consideration and that in view of the facts and circumstances of the case the transfer order in question in respect of the respondent was mala fide.
428 Allowing the appeal, preferred by the Union of India and others, this Court, HELD: 1.1 An order of transfer is an incidence of Government servie.
Who should be transferred where is a matter for the appropriate authority to decide.
Unless the order of transfer is vitiated by malafides or is made in violation of statutory provisions, the Court cannot interfere with it.
There is no doubt that, while ordering the transfer the authority must keep in mind the guidelines issued by the Government on the subject.
Similarly, if a person makes any representation with respect to his transfer, the appropriate authority must consider the same having regard to the exigencies of administration.
The guidelines say that as far as possible, the husband and the wife must be posted at the same place.
The said guideline, however, does not confer upon the government employee a legally enforceable right.
Executive instructions issued by the Government are in the nature of guidelines.
They do not have statutory force.
[430 C E] 1.2.
There is no dispute that the respondent is liable to transfer anywhere in India.
It is not the case of the respondent that the order of his transfer was vitiated by mala fides on the part of the authority making the order, though the Tribunal says so, merely because certain guidelines issued by the Central Government were not followed.
The immediate superior of unit, against whom mischief had been attributed by the respondent, has nothing to do with his transfer.
[430 F] 2.1.
The jurisdiction of the Central Administrative Tribunal is akin to the jurisdiction of the High Court under Article 226 of the Constitution of India in service matters, as is evident from Article 323 A of the Constitution.
The constraints and norms which the High Court observes while exercising the said jurisdiction apply equally to the Tribunal created under Article 323A.
The Administrative Tribunal is not an Appellate Authority sitting in judgment over the order; of transfer.
It cannot substitute its own judgment for that of the authority competent to transfer.
[430 H,431 A] 2.2.
In the instant case, the Tribunal has dearly exceeded its jurisdiction in interfering with the order of transfer.
The order of the Tribunal reads as if it were sifting in appeal over the order of transfer made by the Senior Administrative Officer (competent authority).
[431 B] Bank of India vs Jagjit Singh Mehta, ; , explained. </s> |
<s>[INST] Summarize the following judgement: Appeal No. 2702 of 1984.
From the Judgment and Order dated 20.6.1984 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. ED (SB) 2714/83 C. Harish N. Salve, Ashok H. Desai, Miss Meenakshi Grover, Rajiv Dutta, Ravinder Narain, Miss Amrit and Miss Punita Singh for JBD & Co. for the Appellants.
A.K. Ganguli, k.
Swami, Dilip Tandon and P. Parameshwaran for the Respondents.
J.: Common questions of law arose for decision in these 8 appeals need disposal by this judgment.
The question relates to classification of "toilet soap" in Excise item 15 of the First Schedule to the Central Excise and Salt Act 1 of 1944 as amended in 1964 for short the Act '.
In addition, in C.A. Nos. 81 3/86, 3632 34/88 and 1 102/89 sequal to its finding, they claim refund of excess excise duty.
The facts in C.A. Nos. 2702/84 and 2785/84 are sufficient for disposal.
The appellants laid before Assiatant Collect or classification list claiming "toilet soaps" Kalpa and Oasis, in other appeals Jai, O.K. Moti, Rain drop, Gold and Ria as bath soaps under Tariff item 15 (1) of the First Schedule (Household).
By notice dated August 31, 1982, the Assistant Collector called upon the appellants to show cause as to why they cannot be classified under tariff item 15(2) other sorts and to levy excise duty at 15 per cent ad valorem (as then stood).
The appellants after filing their reply thereto and having had personal hearing, by proceeding dated November 27, 1982, the Asstt.
Collector classified toilet soaps as "other sorts" under tariff item 15(2) of the Schedule.
On appeal the Collector by Order dated January 21, 1983 classified them under tariff item No. 15(1) "household" On second appeal, the CEGAT by its order dated June 20, 1984 reversed the appellate order and upheld the Asstt.
Collector 's order, Same is the case with regard to all other appeals except resultant claim for refund.
In 1954 tariff item No. 15A was introduced in the First Schedule of the Act thus: "15(A) 'Soap ' all varieties of the product known commercially as soap 1.
Soap, in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power or of steam for heating: (1) Soap, household and laundry: (a) Plain bars of not less than Rupees one pound in weight fives & annas four per cwt.
(b) ther sorts Rupees six & annas 382 two per cwt.
(2) Soap toilet Rupees fourteen per cwt.
(3) Soap, other then household Rupees and laundry or toilet.
fourteen per cwt.
This entry as amended in 1964 reads thus " 15 'Soap ' means all varieties of product known commercially as soap : (1)Soap, household and 20 per cent Laundary ad valorem (2) Other sorts 20 per cent ad valorem (Ad valorem rate of tarrif varies from time to time as per amendments).
Later it was amended in the year 1979 empowering the Govt.
to grant exemption under section 8 of the Act.
The details thereof are not material for the purpose of these cases.
It is seen that in 1954 in Tariff entry 15A "soap" means all varieties of the product known commercially as soap.
Item 1 provided that soap in relation to its manufacture with the aid of power or of steam for heating, they were classified as Plain bars, other sorts, toilet soaps and soap, other then husehold or laundry or toilet.
While amending the entry in 1964 the language couched therein as seen earliar is thus: 'soap ' means all varities of products known commercially as soap.
1) Soap, household and Laundry 2) "Other sorts" and graded ad valorem tariff has been prescribed.
It is seen that household and laundry soap was subjected to levy of tariff at a lesser rate than other sorts" ad valorem.
The contention of Sri Ganguli, the learned Senior counsel for the union is that statute always kept distinction between soap "household and laundry" and "other sorts".
Toilet soap was kept in the packet of other sorts.
Household and laundry soaps are being used for cleaning household articles and utensils and washing the clothes while toilet soaps are for bathing purpose.
The latter compose of diverse varieties, based on personal liking and 383 taste, are being used.
They are commercially known as other sorts but not household.
The legislative history furnishes unimpeachable evidence that soaps used for household and laundry are compendiously treated as a class and are subjected to imposition of lesser tariff.
They receive their colour from each other as compendiously known in the commercial parlance that the former are meant for use for household purposes while toilet soap are for use for bath and are subject to higher rate of tariff at par with soap for commercial and industrial purposes.
They bear higher rate of tariff.
The explanatory note appended to the Finance Bill 1964 would furnish the legislative intendment to amend the tariff item and the treatment meted out to toilet soap for tariff purpose.
It is accordingly understood by the department and also by the trade circles.
The appellants too intially treated toilet soap as other sorts but later, on legal opinion, they claimed them as household soaps.
The construction adopted by the tribunal is consistent with the standard works on soaps.
M/s Harish Salve and Ashok Desai, contended that in 1954 toilet soap was treated as an independent tariff sub item and household and laundry soaps were treated as separate entity and separately subjected to varied rates of tariff.
On amendment in 1964 toilet soap was omitted as a separate entity and brought toilet soap as part of genus, namely, soap "house hold", as a toilet soap is always a household soap.
Therefore, the reliance by revenue on varied rates of duty or departmental contemporenia expositio have no bearing.
The object of classification does not show that toilet soap is not part of the genus, "soap household" unless it is established otherwise.
The question, therefore, emerges whether "toilet soap" would be household soap within the meaning of Tariff item 15(1) of the Schedule.
Undoubtedly true, as contended by Sri Ganguli, that preceding amendment toilet soap was classified separately under sub item 2 and assessed to duty accordingly.
But by amendment the distinction was wiped out and toilet soap was brought into common hotchpoch.
So the contention that the variety of products known commercially as soaps have been enumerated or included compendiously, retaining their original colour even after the amendment made in the Finance Act, 1964 and falls into "other sorts" same genus, prima facie, though attractive, on consideration from proper perspective and in its setting in common commercial parlance, soap "toilet" appears to fall in household in sub item 1 of tariff item 15 of the Schedule.
It is true that the heading "soaps" are commercially known to be of diverse variety.
The provisions of the Tariff do not determine the relevant entity ofthe goods.
They deal whether and under what entry, the indentified entity attracts duty.
The goods are to be identified and then to find the appropriate heading, sub heading under which the identified goods/products would be classified.
To find the appropriate classification description employed in the tariff nomenclature should 384 be appreciated having regard to the terms of the headings read with the relevant provisions or statutory rules or interpretation put up thereon.
For exigibility ' to excise duty the entity must be specified in positive terms under a particular tariff entry.
In its absence be deduced from a proper construction of the tariff entry.
There is neither intendment nor equity in a taxing statute.
Nothing is implied.
Neither can we insert nor anything can we delete but it should be interpreted and construed as per the words the legislature has chosen to employ.
in the Act or Rules.
There is no room for assumption or presumptions.
The object of the parliament has to be gathered from the language used in the statute.
The contention that toilet soap is commercially different from household and laundry soaps, as could be seen from the opening words of entry 15, needs careful analysis.
It is well, at the outset, to guard against confusion between the meaning and the legal effect of an expression used in a statute.
Where the words of the statute are plain and clear, there is no room for applying any of the principles of interpretation which are merely presumption in cases of ambiguity in the statute.
The court would interpret them as they stand.
The object and purpose has to be gathered from such word themselves.
Words should not be regarded as being surplus nor be rendered Otiose.
Strictly speaking there is no place in such cases for interpretation or construction except where the words of statute admit of two meanings.
The safer and more correct course to deal with a question of construction of statute is to take the words themselves and arrive, if possible, at their meaning, without, in the first place, reference to cases for theories of construction.
Let us, therefore, consider the meaning of the word soap "household".
The word household signifies a family living together.
In the simplistic language toilet soap being used by the family as household soap is too simplification to reach a conclusion.
Therefore, one has to gather its meaning in the legal setting to discover the object which the Act seeks to serve and the purpose of the amendment brought about.
The task of interpretation of the statute is not a mechanical one.
It is more than mere reading of mathametical formula.
It is an attempt to discover the intention of the legislature from the language used by it, keeping always in mind, that the language is at best an imperfect instrument for the expression of actual human thoughts.
it is also idle to expect that the draftman drafted it with divine prescience and perfect and unequivocal clarity.
Therefore, court would endeavour to eschew literal construction if it produces manifest absurdity or unjust result.
In Manmohad Das vs Vishnu Das; , a Constitution bench held as follows: "The ordinary rule of construction is the provision of a statute must be construed in accordance with the language used therein unless there are compelling reasons, such as, where a leteral construction would reduce the provision to absurdity or prevent manifest intention of the legislature from being carried out".
385 In Ramavatar Budhaiprasad etc.
vs Assit.
Sales Tax Officer, Akola and Anr. ; , another Constitution Bench was to consider whether "betal leaves" are "vegetable" within the meaning of item 6 of the 11 Schedule to the M.P. Sales Tax Act.
It was contended that betal leaves are vegetable and, therefore, they are exempted from the payment of sales tax.
While construing item 6, this court held that the words must be construed not in any technical sense nor from the botanical point of view but as, understood in common parlance.
It has not been defined in the Act and being a word of every day use it must be construed in its popular sense meaning "that sense which people conversant with the subject matter with which the statute is dealing would attribute.
to it".
It is to be construed as understood in common language.
Therefore, betal leaves were held to be not vegetable.
The term 'vegetables ' is to be understood as commonly understood denoting those classes of vegetable matter which are grown in kitchen gardens and are used for the table.
The same view was reiterated in Motipur Zamindari Co. (Pvt.) Ltd. vs State of Bihar [1962] Supp. 1 SCR 498 and State of West Bengal and Ors.
vs Washi Alumed etc.
[1977]3 SCR 149.
In Washi Ahmed 's case green ginger was held to be vegetable within the meaning of the word used in common parlance.
In Motipur Zaminadari 's case it was held that sugarcane was not vegetable.
In Porritts & Spencer (Asia) Lid.
vs State of Haryana, ; this Court held that Dryer felts ' are not textiles.
In that context the principle of understanding the meaning of the word in common parlance was adopted.
In Indo International Industries vs Commissioner of Sales Tax.
U. P., ; at 297C this Court held that "it is well settled that in interpreating items in statutes like the Excise Tax Acts or Sales Tax Acts, whose primary object is to raise revenue and for which purpose they classify diverse products, articles and substances resort should be had not to "the scientific anti technical ' meaning of the terms or expression used but to their popular meaning, that is to say, the meaning attached to them by those dealing in them.
If any term or expression has been defined in the (emphasis supplied) enactment then it must he understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted.
In that case the clinical syringes manufactured and sold by the assessee were not considered as glassware ' falling within entry 39 of the First Schedule of the Act.
In commercial sense Glassware would never comprise of articles like clinical syringes etc., or specialised significance and utility.
Same view was reiterated in P.A. Chillai Chidambara Nadar vs Addl.
Appellate Asst.
Commissioner.
Madurai and Anr.
; that coconut is neither a fresh fruit nor a vegetable.
In khandelwal Metal Works vs Union of India, [1985] Supp. 1 SCR 750 at 774 B C this Court held that court cannot decide classification 386 of goods under Import Tariff by implication.
If rules of interpretation are made in the Act, they should be applied and interpretation would be made with their aid for classification.
The court held that brass scrap is not metal alloy.
Craises on Statute Law (7th Edition) at pace 164 specified one of the Rules of Interpretation of Statutes as extracted below: "The second Rule is that if the statute is passed with reference to a particular trade, business or transaction and, words are used therein which everybody conversent with that trade, business or transaction knows and understands to have a particular meaning in it, then the words are to be construed as having that particular meaning" In Shri Bharuch Coconut Trading Co. and Ors.
vs Municipal Corporation of the city of Ahemdabad and Ors., [1992] Suppl.
1 SCC 298 this Court applied the test as "would a householder when asked to bring some fresh fruits or some vegetable for the evening meal bring Coconut too as vegetable? Obviously the answer is in the negative".
Again when a person goes to a commercial market ask for coconuts, "no one will consider brown coconut to be vegetable or fresh fruit, no householder would purchase it as a fruit.
Therefore, the meaning of the word brown coconut, whether it is a green fruit has to be understood in its ordinary commercial parlance".
Accordingly it was held that brown coconut was not green fruit.
In interpreting the statute the individual appraisal of the wisdom or unwisdom of a particular course consciously selected by the Legislature is to be put aisde.
In Hansraj Gordhan Das vs H.H. Dave.
Collector of Central Excise & Customs and Ors., [ 3 this court held that the operation of the statutory notification had to be judged not by the object which authority had in mind but by the words it had employed to effectuate the legislative interest.
The question whether the cotton textiles manufactured by handlooms are entitled to exemption, this court held to be positive.
It may be noted that marketability of the product is an essential facet to attract dutiability of the goods under the Act.
The general purpose or common use of the product though may not be conclusive but may be relevant to classify it in a tariff entry when it was not specifically enumerated in a particular entry or sub entry.
The construction of the word must yield in favour of promoting and effectuating the object and purpose of the Act.
In Dunlop India Ltd. vs Union of India & Ors. ; this Court found the entry not in residuary but placed in the parentage and relieved it from orphanage.
in Anant B. Timbodia vs Union of India, ; , this Court was to consider whether imported cloves fell with item 169 in List 8 of Appendix 6 or para 167 of chapter 8 of import and export policy 1990 93.
Para 167 of Chapter 8 of import policy clearly provided the heading Import of Spices includes cloves, cinnamon/ cassia, nupneg and Mace.
Therefore, it was held that import permit is necessary.
The doctrine of popular sense or trade or its use in making medicine as crude drug 387 was not accepted.
Dictionary meaning or meaning given in Indian Pharmaceutical Codex was not accepted as given in in view of specific enumeration.
In Superintendent of central Excise, Surat vs Vac Metal Corporaion Ltd. AIR 1986 SC 1167 when the revenue contended that metalised yarn fell within general Tariff entry 18 yarn and synthetic fibres", this court held that entry 15A (2) first schedule of Central Excise & Salt Act 's specific entry relating to articles made of plastics of "all sorts" and metalised yam wax exigible to lessor tariff duty.
In Spaco Carburettors (India) Ltd. vs Collector of Customs.
Bombay ; whether special purpose complex machine tool fell in entry 84 89 or 84,45/48, this court held, after taking into account the purpose and use of it, that it is a multipurpose machine tool and fell in item 84, 45/48 of 1st Schedule.
The contention of the Revenue which finds favour with the tribunal that the legislative history and memorandum appended to the Finance Bill would furnish aid to the construction of the word "household" soap is not apposite to the fact situation.
When there is ambiguity in the word, statement and objects the legislative history, the memorandum appended to the Bill and the speech of the mover of the Bill are relevant material to discover the intention intention of the legislature.
In Shashikant Laxman Kale and Anr.
vs Union of India and Anr.
, ; at 376 para 17 this Court held that "for determining the purpose or object of the legislation, it is permissible to look into the circumstances which prevailed at the time when _the law was made, the Statement of Objects and, Reasons of the Bill which actuated the step to provide a remedy for the then existing malady can be used for the limited purpose of appreciating the background and the antecedent state of affairs leading to the legislation.
The memorandum explaining the provisions in the Finance Bill which were not part of the 'Notes on Clauses ' appended to the Statement of Objects and Reasons of the Bill cannot be used to draw support therefrom as it is not an accurate guide of the final Act.
In that behalf this Court relied on the statement of law profounded by Francis Bennion in his Statuitory Interpretation, Second Edition, 1984 at p. 529 relied on by the appellants in this case too.
In Ajoy Kumar Bannerjee and Ors.
vs Union of India and ors.
relied on by Sri Ganguli in this behalf renders no assistance to the Revenue.
Therein the question was the object of delegated legislation.
Therein the memorandum appended to the Bill incorporating section 16 of the was considered in the context of fixation of the pay scales of the employees.
The doctrine of reading down, placing reliance on Utkal contranctors and Joinery Pvt.
and Ors.
vs State of Orissa and Ors.
; also is of no assistance to the Revenue.
The doctrine of reading down has been applied only to sustain the constitutionality of the statute which question is not before us.
There is no quarrel with the proposition that in ascertaining the meaning of the word or a clause or 388 sentence in the statute in its interpretation, everything which is logically relevant should be admissible.
It is no doubt true that the doctrine of Noscitur A Sociis, meaning thereby, that it is a legitimate rule of construction to construe words in an Act of Parliament with reference to words found in immediate connection with them i.e. when two or more words which are susceptible of analogous meaning are clubbed together, they are understood to be used in their cognate sense.
They take, as it were, their colour from each other, the meaning of the more general is restricted to a sense analogous to a less general.
The philosophy behind it is that the meaning of doubtful words may be ascertained by reference to the meaning of words associated with it.
This doctrine is broader than the doctrine of ejusdem generis.
This doctrine was accepted by this Court in catina of cases but its application is to be made to be context and the setting in which the words came to be used or associated in the statute or the statutory rule.
Equally the doctrine of ' contemporanea erpositio is also being invoked to cull out the intendment by removing ambiguity in its understanding of the statute by the executive.
This Court in a latest case Indian metals & Ferro Alloys Lid.
vs Collector of central Excise cited all the decisions upto date and applied the doctrine to the understanding by the revenue of the provisions in income tax Act ' In Desh Bandhu Gupta and Ors vs Delhi Stock Exchange ; this Court held that this principle can be invoked, though the same will not always be decisive on the question of construction.
But the contemporaneous construction placed by administrative or executive officers charged with executing the statute, although not controlling, is nevertheless entitled to considerable weight as highly persuasive.
We may also add that if the interpretation is erroneous, court would without hesitation refuse to follow such construction.
This Court also equally expressed the view that its application was in restricted sense to ancient legislation in J. K. Cotton Spinning and Weaving Mills Ltd. and Anr.
vs Union of India and Ors.
[1987] Supp.
SCC 350 and in Doypack Systems Pvt.
case ; at 1000 F to H. In State of Madhya Pradesh vs M/s. G.S. Dall and Flour Mills, [1992] Supp.
1 SCC 150 at 153 para 18, this Court doubted the application of the doctrine of contemporanea exposito as given to the construction or its applicability to a recent statute that too in the first few years of its enforcement.
In this case also the question whether toilet soap is a household soap had arisen within a short period after the Amendment Act, 1964 came into force, Therefore the understanding by the executive and its interpretation in bringing toilet soap in sub item (2) "other sorts" instead of item (1) "household" being of formative period of statutory operation the doctrine became inapplicable.
The ratio in Indo Metal case, therefore, is inapplicable.
As rightly contended by Sri Ganguli that the doctrine of placement of a particular goods in a particular tariff item or residuary i.e. parentage or orphanage i.e. in placement of toilet soaps 389 in either sub items is not attracted to the facts as it is not a case of residuary items but of sub classification within the same item.
Thus considered in the legal setting and commercial parlance we are of the considered view that "toilet soap" being of everyday household use for the purpose of the bath and having removed its separate identity which it enjoyed preceding amendment and having been not specifically included in "other sorts", it took its shelter in commercial parlance under "household".
As stated if any body goes to the market and asks for toilet soap he must ask only for household bathing purpose and not for industrial or other sorts.
Even the people dealing with it would supply it only for houshold purpose.
It may be true that Household consists of soap used for cleaning utensils, laundry used for cleaning soiled clothes and soap toilet is used for bathing but household is compendiously used, toilet soap is used only by the family for bathing purpose.
Individual preference or choice or teste of a particular soap for bath is not relevant.
The soap "toilet" would, therefore fall, within the meaning the word of "household" in sub item (1) of item 15 of the Schedule.
The classification shall accordingly be adopted.
The appeals are accordingly allowed.
the cases are remitted to the primary authority to deal with the matters accordingly.
We do not propose to go into the question of refund as it is a matter to be dealt with by the authorities concerned in accordance with the law.
, The appellants shall have to apply for refund and the authorities shall be required to deal with it in accordance with law.
It is for the authority, therefore, to decide the question as per law.
In the circumstances parties are directed to bear their own costs.
V.M. Appeal allowed. [/INST] The appellant Mills claimed that the "toilet soaps" produced by them were bath soaps failing under tariff item 15 (1) of the First Schedule (Household) to the , but the Assistant Collector classified the same as "other sorts" under tariff item 15(2) of the schedule attracting higher levy of excise duty.
On appeal, the Collector held that they fell under tariff item No. 15 (1) "household".
On second appeal, the Tribunal reversed the appellate order, against which the appellant Mills preferred the instant appeals.
The appellants contended that in 1954 toilet soap was treated as an independent tariff sub item and household and laundry soaps were treated as separate entity and separately subjected to varied rates of tariff , that on amendment in 1964 toilet soap was omitted as a separate entity and brought toilet soap as part of genus, namely, soap "household", as toilet soap has always been a household soap.
The respondents contended that statute always kept distinction between soap "household and laundry" and "other sorts" and that toilet soap was kept in the packet of other sorts; that household and laundry soaps were being used for cleaning household articles and utensils and washing the clothes, while toilet soaps are for bathing purpose.
The latter, composed of diverse varieties based on personal liking and taste, are being used; and that they are commercially known as other sorts but not household.
379 Allowing the appeals, and remitting the matter to primary authority, this Court, HELD:1.1 The provisions of the Tariff do not determine the relevant entity of the goods.
They deal whether and under what entry, the identified entity attracts duty.
The goods are to be identified and then to find the appropriate heading, sub heading under which the identified goods/prod ucts would be classified.
To find the appropriate classification the description employed in the tariff nomenclature should he appreciated having regard to the terms of the headings read with the relevant provisions or statutory rules or interpretation put up thereon.
For exigibility to excise duty the entity must he specified in positive terms under a particular tariff entry.
In its absence it has to be deducted from a proper construction of the tariff entry.
There is neither intendment nor equity in a taxing statute.
Nothing is implied.
It should be interpreted and construed as per the words the legislature has chosen to employ in the Act or Rules.
There is no room for assumptions or presumptions.
The object of Parliament has to be gathered from the language used in the statute.
(383 H, 384 A B) 1.2"toilet soap" being of everyday household use for the purpose of the bath and having removed its sperate identity which it enjoyed preceding amendment and having been not specifically included in 'other sorts ', it took its shelter In commercial parlance under household '.
If any body goes to the market and asked for toilet soap, he must asked any for household bathing purpose and not for industrial or other sorts.
Even the people dealing with it would supply it only for household purpose.
It may be true that household consists of soap used for cleaning utensils, laundry used for cleaning soiled clothes and soap toilet is used for bathing but house hold is compendiously used, toilet soap is used only by the family for bathing purpose.
Individual preference or choice or taste of a particular soap for bath is not relevant.
The soap "toilet" would, therefore, fall within the meaning the word of "household" in sub item (1) of item 15 of the Schedule.
(384 B C,) Ajoy kumar Bannerjee and Ors.
vs Union of India and Ors.
, ; and Urkal Contractors and Joinery Pvt. Ltd. and Ors.
vs State of Orissa and Ors.
: ; , distinguished Manmohan Das v Vishnu Das; , ; Ramavatar Budhaipasad etc.
vs Asstt.
Sales Tax Officer, Akola and Anr, ; Motipur Zamindari Co. (Pvt. ) Ltd. vs State of Bihar: 380 [1962] Supp. 1 SCR 498; State of West Bengal and Ors.
vs Washi Ahmed etc.
; , ; Porritts & Spencer (Asia) Ltd. vs State of Haryana, ; ; Indo International Industries vs Commissioner of Sales Tax, U.P., ; at 297 C; P.A. Chillai Chidambara Nadar vs Addl.
Appellate Asstt.
Commissioner, Madurai and Anr., ; ; Khandelwal Metal Works vs Union of India, [1985] Supp.
1 SCR 750 at 774 B C; Shri Bharuch Coconut Trading Co. and Ors.
vs Municipal Corporation of the city of Ahmedabad and Ors., [1992] Supp. 1 SCC 298; Hansraj Gordhan Das vs H.H. Dave Assti.
Collector of Central Excise & Customs and Ors.
, ; Dunlop India Ltd. vs Union of India & Ors. ; ; Anant B. Timbodia vs Union of India; , ; Superintendent of Central Excise, Surat vs Vac Metal Corporation Ltd., AIR 1986 SC 1167; Spaco Carburettors (India) Ltd. vs Collector of Customs, Bombay, ; ; Shashikant Laxman Kale and Anr.
vs Union of India and Anr.
, ; at 376 Para 17; Mitra Prakashan Pvt. Ltd. vs Collector of Customs, para 15; Desh Bandhu Gupta and Ors.
vs Delhi Stock Exchange: ; ; J.K. Coton Spinning and Weaving Mills Ltd. and Anr.
vs Union of India and Ors., [1987] Supp.
SCC 350; Dovack Systems Pvt. Ltd. etc.
vs Union of India & Ors.
etc.[1988] 2 SCR %2 at 1000 F to H and State of Madhya Pradesh vs M/s G. section Dall and Flour Mills:, [1992] Supp.
1 SCC 150 at 153 para 18, referred to, Craises on Statute Law (7th Edition) at Page 164, referred to. </s> |
<s>[INST] Summarize the following judgement: Appeal Nos.
2182/93 with 2181/93.
From the Judgment and Order dated 30.4.1992 of the Gauhati High Court in Civil Rule No. 166 of 1984.
A.M. Mazumdar, Attorney General, Arunachal, K.K. Venugopal, Shahid Rizvi and Ms. Manjula Gupta, Appellant in C.A. No. 2182 of 93 and for the Respondent in C.A. No. 2181/93.
Govind Mukhoty and S.K. Bhattacharya for the respondent in C.A. No. 2182/93 and for the Appellant in C.A. No. 2181/93.
The Judgment of the Court was delivered by MOHAN.J.
Leave granted.
Both these civil appeals arise out of the judgment of the Gauhati High Court dated 30th April, 1992 rendered in CR.
No. 166 of 1984.
The short facts are as under: The parties will be referred to as the appellant and the State of Arunachal Pradesh.
The appellant alongwith his family members and other 56 families migrated to India on 30th March, 1964 from erstwhile East Pakistan, now Bangladesh, due to disturbances prevailing at that time.
They took shelter in a government camp at Abhayapur Block in Tirap District.
The appellant and other 56 families are known as Chakmas of the erstwhile East Pakistan.
They being the refugees were given shelter in government camp at Ledo in the District of Dibrugarh, Assam.
Later on, in 1966, they were shifted to the Camp at Miao within the State of Arunachal Pradesh.
Arunachal Pradesh was called NEFA (North East Frontier Agency) prior to 1972.
On 21st January, 1972 it was given the status of Union Territory of 406 Arunachal Pradesh.
It became a full fledged State on 20th February, 1987, Geooraphically, it is situated on the north east of India and has a long international border with Bhutan, China and Burma (Burma presently called Myanmar).
It is the largest State areawise in the north east region, even larger than Assam which is the most populous State.
The population of Arunachal Pradesh, according to the 1981 census is 6.32 lakhs.
It is scattered over 12 towns and 3,257 villages.
There are 26 Major tribes.
Broadly speaking, the people in the State can be divided into three cultural groups, on the basis of their socio regional affirmities.
i) The monpas and Sherdukpens of Tawang and West Kemeng District; ii)Khamptis and Singhphos inhabiting the entire easternpart of the State , and iii)The Neotes and Wanchos adjoining, Negal and in the Tirup District; In the year 1966, the State Government drew the Scheme known as Chakma Resettlement Scheme for these refugees.
Areas were earmarked for their settlement at different parts of the State and accordingly they were asked to move to the areas earmaked for them, In all, 5 Schemes were sanctioned for their settlement (comprising of about 3100 families of refugees) at the cost of more than Rs. 2 crores.
The appellants along with 56 families were allotted lands in the villages of Gautampur and Maitripur.
There were already a good number of Chakma refugee families who were allotted lands and were living there peacefully.
The appellants instead of residing in the said allotted areas under the Resettlement Scheme drawn by the Government, strayed away from it and negotiated with the Local Raja namely Nigrumong Singpho of Damba for an area of one sq.
mile of his private land and got the same from the said Singpho through an unregistered deed dated 20th November, 1972.
The State would contend that the said transfer is illegal because as per section 7 of the BEFR, 1873 (Regulation 5 of 1873) no person, who is not a native of the District, would acquire any interest in the land or the produce of the land beyond the inner line without the sanction of the State Government or such officer as the State Government may appoint in this behalf.
On the contrary, the stand of the appellant is that since the date of donation they have been residing and cultivating 407 the said land and they have developed the area for habitation purposes.
It is further alleged on behalf of the appellant that in 1975, a village panchayat of Joypur village was formed after election of the members.
The appellant was appointed as the Gaon Bura of the village.
This was with the approval of the Government, in token of which a sanad dated 20.11.75 was issued in his name.
The Deputt Commissioner at kenosa approved the transfer and the Extra Assistant Commissioner, Miao by his memorandum No. MR S (A) n5/8648 51 dated 26.4.70 issued instructions against any attempt to allot the land to other and generally against any eviction of the appellants from the said land.
Some Deori families who were allotted lands in the adjacant area of Joypur village attempted to encroach upon the lands of the appellant and on a complaint lodged, the authorities concerned i.e. Executive Magistrate at Miao by his letter dated 30.5.77 issued instructions to Ningronong Singpho Rajkumar to turn out the extra families from the appellant 's village with a direction to the Circle Officer, Diyun to report compliance.
It was after such intervention that such outsiders in due course were expelled.
After obtaining the donation from the Raja by dint of hard labour they developed the jungle area which was a hillly uneven tract of land.
In view of the tremendous agricultural success the Tirup District authorities granted two Rice Hullar Units in the name of the appellant.
The Chakmas transformed the land into a truly self sufficient village.
In view of prosperity and growth of land the nearby villagers sought to dislodge the appellant and families by raising various disputes, one of which was that the place cannot be utilised as refuge settlement and that they should be shifted to another place.
Circle Officer, Diyun issued an order dated 15.2.84 directing the appellant to shift to the vacant land at Gautampur and Maitripur villages latest by 24th of February, 1984.
The representation requesting the Chief Minister of Arunachal Pradesh to interfere was of no avail.
The appellant after settling in this unauthorised land started committing criminal and illegal activities.
There were several complaints to the effect that the appellant is encroaching upon the private lands illegally in connivance with the local people, particularly, Singphos.
In order to investigate the matter fully, the Government, vide its letter dated 4.4.1979, directed an enquiry into the whole matter through a Committee compris 408 ing of 9 persons with the Deputy Commissioner of the area as the Chairman.
The said committee after the investigation submitted its report on 11.6.79, stating therein that about 788 families of Refugees (Chakmas, Deori, and Bhufia) have illegally encroached upon about 872 Hectares in Miao Sub Division alone.
The said Committee observed that: "7.
The fear of the local people regarding heavy growth of population among the Chaknias has already been stated above and it is also well known to the Government.
But such fear maybe true in the case of Deoris and Ahoms too because it has been seen that in their case too the irpopulation is increasing by leaps and bounds, for instance it is learnt that when they were inducted there were only 6 Ahom families and 32 Deoria, where as this has now increased to 23 and 106 respectively, We should, therefore, watch by one method or the other that flow of Chakmas, Deoris and Ahoms does not at all take place.
For this purpose formal allotment of land to each family is very necessary and further in order to guard against new entrents, the DCs office is said to be taking up the issue of identity cards." "9.2 Land is still available in Innano, Dumba and Modoi, especially after the eviction of four Chakma villages during March last.
Singphos have been known to induct outsiders not only without Govt.
's approval but also by various undesirable mathods, this has to be properly watched and if found necessary we may have to give exemplary punishment to those who indulge in such practice.
Already there is some sign of dissension among the local people due to the activities of one Nirunong of Kumchai village who was mainly responsible for inducting Chaknias in Jaipur village, 10 Deori families and some other from outside.
It has also been seen that in Innano village there are six tea garden tribals who have been living and working since the last 10 years with Inner Line passes renewed from time to time but obviously with the understanding that the local people would subseqently give them land for permanent resettlement.
" The State received complaints that Chakma people were indulging in illegal activities such as commission of offences under various lands, collection of arms and anununitions, establishing conteracts with the Extremist groups, encroachment of adjoining areas.
The State, therefore, found it necessary to shift them to 409 a site where other Chakma families were already residing.
It was in these circumstances, by order dated 15.2.84, the State directed the appellant and the other Chakmas to shift.
The said order is to the following effect: "In connection to this office memoranodum No. LS 4/83/84/ 2478 79 dated 6.2.84, the Chakma of Joypur village are hereby directed to shift to the vacant land allotted at Gautampur and Maitripur village latest by 25.2.1984.
This may be treated as final notice, failing whichlegal action will be taken against the defaulters.
" Questioning the correctness of the order CR No. 166 of 1984 was filed before the High Court of Gauhati: It was urged: (i) The petitioners are citizens of India.
(ii) Their fundamental rights have been infringed.
(iii) The impugned notice dated 15th of February, 1984 is illegal, arbitrary and had been issued in violation of the principles of natural justice.
The High Court of Gauhati formulated three questions for determination: 1.
Whether the writ petitioner and the 56 chakma familes now settled in Joypur village, Miao subdivision, Arunachal Pradesh are citizens of India or foreigners, 2.
If they are not citizens of India, whether the authorities concerned have right to give direction to these Chakma people to move to another place.
Whether the impugned order dated 15.2.1984 is arbitrary, devoid of reason and violative of the provisions of the Constitution.
While urging the first question it was contended that the petitioner and the other Chakma families came to Assam in 1964 and stayed there for some time.
They were shifted to Miao Sub Division in Arunachal Pradesh.
In 1964, the territory of Arunachal Pradesh was included in Assam.
Since they stayed in Assam 410 they must be deemed to be citizens of India within the meaning of Section 6 A of the as amended in 1985.
They also contended that proviso to Section 2 of Immigrants (Expulsion from Assam) Act, 1950 would also protect them.
The High Court, on an elaborate consideration of the provisions of , came to the conclusion that language of Section 6 A of the is very clear.
It states that person who have come into Assam before January 1966 from the specified territory and who have been ordinarily resident in Assam since the date of their entry shall be deemed to be citizens.
Admittedly, the petitioners therein would not fell under this category as they stayed in Assam for a short while in 1964.
Accordingly, they will not be citizens of India.
On the second question, the High Court referred to Section 7 of the Bengal Eastern Frontier Regulation, 1873.
That section specifically prohibits the acquisition of interest in land by other than the natives of the district without the sanction of the State Government.
Admittedly, there was no sanction of the State Government in favour of the petitioners under the said Regulation which is applicable to Arunachal Pradesh.
Besides, clause 9 (2) (a) of the Foreigners Order 1948 prohibits acquisition of land or any interest thoreon or within the prohibited area by any foreigner.
Clause 9 (2) (b) states that the local authority may impose conditions regarding acquisition of land or any interest thereof or any other matter deemed necessary in the interest of public safety.
There was no controversy that the place where chakmas were staying is within the inner line which is protected area notified by the State Government.
In view of the facts, the High Court came to the conclusion that the petitioners had no right to seek a permanent place of abode in that area.
The authority had every right requiring them to shift.
On the third question.
after going through the various files produced by the State Government, in the court, the High Court found various complaints against these chakmas.
They were indulging in procuring arms and ammunation and were actively, associating with anti social elements Accordingly, it was concluded that the impugned order is not devoid of any reason.
Lastly, the High Court, on humanitarian grounds, directed the State Government to give adequate compensation in the event of these chakmas being evicted from the place.
The State of Arunachal Pradesh has preferred S.L.P. (C) No. 12429 of 1992 while Khudiram Chakma has filed S.L.P. (C) No. 13767 of 1992.
411 Mr. Govind Mukhoty, learned counsel for the appellant urges that in 1947 the appellants were Indian citizens.
Because of the partition of the country they went over to the then East Pakistan, presently Bangladesh.
But when they returned in 1964 to the erstwhile Assam State they stayed there for some time and shifted to Arunachal Pradesh.
To deprive them of the citizenship would be violative of Article 14 of the Constitution of India.
By mere accident of their going over to Arunachal Pradesh, they cannot lose their citizenship.
The learned counsel referred us to the various provisions of the .
He urges that there is evidence, in this case, of donation of lands in favour of these appellants by Raja Nirunong Singpho of Dumba.
That was approved by the Deputy Commissioner as seen from memorandum dated 26th of April, 1976.
The appellant was appointed Gaon Bura of Joypur village.
In proof of that Sanad was issued by the Deputy Commissioner.
Again, the Executive Magistrate had directed the Raja to turn out the extra families occupying lands at Joypur in the area allotted to the appellants and other Chakmas.
There is also evidence on record to show that chakmas have been paying taxes including house tax.
When that be the position, there is no justification at all calling upon the appellants and the other 56 families to shift.
There was no notice before calling upon the appellants to shift.
This Court in Scheduled Caste and Weaker Section Walfare Association vs
State of Karnataka ; , a case arising under karnataka Slum Areas (Improvement and Clearance) Act, 1973, held that before eviction a slum dweller does have a right to say.
Therefore, it is submitted that the principle of natural justice applies to noncitizens also.
In Louis De Raedt vs Union of India ; this Court took the view that the fundamental rights are available to foreigners as well, including Article 21 of the Constitution.
Mr. K.K. Venugopal, learned senior counsel, appearing for the State of Assam contends in opposition: The appellants cannot claim to be citizens of India by invoking Section 6 A of the as amended and incorporated on 7.12.85 in pursuance of the Assam Accord.
In order to get the benefit of Section 6 A two conditions mentioned in sub section (2) of the said Section must be satisifed simultaneously: (i) The persons who are of Indian origin (viz. undivided India) came before 1.1.66 to Assam from the specified territory ', and 412 (ii) have been "ordinarily resident ' in Assam (as it existed in 1985) since the date of their entry into Assam.
In so far as the appellants were residing in Miao sub division of Tirup District, Arunachal Pradesh since 1968 they did not satisfy these conditions.
As to what exactly is the meaning of "ordinarily resident" could be seen from Shanno Devi vs Mangal Saini ; at 590.
It is true that this Court in Louis De Raedt (supra) took the view that even foreigner has a fundamental right, but that fundemental right is confined only to Article 21 and does not include the right to move freely throughout and to reside and stay in any part of the territory of India, as conferred under Article 19(1) (d) and (e).
Such a right is available only to the citizens.
The appellants being foreigners, cannot invoke Article 14 of the Constitution to get the same right denied to them under Article 19 since Article 14 cannot operate in regard to a right specifically withheld from non citizens.
In support of this submission, reliance is placed on Indo China Steam Navigation Co vs Jasjit Singh 94 at 621 to 622 and Louis De Readt (supra).
The land donated in favour of the appellants by Raja Nirunong Singpho of Dumba by donation deed dated 20.11.72 is illegal.
Section 7 of the Bengal Eastern Frontier Regulation 1873 and clause 9 of the Foreigners under 1948, which are applicable to Arunachal Pradesh, specifically prohibit such transfer without prior permission of State Government.
No such permission, in this case, was obtained.
The tribals of North eastern States are historically protected races.
Part x of the Constitution of India contains provisions and laws goveming them.
The decision re arding settlement of foreigners is a matter of policy.
It is well settled in law that the Court does not interfere in a matter of governmental policy since it is for the Government to decide.
On the quesion of natural justice before passing the impugned order dated 15.2.84 the learned counsel.
, producing the relevant material from the file, would urge that it is not correct to state that the order came to be issued all of a sudden.
There is abundant material to show that the question of eviction was an ongoing process.
right from 1978.
Many notices were issued over a period of years to shift to villages Maitripur and Gautampur.
There were protests from chakmas.
From the file it is seen that the appellant was aware of the shift order dated 26.9.83.
There was also an oral hearing of the same.
It was because of the complaints filed by the residents of the locality against the appellant and in view of the report that they were induling in procuring arms and ammunition and were in close contact with anti social elements.
Taking an overall view of the matter, the impugned order 413 came to be passed.
On ground realities, natural justice is fully satisfied.
In support of the above submissions, the learned counsel relied on the following cases: p. 331 A to 332 H, 334 A to J: R.v.
Secretary of State for the Home Department ex party Cheblak.
; , Lord Bridge of Harwich, p. 723 F to 724G Lord Templeman, p. 725 J, 726 A to C. Lord Ackner.
p. 73 1 H 732G H 735 F J Lord Lowry, p. 737 D J. Brind vs Secretary of State ; Council of Civil Service Unions vs Minister for the Civil Service D) p. 219, 223 A J, 229 McInnes vs onslow Farne & Anr.
; at p. 722 723 para 12, 13 JR Vohra vs India Export House Pvt. Ltd. at p. 738 para 20 22 Maharashtra State Board of Secondary & Higher Education.
vs KS.
Gandhi at p. 263 Satya Vir Singh vs Union of India However, the learned counsel fairly conceded that the Chief Minister was willing to hear the appellants or any representative of their group, additionally, as a post decisional hearing, even though they had full opportunities over a period of four years.
It is his submission that it must be a post decisional hearing as otherwise, if the decisions were against the appellants a further round of litigation would be embarked upon.
We will proceed to consider the correctness of the above submissions 414 providing the necessary background and the factual matrix.
The history of the mountainous and multitribal north east frontier region which is now known as Arunachal Pradesh ascends for hundreds of years into the mists of tradition and mythology.
According to Puranic legend, Rukmini, the daughter of king Bhishmak, was carried away on the eve of her marriage by Lord Krishna himself.
the ruins of the fort at Bhalukpung are claimed by the Akas as the original home of their ancestor Bhaluka, the grandson of Banna Raja, who was defeated by Lord Krishnaat Tezpur (Assam).
A Kalita Kinu, Ramachandra, driven from his kingdom in the plains of Assam, fled to the Dafla (now Nishan) foothills and established there his capital of Mayapore, which is identified with the ruins on the It a hill.
A place of great sanctity in the beautiful lower reaches of the Lohit River, the Brahmakund, where Parasuram opened a passage through the hills with a single blow of his mighty axe, still attracts the Hindu pilgrims from all over the counrty.
In the year 1838, when the British took over the administrative control of Assam from the last Ahom king, Shri Purander Singh, it was thought necessary to extend elementary regular administration to the adjoining north east frontier region.
The first import and step in this direction was as such initiated with adoption of Regulation V of 1873 empowering the then Lieutenant Governor of Assam to prescribe a Line, called 'Inner Line ' with a view (1) "to bring the commercial relations of the hills with the plains under more, stringent control, (2) to prevent of operation of speculators in "caoutchouc" (raw rubber), (3) to prevent the spread of tea gardens, and (4) to lay down rules for the possession of land and property beyond the 'Inner Line ' without special permit.
" A Notification bearing No. 1486, dated June 21, 1876 was issued by the Government of India, foreign Department to the effect that the Governor General was pleased to prohibit all British Subjects from going beyond the inner line without a pass under the hand and seal of Deputy Commissioner.
After covering the hilly areas administratively, the whole of tribal region was divided into two Frontier Tracts in 1915.
By 1937, the administrative status of North East Frontier Tract could be effected to under the Govemment of India 's (Excluded and Partially Excluded Area) Order of 1936.
Under the effective provision of the Section 91 (i) of the governmentoflndia Act, 1935, the above Frontier Tract came to be known as Excluded Area of Assam.
Again, the 1942 administrative change took place as a consequence of which Tirap Frontier Tract was carved out of the Sadiya Frountier Tract.
In 1943.
an adviser was appointed as the administrative head with a purpose to develop the region 415 through gradual penetration of the administrative machinery.
Another change was effected in the administrative set up on the 26th of January 1950 when the Government of Assam was relieved of its responsibility for looking after the administration of the Excluded Area.
However, the discretionary power was vested in the Governor of Assam, under the provision of the paragraph 18 of the Sixth Schedule to the Constitution and Part 8 of the Table 20 of the Schedule, who served as the agent of the President of the Union of the Republic of India.
In the course of administrative and political events Arunachal Pradesh has travelled from the Tract to the Union Territory.
Under the provision of (Central Act 81 of 1971), the present status of Union Territory was granted to the erstwhile North East Frontier Agency and renamed as Arunachal Pradesh on January 21,1972.
The Union Territory of Arunachal Pradesh was placed under the charge of Chief Commissioner during that year.
The year of 1975 also proved eventful for Arunachal Pradesh.
On 15 August, 1975, then existing Pradesh Council was constituted into the Union Territory legislature.
The panel of then existing five counsellors was constituted into provisional Council of Ministers.
Consequent upon the above change, the post of Chief Commissioner was further elevated to the position of Leutenant Governor on 15 August, 1975.
The first general election to Arunachal Legislature was held in the month of February, 1978.
The Arunachal Pradesh Legislative Assembly has 33 members in total, out of which 3 members are nominated.
Earlier, Arunachal Pradesh had nominated a representative in the Parliament.
By an Act of the Government of India in 1971, the Union Territory was provided with one seat each in Lok Sabha and Rajya Sabha, but these representatives were nominated by the President of India.
But at present, Arunachal Pradesh enjoys two elective seats in the Lok Sabha based on the Universal franchise.
On 20th of February, 1987 Arunachal Pradesh was made a full fledged State.
Thus, it will be seen that at no time Arunachal Pradesh was part of the Territory of the State of the Assam though it was being administered by the Governor of Assam or the President of India, as the case may be.
The following Charonological Statment of changes in the pattern of Administration in NEFA occuring in P.N. Luthra 's constitutional and Administrative Growth of the North East Frontier Agency is useful: 416 1 2 3 4 5 6 1914 1919 1937 1947.
1950 1965 Adminis Administ Adminis Adminis Admin Admini tered by ered by tered by tered by tered by tered the Gove the Gov the Gov the Gov the Pre as be rnment of ernment ernor of ernor of sident fore by Assam of Assam Assam Assam through theGov with acting in acting on the Gover erner special his disc the nor of as agent safe retion advice of Assam as of the guards.
indepen the Pro his agent Presi dently of vincial acting in dentbut the provi Ministry, his disc under ncial Minis retion the try underthe general general supervi super sion and visionand control control of the of Mini Minis try of try of External Home Affairs.
Affairs.
Arunachal Pradesh is situate in the North East of India skirted by Bhutan in West, Tibet and China in North and North East, Burma (Myanmar) in East and Assam in South.
It consists of the sub mountains and mountainous ranges sloping to the plains of Asswn.
It 's capital is Itanagar.
It is the largest state areas wise (33,743 sq kms.) in the North East region even larger than Assam which is the most populous.
Arunachal Pradesh is the most thinly populated state in India.
According to 1991 census the population of Arunachal Pradesh is 6.32 lakh and is scattered over 12 towns and 3,257 villages.
There ate 26 major tribes in Arunachal Pradesh.
Broadly speaking, the people in the state may be divided into three cultural groups on the basis of their socio regional affinities.
i) The Monpas and Sherdukpens of Tawang and West Kemeng District; ii) Khamptis and Singphos inhabiting the entire eastern part of the State; and 417 iii) The Noetes and Wanchos adjoining Negaland in the Tirap District.
This is the history of Arunachal Pradesh, a rich land and poor people.
It was in the year 1964 thousands of chakma families migrated from the then East Pakistan to India.
The appellant along with other 56 families also migrated to India.
Being refugees they were given shelter in government camps at Ledo within the district of Dibrugarh, Assam.
Later on they were shifted to the camp at Miao subdivision in Tirap District, now within the State of Arunachal Pradesh which was then known as North East Frontier Agency (NEFA).
In the years 1966 68 the then Government drew up the Chakma resettlement schemes.
Altogether 5 schemes were sancitioned for settlement of 3100 families at a cost of more than rupees two crores.
The appellants were allotted lands in the villages of Gautampur and Maitripur.
The other Chakmas were also staying there.
As stated earlier, on 2 1st January, 1972 NEFA was given the status of Union Territory and was renamed as Arunachal Pradesh.
The appellants strayed away from the original settlement area allotted to them by the Government under the schemes.
They got donation from the local Raja namely Ningrunong Singpho of Dumba, an area of 1 sq. mile at Joypur village which is inside the Inner Line.
Earlier we were referred to Bengal Eastern Frontier Regulation 1873.
Clause 2 of the said Regulation states thus: "It shall be lawful for the State Government to prescribe and from time to time to alter by notificaton in the Official Gazette line to be called "The inner Line" in each or any of the above named districts.
The State Government may, by notification in the Arunachal Pradesh Gazette prohibit all citizens of India or any class of such citizens or any persons residing in or passing through such districts from going beyond such line without a pass under the hand and seal of the Chief Executive Officer of such district or of such other officer as he may, authorise to grant such pass ', and the State Government may, from time to time, cancel or very such prohibition.
" Clause 7 is important.
That reads as follows: "It shall not be lawful for any person, not being a Native of the district comprised in the preamble of this Regulation, to acquire any interest in land or the product of land beyond the said "Inner Line" without the sanction of the State Government or such officer as the 418 State Government shall appoint in this behalf.
Any interest so acquired may be dealt with as the State Government or its said officer shall direct.
The State Government may also, by notification in the Arunachal Pradesh Gazette extend the prohibition contained in this section to any class of persons, natives of the said districts, and may from time to time in like manner cancel or very such extensions Under Section 3 of the of 1946, the central Government may.
by order, make provision for prohibiting regulating or restricting the entrt of foreioners into India.
In exercise of power conferred under Section 3 of the said Act Foreigners Order of 1948 dated 10.2.48 was issued.
Under clause 9 of tile said Order the Central Government or with prior sanction, a civil authority may, by order, declareany area to be a protected area for the purposes of this order.
On such declaration, the civil authority may, as to any protected area ,prohibit any forging or any class of foreigners from entering or remaining in the area, impose on any foreigner or class of foreigners entering or being entered in the area.
such conditions as may be mentioned under clause 9.
Clause 9 of the Foreigers Order of 1948 in sub clause (2) prohibits the acquisition of any land or anv interest thereon within the prohibited area by any foreigner.
Under Clause 9 the authorities concerned, by an order, may prohibit any foreigner from remaining in any part of the protected area as stated in the Foreigners Protected Area 0rder of 1958 which includes the territory of arunachal Pradesh.
Examined in this light, the donation by Raja is clearly invalid.
However, the memorandum dated 26th of April, 1976 issued by the Extra Assistant Commissioner Miao states that the agreement between the 'appellant, Khudiram Chakma and the local Raja dated 20.11.72 has been approved by the Deputy Commissioner.
That is again mentioned in the direction given by the Executive Magistrate Miao on 30th of May, 1977.
The effect of approval by the Deputy Commissioner will be considered later.
In this factual background, the question arises whether the appellants could claim citizenship under Section 6 A of of 1955.
We will now extract the said Section: 419 "6 A. Special Provisions as to the citizenship of persons covered by the Assam Accord: (1) For the purposes of this section: (a) "Assam" means the territories included in the State of Assam immediately before the commencement of the citizenship (Amendment) Act, 1985; (b) "detected to be a foreigner" means detected to be a foreigner in accordance with the provisions of the (31 of 1946) and the Foreigners (Tribunals) Order 1964 by a Tribunal constituted under the said Order, (c) "specified territory" means the territorises included in Bangladesh immediately before the commencement of the Citizenship (Amendment) Act, 1985; (d) a person shall be deemed to be of Indian origin, if he, or either of his parents or any of his grandparents was born in undivided India; (e) a person shall be deemed to have been detected to be a foreigner on the date on which a Tribunal constituted under the Foreigners (Tribunals) Order, 1964 submits its opnion to the effect that he is a foreigner to the officer or authority concerned.
(2) Subject to the provisions of sub sections (6) and (7), all persons of Indian origin who came before the 1st day of January, 1966 to Assam from the specified territory (including such of those whose names were included in the electoral rolls used for the purposes of the General Election to the House of the People held in 1967) and who have been ordinarily resident in Assam since the dates of their entry into Assam shall be deemed to be citizens of India as from the 1st day of January, 1966.
(3)to(8). . . (unnecessary)" As rightly urged by Mr. K.K. Venugopal, learned counsel for the State of Assam, two conditions are required to be satisfied under sub section (2).
They are: (i) Persons who are of Indian origin (undivided India) came before 1.1.66 to, 420 Assam from the specified territory; and (ii) have been "ordinarily resident" in assam as it existed in 1985 since their date of entry in Assam.
The appellants were no doubt persons of Indian origin.
They came to Assam prior to 1. 1.66, namely, 3 1.3.64 from the then East Pakistan, (presently Bangladesh) which is undoubtedly one of the specified territories under Section 6 (1) (c).
Assam, as seen from 6A (a), means the territories included in the State of Assam immediately before the commencement of the Citizenship (Amendment) Act, 1985.
It is the common case that chama people entered into Assam and stayed their for some time in Ledo within Dibrugarh District.
Thereafter they shifted to Miao, Arunachal Pradesh.
According to the appellant, since the territory of Arunachal Pradesh in 1964 was included in the State of Assam they would be entitled to the benefit of Section 6A.
This contention overlooks the fact the Immigrants (Expulsion from Assam) Act, 1950 (Act X of 1950) applied to the territories presently forming part of Meghalaya, Nagaland and Arunachal Pradesh.
However, by the , 197 1, the territories of Arunachal Pradesh were excluded from the purview of the Immigrants (Expulsion from Assam) Act of 1950.
Turning to Condition No. 2 the requirement is ordinarily resident in Assam from the date of entry till the incorporation of Section 6A, namely, 7.12.85.
As to the meaning of "ordinarily resident" we may refer to Smt.
Shanno Devi vs Mangal Saini ; We find the following observations at page 590 apposite: "It is not necessary that for every day of this period he should have resided in India.
In the absence of the definition of the words ,. 'ordinarily resident" in the constitution it is reasonable to take the words to mean "resident during this period without any serious break".
In so far as the appellants and the chakmas were residing in Miao subdivision of Tirap District in Arunachal Pradesh long before 1985, they cannot be regarded as citizens of India.
We find it difficult to appreciate the argument of Mr. Govind Mukhoty, learned counsel, that the accident of the appellants living in Arunachal Pradesh should not deprive them of citizenship.
In this connection, it 421 is worthwhile to note that Secion 6A of the came to be incorporated by Amending Act as a result of Assam Accord.
If law lays down certain conditions for acquiring citizenship, we cannot disregard the law.
As laid down in Kennedy, vs Mendoza Martinez ; , 159 [1963] "Citizenship is a most precious right.
" Aristotle, Politics, III, 5 States thus: "From earliest times, it has been such status alone that has enabled the individual to share fully in the benafits of the community in which he resides: "Compare Homer 's words, like some dishonored stranger ': he who is excluded from the honors of the state is no better than an alien.
" That is the position of appellant and the other 56 families.
If they are aliens, the donation deed dated 20th November, 1972 is illegal.
The Raja did not obtain any permission for sale from the Government.
From the records it is also clear that the Rajs had been donating the lands and wag indulging in anti social activities for which he was warned.
We do not know how the Deputy Commissioner or the Extra Assistant Commissioner ever approve of this donation without there being an express authorisation by the State.
It is an admitted fact that the place where the chakma families are residing is within the inner line notified by the State Government.
Therefore, the argument that they have cleared the forest and reclaimed the land and as such would be entitled to a permanent abode, cannot be accepted.
Now we come to the validity of the impugned order.
Mr. K.K. Venugopal, learned counsel has filed various notings and the orders from the relevant files.
From the files it is clear that there have been complaints against chakmas that they were procuring arms and ammunition and indulging in anti social activities.
The Deputy Commissioner, Tirap District on 19.8.81 wrote to the Extra Assistant Commissioner, Miao as follows: "Please refer to your report under reference, wherein it is indicated that a large number of arms and ammunitions seized from the possession of the Chakmas and are still kept in Quarterguard.
It is, therefore, requested to send us a detailed report indicating datails of arms and ammunitions seized.
422 2.It is further seen from your report regarding judicial cases, submitted to this office, that there are altogether 76 cases registered upto November, 1979 against the Chakmas and most of them were related to theft, assault and offences under Forest Act.
It is also therefore requested that more details on specific offences and results thereof may be furnished urgently.
3.The above two informations are urgently required by the Govt.
" A list of cases including ones under Section 302 I.P.C. and other offences under Section 25A of the Arms Act is enclosed to the letter quoted above.
The chakmas also encroached Upon the neighbouring area by unfair means and created trouble to the local people.
An appeal was made to the Chief Minister in 1980 itself that because of these criminal activities they should be removed.
It is not correct to state that the impugned notice came to be issued like a bolt from the blue.
The following letter of the appellant addressed to the Deputy Commissioner speaks eloquently: "With reference to the subject quoted above, 1 on behalf of the villagers of Joypur Village have the honour to draw your kind attention to the following few lines for favour of your needful action.
That, being landless in Abhoypur Village, a few Villagers consisting of fifty six families have been settled in Joypur Village in the year, 1968 with the mutual help of Sri Ningronong Rajkumar (Singphoo) and the same was approved by the then Deputy Commissioner, Khonsa in accordance with the agreement adopted by Sri Rajkumar Singphoo dated 20th Novn2.
Now, the most regretful matter is that in spite of our permanent cultivation on the area for long sixteen years.
keeping all conformities with the Govt.
as well as the neighbouring local people, we are being harassed by notice after notice to shift from the area.
On the contrary, I am to state that the land where we have been directed to shift is quite short and extremely unfit for cultivation due to which those vacant lands are not yet accupied by anybody in spite of lying considerable landless families in the said villages.
423 All documents created in regard to this matter are attached herewith for favour of your kind perusal necessary action.
Under the circumstances stated here, I earnestly pray and request you afresh to look into the matter and thereby revoke the shifting order at an early date.
I shall remain greteful to you thereor From the endorsement.
it is also seen that two representatives met the Deputy Commissioner on 13th Februaty, 1984.
Therefore, there was an oral hearing.
The above letter mentions notice after notice to shift.
It was alleged by a petition to the Chief Minister that the Extra Assistant Commissioner had been paid handsomely to allow chakma families to stay on illegally.
On 16th of November, 1982 the Extra Assisstant Commissioner called upon the Circle Officer, Diyum to issue notices to the chakms families 'staying at Joypur village to return to their original place of settlement within 31.12.82.
The survey Reports for resettlement of these chakmas dated 27.4.83 inter alia states: "Survey had been done in Maitripur and Gautampur areas where they have found 110 acres and 245 acres respectively which are liable for settlement of Chakma settlers.
" Thus, it will be clear that the reason for shifting these chakma families are: (1) They are in illegal occupation of the protected area.
(ii) They are indulging in procurement of arms and ammunition.
(iii) They are indulging in criminal activities and associating with anti social elements.
(iv) They have been source of constant/trouble to the other tribals.
As regards notice, it is seen from the above, that the very appellant had notice after notice proposing to evict which was resisted.
Therefore, as rightly urged by Mr. K.K. Venugopal, learned counsel on ground realities, the plea of natural justice is fully satisfied.
424 Ruling in Scheduled Caste and Weaker Section Welfare Association vs State of Karnataka ; affording a hearing to slum dwellers under the Karnataka Slum Areas (Improvement and Clearance) Act, 1973, relied on by Mr. Govind Mukhoty, learned counsel, has no application in the above circumstances.
Even then what is that is sought to be done to the appellants? They are asked to settle in Maitripur and Gautampur villages from Miao.
Cartainly, settling the chakmas in a particular place is a matter of policy.
This Court cannot enter into the wisdom of such a policy, in view of what has been stated above, Arunachal Pradesh is strategically important with Bhutan in the West, Tibet and China in the North and North East, Burma (Myanmar) in the East.
It is true that fundamental right is available to a foreigner as held in Louis De Raedt vs Union of India ; at 562.
"The next point taken on behalf of petitioners, that the foreigners also enjoy some fundamental rights under the Constitution of this country, is also of not much help to them.
The fundamental right of the foreigner is confined to Article 21 for life and liberty and does not include the right to reside and settle in this country, as mentioned in Article 19 (1) (e) which is applicable only to the citizens of this country As such Articles 19 (1) (d) and (e) are unavailable to foreigners because those rights are conferred only on the citizens.
Certainly, the machinery of Article 14 cannot be invoked to obtain that fundamental right.
Rights under Article 19 (1) (d) and (e) are expressly withheld to foreigners.
Now we come to the humanitarian grounds which prompted the High Court of Gauhati to direct compensation to the appellants in the event of their being evicted.
Blackburn and Taylor speaking on the right enjoy asylum in Human Rights for the 1990 s state at page 51 as under: "The most urgent need of a fugitive is a place of refuge.
His or her most fundamental right is to be granted asylum.
The Universal Declaration of Human Rights addressed this issue in deceptive language.
To the inexpert reader there is great comfort in Article 14 (1) of that Declaration, which provides that: 'Everyone has the right 425 to seek and enjoy in other cuntries ' asylum from persecution, it seems tolerably clear, however, that the right to enjoy asylum means no more than the right to enjoy it if is granted.
" Again at page 52 it is stated thus: "Article 14 of the Universal.
Declaration of Human Rights, which speaks of the right to enjoy asylum has to be interpreted in the light of the instrument as a whole; and must be taken to mean something.
It implies that although an asylum seeker has no right to be granted admission to a foreign state, equally a state which has granted him asylum must not later return him to the country whence he came.
Moreover, the Article carries considerable moral authority and embodies the legal prerequisite of regional declarations and instruments.
" Warwick Mckean, dealing with the equality in the treatment of aliens, states in Equality and Discrimination under International Law at pace 194 as under: "It has long been recognized that persons who reside on the territory of countries of which they are not nationals possess a special status under international law.
States have traditionally reserved the right to expel them from their territory and to refuse to grant them certain rights which are enjoyed by their own nationals, e.g. the right to vote, hold public office or to engage in political activities.
Aliens may be prohibited from joining the, civil service or certain professions, or from owning some categories of property, and states may place them under restrictions in the interests of nations security or public order.
Nevertheless, once lawfully admitted to a territory, they are entitled to certain minimum rights necessary to the enjoyment of ordinary private life.
" At pages 195 196 it is stated thus: "General international law provides that aliens should not be discriminated against in their enjoyment of property rights once they have been acquired.
If alien property is nationalized whereas the property of nationals remains unaffected then that act is dis criminatory and prohibited under international law.
As Fitzmaurice points out, it has long been recognized that in certain matters, e.g. 426 the general treatment of foreigeners in a country, or compensation for property which may be expropriated or nationalized, non discrimination as between persons of different nationality or against foreigners as compared with persons of local nationality, amounts to a rule of international law, the breach of which gives rise to a valid claim on the part of the foreign government whose national is involved." Certainly, if the acquisition had been legal, compensation could have been awarded.
But in view of the Bengal Eastern Frontier Regulation, 1873 and clause 9 (2) of the Foreigners Order 1948 we do not think this is a case for award of ' compenstion.
Though we have held that the principles of natural justice have been fully complied with in this case, we record the statement made by learned counsel for the State that the Chief Minister is ready to hear the Respondents (appellants herein) or any representative of their group.
Accordingly we direct that an opportunity be afforded to the appellants by the Chief Minister and grant such relief as he deems fit.
We make it clear that it will be a post decisional hearing.
Accordingly we dismiss civil appeal arising out of SLP (C) No. 13767 of 1992 filed by Khudiram Chakma while civil appeal arising out of SLP(C) No.12429 of 1992 filed by State of Arunachal Pradesh is allowed.
However,there shall be no order as to costs.
R.P. SLP (C) No. 13767/92 dismissed.
SLP (C) No. 12429/92 allowed. [/INST] The appellant in Civil Appeal No.481 of 1983, and thousands of other families, known as Chakmas, migrated from the erstwhile East Pakistan to Assam where they were given shelter as refugees in 1964.
In the year 1966 the Government drew up the Chakma resettlement Schemes whereunder they were allotted lands within the North East Frontier Agency, which later became State of Arunachal Pradesh.
The appellant and 56 other Chakma families strayed away from the original settlement area and negotiated with the local Raja who through an unregistered deed donated land to them inside the inner line which was a protected area under the Foreigners ' Protection Area Order 1958.
Later, the State Govenment received complaints that the 402 Chakmas were making encroachment on lands of local people, indulging in illegal collection of arms and ammunition and establishing contacts with the extremist groups.
An inquiry into the matter was directed.
The Government found it necessary to shift them, and by order dated 15.2.1984 directed the appellant and the other Chakma families to vacate the land and to shift to the original settlementarea where other Chakma families were already` residing.
The appellant challenged the order before the High Court by filing a writ petition which was dismissed.
However, the High Court, on humanitarian grounds, directed the State Government to give adequate compensation to the Chakmas.
Both, the appellant and the State Government filed the appeals by special leave.
It was contended on behalf of the appellant that the appellant and the other Chakmas being of Indian origin and having returned to Assam State in 1964, would be entitled to citizenship under Section 6A of the , and by mere accident of their going to Arunachal Pradesh they cannot lose their citizenship; and that the order dated 15.2.1984, besides being against the principles of natunal justice, was violative of Article 14 of the Constitution as it infringed the rights of the appellant and other Chakmas under Articles 19(1) (d) and (e) of the Constitution.
Dismissing the appeal on behalf of the Chakmas and allowing that of the State, this Court, HELD : 1.1 The appellant and other Chakmas residing in Arunachal Pradesh long before 1985 cannot be regarded as citizens of India.
[420 H] 1.2 Under Section 6 A of the , which was incorporated by the Amending Act, 1985 as a result of Assam Accord, two conditions are required to be satisfied: (1) Persons of Indian origin (undivided India) who came before 1.1.1966 to Assam from the specified territory; and (2) they have been "ordinarily resident" in Assam as it existed in 1985 since their date of entry in Assam.
[411 G H; 412 A] 1.3 Though the appellant and other Chakmas were of Indian origin and came to Assam prior to 1.1.1966 from the then East Pakistan, one of the specified territories but, in 1966 they shifted to the area within North East Frontier Agency which later became State of Arunachal Pradesh, and at no time was part of the Territory of the State of Assam though was being administered by the Governors of Assam or the President of India, as the case 403 may be.
Besides, bt the , the territories of Arunachal Pradesh were excluded from the purview of the Immigrants (Explusion from Assam) Act, 1950.
The appellant and the other Chakmas were residing in Arunachal Pradesh long before 1985, and as such cannot be said to be "ordinarly resident" in Assam as it existed in 1985 since their date of en try in Assam.
(420 A F) Smt.
Shanno Devi vs Mangal Saini ; , relied on.
1.4 If the law lays down certain conditions for acquiring citizenship, the same cannot be disregarded.
(421 A) Kennedy vs Mendoza Martinez ; ,159 [1963], referred to.
Arstotle, Politics, III, 5, referred to.
2.The place where the Chakma families are residing is within the inner line notified by the State Government.
The place is the protected one under the Foreigners 'Protection Area Order, 1958, wherein acquisition of any land or any interest thereon by any foreigner is prohibited as envisaged by clause section 7 of the Bengal Eastern Frontier Regulation, 1873 and Clause 9(2) of the Foreigners ' Order 1948 issued under Section 3 of the .
(410 DE) 2.2Accordingly, the donation deed through which the Raja gave land to the appellant and the other Chakmas is illegal.(421 D) 2.3Unlike article 21, rights under Articles 19(1) (d) and (e) of the Constitution are unavailable to foreigners because these rights are conferred only on the citizens and are expressly withheld to foreigners.
The machinery of Article 14 cannot be invoked to obtain that fundamental right.(424 E) Indo China Steam Navigation Co. vs Jasjit Singh, [1964]6 SCR 594 at 621 to 622, followed.
Louis De Raedt vs Union of Indian ; , referredto.(412 CD) 404 3.1 Settling the Chakmas in a particular place is a matter of policy.
This Court cannot enter into the wisdom of such a policy.
Besides, the reasons for shifting the Chakma families are : they are in illegal occupation of the protected are, they are indulging in procurement of arms and anununitions and other criminal activities; they are associating with anti social elements, and have been source of constant trouble to the local tribals.
Arunachal Pradesh being a Border State is stategically important (424B, 423EFG) 4.
In the instant case, the principles of natural justice were fully complied with.
It cannot he said that the order dated 15.2.1984 for shifting the Chakmas came to be issued like 'a bolt from the blue '.
The record mentions that before passing of the shifting order, notice after notice were issued to chakma families to return to their original place of settlement.
Survey Reports for their settlement were submitted and representation were made to the authorities concerned who gave oral hearing to the representatives of Chakmas.
(412 GH) Scheduled Caste and Weaker Section Welfare Association vs State of Karnataka, [1991]2 SCC 604, inapplicable.
R. vs Secretary of Stale for the Home Department, ; Brind vs Secretary of State ; ; Council of Civil Service Unions vs Minister for the Civil Service; ; ; McInnes vs onslow Farme & Anr., D) p. 219; JR Vohra vs India Export House pvt.
Ltd.; , ; Maharashtra State Board of Secondary & Higher Education vs K.S. Gandhi, and Satya Vir Singh vs Union of India, , referred to.
5.1 In view of the Bengal Eastern Frontier Regulation, 1873 and Clause 9(2) of the Foreigners 'Order 1948 the acquisition of the land being illegal, the instant one is not a case for award of compensation.
(426 C) 5.2 However, having regard to the statement made on bahalf of the State that the Chief Minister is ready to hear the Chakmas, an opportunity be afforded to them by the Chief Minister who may grant such relief as may be deemed fit.
It is made clear that it will be a post decisional hearing.
(426 D) 405 Blackburn and Taylor on the right to enjoy asyum in Hussan Rightsior the 1990s, 'Equality and Discrimination under International Law ' by Warwick Mckean, referred to. </s> |
<s>[INST] Summarize the following judgement: Appeal No. 4851 (NT) of 1990.
From the Judgment and Order dated 31.1.89 of the Madras High Court in Tax Case No. 900 of 1979, K.N. Shukla, R. Satish for Ms. A. Subhashini for the Appellant.
T.A. Ramachandran and Mrs. Janaki Ramachandran for the Respondent.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY.J.
This appeal is preferred by the assessee against the judgment of the Madras High Court answering the question referred to it under section 256 (1) of the Income tax Act in favour of the Revenue and against the assessee.
The question stated, at the instance of the High Court reads: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the assessable capital gain would be only Rs. 1,81,671 computed in the manner set out in paragraph 14 of the order of the tribunal? The assessee is a registered firm.
The assessment year concerned is 1973 74, the relevant previous year being the financial year 1972 73.
During the said previous year, the assessee sold shares held by him in several companies.
From the sale of 'shares in three companies, it secured a gross long term capital gain of Rs. 5,61,508.
However, in the sale of shares in six other companies, it sustained a long term capital loss in a sum of Rs. 96,583.
The assessee computed the capital gains on the aforesaid transaction of sale of shares in the following manner: Gross long term capital gains Rs. 5,61,508.00 LESS, Deduction under Rs. 5,000.00 Section 80 T (b) Rs. 5,65,508.00 LESS:Deduction under section 80 T (b) (ii) at 50% Rs. 2,78,254.00 449 LESS Loss on sale Rs. 2,76,254.00 of shares Rs. 96,583.00 Profits: Rs. 1,81,671.00 The Income tax Officer did not agree with said mode of computation.
He set off the long term capital loss against the long term capital gain in the first instance and then applied the deductions provided by section 80 T to the balance figure of Rs. 4,64,925.
His computation was in the following terms: Gross long term capital gain Rs. 5.61,508 LESS: Long term capital loss of the same year Rs. 96,583 Balance of long term capital gains of the year Rs. 4,64,925 LESS: Deduction under section 80 T(b) (ii) at 50% Rs. 2,29,962 Capital gains included in the total income Rs. 2,29,963 Aggrieved by the order of assessment, the assessee preferred an appeal which was dismissed by the Appellate Assistant Commissioner.
On further appeal, however, the Tribunal agreed with his mode of computation.
Thereupon the Revenue asked for and obtained the said reference.
The High Court answered the said question in the negative i.e., in favour of the Revenue, on the following reasoning: the income from capital gains constitutes a separate head of income under the Act.
Capital gains are bifurcated into long term capital gains and shurt term capital gains.
In this case the Court is concerned only with long term capital gains.
Section 70 (2) (ii) prescribes the manner in which the loss from sale of longterm capital asset is to be set off.
According to the said provision, the assessee " shall be entitled to have the amount of such loss set off against the income, if any, as arrived at under the similar computation made for the assessment year in respect of any other capital asset not being a short term capital asset".
Support for the said proposition was derived from the decision in Commissioner of Income Tax vs 450 Sigappi Achi, The correctness of the view taken by the High Court is questioned in this appeal.
Shri T.A. Ramachandran, learned counsel for the appellant submitted that according to the provisions and scheme of the Act, capital gains have to be computed in respect of each asset separately.
Section 80 T prescribes different percentages of deduction for different types of capital assets: If the capital asset sold consists of "buildings or land or any rights in buildings or lands", the deduction provided is 35% in addition to the standard deduction of Rs. 5,000 Whereas in the case of any other capital asset, the percentage of deduction provided is 50%, in addition to the standard deduction of Rs. 5,000/ .
The deductions have to be worked out separately where the capital assets transferred during a previous year fall in both the categories.
Even the proviso to section 80T shows that the gains arising from the transfer of these two types of capital assets must be treated as separate and distrinct.
If the capital gains arising from the transfer of both the types of capital assets are clubbed together, it would not be possible to work out the provisions of section 80 T.
The correct method, therefore, is to compute the capital gains with respect to each asset transferred separately, in accordance with section 80 T, before setting off the losses.
We are afraid the arguments advanced by Mr. Ramachandran travel far beyond the controversy involved herein.
This is not a case where the assets transferred by the assessee during the relevant previous year consisted both the types of capital assets.
They were of only one type namely shares.
From the sale of certain shares the assessee derived profit and from the sale of certain other shares, he suffered loss.
The simple question is how to work out and apply the deductions provided by section 80 T in such a case.
For answering this question, it is necessary to notice the provisions of section 80 T and section 70, as they stood during the relevant previous year. "80 T. Where the gross total income of an assessee not being a company includes any income chargeable under the head "Capital gains" relating to capital assets other than short term capital assets (such income being, hereinafter , referred to as long term capital gains), there shall be allowed, in computing the total income of the assessee, a deduction from such income of an amount equal to, (a)in a case where the gross total income does not exceed ten thousand rupees or where the long term capital gains do not exceed five thousand rupees, the whole of such long term capital gains; 451 (b)in any other case, five thousand rupees as increased by a sum equal to, (i)(thirty five percent) of the amount by which the long term capital gains relating to capital assets, being buildings or lands, or any rights in buildings or lands, exceed five thousand rupees; (ii)(fifty per cent.) of the amount by which the long term capital gains relating to any other capital assets exceed five thousand rupees: Provided that in a case where the long term capital gains relate to buildings or lands, or any rights in buildings or lands, as well as to other assets, the sum referred to in sub clause (ii) of clause (b) shall be taken to be (A)where the amount of the long term capital gains relating to the capital assets mentioned in sub clause (i) is less than five thousend rupees, (fifty percent.) of the amount by which the long term capital gains relating to any other capital assets exceed the difference between five thousand rupees and the amount of the long term capital gains relating to the capital assets mentioned in sub clause (i); and (B)where the amount of the long term capital gains relating to the capital assets mentioned in sub clause (i) is equal to or more than five thousand rupees, (fifty percent.) of the long term capital gains relating to any other capital assets.
70(1) Save as otherwise provided in this Act, where the net result for any assessment year in respect of any source falling under any head of income other than 'Capital gains ' is a loss, the assessee shall be entitled to have the amount of such loss set off against his income from any other source under the same head.
(2)(i) Where the result of the computation made for any assessment year under sections 48 to 55 in respect of any short term capital asset is a loss, the assessee shall be entitled to have the amount of such loss set off against the income, if any, as arrived at under a similar computation made for the assessment year in respect of any other capital asset.
452 (ii)Where the result of the computation made for any assessment year under sections 48 to 55 in respect of any capital asset other than a short term capital asset is a loss, the assessee shall be entitled to have the amount of such loss set off against the income, if any, as arrived at under a similar computation made for the assessment year in respect of any other capital asset not being a short term capital asset.
" The opening words of section 80 T are relevant.
If the gross total income of an assessee (not being a company) "includes any income chargeable under the head "capital gains" relating to capital assets (referred to as long term capital gains) there shall be allowed in computing the total income of the assessee a deduction from such income of an amount equal to. . . . .
In our Judgment delivered on April 13, 1993 in Civil Appeal No. 3044 of 1983 (Commissioner of Income Tax vs V Venkatachalam) we have held that the deductions provided by section 80 T have to be applied to the "capital gains" arising from sale of long term capital assets.
In other words, the deductions provided by the said section have to be applied to the amount representing the capital gains during the relevant previous year.
The amount of capital gains during the relevant previous year means the profits derived minus the losses suffered.
This is precisely the opinion of the High Court, with which view we agree.
It is not possible to treat the transfer of each asset separately and apply the deductions separately.
If the argument of the learned counsel for the appellant is logically extended it would mean that even the deduction of Rs. 5,000 should be applied in each case separately.
Learned counsel, however, did not take that stand.
He agreed that the standard deduction of Rs. 5,000 must be applied to the totality of the capital gains.
At the same time, he says, the deductions provided in clause (b) should be applied separately to each asset.
We have not been able to appreciate the logic behind the contention of the learned counsel.
This is not a case where the capital assets transferred consist of two types mentioned in sub clauses (i) and (ii) of clause (b) of section 80 T.
They are only of one type namely those falling under sub clause (ii).
We need not, therefore, deal with or answer the hypothetical contention raised by the learned counsel.
Further as pointed out by the High Court the provision contained in clause (ii) of subsection (2) of section 70, as it stood at the relevant time, supports the conclusion arrived at by us.
The learned counsel for the appellant relied upon the decision of this Court in Commissioner of Income Tar (Central), Madras vs Canara Workshops Private 453 Limited, That was a case arising under section 80 E of the Act, as it stood during the assessment years 1966 67 and 1967 68.
On the language of section 80 E, it was held that in computing the profits for the purpose of deduction under the said section, each 'priority industry ' must be treated separately.
We do not see how the principle of the said decision has any application to the facts of this case, which has to be decided on the language of a different provision namely section 80 T read with section 70 (2) (ii).
For the above reasons, we agree with the opinion expressed by the High Court and dismiss this appeal.
No order as to costs.
N.V.K. Appeal dismissed. [/INST] The appellant assessee was a Registered Firm.
The assessment year concerned was 1973 74.
During the relevant previous year being the financial year 1972 73, the assessee sold shares it held in several companies; from the sale in three companies it secured a gross long terms capital gain of Rs.5,61,508 However, in the sale of shares in six other companies it sustained a long term capital loss in a sum of Rs. 96,583.
The assessee computed the capital gains on these transactions of sale of shares less the deductions under Section 80 T(b) and Section 80T (b) (ii) (1) and showed a profit of Rs. 1,81,671.00 The Income Tax Officer did not agree with the mode of computation indicated by the asssessee; and set off the long term capital loss against the long term capital gain in the first instance and then applied the deductions, provided by Section 80 T to the balance figure and ultimately computed the capital gains included in the total income at Rs. 2,29,963.
The assessee aggrieved by the aforesaid assessment preferred an appeal which was dismissed by the Appellate Assistant Commissioner.
In further appeal by the assessee the Tribunal agreed with the assessee 's computation.
Revenue asked for and obtained a reference which the High Court answered in the negative i.e. in favour of the Revenue.
The High Court held that the income from capital gains constituted a separate head of income under the Income Tax Act and that capital gains are bifurcated into long term capital gains and short term capital gains, and 446 447 relying on the decision in Commissioner of income Tax vs Sigappi Achi, held that in the instant case it was concerned only with long term capital gains, and that Section 70 (2) (ii) prescribes the manner in which the loss from sale of long term capital asset is to be set off.
In the appeal to this Court it was submitted on behalf of the appellant assessee that according to the provisions and scheme of the Income Tax Act capital gains had to be computed in respect of each asset separately and that Section 80 T prescribes different percentages of deduction for different types of capital assets, and that the correct method, therefore, is to compute the capital gains with respect to each asset transferred saparately, in accordance with Section 80 T before setting off the losses.
Dismissing the appeal, this Court, HELD: 1.
This is not a case where the assets transferred by the assessee during the relevant previous year consisted of both the types of capital assets, mentioned in sub clauses (i) and (ii) of clause (b) of Section 80 T.
They were of only one type namely those failing under sub clause (ii) viz. shares.
From the sale of certain shares the assessee derived profit and from the sale of certain other shares, he suffered loss.
(450 E) 2.
The deductions provided by Section 80 T have to be applied to the " capital gains" arising from sale of long term capital assets.
In other words, the deductions provided by the said section have to be applied to the amount representing the capital gains during the relevant previous year.
The amount of capital gains during the relevant previous year means the profits derived minus the losses suffered.
(452 D) 3.
It is not possible to treat the transfer of each asset separately and apply the deductions separately.
(452 E) Commissioner of Income Tax vs V Venkarachalam, Civil Appeal No. 3044 of 1993, dated April 13,1993, relied on.
Commissioner of Income Tax (Central) Madras v, Canara Workshops Private Limited, , distinguished. </s> |
<s>[INST] Summarize the following judgement: l Leave Petition (Civil) No. 4460 of 1993.
From the Judgment and Order dated 15.1.1993 of the Himachal Pradesh High Court in Civil Writ Petition No. 566 of 1990.
Arun Jaitley and Maninder Singh for the Petitioner.
The following Order of the Court was delivered: How statutory bodies waste public money in fruitless litigation to satisfy 479 misplaced ego is demonstrated by this petition.
The opposite party was appointed as Sales Girl by the petitioner, a cooperative society registered under Cooperative Societies Act, running a Super Bazar in Shimla.
When one of the managers came there on transfer, her trouble started.
Apart from insult, humiliaton and harassment thrust on her, that manager terminated her services illegally without being authorised to do so and without obtaining permission of the Administrator and without giving any notice or hearing her.
The opposite party who had been apprising her superiors of that manager 's misbehaviour and of her apprehensions that he was out to get rid of her although was assured not only of his good behaviour and security of her services, immediately took recourse to legal action.
To her misfortune the Assistant Registrar decided her case after seven years.
It was held by him that the order of termination was illegal, arbitrary and was passed without obtaining approval of the Administrator.
He directed the petitioner to reinstate her but did not grant any back wages.
Even with this order which was prejudicial to her the opposite party was satisfied but the ego of petitioner was hurt.
For eight months the order was not implemented by the petitioner as it was contemplating to file the appeal.
And when the petitioner succeeded in obtaining the order it informed the opposite party that her Joining Report could not be entertained.
Since then the opposite party has been knocking at the door of the petitioner but she was made to approach the appellate authority, the revising authority, the High Court, the Labour Court and finally the High Court again as the petitioner did not succeed anywhere but went on filing appeal and revision forcing the opposite party to file cross appeal or revision or even writ for her back wages and other benefits.
Not one authority, even in the cooperative department found in favour of petitioner.
Yet the petitioner had the obstinacy not only to approach this Court but to place the blame of inordinate delay on adjudicatory process.
Such obstinacy without the least regard of the financial implications could only be indulged by a public body like the petitioner as those entrusted to look after public bodies affairs do not have any personal involvement and the money that they squander in such litigation is not their own.
Sri Arun Jaitley the learned senior counsel attempted to assail the finding recorded by the High Court and the Labour Court.
Suffice it to say that the conclusions arrived at are not only well reasoned but are based on material on record and could not be demonstrated to be vitiated by any error of Law.
Having failed to persuade us on merits the Learned counsel attempted to highlight the financial difficulty of the petitioner and placed reliance on Surendra Kumar Verma & Ors.
vs Central Government Industrial Tribunal cum Labour Court New, Delhi & Another [1980]4 SCC 443 in support of the submission that 480 the Courts while directing payment of back wages should exercise discretion considering the financial viability of the employer.
It was urged that the respondent has been pursuing her remedy for 16 years therefore the petitioner whose profit margin is very low and the overhead expenses are very high resulting in accumulation of losses for which financial assistance has been granted by State as well as the Central Government for rehabilitation subject to the condition that the amount shall not be utilised towards past debts, shall be rendered in serious predicament brought upon it by the respondent for which it is not responsible.
Nothing is farther than truth.
It was other way round.
In fact it was the petitioner who had disputed, the finding of the Registrar, directing reinstatment without back wages, and made respondent to run from court to court.
When the petitioner did not reinstate her and filed an appeal she too filed a cross appeal for back wages.
It is more than apparent that it was the petitioner who was not complying with the orders passed by the authorities from time to time and was leaving no stone unturned to see that an illegal order passed by its officer was upheld.
We, therefore, do not see any justification for exercising discretion in favour of such a litigant.
Public money has been wasted due to adamant behaviour not only of the officer who terminated the services but also due to cantankerous attitude adoped by those responsible for pursuing the litigation before the one or the other authority.
They have literally persecuted her.
Despite unequal strenght the opposite party has managed to survive.
We are informed that the opposite party has been reinstated.
This was put forward as bonafide conduct of petitioner to persuade us to modify the order in respect of back wages.
Facts speak otherwise.
Working life of opposite party has been lost in this tortuous and painful litigation of more than twenty years.
For such thoughtless acts of its officers the petitioner society has to suffer and pay an amount exceeding three lakhs is indeed pitiable.
But considering the agony and suffering of the opposite party that amount cannot be a proper recompense.
We, therefore, dismiss this petition as devoid of any merit and direct the petitioner to comply with the directions of the High Court within the time granted by it.
We however leave it open to the society to replenish itself and recover the amount of back wages paid by it to the opposite party from the personal salary of the officers of the society who have been responsible for this endless litigation including the officer who was responsible for terminating the services of the opposite patty.
We may clarify that the permission given, shall have nothing to do with the direction to pay the respondent her back wages.
Step if any to recover the amount shall be taken only after payment is made to the opposite party as directed by the High Court.
SLP dismissed. [/INST] The private respondent was appointed as sales girl with the petitioner.
The new manager not only insulted, humiliated and he her, he also terminated her services.
On ber plea, the Assistant Registrar who decided the case after seven years, held the Impugned order as Illegal, arbitrary and passed without obtaining the requisite approval.
He ordered reinstatement of the private respondent but did am grant back wages.
The petitioner Informed the private respondent that her joining report could not be entertained.
The letter was forced to approach the appellate and revising authorities the labour court and finally the High Court for back wages and other benefits.
The petitioner approached this court to assail well reasoned finding recorded by the High Court, without the least regard of the financial implications.
Meanwhile as the petitioner was unable to persuade this courtes of the case, the petitioner made attempt to highlight the financial difficulties in payment of back wages.
Surendra Kumar Varma and others vs Central Government Industrial Tribunal Cum Labour Court, New Delhi & Anr. ; , referred to.
The petitioner urged that the private respondent had been pursuing the 478 ` remedy for 16 years.
And the profit margin of the petitioner being very low and the overhead expenses high.
The State and the Centre who granted financial assistance for rehabilitation subject to the condition that the amount be not paid towards past debts, would be rendered in serious predicament.
On facts this court found that it was the petitioner who was not complying with the orders passed by the authorities from time to time, so there was no justification for exercising discretion in favour of the petitioner.
Dismissing the SLP and upholding the order of the High Court, this Court, HELD: Public money has been wasted due to adamant behaviour not only of the Officer who terminated the services of the private respondent but also due to cantankerous attitude adopted by those who were responsible for pursuing the litigation, and literally persecuted her.
Working life of the private respondent has been lost for more than twenty years.
While considering the agony and suffering, the amount of back wages exceeding three lakhs could not be a proper recompense.
And the reinstatement of the private respondent could not be considered as bonafide conduct for modification of the order of back wages.
(480 D) Leaving it open to the petitioner to replenish itself and recover the amount of back wages from personal salary of its officers who were responsible for the endless litigation and for terminating the services of the private respondents this Court clarified that this permission shall have nothing to do with the direction and the step for recovery be taken only after payment of back wages to the private respondent.
(480 G) </s> |
<s>[INST] Summarize the following judgement: on (c) Nos. 9835 38 of 1983.
(Under Article 32 of the Constitution of India) WITH W.P.(C)Nos.7468 7469/81,3838 39/83,5398/85,5435/85,386/84, 1489/ 86, 12691/85, 489 90/83, 81/83, 68/86 & 1065/87 Lakshmi Chandra Goyal, B.B. Sahni and Serve Mitter for the Petitioners D.P. Gupta, Solicitor General, Ms. Indu Malhotra, Ms. Aysha Khatri, Ms. V. Mohana and Ms. Nisha Bagchi for the Respondents.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY J.
A common question arises in this batch of writ petitions.
We may take the facts in writ petition (C) No. 9835 of 1983 filed by M/s K. B. Handicrafts Emporium & Ors., as representative of the facts in all the cases.
The petitioners are firms engaged in the manufacture and sale of handicrafts items.
They are registered Sales Tax Dealers in the State of Haryana.
They purchased raw material within the State against declaration forms ST 15 prescribed under Rule 21 of the Haryana General Sales Tax Rules read with Section 24 of the Act.
By issuing Form ST. 15, the petitioners undertook that the goods manufactured by them out of the said raw material would be sold by them either within the State or in the course of inter state trade and commerce or in the course of export within the meaning of Section 5(1) of the Central Sales Tax Act.
A dealer issuing the said Form need not pay the purchase tax on such raw material.
After manufacturing the items of handicrafts, the petitioners say, they sold them to dealers in Delhi who, in turn, exported them out of India.
At the time of sale of handicrafts to Delhi dealers, the Delhi dealers issued Form H, prescribed under the Central Sales Tax Rules which means that the goods purchased were meant for export.
Neither party paid tax on the said sale/purchase.
457 For the assessment years in question, the Sales Tax Authorities of Haryana levied purchase tax on the purchase of raw material made by the petitioner, following the decision of the Punjab and Haryana High Court in M/s. Murli.
Manohar and Company Panipat & Ors.
V. State of Haryana & 0rs.
(Civil Writ., Petition No. 1227 of 1980), under section 9 of the Haryana General Sales Tax.
Act, 1973.
However, the assessing authority computed the tax with reference to the purchase value of the goods exported against Form H. The petitioners.
did not choose to file an appeal but directly approached this Court by way of this writ petition on the ground that in view of the decision of the Punjab and Haryana.
Hig h Court in Murli Manohar there was no point in their pursuing the remedies under the Act in that State.
Appeals were preferred in this court against the decision of the Punjab and Haryana High Court in Murli manohar which have been disposed of by this Court on October 25, 1990 (reported in ; This.
Court allowed the appeal and set aside the judgment of the High Court.
When these writ petitions came up for hearing, it was, urged by the learned counsel for the petitioners that in view of the decision of this Court in Murli Manohar the writ petitions must be allowed stria ghtway.
This was demurred to by the learned Solicitor General appearing for the respondent State.
We are of the opinion that the decision of this Court in Murli Manohardoes cover the point raised in these appeals but it is necesary to add a clarification.
Before we do that, it is necessary to state a little background.
Earlier to the.
rendering of the decision in Murli Manohar, a Bench of this.
Court comparising Sabyasachi Mukharji and Ranganathan, JJ.
held in Good year India Ltd. and Ors.
vs State ofHaryana and Anr.
[1990] 2 S.C.C.71 that where the goods manufactured are taken out of Haryana (without effecting a sale) to the branch office or depot of the Manufacturer or to the office or depot of his agent, no purchase tax can be levied under section 9 of the Act on the raw material purchased within the State and used in the manufacture of such goods.
It was held that imposing such ta would amount to levying tax on consignment, which the State Legislature was not ' competent to do.
Section 9 as it then stood, stated expressly that no such purchase tax on raw material was leviable, if the goods manufactured out of such raw material were sold either within the State or were sold in the course of inter state Trade and Commerce or were sold in the course of export within the meaning of Section 5(1) of the Central Sales Tax Act.
MurliManohar was decided in the light.
of the law declared,in Goodyear.
Later, However, a Bench of three.
Judges comprising S.Ran anathan, vs Ramaswami, JJ.
and one of us(B.P.Jeevan Reddy, J.) held that.
Goodyear does not lay down the correct law vide Hotel Balaji and 458 Ors.
vs State of Andhra Pradesh & Ors. etc.
JT It was held in Hotel Balaji that having regard to the scheme of and the objective underlying section 9 it was competent for the State Legislature to levy purchase tax on raw material purchased within the State where the goods manufactured out of such raw material are taken out of the State (without effecting a sale within the State or otherwise than by way of aninter state sale or by way of an export sale within 'the meaning of Section 5(1) of the Central Sales Tax Act).
It was held that such a tax does not amount to consignment tax.
It is this decision in Balaji that calls for a certain clarification of the principles enunciated in Murli Manohar.
The facts in Murli Manohar Were substantially similar to the facts herein.
The dealers within the State of Haryana purchased raw material without paying tax, manufactured goods out of the same and sold the manufactured goods to dealers who in turn exported those goods out of India.
On these facts it was held by the Punjab and Haryana High Court that inasmuch as the sale to exporters was a penultimate sale falling under section 5(3) of the Central Sales Tax Act and further inasmuch as Section 9 of the State Act exempted only export sales within the meaning of section 5(1) of the Central Sales Tax Act but not the penultimate sale falling under Section 5(3), tax under Section 9 was leviable.
On appeal, this court affirmed that Section 9 of the Haryana Act (before it was amended by Haryana Act 1 of 1988) did not exempt as sale falling under Section 5(3) but exempted only a sale failing under section 5(1).
Even so, the appeal was allowed on the following reasoning "the sales made by the assesses can only fall within one of the three categories.
They are either local sales or inter state sales or export sales. . .
We are unable to conceive of a fourth category of sale which could, be neither a local sale nor an interstate sale nor an export sale.
" In other words, the decision says that there can be only three types of sales, namely, intrastate sales, inter :state sales,and export sales and no other.
A sale to an exporter would be either an intrastate sale or an inter state sale; in either case, it does not attract the purchase tax (on raw material) under Section 9 of the Haryana Act, says the decision: It is on this reasoning that the appeals were allowed inspite of the clear enunciation that the sales failing under Section 5(3) of the Central Sales Tax Act were not exempt under Section 9 of the Haryana Act, as it then stood.
The above holding is evidently influenced by the decision in Goodyear, which was good law at the time Murli Manohar was decided.
However, in the light of the decision of Hotel Balaji, it must be held that there is one more category in addition to the three categories mentioned above.
The fourth category is where a dealer in Haryana takes, his goods out of the Haryana without effecting a sale.
An illustration would serve to highlight what we say: a Haryana manufacturer takes his goods to Delhi without effecting a sale.
In Delhi.
if he finds it more profitable, 459 he will sell it to a dealer in Delhi.
Or if he finds it more profitable to sell it to an exporter in Delhi he will sell the same to such exporter.
These two sales are neither intrastate sales nor inter state sales, nor export sales within the meaning of Section 5(1) of the Central Sales Tax Act.
In one Case, it is a sale in Delhi and.
the other, it is a punultimate sale within the meaning of Section 5(3) of the Central Sales Tax Act.
According to Section 9 of the Haryapa Act, as explained in Hotel Balaji and Murli Manohar purchase tax can be levied and collected on the raw.
material purchased by the manufacturer within Haryana, which was utlised for manufacturing the goods so sold in these two situations.
We must make it clear that in a petition under Article 32 of the Constitution, it is not our province to go into facts.
As repeatedlly emphasised by this court, the.
question whether a particular sale is an intra state sale,an inter state sale ,an export sale within the meaning of section 5(1) or a penultimate sale within the meaning of section 5(3), or otherwise, is always a question of fact to be decided by the apporiate authority in the light of the principles enunciated by Courts.
In these circumstances, we content ourselves by declaring the law and leave it to be applied by the appropriate authorities.
Counsel for the petitioners says that all the sales effected by all the petitioners are inter State sales.
May be,or may not be.
We leave the matters to be, disposed of by the authorities under the Act in the light of the law declared by &.Is Court in Murli Manohar, Hotel Balaji and in this judgment.
The writ petitions are disposed of with the aforementioned clarification and, observations.
No costs.
V.P.R. Petitions disposed of. [/INST] Petitioners firms were registered sales tax dealers.
They manufactured and sold handicraft items.
As they purchased raw material within the State against declaration forms ST 15 prescribed under Rule 21 of the Haryana general Sales Tax Rules read with Section 24 of the Haryana General Sales tax Act, purchase tax was not paid.
The petitioners sold the items of handicrafts to dealers in Delhi who exported the same out of India.
As the Delhi dealers issued Form H, prescribed under the Cectral Sales Tax Rules, they did not pay tax on the said sale/purchase.
Following the High court decision in M/s. Murli Manohar and company, Panipat & ors.
vs State of Haryana & Ors.
C.W. P. No. 1227 of 1980.
The Sales Tax Authorities levied purchase tax u/s 9 of the Haryana General Sales Tax Act for the assessment years in question on the purchase of raw material made by the petitioners, computing the tax with reference ' to the purchase value of the goods exported against Form H. Hence the present writ petition before this Court was filed challenging 454 155 the impugned order of levying purchase tax.
Meanwhile this court allowed the appeals preferred against the decision of the High Court in Murli Manohar and Company 's case, setting aside the judgment of the High Court.
As a common question arose in this batch of writ petitions, all petitions heard together.
The petitioners contended that in view of the decision of this Court in Murli Manohar 1991 [1] SCC 377, the writ petitions were to be allowed.
Disposing of the writ petitions, this Court, section HELD: 1.1,.
The decision in Murli Manohar says that there can be only three types of sales, namely, intra state sales, inter state sales and export sales a nd no other.
A sale to an exporter would be either at% intrastate sale or an inter state sale; in either case, the decision says, it does not attract the purchase tax(on raw material) under Section 9 of the Haryana General Sales Tax Act.
However, in the light of the decision in Hotel Balaji, it must be held that there is one more category in addition to the three categories mentioned above.
The fourth category is where a dealer in Haryana takes his goods (out of Haryana (without effecting a sale, within the State), and effects the sale in the other State.
According to Section 9 of the Haryana Act, as explained in Hotel Balaji, purchase tax can be levied and collected on the raw material purchased by the manufacture within Haryana, which was utilised for manufacturing the goods so sold in the other State.
(458 D F) Murli Manohar case.
; , followed.
Good year India Lid.
and Ors.
vs State of Haryana and Anr.
; , referred to.
Hotel Balaji and Ors.
vs State of Andhra Pradesh & ors.
J.T. explained 2.1.
In a petition under article 32 of the Constitution it is not the province of the Supreme Court to go into facts.
As repeatedly emphasised by this Court, the question whether a particular sale is an intra state sale, an inter state sale, an export sale within the meaning of Section 5(1) or a 456 penultimate sale within the meaning of section 5(3), or otherwise, is always a question of fact to be decided by the appropriate authority in the light of the principles enunciated by Courts.
(459 C) 2.2.
In these circumstances, it is directed that the matters be disposed of by the authorities under the Act in the light of the law declared by this Court in Murli Manohar, Hotel Balaji and in this judgment.
(459 D) </s> |
<s>[INST] Summarize the following judgement: Appeal No. 2476 of 1993.
From the Judgment and Order dated 21.2.1992 of the Orissa High Court in O.J.S. No. 4866 of 1991.
476 R. K. Mehta for the Appellants.
H.L. Aggarwal, S.K. Patri, Abhijat P. Medh, Ms. Kirti Mishra and A.K. Panda for the Respondents.
The following Order of the Court was delivered Service of the appellants employed in the school established in the year 1981 recognised in 1983 brought on grants in aid in 1988, were terminated in 1986.
Their termination was not approved by the Inspector of Schools.
Since the order not approving termination was not given effect to by the Institution the appellants approached the High Court by way of a writ petition for a mandamus to reinstate them and grant them their salaries from the date the school became an aided institution.
The High Court did not find any merit in the claim for various reasons.
Section 10 A of the Orissa Education Act provides that the termination of a teacher of an aided institution shall be subject to the approval of the Inspector.
Use of the word 'aided institution ' is clear indication that the provisions of approval apply only to the aided schools.
Since on the date the services of the appellants were terminated the institution was recognised only and not aided the Inspector could not have exercised the power of disapproval.
Consequently no right vested in the appellant which he could get enforced in a court of law.
The submission that the principle of Section 10 A being benevolent in nature should be extended to teachers of the institution once it has been granted recognition to avoid exploitation and undue harassment of those who are unequal in the bargain cannot be accepted.
Recognition of an institution for purpose of imparting education is different than bringing it on grants in aid.
To the former the regulatory provisions of the Education Act or the rules do not apply.
The Education Departments has no control either on admission of students or members of staff.
The High Court, therefore. did not commit any error of law in dismissing the writ petition.
The appeal accordingly fails and is dismissed.
But there shall be no order as Appeal dismissed. [/INST] The services of the appellants were terminated by the Management of a recognised school.
The termination was not approved by the Inspector of Schools.
The appellants filed a writ petition before the High Court for reinstatement and salaries from the date the school became an aided institution.
The High Court having dismissed the writ petition, appellants preferred the present appeal.
Dismissing the appeal, this Court, HELD: Section 10 A of the Orissa Education Act provides that the termination of a teacher of an aided institution shall be subject to the approval of the Inspector of Schools.
Use of the word 'aided institution ' is dear indication that the provisions of approval apply only to the aided schools.
Since on the date the services of the appellants were terminated the institution was recognised only and not aided, the Inspector could not have exercised the power of disapproval.
Recognition of a institution for purposes of imparting education is different than bringing It on grants in aid.
To the former the regulatory provisions of the Education Act or the rules do, not apply.
The Education Department has no control either on admission of students or members of staff.
(476 D F) </s> |
<s>[INST] Summarize the following judgement: Civil Appeals Nos. 85 & 389 of 1957.
Appeal from the judgment and order dated August 26, 1955, of the Calcutta High Court in Income tax References Nos. 44 of 1954 and 17 of 1953.
section Mitra and P. K. Mukherjee, for the appellant (in C. A. No. 85/57.) N. C. Chatterjee and P. K. Ghosh, for the appellant (in C. A. No. 389/57).
R. Ganapathy Iyer, R. H. Dhebar and D. Gupta, for the respondent.
April 15.
The judgment of Sinha and Kapur, JJ., was delivered by Sinha, J. Hidayatullah, J., delivered a separate judgment.
SINHA, J.
The common question of law arising in these two appeals on certificates of fitness granted by the High Court of Calcutta under section 66A(2) of the Indian Income tax Act, 1922, is the effect and scope of the words " constituted under an instrument of partnership" in section 26A of the Income tax Act, which, in the course of this judgment, will be referred to as the Act.
644 The facts of the two cases, leading upto these appeals, though not dissimilar, are not identical.
They are, therefore, set out separately.
In Civil Appeal No. 85 of 1957, Messrs. R. C. Mitter and Sons, 54, Rani Kanto Bose Street, Calcutta, claim to be a firm said to have been constituted in April 1948, with four persons whose names and shares in the nett profits of the partnership business, are stated to be as under (a) Ramesh Chandra Mitter 40 per cent.
of the nett profits.
(b) Sudhir Chandra Mitter 30 per cent.
of the nett profits.
(c) Sukumar Mitter 20 per cent.
of the nett profits.
(d)Sushil Chandra Mitter 10 per cent.
of the nett profits.
The firm intimated its bank, the Bengal Central Bank, Limited, (as it then was), of the constitution of the firm as set out above, by its letter dated April 15, 1948.
The letter also stated that a partnership deed Was going to be drawn up and executed by the partners aforesaid, and that the deed so drawn up, will be forwarded to the bank in due course.
Though the firm is said to have come into existence in April 1948, the deed of partnership which is set out as annexure " A " at P. 5 of the paper book, was drawn up only on September 27, 1949.
This deed of partnership appears to have been registered under the provisions of the Indian Partnership Act, on October 1,2, 1949.
It was also forwarded to the Bengal Central Bank, Ltd., Head Office at Calcutta, as it appears from the seal of the bank and the signature dated December 7, 1949.
An application to register the firm under section 26A, for the assessment year 1949 50, was made to the Income tax Authorities.
The date of the said application does not appear from the record before us.
The application was rejected by the Income tax Authorities.
The firm preferred an appeal to the Income tax Appellate Tribunal, which was also dismissed by the Tribunal by its order dated September 7, 1953.
The ground of the order of the Tribunal was that as the firm admittedly 645 was formed by a verbal agreement in April 1948, and not by or under an instrument in writing dated September 27, 1949, and as the assessment was for the year 1949 50, for which registration of the firm was sought, the registration could not be ordered.
The Tribunal also referred to the letter aforesaid to the Bengal Central Bank, and observed that the letter merely contained information as to the formation of the partnership and of the personnel thereof, but it did not contain the terms on which the partnership had been formed.
It also showed that a partnership had been created but not by deed.
Hence, the Tribunal further observed, the letter might be useful for consideration on the question of the genuineness of the firm, but it could not fulfil the requirements of section 26A, namely, that the firm should be constituted under an instrument of partnership.
Therefore, the Tribunal held that assuming the firm to be genuine, it was not entitled to be registered under section 26A of the Act.
Thereupon, the assessee moved the Tribunal under section 66(1) of the Act.
That application was granted by the order dated February 2, 1954, and the case stated to the High Court for its decision on the following question : " Whether the assessee firm which is alleged to have come into existence by a verbal agreement in April, 1948, is entitled to be registered under section 26A for the purpose of assessment for 1949 50, where the Instrument of Partnership was drawn up only in September, 1949, after the expiry of the relevant previous year ".
The High ' Court Bench, presided over by Chakravarti, C. J., by its judgment dated August 26, 1955, answered the question in the negative.
The learned Chief Justice considered the matter from all possible view points, including grammatical, etymological and textual matters, and came to the conclusion that " constituted " meant created ".
He also considered that the preposition under " is " obviously inappropriate after having convinced himself that " constituted could be equated with "created".
He also found no difficulty in observing that " some of the 646 paragraphs of the Form appear to be ill adjusted to the provisions of the Act and the Rules ".
In the end, therefore, he concluded with the remarks: " It appears to me to be desirable that the language of the section, as also that of the Rules should receive legislative attention ".
In Civil Appeal No. 389 of 1957, Messrs. D. C. Auddy & Brothers, Calcutta, claim to be a partnership consisting of Dulal Chand Auddy, Prem Chand Auddy, Gora Chand Auddy and Kalipada Nandy.
The partnership business is said to have begun in June, 1944.
An application was made on August 24,1949, for the registration of the partnership.
The Income tax Officer and the Appellate Assistant Commissioner were of the opinion that the partnership was not a genuine one, and could not be registered.
Another reason for not ordering registration was that the partnership deed, having been executed on June 2, 1948, could not be operative during the two years under consideration, namely, 1945 46 and 1946 47.
On appeal, the Income.
tax Appellate Tribunal rested its decision on the finding that the alleged partnership had not been constituted under an instrument of partnership within the meaning of those words in section 26A of the Act.
At the instance of the assessee, the Tribunal framed the fol lowing question for determination by the High Court: " Whether the assessee firm constituted orally in June, 1944, can validly be registered in the assessment years 1945 46 and 1946 47 under Section 26A of the Indian Income Tax Act on the basis of a Memorandum of Partnership executed in June 1948.
" The other parts of the statement of the case by the Tribunal, refer to the merits of the assessment, with which we are not concerned in this appeal.
Hence, it is not necessary to set out those facts.
On this part of the statement of the case, the High Court gave the same answer as in the other appeal.
In this case also, the High Court granted the necessary certificate under section 66A(2), read with article 135 of the Constitution.
As both the cases raise the same question of law, they have been heard together, and will be governed by this judgment.
647 It is convenient at this stage to set out the relevant provisions of the Act.
Section 26A is in these terms :" 26A. Procedure in registration of firms. (I) Application may be made to the Income tax Officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purposes of this Act and of any other enactment for the time being in force relating to income tax or super tax.
(2) The application shall be made by such person or persons and at such times and shall contain such particulars and shall be in such form, and be verified in such manner, as may be prescribed and it shall be dealt with 'by the Income tax Officer in such manner as may be prescribed.
" The section contemplates the framing of rules laying down the details of the Form in which the application has to be made and the particulars which should be stated in the application, and other cognate matters.
Section 59 of the Act, authorizes the Central Board of Revenue, subject to the control of the Central Government, to make rules for carrying out the purposes of the Act, and sub section
(5) of section 59 provides that rules made under the section, shall be published in the Official Gazette, and " shall thereupon have effect as if enacted in this Act".
Income tax Rules 2 to 6B lay down the details of the procedure for making an application for the registration of a firm, as contemplated under section 26A, quoted above.
These rules have been amended extensively in 1952, but we are concerned in this case with the rules before those amendments.
Rule 2 requires such an application to be signed by all the partners personally, and to be made before the income of the firm is assessed for the year, under section 23 of the Act.
Rule 3 requires that the application be made in the Form annexed to the rule, and that the application shall be accompanied by the original Instrument of, Partnership under which the firm is constituted. .
The Form appearing in r. 3, requires the assessment year to be specified.
Thus, the registration is for a particular year of assessment, and not for future years also, and therefore, the application for registration has 648 to be made every year, which in fact means an application for renewal of the registration.
Paragraph 3 of the Form requires a certificate to be signed by the applicants for registration, to the effect that the profits (or loss, if any) of the previous year were divided or credited as shown in Section B of the Schedule.
The Form contains the Schedule in 7 columns which require the names of the partners, their addresses, the date of admittance to partnership, their shares in the profits or loss, etc., to be filled in.
Under the Schedule, there are Section A and Section B. Section A has to contain particulars of the firm as constituted at the date of the application, and Section B has to contain the particulars of the apportionment of the income, profits or gains (or loss) of the business in the previous year between the partners who in that previous year were entitled to share therein.
Rule 4 provides that if the Income tax Officer.
is satisfied that there is or was a firm in existence constituted as shown in the instrument of partnership, and that the application has been properly made, he has to enter a certificate at the foot of the Instrument of Partnership that the firm has been registered under section 26A of the Act, and that the certificate of registration shall have effect for the assessment for the year specified therein.
Rule 5 is as follows:" 5.
The certificate of registration granted under Rule 4 shall have effect only for the assessment to be made for the year mentioned therein.
"And Rule 6 makes provision for the certificate of registration to be renewed for a subsequent year, on an application being made in that behalf in accordance with the preceding Rules.
It is manifest that for a true and proper construction of the relevant provisions of the Act, relating to registration of firms, sections 26, 26A and 28, and the Rules summarized above, have to be read together.
So read, it is reasonably clear that the ' following essential conditions must be fulfilled in order that a firm may be held entitled to registration: (1) That the firm should be constituted under an Instrument of Partnership, specifying the individual shares of the partners.
649 (2) That an application on behalf of, and signed by, all the partners, containing all the particulars as set out in the Rules, has been made; (3) That the application has been made before the assessment of the income of the firm, made under section 23 of the Act (omitting the words not necessary for our present purpose), for that particular year; (4) That the profits (or loss, if any) of the business relating to the previous year, that is to say, the relevant accounting year, should have been divided or credited, as the case may be, in accordance with the terms of the Instrument; and lastly, (5) That the partnership must have been genuine, and must actually have existed in conformity with the terms and conditions of the Instrument.
It is clear from what has been said above with reference to the relevant provisions of the Act, that the certificate of registration has reference to a particular assessment year, and has effect for the assessment to be made for that particular year.
In other words, the terms of the partnership should appear in the Instrument of Partnership in respect of the relevant accounting year.
It is equally clear that the firm to be registered, should have been in existence during the accounting year, " constituted as shown in the Instrument of Partnership ".
The Rules, thus, contemplate a document operative during the accounting year.
We are not here concerned with the further question whether the document should be in existence at the very inception of the accounting year, or before the year is out.
The provisions of the Act, set out above, do not present any serious difficulty except for the words it constituted under an Instrument of Partnership " occurring in section 26A and the relevant Rules.
On the interpretation of these words, there has been a conflict of judicial opinion, as will presently appear.
On behalf of the assessee appellants, it has been contended that so long as the assessment has not been made, the assessees are entitled to have their firms registered in accordance with the terms of the Instrument of 82 650 Partnership, irrespective of the year in which the Instrument may have come into existence.
Strong reliance was placed upon the decision of the Bombay High Court (Chagla, C. J., and Tendolkar, J.) in the case of Dwarkadas Khetan & Co. vs Commissioner of Income tax, Bombay City, Bombay(1), wherein, the following observations have been made: " Any firm can make an application under section 26A for registration and the two conditions that it has got to comply with are that it must be constituted under an instrument of partnership and the second condition is that the instrument of partnership must specify the individual shares of the partners.
If these two conditions are satisfied it would be entitled to registration.
The section does not say that the firm must be constituted by the instrument of partnership.
It does not require that the firm must come into existence by reason of the instrument of partnership, or that the firm should be the creature of the instrument of partnership, or that the firm must not exist prior to the instrument of partnership being executed.
In the case decided by the Bombay High Court, the Instrument of Partnership had been executed on March 27, 1946, with effect from January 1, 1946.
On an application made to the Department to register the firm, the matter was determined by the Income tax Appellate Tribunal against the assessee on the ground that the partnership was in existence before the deed was executed, and that, therefore, it could not be registered.
Before the Bombay High Court, reliance had been placed on behalf of the Department on the decision of the Calcutta High Court, now before us in appeal, as also on a decision of the Punjab High Court.
The decision of the Calcutta High Court now under examination, in the case of R. C. Mitter & Sons vs Commissioner of Income tax (2), takes the view that section 26A of the Act contemplates a firm created or brought into existence by an Instrument of Partnership, which governs the distribution of shares in the relevant accounting period.
Such a deed should have (1) [1956) , 907.
(2) , 704, 705.
651 come into existence on or, before the commencement of the relevant accounting period.
The other decision relied upon in the Bombay High Court, had been given by a Division Bench of the Punjab High Court, reported in Padam Parshad Rattan Chand vs Commissioner of Income tax, Delhi (1).
On the other hand, it has been contended on behalf of the Revenue that in order to entitle a firm to be registered, the firm should have been created by an Instrument of Partnership, or at any rate, such an Instrument should be in existence during the relevant accounting year, that is, the year previous to the year of assessment in respect of which the application for registration has been made.
For the first part of the submission on behalf of the respondent, there is ample authority in the decision under appeal, which bad been relied upon before the Bombay High Court.
In that case, (R. C. Mitter & Sons vs Commissioner of Income tax (supra) (2) ), Chakravarti, C. J., who delivered the opinion of the Court under section 66(1) of the Act, after a very elaborate discussion, came to the conclusion which may best be expressed in his own words, as follows: " If by the expression I constituted under an instrument of partnership ' is meant a firm which originated in a verbal agreement but with respect to which a formal deed was subsequently executed, there would be no room in the section for partnerships actually created by an instrument and such partnerships, although most obviously entitled to registration, would be excluded from the purview of the section.
Even etymologically or textually, I do Dot think that the word constituted ', when used in relation to a firm or such other body, can mean anything but I created when the reference is to some deed or instrument to which the inception of the firm or other body is to be traced. " After having, thus, held that section 26A contemplated firms created or brought into existence by a deed in writing, he had no difficulty in substituting " by " for " under ", thus, making the crucial words " constituted (I) (2) , 704, 705. 652 by " instead of " constituted under ".
In our opinion, the learned Chief Justice fell into the error of re constructing the provisions of the statute, instead of construing them.
The word " by " could be substituted for the word " under " in section 26A only if the words, as they stand in the section, were not capable of making sense, and it would, thus, have been necessary to amend the wording of the section.
Turning his attention from the wording of the section to that of the Rules and the Form appearing under the Rules, he again came to the conclusion that " some of the paragraphs of the Form appear to be ill adjusted to the provisions of the Act ".
Referring to other parts of the Rules, he was constrained to observe that they" would lend strong support to the view that what is meant by 'any firm constituted under an instrument of partnership ' in section 26A is no more than a fir of which the constitution appears from an instrument in writing.
It is obvious that if such be the meaning of the expression 'constituted under an instrument of partnership ', the instrument need not be one by which the partnership was created ".
But then he attempted to get over that difficulty by observing that the language of the Rules and the Form could not supersede a provision contained in the Act itself.
He further opined that the language in para.
4(1) is " un doubtedly unsatisfactory ".
In our opinion, any attempt to reconstruct the provisions of the relevant section and the Rules, on the assumption that the intention of the legislature was to limit the registration of firms to only those which have been created by an Instrument of Partnership, is, with all respect, erroneous.
The proper way to construe the provisions of the statute is to give full effect to all the words of the relevant provisions, to try to read them harmoniously, and then to give them a sensible meaning.
Hence, we have to consider, at the threshold, the question whether the words " constituted under an Instrument of Partnership " have some meaning which can be attributed to them harmoniously with the rest of the relevant provisions.
A partnership may be created or set up by a contract in writing, 653 setting out all the terms and conditions of the partnership, but there may be many cases, and perhaps, such cases are more numerous than the other class, where a partnership has been brought into existence by an oral agreement between the parties on certain terms and conditions which may subsequently be reduced to writing which will answer the description of an Instrument of Partnership.
Such an instrument would, naturally, record all the terms and conditions of the contract between the parties which,.
at the initial stages, had not been reduced to writing.
In such a case, though the partnership had been brought into existence by an oral agreement amongst the partners, if the terms and conditions of the partnership have been reduced to the form of a document, it would be right to say that the partnership has been constituted under that instrument.
The word " constituted " does not necessarily mean " created " or " set up ", though it may mean that also.
It also includes the idea of clothing the agreement in a legal form.
In the Oxford English Dictionary, Vol.
II, at pp.
875 & 876, the word " constitute " is said to mean, inter alia, " to set up, establish, found (an institution, etc.) " and also " to give legal or official form or shape to (an assembly, etc.) ".
Thus, the word in its wider significance, would include both, the idea of creating or establishing, and the idea of giving a legal form to, a partnership.
The Bench of the Calcutta High Court in the case of R. C. Mitter and Sons vs Commissioner of Income tax(1), under examination now, was not, therefore, right in restricting the word " constitute " to mean only " to create ", when clearly it could also mean putting a thing in a legal shape.
The Bombay High Court, therefore, in the case of Dwarkadas Khetan and Co. vs Commissioner of Income tax, Bombay City, Bombay (2), was right in holding that the section could not be restricted in its application only to a firm which had been created by an instrument of partnership, and that it could reasonably and in conformity with commercial practice, be held to apply to a firm which may have come into existence earlier by an (1) , 704, 705.
(2) , 907.
654 oral agreement, but the terms and conditions of the partnership have subsequently been reduced to the form of a document.
If we construe the word " constitute " in the larger sense, as indicated above, the difficulty in which the learned Chief Justice of the Calcutta High Court found himself, would be obviated inasmuch as the section would take in cases both of firms coming into existence by virtue of written documents as also those which may have initially come into existence by oral agreements, but which had sub.
sequently been constituted under written deeds.
The purpose of the provision of the Income tax Acts.
26A is not to compel the firms which had been brought into existence by oral agreements, to dissolve themselves and to go through the formality of constituting themselves by Instruments of Partnership.
If we construe the words " constituted under " in that wider sense, we give effect to the intention of the legislature of compelling a firm which bad existed as a result of an oral agreement, to enter into a document defining the terms and conditions of the partnership, so as to bind the partners to those terms, before they could get the benefit of the provisions of section 23 (5) (a).
Section 23 (5) (a) confers a privilege upon partners who may find it more worth their while to be assessed upon their individual total income than upon the total income of the partnership.
It is, therefore, very important from the point of view of the Revenue that the Department should be apprised in time of the true constitution of the partnership, the names of the true partners and the precise share of each of them in the partnership profits (or loss, if any).
The very object of this provision will be defeated if the alleged partner ship is not genuine, or if the true constitution of the partnership and the respective shares of the partners, are not fully and correctly placed on record as soon as possible, for the purpose of 'assessment.
In this connection, the provisions of section 28(2) of the Act, are also worth noticing.
That sub section provides that if the Income tax Officer or the Appellate Authorities under the Act, are satisfied that the profits of a registered firm have been distributed otherwise than 655 in accordance with the shares of the partners, as shown in the Instrument of Partnership registered under the Act, and governing such distribution, and that any partner has concealed any part of his profits, the penalty prescribed therein may be imposed upon such a partner.
Unless the Instrument of Partnership has been registered in respect of the accounting year and before the assessment has been done, the penal provisions aforesaid cannot be enforced.
It is, therefore, essential, in the interest of proper administration and enforcement of the relevant provisions relating to the registration of firms, that the firms should strictly comply with the requirements of the law, and it is incumbent upon the Income tax Authorities to insist upon full compliance with the requirements of the law.
But, in our opinion, there is no warrant in the words of the relevant provisions of the statute for restricting registration under section 26A of the Act to those firms only which have been created or brought into existence by an Instrument of Partnership.
In our opinion, it is more in consonance with the terms of the relevant provisions of the Act, referred to above, to hold that the words " constituted under an instrument of partnership " include not only firms which have been created by an Instrument of Partnership but also those which may have been created by word of mouth but have been subsequently clothed in legal form by reducing the terms and conditions of the partnership to writing.
We have already indicated that there has been a conflict of judicial opinion in the different High Courts in India on the question now before us.
But on a consideration of the facts in each case, it will be found that the decision arrived at in most of the cases, was correct, though the reasons given appear to have gone beyond the requirements of the case.
The decision of the Bombay High Court in Dwarkadas Khetan & Co. vs Commissioner of Income tax, Bombay City, Bombay (1), discloses that the partnership then in question had come into existence with effect from the beginning of 1946, though the Instrument of Partnership (1) [1956) , 907.
656 was executed on March 27, 1946.
Thus, the Instrument of Partnership came into existence during the accounting year, whatever that year may have been, because the year 1946 was the starting year of the partner Ship.
Hence, even the earliest assessment year, presumably the year 1947 48, would be governed by the terms and conditions of the written Instrument of Partnership aforesaid.
The decision of the Bombay High Court was followed by the same Bench of that Court in the case of Commissioner of Income tax, Bombay North vs Shantilal Vrajlal & Chandulal Dayalal & Co. (1).
In the second case, the learned Judges ruled that the second partnership deed of September 12, 1951, which set out the names and shares of all the partners who constituted the partnership, could be registered in respect of the accounting year November, 1948 to October, 1949.
This conclusion was arrived at without even a mention, far less a discussion, of the relevant provisions of the Act.
Apparently, the matter was not critically placed before the learned Judges, when they decided the second case.
The con clusion in this case is, with all respect, apparently wrong in view of our conclusion that the Instrument of Partnership should have been in existence in the accounting year.
In the High Court of Punjab, the question was fully discussed in a judgment of a Division Bench, given by one of us (Kapur, J., as he then was), in the case of Kalsi Mechanical Works, Nandpur vs Commissioner of Income tax, Simla (2).
In that case, the firm had come into existence by a verbal agreement in June, 1944.
The deed of partnership was drawn up as late as May 9, 1949.
The application for registration of the firm under section 26A for the assessment year 1949 50, was dismissed by the lncome tax Authorities as also by the Tribunal.
The High Court, after an elaborate examination of the relevant provisions of the Act, including the Rules and the Forms, upheld the orders of the Department.
The conclusion of the Bench was in these terms: " The sections of the Income tax Act show that (1) (2) , 361. 657 for the purpose of registration it is necessary that the firm should be constituted by an instrument of partnership and in my opinion the Rules read with Sections 26 and 28 of the Act indicate that such a firm as is constituted under an instrument of partnership should have been in existence during the account period and should not come into existence during the assessment year, and if it was not in existence during the account period it cannot be registered so as to affect the liabilities of the partners for income tax accruing during the account period.
" The conclusion reached is correct, except, with all respect, for the observation that under section 26A, it is necessary that the firm should be constituted " by " an instrument of partnership.
That is the leading judgment in the High Court of Punjab.
It was followed by another Division Bench of that Court in the case of Padam ParshadRattan Chand vs Commissioner of Income tax, Delhito the effect that constituted under an instrument in section 26A, meant created or formed by a formal deed".
In this case, the business of the firm had started from April 1, 1947, but the Instrument of Partnership was executed on April 10, 1950.
The application for registration was made in respect of the assessment year 1948 49.
It is clear with reference to these dates that the Instrument of Partnership was not in existence either during the accounting year or even during the assessment year, and the Court, therefore, rightly held that the partnership could not be registered in respect of the assessment year; but they proceeded further to observe that there was no objection to the firm being treated as having been constituted under the Instrument as from the date of the Instrument itself.
The answer of the Court to the question posed, was that the firm could be registered not in respect of the assessment year for which the application had been made, but with effect from the date of the Instrument.
Apparently, the attention of the Court was not drawn to the Rules aforesaid, particularly, Rules 2 and 3, which require (1) 83 658 that the application has to be made before the assessment is completed and for a particular assessment year.
More or less to the same effect, are two other Division Bench rulings Of that High Court in Bery Engineering Co., Delhi vs Commissioner of Income tax, Delhi (1) and Income tax Commissioner, Delhi vs Messrs. Birdhi Chand Girdhari Lal (2).
In all these cases in the Punjab High Court, the deeds came into existence later than the accounting year or the assessment year, and therefore, could not have been registered.
The actual decisions in these cases were correct, though there are orbiter dicta to the effect that section 26A requires that the firm should have been created or set up by an Instrument of Partnership.
In the Patna High Court, the very same question was discussed at great length by a Division Bench of that Court, presided over by Ramaswami, C. J., in the case of Khimji Walji & Co. vs Commissioner of Income tax, Bihar and Orissa (3).
The learned Chief Justice, after an elaborate examination of the relevant provisions of the Act, came to the conclusion in these terms " It is necessary for the purpose of registration under Section 26A that the partnership should be constituted by an instrument of partnership and that such a partnership as is constituted under an instrument of partnership should have been in existence during the accounting year ".
It is on the same lines as the leading judgment of the Punjab High Court, supra.
With reference to the dates given in the judgment, the decision is right, though, in this case also, the words " constituted under " have been construed as " constituted by ", without discussing the necessity for so amending the words of the statute, even as in the Punjab High Court decisions.
As a result of the above discussion, the conclusion is reasonably clear that unless the partnership business was carried on in accordance with the terms of an Instrument of Partnership which was operative during (1) (2) (3) , 470. 659 the accounting year, it cannot be registered in respect of the following assessment year.
As in these cases, the partnership did not admittedly function under such a deed of partnership, the Department and the High Court were right in refusing registration.
We would, therefore, dismiss these appeals, but for different reasons to those given below.
The respondent is entitled to his costs one set of hearing fees to be paid half and half by the appellants.
HIDAYATULLAH, J. I have had the advantage of reading the judgment just delivered by my brother, Sinha, J.
I agree that section 26A of the Indian Income tax Act must be read as it is.
The words of the section, as they stand, are not meaningless, and in view of the decision in Commissioners for special Purpose of the Income tax vs Pemsel (1) it is not possible to read for the expression " constituted under " the words constituted by ".
I entertain, however, some doubt as to whether the instrument sought to be registered, should be in existence in the accounting year, before registration can be claimed.
There is nothing in the Act which says this specifically.
My brother has reasoned from the contents of the Act and the Rules that such a condition is implied.
While I entertain some doubts, I am not prepared to record a dissent, more so as the Board of Revenue has issued instructions that all firms should be registered, whether the documents under which they were constituted existed in the accounting year or not, provided the Income tax Officer was satisfied about the genuineness of the firms.
In the result, I agree that the appeals should be dis.
missed with costs.
Appeals dismissed.
(1) ; 542. [/INST] 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. </s> |
<s>[INST] Summarize the following judgement: minal Appeal No. 398 of 1993.
From the Judgment and Order dated 12.3.1992 of the IVth Metropolitan Megistrate, Hyderabad in Crl.
M.P. No. 92/92 in C.C. No. 234 of 1985.
WITH Writ Petition No. 623 of 1993.
(Under Article 32 of the Constitution of India) K.K. Venugopal, L.K. Pandey and section Anand for the Petitioner.
D.P. Gupta.
Solicitor General and Ms. A. Subhashni for the Respondents.
The Judgment of the Court was delivered by AHMADI, J.
Special leave granted.
The brief facts leading to this appeal are that the appellant 's daughter Geetha married respondent No. 1 (original accused No. 1) sometime in October 1976 according to Hindu rites and thereafter left for Ireland.
A daughter was born to the couple on July 27, 1978 in Ireland.
She was named Nivedita.
In April 1979, the couple along with the child moved to the United States of America, the Child travelling on an Irish passport.
In October 1979 Geetha wrote to her mother.
the appellant, expressing her desire that Nivedita should be brought up under her care in India.
On the appellant expressing her willingness to look after the child, Nivedita was sent to India via Bombay where the appellant received her.
The child then remained in the custody of the appellant.
In March 1980 Geetha returned to 470 India presumbly because her husband had developer intimacy with an American girl and had started to ill treat her.
Within a week after her arrival in India she committed suicide by setting herself on fire.
Nivedita continued to remain in the care and custody of the appellant.
The first respondent married the American girl, with whom he had developed intimacy, sometime in the year 1983 84 and embraced Christianity.
Thereupon the appellant filed an application in the Court of the Chief judge, City Civil Court, Hyderabad, being O.P. No. 203 of 1984, for appointing her as the guardian of the person of the minor child under the provisions of , Respondent No. 1 entered an appearance in the said proceedings through his Advocate and sought time to file a counter.
Leter, he returned to India on December 14, 1984, After reaching India he obtained a duplicate passportfor Nivedita and thereafter with the help of his associates picked up Nivedita fromher school ignoring the protests of the Head Mistress of the School.
The HeadMistress immediately filed a complaint with the commissioner of police and informed the appellant about the same who in turn lodged a First Information Report in that behalf.
On enquiry the appellant 's son traced respon dent No. 1 and his three companions (who had assisted him in procuring the child) at the Madras Airport.
Despite his entreaties, respondent No. 1 forcibly took the child to U.S.A via Singapore.
Since then Nivedita is in the custody of respondent No. 1 and his newly married wife Maureen.
After thus removing the child from the lawful custody of the appellant, respondent No. 1 's Advocate withdrew from the guardianship proceedings.
The Court, however, appointed the appellant as the guardian of the person of Nivedita.
The appellant also filed a complaint alleging kidnapping against respondent No. 1 and his three companions who had aided and abetted him in the Court of the IVth Metropolitan Magistrate.
Hyderabad, which came to be numbered as C.C.No. 234 of 1985.
Process was issued in the said proceedings land the accused persons were duly served.
The respondents thereafter moved an application under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter called 'the Code ') for quashing the process on the plea that in law a father is entitled to his daughter 's custody and hence cannot be liable under section 363, [PC.
In that application the High Court directed that the child be produced before it.
However, the child was not produced before the Court and the Court ultimately dismissed the application against which a Special Leave Petition was filed in this Court.
This Court also rejected the Special Leave Petition.
On the other hand while the application under Section 482 of the Code was pending in the High Court, the father of respondent No. 1 filed an application for rescinding the order appointing the appellant as the guardian of the person of Nivedita.
In the meantime, the Supreme Court in New Jersey U.S.A., was moved which court passed an order permitting respondent No.1 to retain No. 1 to retain the custody of the child on the ground that the Indian Courts had violated the due process clause.
The Chief Judge, City Civil Court, Hyderabad, ultimately dismissed the father 's application for rescinding the 471 earlier order by which the appellant was appointed the guardian of the person of the child.
As staed earlier the Superior Court, New Jersey, having permitted respondent No. 1 to retain the custody of Nivedita, the child 's step mother Maureen applied for permission to adopt Nivedita who had by then been converted to Christianty.
On that permission being granted the adopted mother and respondent No. 1 sent the Child to a Christian school.
In the complaint lodged against respondent No. 1 and his associates.
respondent No. 1 applied for exemption from personal attendance which was granted on condition that he will appear whenever called upon to do so by the court.
Respondent No. 1 was thus represented in the said complaint through his Advocate.
In the said criminal complaint after framing the charge for kidnapping evidence of the prosecution witnesses was recorded in the presence of the Advocate for respondent No. 1 and the other respondents and on completion of the evidence respondent No. 1 's Advocate sought permission to be examined in place of respondent No. 1 under section 313 of the Code.
This permission was granted and he was examined under section 313 of the Code.
On completion of the examination the appellant not being satisfied with some of the replies given by the Advocate filed an application prayino that respondent No. 1 should be directed to personally appear in Court and be examined under section 3 13 of the Code.
The learned Magistrate dismissed the said application whereupon the present appeal has been filed on the plea that no appeal or revision lay against the order impugned herein.
These are the averments on which the present appeal is founded.
The question then is whether the learned Magistrate was right in examining the Advocate of respondent No. 1 in place of respondent No. 1 himself under section 313 of the Code? Sub section (1) of section 313 reads as under: "Power to examine the accused (1) In every inquiry or trial, for the purpose of enabling the accused personally to explain any circumstances appearing in the evidence against him, the Court (a)May at any stage, without previously warning the accused, put such questions to him as the Court considers necessary; (b)shall, after the witnesses for the prosecution have been examined and before he is called on for his defence, question him generally on the case: 472 Provided that in a summons case, where the Court has dispensed with the personal attendance of the accused, it may also dispense with his examination under clause (b).
" This sub section was introduced in its present form pursuant to the recommendations made in the 41st Report of the Law Commission.
It now begins with the words 'in every inquiry or trial ' to set at rest any doubt in regard to its application to summons cases.
the old sub section (1) of section 342 has now been divided into two clauses (a) & (b).
Clause (a) uses the expression 1 may to indicate that the matter is left to the discretion of the Court to put questions to the accused at any stage of the inquiry or trial whereas clause (b) uses the expression 'shall ' to convey that it is mandatory for the Court to examine the accused after the witnesses for the prosecution have been examined before he is called on for his defence.
The proviso is a new provision Which came to be added to sub section (1) with a view to enabling the Court to dispense with the examination of the accused under clause (b) in a summons case if the Court has already dispensed with his personal attendance at an earlier point of time.
Therefore, if the Court on completion of the prosecution evidence finds that there are certain circumstances appearing in the evidence against the accused, the Court is obliged by clause (b) to question the accused before he is called on for his defence.
This provision is general in nature and applies to all inquiries and trials under the Code.
The purpose of the said provision is to give the accused an opportunity to explain the circumstances appearing against him in evidence tendered by the prosecution so that the said explanation can be weighed vis a vis the prosecution evidence before the Court reaches its conclusion in that behalf.
It is thus clear on a plain reading of section 313 (1) of the Code, that the Court is empowered by clause (a) to question the accused at any stage of the inquiry or trial while clause (b) obligate the Court to question the accused before he enters of his defence on any circumstance appearing in the prosecution evidence against him.
The section incorporates a rule of audi alteram partem and is actually intended for the benefit of the accused person.
The newly added proviso is in the nature of an exception to clause (b) of subsection (1) of section 313 of the Code.
It applies to a summons case; it states in no uncertain terms that in a summons case where the court has dispensed with the personal attendance of the accused it would be open to the court to dispense with the examination of the accused under clause (b) of section 313 (1) of the Cods.
Even in cases where the personal presence of the accused has been dispensed with under section 205(1) or section 317 of the Code the Magistrate can dispense with the mandatory requirement of clause (b) only in a summons case i.e, a case other than a warrant case This is clear on plain reading of the definitions of a summons 473 case in Section 2(w)and a warrant case in section 2(x)of the Code.
A warrant case is defined as one relating to an offence punishable with death, imprisonment for life or imprisonment for a term exceeding two years.
Since an offence under section 363 IPC is punishable with imprisonment for a term exceeding two years it is a warrant case and not a summons case.
Therefore, even in cases where the court has dispensed with the personal attendance of the accused under section 205(1) or section 317 of the Code, the court cannot dispense with the examination of the accused under clause (b) of section 313 of the Code because such examination is mandatory.
If the accused is a company or a juridical person it may be open to examine the person conversant with the facts of the case.
It would thus appear that the mandate of section 313 (1) (b) demands that the accused person, if not a company or other juridical person, most be personally examined to explain the incriminating circumstances appearing against him in the prosecution evi dence and the examination of his lawyer would not be sufficient compliance with the mandate of said provision.
A similar question arose for consideration in Bibhuti Bhushan Das Gupta & Anr.
vs State of West Bengal ; = under the provisions of the old Code.
In that case this Court noticed that the accused was not personally examined under section 342 of the Code.
It was submitted that the trial was vitiated as the accused was not personally examined as required by section 342 of the old Code.
The said argument was sought to be repelled on the ground that the examination of the pleader was sufficient compliance with the said provision since the pleader was authorised to appear on behalf of the accused and do all acts which the accused could personally do.
Dealing with this submission this court on a reading of Section 342 pointed out that the privilege of making a statement under that section is personal to the accused and the requirement cannot be satisfied by examining his pleader in his place.
The right of the pleader to represent the accused does not extend to the pleader answering questions under section 342 in place of the accused person.
The submission that such a view will cause inconvenience and harassment to the accused was also repelled in the following words: "We are not impressed with the argument that an accused person will suffer inconvenience and harassment if the Court cannot dispense with his attendance for purposes of section 342.
The examination under the section becomes necessary when at the close of the prosecution evidence the magistrate finds that there are incriminating circumstances requiring an explanation by the accused.
" 474 Proceeding further this Court observed as under "There are exceptional cases when an examination of the accused personally under section 342 is not necessary or possible.
Where the accused is a company or other juridical person it cannot be examined personally.
It may be that the Court may then examine a director or some other agent on its behalf.
" It is another matter that in that case this Court did not interfere with the conviction and sentence on the ground that the non examination of the accused had not caused any prejudice and in the absence of material showing prejudice the conviction and sentence could be sustained by virtue of old section 537 (section 465 of the new Code).
In the result the order impugned in the present appeal/writ petition of the learned Magistrate cannot be allowed to stand, more so in the instant case for the reason that the accused may raise the plea of violation of the due process clause if the order is sought to be executed in the foreign court.
We, therefore, set aside the order of the learned Magistrate and direct him to pass appropriate orders in the light of this judgment in regard to the examination of the accused under section 313(1) (b) of the Code.
As the prosecution is pending since long, the learned Magistrate will take it up immediately, SPS.
Appeal disposed of. [/INST] The daughter of the appellant was married to the respondent and a girt child was born out of the wed lock.
The couple went to the U.S.A. alongwith the child, but the latter was sent back on her mother 's behests.
While the child was in the custody of the appellant the mother also came back, and committed suicide, leaving the child in the custody of the appellant.
Meanwhile the first respondent married an American girl and embraced christianity.
Thereupon the appellant applied to the local court for appointment as guardian of the child.
The respondent appeared in court but took the child to U.S.A. forcibly, and entrusted her to the custody of his newly wedded wife.
On being appointed as guardian of the child the appellant filed a complaint of kidnapping against the respondent and three others.
The respondent applied for exemption from personal appearance in the proceedings in criminal court.
The permission was granted subject to the condition that he will appear whenever called upon to do so.
On the completion of the evidence, the advocate of the respondent sought permission for examination under section 313 Cr.
P.C. in place of the respondent.
Thereupon the appellant sought direction for personal appearance of the respondent for being examined under Section 313 Cr.
The Magistrate dismissed the application of the appellant This Court examined the provision of Sub Section (1) of Section 313 Cr.
P.C. and, HELD:Introduced in its present form pursuant to the recommendations made in the 41st Report of the La* Commission, sub section (1) of 468 Section 313 begins with the words: "In every inquiry or trial.
" (472 B) The old sub section (1) of Section 342 has been divided Into two (a) & (b).
Clause (a) us" the expression 'may ' to indicate dot the matter is left to the discretion of the court to put questions to the accused at any stage of the inquiry or trial, whereas clause (b) uses the expression "shall" to convey that it is mandatory for the court to examine the accused after the witnesses for the prosecution have been examined.
(472 C) The proviso was added to sub section (1) with a view to enabling the court to dispense with the examination of the under clause (b) in a summons case in the court has already dispensed with this personal attandence if the court on completion of the prosection evidence finds that there are certain circumstances appearing in the evidence against the accused, the court is obliged by clause (b) to question the accused before be Ls called upon to enter his defence.
(472 D) Section 313 (1) applies to all inquiries and trials under the co&, to give the accused an opportunity to explain the circumstances appearing against him.
The trial court is empowered by clause (a) to question the at any stage of inquiry or trial, while clause (b) obligates it to question the accused before he enters his defence.
The rule of audi alterm partem incorporated therein is intended for the benefit of the accused.
(472 F) The proviso is in the nature of an exception to dawn (b) of sub section (1) of section 313 Cr.
P.C. and applies to a sommons case.
Where the personal presence of the accused has been dispensed with, the magistrate can dispense with the mandatory requirement of clause(b).
(472 G) Since the offence under section 363 [PC is punishable with imprisonment for a term exceeding two years it is a warrant cm, so even if the court has dispensed with the personal attendence of the accused the examination of the accused u/s 313 Cr.
P.C. is mandatory.
The examination of a lawyer would not be sufficient complaince@ with the @ate of the mid provision.
(473 B) BibhWi Bhushen Dat GWM & Aar.
vs State of West Be"W, A.I.R. (1%9) S.C. 381= 11%9] 2 SCR 104, referred to.
469 In that case this court pointed out that the privilege of making a statement under Section 342 of the old code, is personal to the accused.
This requirement cannot be satisfied by examining his pleader in his place, as the right of the pleader to represent the accused does not extend to the pleader answering questions under section 342 (now 313) Cr.
P.C. (473 E) This court set aside the impugned order and directed the trial magistrate, to pass appropriate orders in regard to the examination of the respondent under section 313 (1) (b) Cr. P. C. (474 D) </s> |
<s>[INST] Summarize the following judgement: Appeal No. 4233 of 1984.
From the Judgment and Order dated 25.3.1983 of the Bombay High Court in W.P. No. 25 of 1982.
S.B. Bhasme and A.S. Bhasme for the Appellant.
Umesh Bhagwat and V.B. Joshi for the Respondent.
The Judgment of the Court was delivered by R.M. SAHAI J.
Can a statutory tenant create a licence? If the answer is in affirmative then can such licensee claim immunity from eviction in execution proceedings in view of Section 15A of this Bombay Rent Hotel and Loging House Rates Control Act 57 of 1947 (hereinafter referred to as 'the Act ')? These are questions which arise for consideration in this appeal directed against the judgment and order of the Bombay High Court.
462 What happened was that the landlord determined the tenancy of the contractual tenant in October 1966 and filed a suit for his eviction in 1967 which was decreed ex parte on 5th October 1973.
In execution of the decree the licensee obstructed and claimed to be protected licensee under Section 15A of the Act.
The objection was rejected by the executing and the appellate court.
The appellate court found that even though the first licence was, created in 1966 before determination of the tenancy for a period of six years but the second licence having been created in 1972, it was not necessary to examine the validity of the first, as second was created when contractual tenant had become statutory tenant therefore he was incapable of transferring any right or interest in favour of the licensee.
The High Court did not disturb the finding that the licence was created in 1972 but it held that creation of licence by a statutory tenant, was valid.
Consequently the licensee was in occupation of the premises as licensee on the date the Bombay Rent Act was amended and was entitled to the benefit of Section 15A of the Act.
For this reliance was placed on certain observations made by a Division Bench of that Court in Vasant Tatoba Hargude and Others vs Dikkava Mutta Pujari, to the following effect: "On this point of initial presumption as to the subsisting incidence of the tenancy, we shall have to follow the ratio of Damadilal 's case ; in preference to the decision in Anand Nivas case and shall have to proceed on the assumption that statutory tenant does ordinarily possess transferable interest in his tenancy.
" Who is a statutory tenant, what right or interest he can assign or transfer have been dealt by this Court in more that one decisions.
In Anand Nivas Private Lid vs Anandji Kalyanji 's Pedhi & others AIR 1965 SC 414 a decision rendered under Bombay Rent Act the majority held, "A person remaining in occupation of the premises let to him after the determination of or expiry of the period of the tenancy is commonly though in law not accurately, called 'a statutory tenant '.
Such a person is not a tenant at all: he has no estate or interest in the premises occupied by him.
He has merely the protection of the statute in that he cannot be turned out so long as he pays the standard rent and permitted increases, if any, and performs the other conditions of the tenancy.
His right to remain in possession after the determination of the contractual tenancy is personal: it is not capable of being transferred or assigned, and devolves on his death 463 only in the manner provided by the statute.
The right of a lessee from a landlord on the other hand is an estate or interest in the premises and in the absence of a contrant to the contrary is transferable and the premisses may be sublet by him.
But with the determination of the lease, unless the tenant acquires the right of a tenant holding over, by acceptance of rent or by assent to his continuing in possession by the landlord, the terms and conditions of the lease are extinguished, and the rights of such a person remaining in possession are governed by the statute alone.
Section 12 (1) of the Act merely recognises his right to remain in possession so long as he pays or is ready and willing to pay the standard rent and permitted increases and performs the other conditions of the tenancy, but not the right to enforce the terms and conditions of the original tenancy after it is determined.
" In Jai Singh Morarji and others vs M/s Sovani (P) Ltd., ; yet another decision from Bombay the ratio in Anand Nivas was reiterated and It was held that tenant in Section 15 of the Bombay Rent Actmeant the contractual tenant and not the statutory tenant.
Then came another decision, Damadilal and others vs Parashram and others; , on M.P. Accommodation Control Act.
It in the Court traced the genesis of the concept of statutory tenant derived from the English Rent Act but carved out an exception, where, the sanctity, of the contract ' was touched by legislation.
It was held that where the statute itself provided continuance in possession of the tenant after determination of the tenancy in some right the tenant was at par with contractual tenant.
Reason was the definition of 'tenant ' under Section (2) (i) of the Act.
It read as under: "a person by whom or on whose account or behalf for the rent of any accommodation is, or, but for a contract express or implied, would be payable for any accommodation and includes any person occupying the accommodation as a sub tenant and also any person continuing in possession after the termination of his tenancy whether before or after the commencement of this Act; but shall not include any person against whom any order or decree for eviction has been made.
" This section was construed thus, "The definition makes a person continuing in possession after the determination of his tenancy a tenant unless a decree or order for eviction has been made against him 464 thus putting him on par with a person whose contractual tenancy still subsists.
The incidents of such tenancy and a contractual tenancy must therefore be the same unless any provision of the Act conveyed a contrary intention.
That under this Act such a tenant retains an interest in the premises, not merely a personal right of occupation, will also appear from Section 14 which contains provisions restricting the tenant 's power of subletting.
Section 148 is in these terms:. . .
No such provision existed in the Bombay Rent Act.
The ratio in Damadilal 's case, therefore, could not apply to right or interest created by a statutory tenant under the Bombay Act.
The decisions in Damadilal 's case did not in any way deviate from the decisions given earlier by this Court in Anand Nivas case.
All these cases however were of sub tenants.
In 1981 this Court had an occasion to deal with the case of a licensee under the Bombay Rent Act and his rights under Section 15A of the Act.
The Bench was of the opinion that the licensee was not entitled to obstruct the eviction proceedings which had become final against the tenant as a statutory tenant could not assign or create any interest after termination of his tenancy.
It was observed in Ludhichem Agencies vs Ahmed R. vs Peer Mohamed and Anr.
1: "An agreement for licence can subsist and continue to take effect only so long as the licensor continues to enjoy a right, title or interest in the premises.
On the termination of his right, title or interest in the premises, the agreement for licence comes to an end.
If the licensor is a tenant, the agreement for licence terminates with the tenancy.
No tenant is ordinarily competent to grant a licence enduring beyond his tenancy.
On the termination of the licensor 's tenancy the licensee ceases to be a licensee.
" On facts however since the statutory tenancy too cam to an end before Section 15A was amended due to passing of the decree by the trial court the High Court distinguished this decision ignoring the material difference between the two enactments.
What was lost sight of was that the observation made by this Court in Damadilas 's case at page 2234 to the following effect, "We find it difficult to appreciate how in this country we can proceed on the basis that a tenant whose contractual tenancy has determined but who is protected against eviction by the statute, has no right of property but only a personal right to remain in occupation, without ascertaining what his rights 465 are under the statute. . .
It is not possible to claim that the "sanctity" of contract cannot be touched by legislation.
Were on the language of the Section as it stood under that Act.
Therefore, in absence of any legislation touching the contract it appears to be settled that contractual tenant is left with no transferable right after determination of his tenancy.
In our opinion the learned judge in drawing an inference from Ludhichem Agencies (supra) that, 'a licence by a statutory tenant would continue to subsist 'lawfully till it was terminated and therefore if on the facts of that case the decree of ejectment against Saraswatibai had been made after 1.2.1973, then the licence in favour of the petitioners could have been considered to the subsisting on 1.2.1973,.
committed an error of law.
Section 15A reads as under: "15A (1)Notwithstanding anything contained elsewhere in this Act or anything contrary in any other law for the time being in force, or in any con tract, where any person is on the lst day of February 1973, in occupation of any premises or any part thereof which is not less that a room as a licensee thereof, he shall on that date he deemed to have become, for the purposes of this Act, the tenant of the landlord in respect of the premises or part thereof in his occupation.
(2)The provisions of sub section (1) shall not affect in any manner the operation of sub section (1) of Section 15 after the date aforesaid.
" The section brought into force with effect from 1st February 1973 undoubtedly protected a licensee form eviction.
But it could operate in his favour only if he was in occupation of the premises on the date the Act came into force as a licensee.
It is, thus, not mere occupation but occupation as licensee which has been statutorily protected.
In other words the law would operate in favour of a person who held the premises under valid licence.
A valid licence could be created, as explained earlier, by a contractual tenant or by a statutory tenant if he continued at par with contractual tenant by operation of legislation.
In absence of any such provision in the Bombay Rent Act the licence created in favour of licensee by the statutory tenant could riot render the respondent, a licensee within the meaning of Section 15A of the Act.
466 Even a valid licence stands revoked in circumstances mentioned in Section 62 of the Indian Easements Act.
Its clause (a) reads as under: "62.
A license is deemed to be revoked (a)when, from a cause preceding the grant of it, the grantor ceases to have any interest in the property affected by the license:" The licence was granted by the contractual tenant in 1972.
But his tenancy had been determined by the landlord in 1966.
He thus had become statutory tenant.
He did not, in law had any assignable interest on the date he created the licence.
The grantor therefore from a cause preceding the grant had ceased to have any interest, and was incapable of creating any valid licence unless he could be deemed to be at par with the contractual tenant by any provision in the statute.
In absence of any such provision in the Bombay Rent Act the licence was invalid and stood revoked.
The occupation of the respondent thus was not as licensee within the meaning of Section 15A of the Act.
In the result this appeal succeeds and is allowed.
The order passed by the High Court in the Writ Petition is set aside and it shall stand dismissed.
In the circumstances of the case, however, there shall be no order as to costs.
V.M. Pretition dismissed. [/INST] The appellant landlord determined the tenancy of the contractual tenant in 1966 and filed a suit for his eviction.
The suit was decreed ex parte.
In execution proceedings the licensee obstructed and claimed to be protected licensee under Section 15A of the Bombay Rent Hotel and Lodging House Rates Control Act, 1947.
The objection was rejected by the executing Court.
The appellate Court confirmed the same holding that even though the first licence was, created in 1966 before determination of the tenancy for a period of six years and the second licence having been created in 1972, it was not necessary to examine the validity of the first, as the second one was created when contractual tenant had become statutory tenant, and therefore, he was incapable of transferring any right or interest in favour of the licensee.
On appeal, the High Court upheld the finding of the appellate court that the licence was created in 1972 It also held that creation of licence by a statutory tenant, was valid.
Being aggrieved by the judgment of the High Court, the appellant landlord preferred an appeal, before the Court.
Allowing the appeal, this Court, HELD: 1.1 In the absence of any legislation touching the contract, a contractual tenant is left with no transferable right after determination of his tenancy.
(465 B) 1.2 The law would operate in favour of a person who held the premises under valid licence.
A valid licence could be created, by a contractual tenant or by a statutory tenant if he continued at par with contractual tenant by 461 operation of legislation.
(465 G) 1.3In the instant case, the licence was granted by the contractual tenant in 1972.
But his tenancy had been determined by the landlord in 1966.
He thus had become statutory tenant.
He did not, in law had any assignable interest on the date he created the licence.
The grantor, therefore, from a cause preceding the grant had ceased to have any interest, and was incapable of creating any valid licence unless he could be deemed to be at par with the contractual tenant by any provision in the Statute.
In absence of any such provision in the Bombay Rent Act, the licence was invalid and stood revoked.
The occupation of the respondent thus was not as licensee within the meaning of Section 15A of the Act.
(466 B C) Vasant Tatoba Hargude and Ors.
vs Dikkaya Muttaya Pujari: , approved.
Anand Nivas Private Ltd. vs Anandji Kalyanji 's Pedhi & Others, AIR 1965 SC 414; Jai Singh Morarji and others vs M/s Sovani (P) Ltd., ; ; Damadilal and others vs Parashram and Others, ; and Luadhichem Agencies vs Ahmed R. vs Peer Mohamed and Anr., 1, referred to. </s> |
<s>[INST] Summarize the following judgement: Appeal No. 2485 of 1992.
From the Judgment and Order dated 8.10.1991 of the Calcutta High Court in F.M.A.T. No. 2532 of 1991.
P.S. Poti and Rathin Das for the Appellants.
Dr. Shankar Ghosh, Raj Kumar Gupta and P.C. Kapur for the Respondents.
J. Special leave granted.
487 This appeal arises against the judgment dated October 8, '1991 of the ' Division Bench of the Calcutta High Court made in F.M.A.T. No. 2532 of 1991.
The first respondent, a limited Company filed under article 226 of the constitution of India Civil Order No. 16339 (W) of 1988 for a mandamus to refrain the appellants from giving effect to the vesting of the lands in Dag No. 1, Khatian No., 10, Tauzi No. 56, J.L. No. 26, Mouza Chowkgaria within P.S. Kasba, admeasuring 128.40 acres and to take possession of tank fisheries lying therein pursuant to the provisions of West Bengal Estate Acquisition Act, of 1954, for short 'the Act '.
The learned Single Judge directed an action under Sec.
10(2) of the Act after giving an opportunity to the respondents and to take possession of the said lands pursuant thereto.
On appeal the Division Bench in the impugned judgment held that the appellants should take action under the West Bengal Land Reforms Act, 1955 within a period of two months from the date of the said judgment and on its failure, the respondents would be at liberty to deal with and dispose of the lands in its own manner.
Until then the appellants were restrained to take possession of the land.
Feeling aggrieved against the said direction the above appeal under article 136 has been filed.
The Revenue Officer found from finally published record of rights that the lands in question were classified as 'Beel ' (marshy land) and tank fisheries would he classified as 'Beel Mash Khas '.
The learned Single Judge and the Division Bench of the High Court found that when the Revenue Officer initiated proceedings to revise the old Jama Rs. 1230.
9 Anas in three Jamas of Rs. 1,188 and odd in khata No. 102; Rs. 396 and odd in khata No. 128 and Rs. 3024 and odd in khata No. 131.
the respondent succeeded in his appeal under Sec.
44(3) of the Act holding the lands to be 'Tank fisheries ' and that, therefore, old Jama was to be maintained.
So the Division Bench directed to take action under the Land Reforms Act.
Shri P.S. Poti, learned Senior Counsel for the appellants contended that by operation of Secs.
4 and 5 of the Act, fisheries being one of the interests that stood extinguished and vested in the State Govt.
Free of all incumbrances with effect from June 1, 1956, the respondents have lost right, title and interest therein.
Section 6 only enables an intermediary to retain possession of certain enumerated lands which includes "tank fisheries" provided he makes an application in form 'B ' within the specified time expressing his intention to retain the lands.
Since the respondent had failed to do so the entire lands including tank fisheries stood vested in the state.
As per the entries in the record of rights the lands are only Beel (Marshy lands) and not tank fisheries and, therefore, even the exercise of the option to retain possession is not available.
Even assuming that the lands are tank fisheries, what was saved from the operation of the Act is the entitlement of the respondent to hold 488 the land as a tenant without any interest therein except the right to remain in khas (physical) possession subject to such terms and conditions as may be prescribed by the Govt.
and payment of rent.
Since the respondent raised a dispute the learned single Judge rightly directed an enquiry under Sec. 10 (2) in this behalf and to take action pursuant to its result under Sec.
10(1).
The Division Bench committed gravest error in treating that the decision of the Tribunal under Sec.
44(3) relating to Jama to be final and the lands to be tank fisheries and that the respondent is entitled to retain khas possession with all right, title and interest therein as an owner.
The direction given to initiate the action under the Land Reforms Act 1955 within the specified period and on failure thereto liberty given to the respondent to alienate the lands is beyond the relief sought in the writ petition.
Therefore, the Division Bench committed manifest error of law warranting interference.
Dr. Ghosh, learned senior counsel for the respondents, contended that initially Devendra Nath Dey Sarkar purchased the lands from Harkishan Mondal, the original Zamindar in 1911 and from him the respondents had purchased the leasehold rights in 1937 and ever since they have been using the lands as tank fisheries.
When notification under Sec. 4 was issued, the lands were being used as.
tank fisheries.
Despite its vesting, by operation of Sec.
6(2) the respondent has right to retain possession as an owner.
In support thereof he placed reliance on State of U.P. vs Krishna Gopal & Anr.
[1988] Suppl.
2 SCR 391, State of West BengaI vs Atul Krishna Shaw & Anr.
[1990] Supp. 1 SCR 91 and Sasanka Sekhar Maity & Ors.
vs Union of India ; He further contended that the liability of dispossession of the respondent from the lands would arise only if the possession is found to be unlawful.
But by operation of Sees.
6(2) and 10(5) the possession is lawful.
The order of the Appellate Tribunal passed in 1957 under section 44(3) having been allowed to become final and the civil suit for declaration that it is Beel and not tank fisheries having filed by the State and got dismissed, concludes that the lands in question are only "tank fisheries".
By operation of Subsec.
(2) for Sec.
6 of the Act the respondent is entitled to retain possession and the action for dispossession under Sec.
10 (1) is illegal.
The Division Bench therefore, rightly directed to initiate proceedings under the Land Reforms Act and to take action thereunder.
Admittedly the Act came into force on February 12,1954.
Notification under Secs.
4(1) and (3) was published in the prescribed manner specifying the date of vesting of the estate and had come into effect from June 1, 1956.
By operation of sub sec.
(1) of Sec.
5 the estate and all the rights of intermediaries including fisheries in the estate shall stand determined and ceased and stood vested in the State free from all incumbrances.
"Incumbrance" defined under Sec. 2(h) of the Act means 'in relation to estates and rights of intermediaries therein, does not 489 include the rights of a raiyat or of an under raiyat or of a non agricultural tenant, but shall, except in the case of land allowed to be retained by an intermediary under the provisions of sec.
6, include all rights or interests of whatever nature, belonging to intermediaries or other persons, which relates to lands comprised in estates or to the produce thereof.
Therefore, title to, rights or interests in lands which include fisheries held by an intermediary shall stand extinguished and ceased and stood vested in the state free of all incumbrances.
The respondents being purchasers of lease hold interest in tank fisheries, as per their own case, it also stood extin guished.
But, however, since the appellant treated the respondent as an intermediary, we proceed on that footing.
The exceptions engrafted in the incumbrance and exempted from the operation of Sections 4 and 5 are only the rights of a raiyat or of an under raiyat or of a non agricultural tenant and the right of retention of possession allowed to an intermediary under Sec.6 of the Act.
All other rights, interest of whatever nature or little belonging to the intermediaries or other persons who hold the lands under lease from intermediary should also stood extinguished.
All grants and confirmation of title, to estates and rights therein, to which the declaration of vesting applies and which were made in favour of intermediaries shall stand dismissed and ceased by operation of Sec.
5(1) (b) of the Act, Section 6 postulates by a non obstanti clause that notwithstanding anything contained in secs.
4 and 5 an intermediary shall, except in the cases mentioned in the proviso to sub sec.
(2) but subject to the other provisions of that sub sec., be intitled "to retain with effect from the date of vesting", various kinds of lands like homestead etc.
enumerated therein including 'tank fisheries ' covered by clause (e) thereto.
The explanation of 'tank fisheries ' means, "a reservior or place for the storage of the water, whether formed naturally of by excavation or by construction of embankments, which is being used for pisciculture or for fishing, together with the sub soil and the banks of such reservoir or place, except such portion of the banks as are included in a homestead or in a garden or orchard and includes any right or pisciculture or fishing in such reservoir or place".
Therefore, if lands comprised of tank fisheries whether naturally formed or by excavation or by construction of embankments being used for pisciculture or fishing, the intermediaries became entitled to retain possession, despite the intermediaries having been divested of right, title and interest therein.
This is made manifest by Sec.
10(5) of the Act which postulates that 'nothing in this section shall authorise the Collector to take khas possession of any estate or of any right of an intermediary therein, which may be retained under sec.6 '.
Sub sec.
(2) of Sec. 6 declares that, "An intermediary who is entitled to retain possession of any land under sub sec.(1) shall "be deemed to hold such land" directly under the State from the date of vesting as a tenant, subject to such terms and conditions as may be prescribed and subject to payment of such rent as may be determined under the provisions of this 490 Act and as entered in the record of rights finally published under Chapter V except that no rent shall be payable for land referred to in clause (h) or (i), provided that if any tank fishery or any land comprised in a tea garden, orchard, mill, factory or workshop was held immediately before the date of vesting under lease, such lease shall be deemed to have been given by the State Govt.
On the same terms and conditions as immediately before such date, subject to such modification therein as the State Govt.
may think fit to make '.
On the issue of notification under Sec.49, Sec. 52 prescribed procedure to deal with raiyats and under raiyats covered in Chapter 11 etc.
It says that the provisions in Chapter II shall with such modification as may be necessary apply mutatis mutandis to raiyats or under raiyats as if such raiyats or non raiyats were intermediaries and the land held by them were estates and such a person holding under a raiyat or an under raiyat were a raiyat for the purpose of clauses (c) and (d) of Sec.5, provided that, where a raiyat or an under raiyat retains under sec.6 any land comprised in a holding, then notwithstanding anything to the contrary contained in sub sec.
(2) of sec.6, then he shall pay the rent as prescribed in clauses (a) to (d) thereto.
Under Sec.5(c) every raiyat holding any land under an intermediary shall hold the same directly under the state as if the state had been the intermediary and on the same terms and conditions as immediately before the date of vesting.
Thus the right, title and interest of a raiyat or under raiyat in the lands in his possession and enjoyment are saved.
By operation of law they became full owners thereof subject to the terms and conditions that maybe imposed under Sec. 52 and payment of Jama existing on the date of notification or revised from time to time and finally entered in Record of Rights.
The pre existing rights of the intermediaries in the estate to which the declaration applied shall stand vested in the State free from all incumbrances.
Section 6 does not have the effect of divesting the state of the vested right, title and interest of the intermediary.
One of the rights i.e. possession held by the intermediaries is the only interest saved by Sec.6.
from the operation of Secs.
4 and 5.
The fishery rights also stood vested.
The pre existing rights, title and interest therein also shall stand determined as against the state and ceased.
The Collector had symbolic possession under Sec. 10.
But by use of non obstanti clause in Sec.6 (1) the respondent became entitled to retain khas possession of tank fisheries, and he shall hold tank fisheries directly under the state on such prescribed terms and conditions and subject to payment of such rent as may be determined under the Act from time to time as finally entered in Record of Rights.
If any lease by the intermediary of any tank fisheries granted prior to the date of vesting, by operation of the proviso to sub sec.
(2) of Sec. 6, the lease shall be deemed to have been given by the State Govt.
On the same terms and conditions and subject to such modification 491 therein as the State Govt. may think fit.
Such holding of the land by the intermediary of the tank fishery shall be as a tenant.
The word 'retain ' has been defined in Black 's Law Dictionary, 6th Edition, page 1316 to mean 'to continue to hold, have, use, recognise, etc.
and to keep '.
In Collings English Dictionary at page 1244 'retain ' has been defined as 'to keep in one 's possession, to be able to hold or contain, to hold in position, to keep for one 's future use as by paying a retainer or nominal charges '.
In Webster Comprehensive Dictionary International Edition, Volume II, at page 1075, the word 'retain ' has been defined, 'to keep or continue to keep in one 's possession '.
Section 10(2) of the Act empowers the Collector, after his taking charge of the estate and the interest of the intermediaries under Sec.
10(1), to issue a written order serving in the prescribed manner requiring the intermediary or any person in possession (khas or symbolic) of any such estate or any interest to give up such possession by a date to be specified in the order which shall not be earlier than 60 days from the date of service of the order, etc.
Sub section 5 of Sec.
10 prohibits him to take khas possession of any right of intermediary in the estate retained under Sec.6.
The conjoint operational conspectus assists us to conclude that the preexisting right, title and interest in the lands situated in an eatate stood extinguished and ceased to have effect on and from notified date i.e. June 1, 1956 and stood vested in the state free from all incumbrances.
The non obstanti clause under Sec.6 excluded from the operation of sees.
4 and 5 only of the interest of the respondent to retain physical possession of the lands covered by Sec.6, subject to Sec 6 (2).
The intermediary by operation of Sec.
10(2) shall be required to submit in form 'B ' within 60 days from the date of issuing notice under Sec.
10 (1) of his intention to retain possession of the tank fisheries.
On such submission of Form 'B ', the Collector without dispossessing him/it shall be entitled to prescribe such terms and conditions to which the intermediary or the lessee shall be bound and hold the tank fishery and shall remain in possession, using the tank fisheries for pisciculture or for fishing and subject to payment of such rent as may be determined under the Act and finally entered in the Records of Rights.
Under Sec. 39 in Chapter V, the State Govt has to carry out the purpose of the Act.
It shall prepare the Records of Rights in respect of the lands in an estate in any district or a part of a district in the manner prescribed therein.
Section 44 provides the procedure for publication of the draft and final Record of Rights prepared or "revised".
Sub section (1) thereof postulates that when a Record of Rights has been prepared or "revised" the Revenue Officer was enjoined to have it published in the prescribed manner.
On receipt of objections, if any, made 492 regarding any entry therein or any ommission thereof, he shall consider the same and is enjoined to pass an order under Sec.5A of the Act.
By operation of the proviso to sub sec.
(1) of Sec.
44 the order so passed under Sec.
5A shall be final, subject to the order of the appellate Tribunal under Sec. 44 (3) and during the continuance of that order it is not liable to be reopened.
The respondent is not right in its contention, as found favour with the High Court, that entries once made shall be final and can never be revised.
The word 'revised ' under sub sec.
(1) of Sec.
44 indicates that the State Govt.
or its officers shall be entitled to revise from time to time the Record of Rights and to make necessary entries or corrections in the relevant columns of Record of Rights in its settlement operations or as per exigency envisaged under the Act and the rules made there the order under Sec.
44(3) becomes final so long as there is no revision effected.
The question of res judicate therefore, does not arise and the previous appellate order does not preclude the authorities to revise the Record of Rights.
The Division Bench of the High Court, therefore, is not right in its conclusion that the order passed by the appellate authority under Sec.
44(3) is final and the authorities have no jurisdiction to revise the Record of Rights.
After the act was amended by Act 33 of 1973, Sec.
57B was brought on statute which had barred the jurisdiction of the civil courts and exclusive jurisdiction has been conferred on the revenue authorities to deal with the matters arising under the Act.
So the dismissal of the suit as having been abated is of little consequence.
The appellants contend that even on the date of vesting the lands in question are "Beel" lands and that it is not tank fisheries.
The entries in the record of the rights disclose that the lands in question are being used as homestead or for agricultural purpose and that, therefore, it is not tank fishery.
The respondents disputed the Govt.
's stand and so it is a disputed question of fact.
We do not propose to go into, nor decide the same.
It is true, as rightly contended by Dr. Ghosh, that the lands once retained under Sec.6 by the intermediary and accepted by the authorities pursuant to form 'B ' declaration, the intermediary is entitled to retain possession and is not liable to dispossession so long as he complies with the terms and conditions, if any, imposed and the rent imposed is being paid.
The avowed object of Act is to divest the pre existing right, title and interest of the intermediary in the lands situated in an estate in a district or part of the district and shall stand divested from the Zamindar or intermediary except of a raiyat or under raiyat or non agricultural tenant.
Notwithstanding such divestment thereof the intermediary has been empowered to hold and retain possession directly under the state and hold it as a tenant, subject to such terms and conditions and subject to payment of rent as may be determined under the Act.
Therefore, the entitlement to retain possession of the land i.e. tank fisheries in this case is not absolute but hedged with the conditions precedent of expressing his intention to retain 493 possession by filing form 'B ' within 60 days and abiding to comply with such terms and conditions as may be imposed and also payment of rent.
By operation of the explanation to Sec.
6(1) (e) "tank fisheries" not only it must be a tank fishery at the date of vesting, but it must also continue to be used for pisciculture or for fishing.
The emphasis on 'being used ' obviously is that the tank fisheries should be continued to be used for public purpose, namely the fish seedling or fish must be made available for public consumption.
Dr. Ghosh is right that the crucial date is the date of vesting with regard to tank fishery also.
Not only that the intermediary shall hold the tank fishery on the date of vesting as tank fishery but continue to hold and use the same thereafter for pisciculture or fishing as explained in explanation 6(1) (e) of the Act.
Subsequent conversion of the land as tank fisheries is not material.
Whether, as a fact, it was used as a tank fishery on the date of vesting i.e. June 1, 1956 and being continued to be used as such or converted later on is a question of fact to be adjudicated after giving reasonable opportunity to the respondents.
Equally whether the respondents exercised the option to retain possession of tank fishery within 60 days from the date of publication of notification under section 4 or the notice under Sec.
10(1), etc., is also a question of fact to be determined.
In Saroj Kumar Bose vs Kanailal Mondal & Ors.
the facts were that the predecessor in interest of the respondents took permanent lease of fishery right without sub soil rights under a registered lease deed prior to the Act came into force and they continued to remain in possession and was using the lands as tank fishery.
The lassor, filed a suit for recovery of rent together with interest.
The appellant lessee resisted the suit liability contending that the tank fishery stood vested in the State and that, therefore, he was absolved of his liability to pay rent to the lessors.
The trial court decreed the suit.
On appeal, it was confirmed.
Dismissing the appeal, this court held that by operation of sec.6 of the act the right to retain possession of tank fishery by an intermediary was saved and that, therefore, the lessor continued as an intermediary to remain in khas possession.
In spite of the estate vested in the State, the tank fishery continued to remain in possession of the lessor.
In that context it was held, as relied on by Dr. Ghosh, that khas possession is not a necessary condition for retaining the property by intermediary.
State had recognised the plaintiffs as tenant by accepting rent from them.
Therefore, it was held that interest of the plaintiff did not vest in the State either.
In State of West Bengal vs Atul Krishna Shaw & Anr.
[1990] Supp. 1 SCR page 90, by a bench of this court to which one of us (K. Ramaswamy,J.) was a member, the facts were that after the estate vested in the state, the tank fisheries continued to remain in possessions of the respondent intermediaries.
Suo moto 494 proceedings were taken for correction of the classification of lands on the grounds that the plots were wrongly recorded as fishery plots.
The respondents objected to the re classification contending that they were continuing to cultivate pisciculture in the lands.
The claim of the respondents was negatived by the Settlement Officer.
On appeal, the Tribunal reversed the order of the Settlement Officer and confirmed the original classification as tank fishery.
On a writ petition filed in the High Court by the State, it was dismissed in limine.
While allowing the appeal, this court held that the crucial date for consideration whether the lands were being used as tank fishery was the date of the vesting and subsequent conversion was not material and that by operation of Sec 6 (2) of the Act, the tank fishery stood excluded from the operation of Sec. 4 and Sec. 5 of the Act.
Placing reliance on the findings at p. 101A & B, namely, 'Therefore, when by means of reservoir or a place for storage of water whether formed naturally or by excavation or by construction of embankment, is being used for pisciculture or for fishing is obviously a continous process as a source of livelihood, would be 'tank fisheries ' within the meaning of Sec.6 (1) (e) '.
Such tanks stand excluded from the operation of Sections 4 and 5 and the crucial date is the date of vesting.
As seen earlier the effect of the operation of Secs.4 and 5 is divesting the intermediaries of his pre existing right, title and interest in the estate except those which were exempted from the operation of the Act.
One of the exemptions is retention of the possession of the lands covered by Sec 6 of the Act.
See 6(1) (e), tand fisheries is one such.
Sub section (2) amplifies its effect.
Sub section '(2) transposes the pre existing possessory right of the retained lands of an intermediary of tank fisheries into holder of it as a tenant without any interest therein.
By fiction of law the respondent was transposed as "holder" of the possession directly under the State as tenant, subject to such terms and conditions as may be specified and subject to payment of rent as may be determined from time to time.
Therefore, what was saved by non obstenti clause of Sec.6(1) & (2) of the Act is the right of retention.
of the Physical (Khas) Possession of tank fisheries.
What was intended in Atul Kishan Shaw 's case was that Sec.
6(2)saved the retention of possession of tank fisheries and not divesting the state of the vested rights etc.
in the estate.
In South Indian States of A.P. and Tamil Nadu etc.
of the Madras Province, Madras Estate (Abolition and Conversion into Raiyatvari) Act, 26 of 1948 is in operation.
After the states reorganisation, in Tamil Nadu it is called Tamil Nadu Act and in Andhra Pradesh it is called Andhra Pradesh (Andhra Area) Act.
Thereunder Sec.
II provides procedure to grant raiyatvari patta to a raiyat in occupation.
Section 3(2) (d) proviso gives statutory protection to a raiyat from dispossession till raiytavari patta has been granted , Sees.
12 to 14 give right to landholder to obtain patta and see 15.
empowers the settlement officer to grant 495 patta to the landholders.
Section 19 provides that "where any raiyat or non raiyat land has been sold by any landholder for non agricultural purpose before first day of July, 1945, the buyers shall be entitled to keep the land subject to payment by him to the Govt.
of the raiyatvari assessment or ground rent which may be imposed upon the land and under the proviso it was declared that sale was not void or illegal under any law in force at that time.
The object of those provisions is to confer raiyatvari rights on person in occupation be it raiyat or landholder absolutely with no further conditions.
Thereafter he is entitled to use the raiyati land as if he is the owner thereof and the liability is to pay only land assessment or cist.
There is no limitation on the nature of user of the land.
But the language in the Act appears to be different.
As regards the raiyat or under raiyat they are treated differently from intermediary.
As regards the raiyat and non raiyat is concerned his pre existing right, title and interest in the land was not abolished and he is entitled to retain all his boundle of rights as intermediary directly under the state subject to the orders passed as per the procedure prescribed under Sec.52 and the relevant rules and payment of rent.
But in the case of an intermediary, he has been given only right to retain possession under Sec.
6 of the homestead lands or land comprised in or appertaining to buildings and structures, 25 acres of agricultural lands in khas possession, factories, workshops, tank fisheries or other enumerated properties etc.
without any interest therein and subject to the terms and conditions that may be imposed and payment of rent excising or revised as per the provisions relevant thereto.
Sub section (2) of Sec.
6 expressly postulates that if he holds the tank fisheries should be for continued for use as tank fisheries and it would be subject to such terms and conditions and subject to payment of rent as may be fixed.
The holding of the land is as a tenant, the emphasis is that his possession is without any interest in the land.
Under T.P. Act a tenant has leasehold interest in the land.
But in Sec. 6 (2) as a tenant for the purpose of payment of the rent and retention of possession and appears to be nothing more.
As regards tank fishery is concerned, though exemption has been granted, it is subject to the condition of continued user for pisciculture of fishing.
From the scheme of the Act it would appear that the intermediary or the lessee gets no absolute right in the tank fisheries which were already divested but to remain in khas possession and to enjoy the usufruct thereof i.e. for pisciculture or fishing without any interest or sub soil rights and subject to such terms and conditions and subjects to payment of rent as prescribed under the Act, but not as owner thereof.
The direction, therefore, by the High Court that the respondents are entitled to dispose of the land is contrary to and in negation of the scheme of the Act and Rules.
Therefore, it is manifestly illegal.
The appeal is accordingly allowed.
The order of the Division Bench of the High Court is set aside.
The direction of the Single Judge is restored.
The appellant 496 is free to issue notice to the respondent under Sec.
10(2) of the Act and conduct an enquiry into and find: (1) on the date of the vesting whether the lands were being used for pisciculture or fishing i.e. tank fisheries; (2) whether the respondent had submitted form 'B ' within the prescribed time exercising the option to retain possession of the lands in question as tank fisheries; and (3) whether the respondent is continuing to use the lands in question as tank fisheries.
Reasonable opportunities shall be given to the respondents to prove its/their case.
On the enquiry if it is found that the lands are not tank fisheries as on the date of the vesting or that the respondent had not submitted option in Form 'B ' to retain possession of the lands as tank fisheries within the prescribed period, then the lands stood vested in the state free from all incumbrances and authorities are entitled to take possession of the land under Sec.
10(1) read with Sec.
10(3).
In case if it finds that the lands were being used as tank fisheries as on the date of vesting and that the respondents exercised the option within the time to retain possession and is continuing to use the tank fishery for pisciculture or for fishing; and if it has been continuing in possession of tank fishery, it is free to impose, if not already impossed such terms and conditions as may be necessary to ensure continued use of tank fishery for pisciculture or for fishing, subject to payment of such rent as may be fixed or revised and ultimately entered in the Record of Rights.
In case the respondent commits contravention thereof, it is open to the state to resume possession.
In case the respondent is not using the tank fishery for pisciculture or for fishing or alienated the lands it is open to the appellants to take possession of the lands and all sales if made by the respondents do not bind the state.
The appeal is accordingly allowed with the above modification and the rule absolute issued by the learned single Judge of the High Court will stand modified to the above extent and the writ petition is disposed of accordingly.
In the circumstances parties are directed to bear their own costs throughout.
Appeal allowed. [/INST] Respondent Company filed a writ application in the High Court to refrain the appellants from giving effect to the vesting of the lands in question and to take possession of tank fisheries lying therein.
The Single Judge directed an action under section 10(2) of the West Bengal Estate Acquisition Act, 1953 and to take possession of the lands pursuant thereto giving an opportunity to the respondents.
The Division Bench on appeal held that appellants should take action under the West Bengal Land Reforms Act, 1955 within a period of two months of its judgment, failing which the respondents would he at liberty to deal with and dispose of the lands and until then the appellants were restrained to take possession of the lands.
The Single Judge and the Division Bench found that the Revenue Officer initiated proceedings to revise the old Jama of lands as he found from record of rights that lands were classified as 'Beel ' (marshy land) and the appeal of the respondent under Section 44(3) of the Act was allowed holding that the lands being 'tank fisheries ' old Jama was to be maintained.
481 482 ` The present appeal by special leave was filed against the judgment of the Division Bench of the High Court contending that by operation of sections 4 and 5 of the West Bengal Estate Acquisition Act, fisheries being one of the interests that stood extinguished and vested in the State Govt.
free of all incumbrances with effect from 1.6.1956, the respondents lost right, title and interest therein; that since the respondent failed to make an application in form 'B ' within the specified time expressing his intention to retain the lands, the entire lands including tank fisheries stood vested in the State; that as per the entries in the record of rights the lands were only Beel (Marshy lands)and not tank fisheries and, therefore, even the exercise of the option to retain possession was not available; that since the respondent raised a dispute, the Single Judge rightly directed an enquiry under section 10(2) and to take action pursuant to its result under section 10(1); that the Division Bench committed manifest error in treating that the decision of the Tribunal under section 44(3) relating to jama to be final and the lands to be tank fisheries and that the respondent was entitled to retain khas possession with all right, tide and interest therein as an owner; and that the direction given to initiate the action under the West Bengal Land Reforms Act, 1955 within the specified period and on failure thereto liberty given to the respondent to alienate the lands was beyond the relief sought in the writ petition.
The respondents submitted that they purchased the leasehold rights in 1937 from the earliest purchaser of the lands who purchased the same from the original Zamindar and since then the respondents were using the lands as tank fisheries; that when notification under section 4 was issued, the lands were being used as tank fisheries; that despite its vesting, by operation of section 6(2), the respondent had right to retain possession as an owner; and the action for dispossession under section 10(1) was illegal; that the liability of dispossession of the respondent from the lands would arise only if the possession was found to be unlawful; and that the Division Bench, therefore, rightly directed to initiate proceedings under the West Bengal Land Reforms Act and to take action thereunder.
Allowing the appeal, this Court, HELD:1.1.
By operation of sub sec.
(1) of Sec.
5 the estate and all the rights of intermediaries including fisheries in the estate shall stand determined and ceased and stood vested in the State free from all incumbrances.
(488 G) 483 1.2."Incumbrance" defined under Sec.
2(h)of the Act means 'in relation to estates and rights of intermediaries therein, does not include the rights of a raiyat or of an under raiyat or of a non agricultural tenant, but shall, except in the case of land allowed to be retained by an intermediary under the provisions of sec.
6, include all rights or interests of whatever nature, belonging to intermediaries or other persons, which relates to lands com prised in estates or to the produce there of.
Therefore, tide to, rights or interests in lands which include fisheries held by an intermediary shall stand extinguished and ceased and stood vested in the state free of all incumbrances.
(488 H, 489 A) 1.3.The exceptions engrafted in the incumbrance and exempted from the operation of Sections 4 and 5 are only the rights of a raiyat or of an underraiyat or of a non agricultural tenant and the right of retention of possession allowed to an intermediary under Sec.
6 of the Act All other rights, interest of whatever nature or tide belonging to the intermediaries or other persons who hold the lands under lease from intermediary should also stood extinguished.
(489 C) 1.4.All grants and confirmation of title, to estates and rights therein, to which the declaration of vesting applies and which were made in favour of intermediaries shall stand determined and ceased by operation of Sec.
5(1) (b) of the Act.
(489 D) 1.5.The respondents being purchasers of lease hold interest in tank fisheries? it also stood extinguished.
1.6.The pre existing right, tide and interest in the lands situated in an estate stood extinguished and ceased to have effect on and from notified date i.e. June 1, 1956 and stood vested in the State free from all incumbrances.
The non obstanti clause under Sec. 6 excluded from the operation of secs.
4 and 5 only of the interest of the respondent to retain physical possession of the lands covered by Sec. 6, subject to sec.
The intermediary by operation of Sec.
10(2) shall be required to submit in form 'B ' within 60 days from the date of issuing notice under Sec.
10(1) of his intention to retain possession of the tank fisheries.
On such submission of Form 'B ', the Collector without dispossessing him/it shall be entitled to prescribe such terms and conditions to which the intermediary or the leasee shall be bound and hold the tank fishery and shall remain in possession, using the tank fisheries for pisciculture or for fishing and subject to payment of such rent as may be determined under the Act and 484 finally entered in the Records of Rights.
(491 E F) 1.7.
The lands once retained under Sec.
by the intermediary and accepted by the authorities pursuant to form 'B ' declaration, the intermediary is entitled to retain possession and is not liable to dispossession so long as he complies with the terms and conditions, if any, imposed and the rent imposed is being paid.
(492 E) 1.8.
The avowed object of Act is to divest the pre existing right, tide and interest of the intermediary in the lands situated in an estate in a district or part of the district and shall stand divested from the Zamindar or intermediary except of a raiyat or under raiyat or non agricultural tenant.
Notwithstanding such divestment thereof the intermediary has been empowered to hold and retain possession directly under the State and hold it as a tenant, subject to such terms and conditions and subject to payment of rent as may be determined under the Act.
Therefore, the entitlement to retain possession of the land i.e tank fisheries in this case is not absolute but hedged with the conditions precedent of expressing his intention to retain possession by filing form 'B 'within 60 days and abiding to comply with such terms and conditions as may be imposed and also payment of rent.
(492 GH, 443 A) 1.9.
By operation of the explanation to Sec.
6(1) (e) "tank fisheries" not only it must be a tank fishery at the date of vesting, but it must also continue to be used for pisciculture or for fishing.
The emphasis on 'being used ' obviously is that the tank fisheries should be continued to be used for public purpose, namely the fish seedling or fish must be made available for public consumption.
(493 B) 1.10.
The intermediary shall hold the tank fishery on the date of vesting as tank fishery but continue to hold and use the same thereafter for pisciculture or fishing as explained in explanation 6(1) (e) of the Act.
Subsequent conversion of the land as tank fisheries is not material.
(493 D) State of U.P. vs Krishna Gopal & Anr., [1988] Supp.
2SCR 391 and Sasanka Sekhar Maity & Ors.
v Union of India, ; , cited.
Saroj Kumar Bose v Kanailal Mondal & Ors., [1985]2 SCR 393 and State of West Bengal v Atul Krishna Shaw & Anr., [1990] Supp. 1 SCR 901, explained.
485 1.11.
The word 'revised ' under sub sec.
(1) of Sec.
44 indicates that the State Govt.
or its officers shall be entitled to revise from time to time the Record of Rights and to make necessary entries or corrections in the relevant columns of Record of Rights in its settlement operations or as per exigency envisaged under the Act and the rules made therein.
The order under Sec.
44(3) becomes final so long as there is no revision effected.
The question of res judicata, therefore, does not arise and the previous appellate order does not preclude the authorities to revise the Record of Rights.
(492 B) 1.12.
The Division Bench of the High Court is not right in its conclusion that the order passed by the appellate authority under Sec. 44 (3) is final and the authorities have no jurisdiction to revise the Record of Rights.
(492 C) 1.13.
Sub section(2) of Sec. 6 expressly postulates that if he holds the tank fisheries should be for continued for use as tank fisheries and it would be subject to such terms and conditions and subject to payment of rent as may be fixed.
The holding of the land is as a tenant, the emphasis is that his possession is without any interest in the land.
Under T.P Act a tenant has lease hold interest in the land.
But in Sec.6(2) as a tenant for the purpose of payment of the rent and retention of possession and appears to he nothing more.
As regards tank fishery is concerned, though exemption has been granted, it is subject to the condition of continued user for pisciculture or fishing.
(495 E) 1.14.
From the scheme of the Act it would appear that the intermediary or the lessee gets no absolute right in the tank fisheries which were already divested but to remain in khas possession and to enjoy the usufruct thereof i.e. for pisciculture or fishing without any interest or sub soil rights and subject to such terms and conditions and subject to payment of rent as prescribed under the Act, but not as owner thereof.
The direction, therefore,by the High Court that the respondents are entitled to dispose of the land is contrary to and in negation of the scheme of the Act and Rules.
Therefore, it is manifestly illegal.
(495 G) 1.15.
The appellant is free to issue notice to the respondent under Sec.
10 (2) of the Act and conduct an enquiry into and rind: (1) on the date of the vesting whether the lands were being used for pisciculture or fishing i.e. tank fisheries; (2) whether the respondent had submitted form `B ' within the prescribed time exercising the option 486 to retain possession of the lands in question as tank fisheries; and (3) whether the respondent is continuing to use the lands in question as tank fisheries.
Reasonable opportunities shall be given to the respondents to prove its/their case.
(496 A B) 1.16.On the enquiry if it is found that the lands are not tank L1.16.On the enquiry if it is found that the lands are not tank L1.16.On the enquiry if it is found that the lands are not tank fisheries as on the date of vesting or that the respondent had not submitted option in Form `B ' to retain possession of the lands as tank fisheries within the prescribed period, then the lands stood vested in the State free from all incumbrances and authorities are entitled to take possession of the land under Sec.
10(1) read with Sec.
10(3).
In case if it rinds that the lands were being used as tank fisheries as on the date of vesting and that the respondents exercised the option within the time to retain possession and is continuing to use the tank fishery for pisciculture or for fishing; and if it has been continuing in possession of tank fishery, It is free to impose, if not already imposed, such terms and conditions as may be necessary to ensure continued use of tank fishery for pisciculture or for fishing, subject to payment of such rent as may be fixed or revised and ultimately entered in the Record of Rights.
In case, the respondent commits contravention thereof, it is open to the State to resume possession.
In case the respondent is not using the tank fishery for pisciculture or for fishing or alienated the lands it is open to the appellants to take possession of the lands and all sales if made by the respondents do not bind the State.
(496 C E) </s> |
<s>[INST] Summarize the following judgement: minal Appeal Nos.
420 22 of 1993.
From the Judgment and Order dated 31.8.1992 of the Kerala High Court in Crl.
R.P. Nos.
665/91 and 666/91 and Crl.
M.C. 832 of 1992.
AND Criminal Appeal No. 423 of 1993.
From the Judgment and Order dated 15.12.1992 of the Kerala High Court in Crl.
M.C. No. 1192 of 1992.
T.S. Krishna Murthy Iyer and M.T. George for the Petitioner in C.A. Nos.
420 22/93 and for the Respondents in C.A. No. 423/93.
G. Ramaswamy, John Joseph, P.S. Nayar, K.V. Sree Kumar, K. Raghunath and T.G.N. Nair for the Appellant in C.A. No. 423/93 and for the Respondents in C.A. Nos.
420 422/93.
J.: Special Leave granted.
Untramelled by questions of fact the learned Senior counsel on both sides neatly presented question of law whether "sandlewood oil" is forest produce within the meaning of Section 2 (f) (1) of the Kerala Forest Act, 1961 for short the Act '.
When proceedings were laid under section 51 (1) of the Act against the respondents in Special Leave Petition (Crl.) Nos.
27 29 of 1992, they questioned the jurisdiction of the court in C.C. Nos. 145 and 148 of 1988.
Eschewing delineation of intermediary proceedings went on from the start of prosecution, the High Court in exercise of its power under section 482 of the Code of Criminal Procedure, 1973 for short 'the Code ' by order dated August 31, 1992, reported in Mohammed Aliv.
Forest Range Officer, quashed the complaint holding that Sandal Wood Oil is not 'wood oil ' as defined in s.2 (f) (i) of the Act.
So it is not a forest produce.
Thus these appeals by Special leave.
When same question subsequently arose, other learned Single Judge doubting the correctness of aforesaid judgment referred the matter to the division bench which by order dated December 15, 1992, reported in Khushboo Enterprises vs Forest Range officer, held that Sandalwool Oil is a forest produce within the meaning of S.2 (f) (1) of the Act.
Thus the appeal in the other case.
The Forest Conservation Act, 1980 aims to prevent depleting forests, conservation thereof and protection of wild life in the country to maintain ecological balance.
The State, Acts regulate preservation of forest and forest produce to supplement the Central Act.
The Act prescribes procedure for preservation of the forest and regulates possession of the forest produce, failing of trees in the forest area and removal from the forest or reserved forest area by transit permits etc.
When Sandalwood Oil either was found in transit or in possession of the manufacturers, it was seized in the respective cases and laid the complaints under section 5 1 (1) (or contravention thereof.
As said earlier the jurisdictional question was raised on the premise that Sandal Wood Oil is not a wood oil as defined under section 2(f) (1) of the Act.
The question, therefore, emerges whether Sandalwood Oil is a wood oil.
S.2(f) defines forest produce thus: "Section 2(f) 'forest produce ' includes: (i)the following whether found in or brought from, a forest or not 502 that is, to say timber, charcoal, wood oil, gum, resin, natural varnish, bark, lac, fibres and roots of sandalwood and rosewood; and (ii)the following when found in or brought from aforest, that is to say a)trees and leaves, flowers and fruits and all other parts or produce not here in before mentioned, of trees.
b)plants not being trees including grass, creapers, reeds and moss and all parts or produce of such plants; c) silk cocoons, honey and wax, and d) peat, surface soil, rock and minerals (including lime stone, laterite), mineral oils and all products of mines or quarries".
A reading thereof do indicate that the forest produce whether found in or ,brought from a forest or not is a forest produce which include, that is to say, the 'enumerated items in Clauses 1 and 11 "wood oil" is one of the enumerate items as well as roots of sandalwood and rosewood.
The contention of Sri G. Ramaswami, the learned Senior counsel for the accused is that technical Dictiontries, Botanical Tax Books and expert opinion would bring out a demonstrable distinction between wood oil and sandalwood oil.
The wood oil is a natural produce of the forest directly derived as an exudation from living trees in the forest belonging to the family of the Dipterocarpucoae trees while sandal wood oil is a bye product from sandalwood (Santalum Album) by industrial process.
Wood oil is produced by making a hole on the trunk of the living tree commonly known as "oil trees" or "wood oil trees".
This family of trees are variously known in different parts of South India but they relate to Dipterocarpucoae family.
Wood oil is gathered by heating the hole in the trunk to induce exudation of the olec resin from the tree and commercially dealt with as wood oil which is a cheap substance in the commercial world used solely for the purpose of painting planks of wood or wooden vessels floating in the sea.
The physio chemical properties of wood oil are distinct and different from other oil.
Sandal wood oil would be produced only at factory level and that too by mechanised process utilising the heart wood and roots of sandal wood trees removed from the forest as a raw material.
Sandal wood oil is having very high commercial value and it is mainly used in manufacturing perfumery and 503 cosmetic items of different types and grades.
The production of sandal wood oil is being carried out as industry, either by licence by the individuals or the state government as its monopoly like Karnataka State, in a larger scale or as a small scale business.
It is further contended that the meaning of the word "wood oil" defined in section 2 (f) (1) must receive its colour from its context and connotation.
When the legislature used the word 'that is to say 'the wood oil and other natural growth referred to in the definition it would only mean natural bye product directly drawn from the trees.
The Learned Single Judge had rightly construed the meaning of the word 'wood oil ' and held that sandal wood oil being the bye product derived commercially manufacturing process is not wood oil.
The division bench committed manifest error in its construction of the word 'wood oil 'to include sandal wood oil.
Sri Krishna Murthy Iyer, the learned Senior counsel for the respondents on the other hand, refuted the contention arguing that inclusive definition of forest produce must receive extended meaning.
It must also be construed in the context in which it is used and the purpose the Act seeks to serve and the family to which sandal wool oil belongs being an essential oil would include wood oil.
The expression wood oil being a technical and part of inclusive definition has to be construed in its technical sense and in an exhaustive manner.
It cannot be restricted in a narrow circumference as was done by the learned Single Judge so as to defeat the object and purpose of the Act.
Extraction of sandal wood oil even by mechanised process would nonetheless be a wood oil.
He laid emphasis on the word 'timber ' defined in section 2(k) which include 'Sandal wood ', being a forest produce the oil extracted therefrom would also be within the meaning of the word `wood oil '.
The restricted meaning canvassed by the counsel would defeat the purpose of the Act and the literal interpretation giving narrow meaning to the word wood oil ' should be excluded.
Ex facie the argument of Sri Ramaswami backed by material, though is alluring, deeper probe denied its acceptance.
Undoubtedly, the Karnataka Forest Act, 1963 incorporated in its definition of forest produce Sandalwood oil after the word "wood oil" and the legislature in Andhra Pradesh and Tamilnadu, like the Act, do not specifically incorporate Sandalwood oil in the definition of forest produce.
From this could it be concluded, if it be otherwise interpretable, that wood oil would not include Sandalwood oil as well.
Undoubtedly Stedman 's Medical Dictionary (23rd Edition) defined at page 1576, wood oil as gurjan balsam and gurjan balsam defined at p. 156 to mean wood oil oleo resin from Dipterocarpus alatus (family Dipterocarpuceae), a tree of India and other regions of Southern Asia.
Similar meaning was given in Concise Chemical and Technical Dictionary edited by H. Bennett (Fourth Edition) at page 1217; Scientific Treatises on the subject by Ernest Guenther in volume 6; Edward Balfour in his 'Cryclopaedia of India ' and of Eastern and Southern Asia; R.N. Khori in his 'Materia Medica of 504 India and their Therapeutics ' and ' Pharmacographia Indica ' by Willim Dymock defined wood oil in the same strain.
All these technical literatures were concerned in finding out physio chemical properties contained in wood oil and the source from which they are drawn for use in industrial purposes.
The literal interpretation given therein if given acceptance would lead to manifest frustration of the purpose of the Act.
In its interpretation we have to keep at the back of our mind the purpose which the Act and the Parent Act (Forest Conservation Act) seek to subserve.
J.F. Dastru equally in his 'Medical Plants of India and Pakistan 'tread into the same path and given construction to wood oil in the context of its exudation obtained from the trunk of the trees belonging to the family of Dipterocarpaceae as an oleoresin or gurjan balsam.
There would be no quarrel on that behalf.
It must be noted in this context that there are several types of essential oils in India, the important being Sandalwood oil, agar wood oil, deodar oil and pine oil, apart from oleo resin and wood oil derived from exudation from living trees in the forest area.
These essential oils are obtained from any of forest wood.
Sandalwood as observed by the High Court is forest produce.
Even its roots thereof are also included as forest produce.
They are also timber within the meaning of Section 2(k) of the Act.
The purpose of the Act is to conserve forest wealth which is very dear for preservation to maintain ecology.
Forest produce defined under section 2(f) is an inclusive definition.
It is settled law that the word 'include ' is generally used as a word of extension.
When used in an interpretation clause, it seeks to enlarge the meaning of the words or pharases occuring in the body of the Statute.
Craies on Statute Law, Seventh Edition at p. 64 stated the construction to be adopted to the meanings of the words and pharases that "The cardinal rule for the construction of Acts of Parliament is that they should be construed according to the intention expressed in the Acts themselves.
If the words of the statute are themselves precise and unambiguous, then no more can be necessary than to expound those words in their ordinary and natural sense.
The words themselves alone do in such a case best declare the intention of the law giver",.
At p. 214 it is stated that an interpretation clause which extends the meaning of a word does not take away its ordinary meaning.
An interpretation clause of the inclusive definition is not meant to prevent the word receiving its ordinary, popular and natural sense whenever that word that would be properly applicable, but to enable the word as used in the Act, when there is nothing in the context or the subject matter to the contrary, to be applied to some things to which it would not ordinarily be applicable. .
An interpretation clause should be used for the purpose of interpreting word which are ambiguous or equivocal, and not so as to disturb the meaning of such as are plain.
At p. 216 it is stated that another important rule with regard to the effect of an interpretation clause is, that an interpretation clause is not to be taken as substituting one set of words for another, or as strictly defining what the meaning 505 of the term must be under all circumstances, but rather as declaring what may be comprehended within the term where the circumstances require that it should be so construed.
This Court in Babu Manmohan Das Shah & Ors.
vs Bishun Das [ ; adopting the ordinary rule of construction stated that "the provisions of a statute must be construed in accordance with the language used therein unless there are compelling reasons such as where the literal construction would reduce the Act to absurdity or prevent manifest legislative purpose from being carried out".
The question therein was the interpretation of the phrase "materially altered the accommodation or is likely substantially to diminish its value" in the construction to a shop.
In that context this court laid that cardinal principle of statutory construction referred to hereinbefore would apply.
In State of Madhya Pradesh vs M. V. Narasimhan; , the definition of 'public, servant ' in S.21 I.P.C. was amended and clause 12 thereof was brought on statute.
The Prevention of Corruption Act, 1947 created its own provisions as specific offences of criminal misconduct which is different from the offence of bribery defined in the Indian Penal Code.
When similar definition was not given under the P.C. Act, 1947 the contention was raised that the respondent cannot be prosecuted not being a public servant under the P.C. Act.
This court while holding that definition of public servant was incorporated in P.C. Act by necessary implication of public servant defined in Cl. 12 of S.21 I.P.C. and held that P.C. Act is supplemental to I.P.C. and that, therefore, both would deal with the same offence.
Accordingly, the respondent was held to be public servant coming within the definition of P.C. Act.
This court adopted the doctrine of purposive interpretation to prevent corruption, a penal offence.
In Municipal Corporation of Greater Bombay vs Indian Oil Corporation; , this Court adopted purposive construction in the definition of the word 'building ' for the purpose of levy of property tax under the Bombay Municipal Corporation Act to include oil storage tanks to be "building" and held that the language of a statutory provision is not static vehicle of ideas and concepts and as ideas and concepts change, as they are bound to do in any country like ours with the establishment of a democratic structure based on agalitarian values, the meaning and content of the statutory provision undergo a change.
The law does not operate in a vaccum.
It cannot be interpreted without taking into account the social, economic and political setting in which it is intended to operate.
The Judge has to inject flesh and blood in the dry skeleton provided by the legislature and invest it with a meaning which will harmonise the law with the prevailing concepts and values and make it an effective instrument for delivering justice.
The word include in the definition under section 2(f) would show that it did 506 not intened to exclude what was ordinarily and in common parlance be spoken of wood oil.
The expression being technical and being part of an inclusive definition has to be construed in its technical sense but in an exhaustive manner, it cannot be restricted in such a manner so as to defeat the principle object and purpose of the Act.
The process by which the oil is extracted is not decisive as oil may be extracted by natural process of exudation or it may be extracted by subjecting to chemical or mechanical process and Sandalwood (Santalum Album) are cut into pieces.
Its heart wood and roots of Sandalwood trees removed from the forest are used as a raw material at a factory level that too by mechanised process to extract sandalwood oil.
The purpose for which the oil is used is not decisive.
Therefore, the word wood oil used in the Act will require purposive interpretation drawing the context in which the words are used and its meaning will have to be discovered having regard to the intention and object which legislature seeks to subserve.
The restricted meaning sought to put up by the accused would frustrate the object and the literal interpretation would defeat the meaning.
The Legislature does not intend to restrict the word wood oil nor we find any compelling circumstances in the Act to olive restricted meaning that only oil derived from Dipterocarpus trees to be wood oil as contended for the accused and found acceptance to the learned single Judge.
The purposive interpretation would aid conservation of sandle wood, a valuable forest wealth, prevent illicit failing and transportation of them and makes the manufacturers of sandlewood oil accountable to the possession of sandlewood trees or chips or roots etc.
Incorporation of sandlewood oil abundentecatela in Karnataka Act and absence thereof in sister Acts operating in South India does not detract from giving its due meaning.
The expert opinion is only an opinion evidence on either side and does not aid us in interpretation.
This court in Adity Mills vs Union of India, ; did not adopt the dictionary meaning as it may be to some extent delussive guide to interpret entries in Central Excise and Salt Act.
In Kishan Lal vs State of Rajasthan, ; to which one of us, Sahai, J, was member, this court was to consider the word 'Sugar ' whether under Rajasthan Agricultrual Produce Marketing Act, 1961 an agricultural produce.
It was contended that the Khandsari Sugar was not an agricultural produce.
Repelling that contention, this Court held that the word agricultural produce include all produce whether agricultural, horticultural, animal husbandary or otherwise as specified in the schedule.
The legislative power to add or include and define a word even artificially, apart, the definition which is not exhaustive but inclusive neither exclude any item produced in mills or factories nor it confines its width to produce from soil.
If that be the construction then all items of animal husbandry shall stand excluded.
It further overlooks the expression "or otherwise as specified in the Schedule".
Accordingly it was held that Khandsari Sugar is an agricultural produce under that Act.
In State of Bombay & Ors.
vs The Hospital Mazdoor Sabha & Ors.
; this court adopted purposive approach 507 in interpreting the word 'industry ' in section 2(j) of the Industrial Disputes Act, and held that the Legislature in defining the word 'industry ' in s.2 (j) of the Act deliberately used term of wide import in its first clause and referring to several other industries in the second in an inclusive way obviously denoting extention.
The conventional meaning attributed to trade or business was eschewed even in the absence of profit motive.
It was held that hospital was an industry.
Therefore, the ratio, far from helping the accused, is consistent with the view we have expressed above.
In South Gujarat Roofing Tiles Manufacturers Association and Anr.
vs State of Gujarat and Anr.
, ; the inclusive definition was construed in the context of the explanation given to Entry 22.
It was held, therefore, that the word 'pottery ' does not include tiles industry for the purpose of Minimum Wages Act.
The ratio therein renders little assistance to the accused.
In Rathi Khandsari Udyog and Ors.
vs State of U.P. and Ors.
; , , this court held that the words not defined may be construed in the popular sense in which it is being commonly used in commercial parlance.
The ratio is not apposite to the fact situation.
Similarly the construction placing reliance on the passage at p. 164 of Craies on Statute Law that the word is to be construed in the sense in which it is being understood in trade, business or transaction known to the trade is also inapplicable to the factual context.
In Fatesang Gimba Vasava and Ors.
vs State of Gujarat and ors.
, the division bench construed whether bamboo would include in its ambit cut pieces in the context and the purpose the Act sought to serve the tribals in the forest area.
Privilege was granted to the tribals to remove certain forest produce from forest area for sale to supplement their livelihood.
When toplas, supdas and palas made out of bamboo chips were being taken out for sale, they were sought to be prosecuted.
It was challenged by the tribals.
In that context the division bench held that though bamboo is a forest produce, the Bamboo chips of the specified description do not fall within the definition of forest produce.
Accordingly it was interpreted, from the context and purposive approach of the word 'forest produce '.
Accordingly the ratio therein does not assist the accused.
The Andhra Pradesh High Court, relied for the accused, had not correctly laid the law in Kangundi Industrial works, Kuppam vs The Govt.
of A.P.
Accordingly we hold that Sandalwood oil is wood oil within the meaning of section 2 (f) (i) of the Act.
Therefore, it is a forest produce.
Necessary conclusion is that the Trial Court has jurisdiction to proceed with the trial.
It is for the Trial Court to find whether the offence as imputed to the accused has been made out the trial.
We need express no opinion at this stage.
The appeals of the State are allowed and the appeal of the accused is dismissed.
R.P. Appeals dismissed/allowed. [/INST] The Kerala Forest Act, 1961 regulates preservation of forests and forest produce.
Section 2(f) (i) defines forest produce which includes wood oil.
The respondents in Crl.
Appeals Nos.
420422 of 1993 were found manufacturing/in possession of sandalwood oil.
Proceedings under section 52 (1) of the Act were initiated against them.
They filed applications under section 482, Cr.
P.C. before the High Court challenging the jurisdiction of the trial court on the premise that sandalwood oil was not wood oil as defined under section 2(f) (i) of the Act The High Court allowed the case of the respondents and quashed the complaint*.
Subsequently in another case involving the same controversy, a Division Bench of the High Court held that sandalwood oil was a forest produce within the meaning of section 2(f) (i) of the Act.
**The State and tile accused challenged the respective judgments in the appeals by special leave.
It was contended on behalf of the accused that sandalwood oil is not a forest produce inasmuch as there is a distinction between wood oil and sandalwood oil wood oil is a natural produce of forest directly derived as an exudation from living trees in the forest whereas sandalwood oil is a bye product from sandalwood by industrial process utilising the heart wood and 497 498 roots of sandalwood trees removed from the forest as a raw material.
The State contended that extraction of sandalwood oil even by mechanical process would nonetheless be a wood oil; and that since the word 'timber ' defined under section 2 (k) of the Act includes 'sandalwood ' being a forest produce, the oil extracted therefrom would also he within the meaning of the word 'wood oil '.
On the question: whether sandalwood oil is a forest produce within the meaning of section 2(f) (i) of the Kerala Forest Act, 1961.
Allowing the appeals of the State and dismissing the other appeal, this Court, HELD: 1.1 Sandalwood oil is wood oil within the meaning of s.2(f) (i) of the Kerala Forest Act, 1961.
Therefore, it is a forest produce.
(507 G) * Mohammed Ali vs Forest Range Officer: , overruled **Khushboo Enterprises vs Forest Range Officer. , approved.
Kangundi Industrial Works.
Kuppam vs The Govt.
of A.P. , disapproved.
1.2 Sandalwood is forest produce.
Even its roots are also included as forest produce.
They are also 'timber 'within the meaning of section 2(k) of the Act.
(504 D) 1.3 Forest produce as defined in s.2 (f) of the Act, whether found in or brought from a forest or not is a forest produce which include, that is to say, the enumerated items in clauses (1) and (ii).
"Wood oil" is one of the enumerated items as are roots of sandalwood and rose wood.
(502 E) 2.1 The word "wood oil" used in the Act will require purposive interpretation drawing the context in which the words are used and its meaning will have to be discovered having regard to the intention and object which legislature seeks to subserve.
The purposive interpretation would aid conservation of sandal wood, a valuable forest wealth, prevent illicit felling and transportation of them and makes the manufacturers of sandalwood oil 499 accountable to the possession of sandalwood trees or chips or roots etc.
(506C D) Municipal Corporation of Greater Bombay vs Indian Oil Corporation, ; ; State of Bombay & Ors.
vs The Hospital Mazdoor Sabha & Ors, ; and State of Madhya Pradesh vs M. V Narasimhan, 1197512 SCC, relied on.
2.2 The Legislature does not intend to restrict the word 'wood oil ' nor are there any compelling circumstances in the Act to give restricted meaning that only oil derived from Dipterocarpus trees would be wood oil.
The literal interpretation if given acceptance would lead to manifest frustration of the purpose of the Act.
(506 D) Aditya Mills vs Union of India, [1988] 4SCC315, and Babu Manmohan Das Shah & Ors.
vs Bishun Das, ; , referred to.
Rathi Khandsari Udyog and Ors vs State of U.P. & Ors, [1985]2SCC 485, inapplicable.
Craies on Statute law.
Seventh Edition, referred to.
Stedman 's Medical Dictionan, (23rd Edition), Concise Chemical and Technical Dictionary (Fourth edition); 'Scientific Treatises ' (Vol. 6) by Ernest Guenther; 'Cyclopaedia of India and of Eastern and Southern Asia ' by Edward Balfour; 'Materia Medica of India and their Therapeutics ' by R.N. Khori, Pharma cographia Indica by William Dymock and 'Medical Plants of India and Pakistan ' by J.F. Dastru, referred to.
2.3 The expert opinion is only an opinion evidence on either side and does not aid in interpretation.
(506 E) 3.1 Forest produce defined under section 2(f) of the Act is an inclusive definition.
It is settled law that the word 'include ' is generally used as a word of extension.
When used in an interpretation clause, it seeks to enlarge the meaning of the words or phrases occurring in the body of the statute.
(504 D) 3.2 The word 'include ' in the definition under section 2(f) would show that it did not intend to exclude what.
was ordinarily and in common parlance to be spoken of wood oil.
The expression being technical and being part of an 500 inclusive definition has to be construed in its technical sense but in an exhaustive manner, it cannot be restricted in such a manner so as to defeat the principal object and purpose of the Act (505 H, 506 A) Kishan Lal vs State of Rajasthan, ; and South Gujarat Roofing Tiles Manufacturers Assn.
& Anr.
vs State of Gujarat and Anr.
, ; , referred to.
Fatesang Gimba Vasava & Ors vs State of Gujarat & Ors., , distinguished.
The process by which the oil is extracted is not decisive as oil may be extracted by natural process of exudation or it may be extracted by subjecting to chemical or mechanical process.
The purpose for which the oil is used is also not decisive.
(506 B) 5.
The trial court has jurisdiction to proceed with the trial.
It is for the trial court to find whether the offence as amputed to the accused has been made out at the trial.
(507 G) </s> |
<s>[INST] Summarize the following judgement: minal Appeal Nos.
402 to 419 of 1993.
From the Judgment and Order dated 3.3.1992 of the Karnataka High Court in Crl.
Petitions Nos. 1574 to 1584 of 1991 and 1588 to 1594 of 1991.
M.S. Nesargi, R.C. Mishra and Dr. (Mrs.) Meera Aggarwal (For Aggarwal & Mishra & Co.,) for the Appellant.
V.Gauri Shankar, Anil Srivastava and Mrs. Anil Katiyar (NP) for the Respondent.
The Judgments of the Court were delivered by K. RAMASWAMY.J. Special Leave granted.
Since common question of law arises in these 18 appeals for decision, they are disposed of by a common judgment.
The appellant is one of the Directors of M/s Ideal Jawa (India) Ltd. Yadavagiri, Mysore, a Private Ltd. Company estab lished under the Companies Act.
It was also registered under the .
Its object is to manufacture Motor Cycles and its accessories.
It has its Managing Director, Joint Managing Director and Directors including the appellant to manage the establishment.
The respondent laid 18 complaints against six accused including the appellant(A 6) and the Company,employer,for their failure to deposit the contribution for the periods of October to December, 1990 to the Provident Fund Account No. NK 2260 under the Employees 'Provident Funds and Miscellaneous Provisions Act, 1952, for short 'the Act ', Employees ' Provident Funds Scheme, 1952,Employees ' Family Pension Scheme, 1971 and Employees ' Deposit Linked Insurance Scheme, 1976, for short 'the Schemes ' punishable under section 14A of the Act read with para 76 of 1952 scheme.
On the Magistrate 's taking cognizance thereof, the appellant laid Crl.
in the High Court to quash the complaints as they do not contain the relevant averments constituting the offences against the appellant.
It is his case that he is a mere Director of the 514 Company.
He was neither Incharge of the Company, nor is responsible to comply with the provisions of the Act and the Scheme,.
In support thereof he placed reliance on the definition 'employer ' and the liability has been fastened on the Managing Director or the Manager or occupier of the establishment to abide by the Act and the Schemes.
The High Court by its order dated March 3,1992, dismissed the applications.
Thus these appeals.
Sri Nesargi, learned Sr. counsel for the appellant contended that a reading of the definition 'employer ' in s.2(e) read with sections 30, 14 (1 A) and paras 30 and 38 of the Schemes demonstrates that the employer in relation to an establishment means the owner or occupier of the factory which includes the Agent or the Manager of the Factory under the .
One Sri N.K. Khudamurad was recorded as occupier and one Sri D.K. Darashawas recorded as the Manager.
They are Incharge of and were responsible to comply with the Act and the Schemes.
No specific averments were made in the complaint making the appellant responsible for the management of the factory or the liability to comply with the Act and the Schemes.
The complaint, therefore, laid against him is illegal and the cognizance taken by the Magistrate is vitiated by manifest error of law.
In support thereof he placed reliance on the decisions of this court in Municipal.
Corpn.
of Delhi vs Ram Kishan Rohtagi & Ors.
; and Employees 'State Insurance Corpn.v.
Gurdial Singh & Ors.
[1991] Supp.
1 SCC 204.
The Act and the Schemes are self contained code for deduction from the salary of the employees and the responsibility to contribute in equi proportion the employer 's share and deposit thereof in the account within the specific time under Act and the Schemes into the account.
It is a welfare legislation to provide benefits to the employees as per the schemes.
They need mandatory compliance and violation thereof visits with penal action.
Section 2(e) of the Act defines 1 employer ' which means in relation to an establishment which is a factory, the owner or occupier of the factory, including the Agent of such owner or occupier, the legal representative of deceased owner or occupier and, where a person has been named as a Manager of the factory under clause (f) of sub section
(1) of s.7 of the , the person so named. . .
The definition is an inclusive definition bringing within its ambit the owner or occupier as well:" its Manager.
Section 2(k) defines 'occupier ' which means the person who has ultimate control over the affairs of the factory, and, where the said affairs are entrusted to a Managing Agent such Agent shall be deemed to be the occupier of the factory.
Therefore, by its extended definition its sweep is enlarged bringing within its scope the person who is incharge or responsible for in management or ultimate control over the affairs of the factory or establishment.
515 In the event of entrustment to a Managing Agent, such Managing Agent shall also be deemed 'to be the occupier of the factory '.
Section 6 fastens the obligation on the employer in this behalf.
It postulates that the contribution shall be made by the employer to the Fund and shall be 8 1/3% of the basic wages, dearness allowances and retaining allowances, if any, for the payment being payable to each of the employees, whether employed by him directly or through a Contractor.
The employee 's contribution shall be equal to the contribution payable by the employer in respect of him, etc.
in its application to any establishment or class of establishments.
Other provisions are not relevant, hence they are omitted.
Under para 30 of the Employees ' Provident Fund Scheme, 1952 and the other Schemes, the employer shall deposit the contribution to the Fund.
Under para 36A of the Scheme the employer is enjoined to furnish particulars of the ownership of the factory which provides thus: "36 A Employer to furnish particulars of ownership: Every employer in relation to a factory or other establishment to which the Act applies on the date of coming into force of the Employees ' Provident Funds Scheme, 1961, or is applied after that date, shall furnish in duplicate to the Regional Commissioner in Form No. 5A annexed hereto particulars of all the branches and departments, owners, occupiers, directors, partners, manager or any other person or persons who have the ultimate control over the affairs of such factory or establishment and also sent intimation of any change in such particulars, within fifteen days of such change, to the Regional Commissioner by registered post and in such other manner as may be specified by the Regional Commissioner.
Provided that in the case of any employer of a factory or other establishment to which the Act and the Family Pension Scheme, 197 1, shall apply the aforesaid Form may be deemed to satisfy the requirements of the Employees ' Family Pension Scheme, 197 1, for the purpose specified above.
" The employer shall, in the first instance, pay both the contributions payable by himself (in the Scheme referred to as employer 's contribution) and also on behalf of the members employed by him directly or through a Contractor, the contribution payable by such member (in the Scheme referred to as member 's contribution).
Para 38 provides that the employer shall send to the Commissioner within 15 days of the close of every month, pay the same to the Fund by separate Bank Drafts or cheques and the administrative charges.
Within 25 days of close 516 of the month, the employer shall submit a monthly consolidated statement as per form 5 with particulars mentioned therein.
Form 5 A envisages to give particulars in Columns 1 to 7 thereof, i.e. particulars of owner, etc.
The appellant 's establishment stated the name of the establishment as Ideal Jawa (India) Ltd., Code No. of the establishment, its address, nature of business, period of its commencement and manufacturing status, have been given.
In Column 8 the establishment is to furnish the names of the owner company, Directors.
It was mentioned therein as Mr. N.K. Irani as Managing Director; the appellant as one of the Directors and others.
In column 10 the names of occupier and Manager as registered under the were given.
In Column 11 which specifies particulars thus: 'particulars of the persons mentioned above, who are Incharge of, and responsible for the conduct of the business of the establishment '.
Therein it was stated that "as per the details mentioned in item 8".
As stated earlier in column 8 the names of the Managing Director, the Joint Managing Director and two Directors including the appellant have been mentioned.
Section 14A which is penal states thus: "14A. Offences by Companies: (1)If the person committing an Offence under this Act, the Scheme or the Family Pension Scheme or the Insurance Scheme in a company, every person who at the time the offence was committed was Incharge of and was responsible to the company for the conduct of the business of the company, as well as the company shall be deemed to be guilty of the offences and shall be liable to be proceeded against and punished accordingly.
Provided that nothing contained in this sub section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
(2)Notwithstanding anything contained in sub section
(1), where an offence under this Act, the scheme or the Family Pension Scheme or the Insurance Scheme has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of any 517 director or manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation:For the purposes of this Section (a) "Company" means any body corporate and includes a firm and other association of individuals; and (b) "director" in relation to a firm means a partner in the firm.
" Para 76 also fastens criminal offence for non compliance of the provisions of the schemes on the persons incharge of and responsible for the management or control of the establishment.
It could thus be seen that every person, who at the time of the offence was committed, was Incharge of and was responsible to the establishment for conduct of its business as well as the company shall be liable to be proceeded against and punished accordingly.
It is seen that Form 5 A read with para 36A give an option to the employer to furnish particulars of ownership and the branches of the department, owners, occupiers, directors, partners, manager or other person or persons who have ultimate control over the affairs of such factory or establishment incharge of and responsible for the conduct of the business of the company and compliance of the statutory obligation fastened under the Act and the relevant schemes.
Particulars in column 8 as regards owners and column 10 relates to Manager or occupier and their names, addresses etc.
and column 11 refers to the persons Incharge of, and are responsible to the management of the establishment or factory are specified.
In form 5 A, as seen earlier in columns 8 and 1 1, it was specifically stated that the Managing Director, Joint Managing Director and Directors including the appellant as not only owners of the factory, but are Incharge of and responsible for the management of the factory and the establishment.
In paragraph 3 of the complaint, It was specifically stated, "that accused 2 to 6 (appellant) are the persons Incharge of the said establishment and are responsible for conduct of its business.
They are thus required to comply with all the provisions of the Act and the Schemes in respect of the said establishment".
It is made mandatory to the employer to abide by the same and non compliance thereof is liable for prosecution under section 14A of the Act.
Section 14(1 A) relied on by Sri Nesargi relates to only liability for punishment for contravention or making default to comply with section 6 or section 17 (3 A) in so far as it relates to the payment of inspection charges and para 38 of the Scheme in so far as it relates to payment of administrative charges.
That has no application as regards the offence covered under section 14A by the companies are concerned.
Accordingly, we hold that the 518 appellant having been declared himself as one of the person Incharge of and responsible for conduct of the business of the establishment or the factory, the complaint and non compliance thereof having been enumerated in subsequent paras of the complaint, it was validly made against the appellant along with other accused for the alleged contravention.
Necessary allegations bringing out the ingredient of offence have been made out in the complaint.
Therefore, the learned Magistrate has rightly been taken cognizance of the offence alleged against the appellant.
Employees ' State Insurance Corporation vs Gurdial Singh & Ors.
[1991] Supp. 1 SCC 204 is the case relating to an admission made by the prosecution that the Directors were not Incharge nor are responsible for compliance of the provisions of the , "Admittedly the company had a factory and it is not in dispute that the occupier of the factory had been duly named.
It is also not in dispute that it has a Manager too".
In view of this admission the Directors were held not responsible for non compliance with the provisions of the .
The ratio therein, therefore, does not assist the appellant.
Equally in Municipal Corporation of Delhi vs Ram Kishan Rohtagi & Ors. ; for an offence under Prevention of Food Adulteration Act specific provision of Food Adulteration Rules provide to nominate occupier or Manager responsible for the production or manufacture of articles of food, etc.
by the company and were nominated.
Under those circum stances, this court upheld the quashing of the proceedings against the Directors as the complaint did not contain necessary allegations constituting the offence against the Directors.
The appeals are thus dismissed.
R.M. SAHAI, J. Can a director of a private company, who is neither an occupier nor a manager be prosecuted under Section 14(A) of the Employees ' Provident Fund and Miscellaneous Provisions Act, 1952 (in brief 'the Act ') for violation of the Provident Fund Scheme.
That depends, obviously, on the scheme of the Act the liability it fastens on the director of the Company and applicability of the penal provisions to the statutory violation or breach of the scheme framed under it.
But before doing so it may not be out of place to mention that the Act is a welfare legislation enacted for the benefit of the employees engaged in the factories and establishments.
The entire Act is directed towards achieving this objective by enacting provisions requiring the employer to contribute towards Provident Fund, Family Pension and Insurance and keep the Commissioner informed of it by filing regular returns and submitting details in forms prescribed for that purpose.
Paragraph 36A of the 519 Provident Fund Scheme framed by Central Government under Section 5 of the Act requires the employer in relation to a factory or other establishment to furnish Form 5A mentioning details of its branches and departments, owners, occupiers, directors, partners, managers or any other person or persons who have ultimate control over the affairs of the factory or establishment.
The purpose of giving details of the owners, occupiers and directors etc.
is not ail empty formality but a deliberate intent to widen the net of responsibility on any and every one for any act or omission.
It is necessary as well as in absence of such responsibility the entire benevolent scheme may stand frustrated.
The anxiety of the Legislature to ensure that the employees are not put to any hardship in respect of Provident Fund is manifest from Sections 10 and 11 of the Act.
The former grants immunity to provident fund from being attached for any debt outstanding against the employee.
And the latter provides for priority of provident fund contribution over other debts if the employer is adjudged insolvent or the company is winded up.
Such being the nature of provident fund any violation or breach in this regard as to be construed strictly and against the employer.
Reverting to the statutory provision Sections 14 and 14A provide for penalities.
The one applies to whosoever is guilty of avoiding payment of Provident fund and to employer if he commits breach of provisions mentioned in its various clauses where as Section 14A fastens liability on certain persons if the person committing the offence is a company.
The scope of the two sections is same.
Latter is wider in its sweep and reach.
The former applies to anyone who is an employer or owner or is himself responsible for making payment whereas latter fastens the liability on all those who are responsible or are in charge of the company for the offence committed by it.
Section 14A reads as under: "14 A. Offences by companies (1) If the person committing an offence under this Act, the Scheme or the Family Pension Scheme or the Insurance Scheme is a company, every person, who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
520 (2) Notwithstanding anything contained in sub section (1), where an offence under this Act, the Scheme or the Family Pension Scheme or the Insurance Scheme has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director or manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation For the purposes of this section, (i) "company" means any body corporate and includes a firm and other association of individuals; and (ii) "director", in relation to a firm means a partner in the firm.
" Sub sections (1) and (2) extend the liability for any offence by any person including a partner by virtue of explanation if he was incharge or was responsible to the company at the time of committing the offence.
The expression, 'was in charge of and was responsible to the company for the conduct of the business ' are very wide in their import.
It could not, therefore, be confined to employer only.
The employer is defined by Section 2(e) to mean, "2 (e). 'employer ' means (i)in relation to an establishment which is a factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and, where a person has been named as a manager of the factory under clause (f) of sub section (1) of Section 7 of the , the person so named; and (ii)in relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment, and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent;" Both clauses (i) and (ii) again are wide in their sweep.
In clause (i) are 521 included not only owner or occupier but even the agent or manager.
When it comes to establishments other than factory it is not confined to owner or occupier but to all those who have control or are responsible for the affairs of the company.
It includes even director.
Therefore, every such person who has the ultimate control over the affairs of company becomes employer.
To say therefore that since paragraph 36 A requires an employer to do certain acts the responsibility for any violation of the provision should be confined to such employer or owner would be ignoring the purpose and objective of the Act and the extended meaning of employer in relation to establishments other than the factory.
The declaration therefore in Form 5A including appellant as one of the persons in charge and responsible for affairs of the company was in accordance with law therefore his prosecution for violation of the scheme does not suffer from any error of jurisdiction or law.
ORDER For reasons given by us in our concurring but separate orders the appeals fail and are dismissed.
Appeals dismissed. [/INST] The appellant was one of the Directors of a Company registered under the Companies Act This company was also registered under the Factories Act and its object was to manufacture Motorcycles and its accessories.
It had a Managing Director, Joint Managing Director and Directors including the appellant for managing the establishment.
The respondent an Enforcement Officer, Regional Provident Fund Commissioner 's Office laid 18 complaints against six accused including the appellant (A 6) and the Company employer, for the failure to deposit the contribution for the period October to December 1990 to the Provident Fund Account under the Employees Provident Fund and Miscellaneous Provisions Act, 1952, Employees Provident Fund Scheme 1952, Employees Family Pension Scheme, 1971 and Employees Deposit Linked Insurance Scheme 1976, offences punishable under Section 14A of the 1952 Act read with para 76 of the 1952 Scheme.
On the Magistrate taking cognizance of the complaint, the appellant filed Criminal Miscellaneous Petitions in the High Court for quashing the complaint as they did not contain the relevant averments constituting offences against the appellant.
It was contended that the appellant was a mere Director of the Company, that he was neither incharge of the company nor was 509 responsible to comply with the provisions of the aforesaid Act and the Schemes thereunder.
Reliance was placed on the definition of 'employer ' in Section 2 (e) of the Act and the liability that had been fastened on the Managing Director or the Manager or occupier of the establishment to abide by the Act and the Schemes.
The High Court dismissed the applications.
The appellant appealed to this Court and contended that the reading the definition of 'employer ' in section 2(e) of the Act with Sections 30,14(1a) and para 31 of the Scheme, demonstrate that the employer in relation to the establishment means the owner or occupier of the factory which includes the Agent or the Manager of the factory under the Factories Act, that there was an occupier and Manager recorded for the instant company, and that they were Incharge of and were solely responsible to comply with the Act and the Schemes thereunder and that no specific averments have been made in the complaint making the appellant responsible for the management of the factory or the liability to comply with the Act and the Schemes.
The complaint laid against the appellant was therefore illegal and the cognizance taken by the Magistrate was vitiated by manifest error of law.
On the question: whether a Director of a Private Company, who is neither an occupier nor a manager can be prosecuted under Section 14(A) of the Employees ' Provident Fund and Miscellaneous Provisions Act, 1952 for violation of the Provident Fund Scheme.
Dismissing the appeals, this Court, HELD: (By the Court K. Ramaswamy & R.M. Sahai, JJ.) 1.
The Employees ' Provident Fund and Miscellaneous Provisions Act 1952 by Section 2(e) defines 'employer '.
It is an inclusive definition and consists of two clauses which are vide in their sweep.
In Clause (i) are included not only owner or occupier but even the agent or manager.
When it comes to establishments other than factory it is not confined to owner or occupier but to all these who have central or are responsible for the affairs of the company.
It includes even director.
Therefore, every such person who has the ultimate control of the affairs of the company becomes employer Section 2(k) defines `occupier ' which means the person who has the ultimate control of the factory, and where the said affairs are entrusted to a Managing Agent, such agent shall be deemed to be the occupier of the factory.
Therefore, by its extended definition its sweep is enlarged bringing within its scope the person who is incharge of or responsible for,the management or 1 510 ultimate control over the affairs of the factory or establishment.
In the event of entrustment to a Managing Agent, such Managing Agent shall also be deemed 'to be the occupier of the factory '.
(514 GH,) 2.
In the instant case, the appellant having been declared himself as one of the person Incharge of and was responsible for conduct of the business of the establishment or the factory in Form 5A the complaint and non compliance thereof having been enumerated in para 3 of the complaint, it was validly made against the appellant along with other accused for the alleged Contravention.
Necessary allegations bringing out the ingredient of offence have been made out in the complaint.
Therefore, the Magistrate has rightly taken cognizance of the offence alleged against the appellant.
(518 A B) (Per K. Ramaswamy, J.) 1.
The Act and the Schemes are self contained code for deduction from the salary of the employees and the responsibility to contribute in equiproportion of the employer 's share and deposit thereof in the account within the specified time under the Act and the Schemes into the account It is a welfare legislation to provide benefits to the employees as per the schemes.
They need mandatory compliance and violation thereof visits with penal action.
(514 E) 2.
Section 6 fastens the obligation on the employer.
It postulates that the contribution to the fund shall be made by the employer.
(515 A) 3.
Under para 30 of the Employees ' Provident Fund Scheme, 1952 and the other Schemes, the employer shall deposit the contribution to the Fund.
(515 B) 4.
The employer shall, in the first instance, pay both the contributions payable by himself(in the Scheme referred to as employer 's contribution) and also on behalf of the members employed by him directly or through a Contractor, the contribution payable by such member (in the Scheme re ferred to as member 's contribution).
(515 G) 5.
Para 38 provides that the employer shall send to the Commissioner within 15 days of the close of every month, pay the same to the Fund by separate Bank Drafts or cheques and the administrative charges within 25 days of close of the month, the employer shall submit a monthly consolidated 511 statement as per form 5 with particulars mentioned therein.
(515 H, 516 A) 6.
Para 76 also fastens criminal offence for non compliance of the provisions of the schemes on the persons incharge of and responsible for the management or control of the establishment.
Every person, who at the time the offence was committed, was Incharge of and was responsible to the establishment for conduct of its business as well as the company shall be liable to be proceeded against and punished accordingly.
(517 C) 8.
Form 5 A read with para 36A give an option to the employer to furnish particulars of ownership and the branches of the department, owners, occupiers, directors, partners, manager or other person or persons who have ultimate control over the affairs of such factory or establishment incharge of and responsible for the conduct of the business of the company and compliance of the statutory obligation fastened under the Act and the relevant schemes.
It is made mandatory to the employer to abide by the same and noncompliance thereof is liable for prosecution under Section 14A of the Act (517 D) Municipal Corpn.
of Delhi vs Ram Kishan Rohtagi & Ors.
; ; and Employees 'State Insurance Corpn.
vs Gurdial Singh & Ors.
[1991] Supp. 1 SCC 204, referred to.
Employees ' State Insurance Corporation vs Gurdial Singh & Ors.
(1991 Supp. 1 SCC 204, and Municipal Corporation of Delhi vs Ram Kishan Rohtagi & Ors.
, ; , distinguished.
(Per R.M. Sahai, J.) 1.
The Act is a welfare legislation enacted for the benefit of he employees engaged in the factories and establishments and is directed towards achieving this objective by enacting provisions requiring the employer to contribute towards Provident Fund, Family Pension and Insurance and keep the Commissioner informed of it by riling regular returns and submitting details in forms prescribed for that purpose.
(518 G) 512 2.
Paragraph 36A of the Provident Fund Scheme framed by Central Government under Section 5 of the Act requires the employer in relation to a factory or other establishment to furnish Form 5A mentioning details of its branches and departments, owners, occupiers, directors, partners, managers or any other person or persons who have ultimate control over the affairs of the factory or establishment.
The purpose of giving details of the owners, occupiers and directors etc, is not an empty formality but a deliberate intent to widen the net of responsibility on any and every one for any act or omission.
It is necessary as well as in absence of such responsibility the entire benevolent scheme may stand frustrated.
(519 A B) 3.
The anxiety of the Legislature to ensure that the employees are not put to any hardship in respect of Provident Fund is manifest from sections 10 and 11 of the Act.
The farmer grants immunity to provident fund from being attached for any debt outstanding against the employee.
And the latter provides for priority of provident fund contribution over other debts if the employer is adjudged insolvent or the company is winded up.
Such being the nature of provident fund any violation or breach in this regard has to be construed strictly and against the employer.
(519 C) 4.
Sections 14 and 14A provides for penalties.
The one applies to whosoever is guilty of avoiding payment of provident fund and to employer if he commits breach of provisions mentioned in its various clauses where as Section 14A fastens liability on certain person if the persons committing the offence is company.
The scope of the two sections is same.
Latter is wider in its sweep and reach.
The former applies to anyone who is an employer or owner or is himself responsible for making payment whereas latter fastens the liability on all those who are responsible or are in charge of the company for the offence committed by it.
(519 D E) 5.
Sub sections (1) and (2) of Section 14A extend the liability for any offence by any person including a partner by virtue of explanation if he was incharge or was responsible to the company at the time of committing the offence.
The expression, 'was in charge of and was responsible to the company for the conduct of the business ' are very wide in their import.
It could not, therefore, be confined to employer only.
(520 D) 6.
To say therefore that since paragraph 36A requires an employer to do certain acts the responsibility for any violation of the provision should be confined to such employer or owner would be ignoring the purpose and 513 objective of the Act and the extended meaning of 'employer ' in relation to establishments other than the factory.
The declaration therefore in Form 5A in the instant case including appellant as one of the persons in charge and responsible for affairs of the company was in accordance with law, therefore, his prosecution for violation of the scheme does not suffer from any error of jurisdiction or law.
(521 B C) </s> |
<s>[INST] Summarize the following judgement: Appeal Nos.
2531 33 of 1993.
From the Judgment and Order dated 19.2.1991 of the Delhi High Court in C.W.P. No. 3499 of 1989.
R.M. Bagai, V. Shekhar, Ms. Bina Gupta and Ms. Monika Mohil for the Appellants.
Kapil Sibal, Ranjit Kumar and R.P. Sharma for the Respondents.
J. Special leave granted.
These appeals have been filed against an order passed by the Delhi High Court directing the Municipal Corporation of Delhi (hereinafter referred to as "the Corporation") to issue appropriate notices to the owners/occupiers/builders of the building where illegal constructions have been made.
A liberty has been given to 528 the owners/occupiers/builders to file fresh buildings plans with the Corporation in conformity with the existing bye laws.
The building plans as filed are to be examined in accordance with the law.
The Corporation has been directed that if it finds that the constructions are beyond the compoundable limits, then to seal the same and to demolish thereafter.
The appellants have no grievance so far as the aforesaid part of the order is concerned.
They have sought interference of this Court with the other part of the order, where it has been said that "no civil suit will be entertained by any court in Delhi in respect of any action taken or proposed to be taken by the Corporation with regard to the sealing and/or demolition of any building or any part thereof.
Any person aggrieved by an order of sealing or demolition which is passed shall, however, have the right of filing an appeal to the Appellate Tribunal under the Municipal Act.
The Appellate Tribunal is the only forum which has the jurisdiction to grant interim relief.
" The other part of the order in respect of which objection has been taken is where the Court has directed the Corporation to approach those courts which have already issued injunction "for variation and vacation of the injunction orders in the light of" the said order.
Initially a writ application was filed in respect of some private dispute between two neighbours.
In due course on the material produced by one party or the other it was treated as a Public Interest Litigation and by the impugned order the High Court has purported to find out a solution in respect of unauthorised constructions alleged to have been made by different owners/ occupiers/builders in the different parts of the city without sanctioned plans or by making deviations from the plans which had been sanctioned.
The Court has also purported to ensure that such unauthorised constructions are not perpetuated on the basis of interim orders of injunction passed by Civil Courts.
It cannot be disputed that by the impugned order the jurisdiction of any Court in Delhi to entertain any suit in connection with demolition of any part of any building which, according to the Corporation, is unauthorised and illegal has been ousted.
The Delhi Municipal Corporation Act, 1957 (hereinafter referred to as "the Corporation Act") has made provisions for the constitution of the Corporation and has prescribed the procedure for election of the councillors, levy of taxes, sanitation and public health.
Chapter XVI contains provisions regarding erection of buildings within the Corporation area.
Section 331 defines the expression "to erect a building".
Section 332 says that" no person shall erect or commence to erect 529 any building or execute any of the works specified in section 334 except with the previous sanction of the Commissioner".
The relevant part of section 343 is as follows: "343.
Order of demolition and stoppage of buildings and works in certain cases and appeal . . . . . . (2)Any person aggrieved by an order of the Commissioner made under sub section (1) may prefer an appeal against the order to the Appellate Tribunal within the period specified in the order for the demolition of the erection or work to which it relates.
(3)Where an appeal is preferred under sub section(2)against an order of demolition, the Appellate Tribunal may, subject of the provisions of sub section (3) of section 347 C, stay the enforcement of that order on such terms, if any, and for such period, as it may think fit: Provided that where the erection of any building or execution of any work has not been completed at the time of the making of the order of demolition, no order staying the enforcement of the order of demolition shall be made by the Appellate Tribunal unless security, sufficient in the opinion of the said Tribunal has been given by the appellant for not proceeding with such erection or work pending the disposal of the appeal.
(4)No Court shall entertain any suit, application or order proceeding for injunction or other relief against the Commissioner to restrain him from taking any action or making any order in pursuance of the provisions of this section.
(5)Subject to an order made by the Administrator on appeal under section 347 D, every order made by the Appellate Tribunal on appeal under this section, and subject to the orders of the Administrator and the Appellate Tribunal on appeal.
the order of demolition nude by the Commissioner shall be final and conclusive".
Section 344 vests power in the Commissioner to stop the construction of the 530 building where the erection of such building or execution of any work has been commenced or is being carried on either without sanction or contrary to sanction so granted or in contravention of any condition subject to which sanction has been accorded.
Under section 345A, the Commissioner at any time, before or after making an order of demolition under section 343 or of the stoppage of the erection of any building or execution of any work under section 343, can make an order directing the sealing of such erection or work or of the premises in which such erection or work is being carried or has been completed.
A further appeal has been.
provided under section 347D to the Administrator against the order of the Appellate Tribunal.
Section 347E says: "347E. Bar of jurisdiction of courts.
(1) After the commencement of section 7 of the Delhi Municipal Corporation (Amendment) Act, 1984, no court shall entertain any suit, application or other proceedings in respect of any order or notice appealable under section 343 or section 347B and no such order or notice shall be called in question otherwise then by preferring an appeal under these sections.
(2)Notwithstanding anything contained in sub section (1), every suit, application or other proceeding pending in any court immediately before the commencement of section (7) of the Delhi Municipal Corporation (Amendment) Act, 1984, in respect of any order or notice appealable under section 343 or section 347B, shall continue to be dealt with and disposed of by that court as if the said section had not been brought into force.
" Because of sub sections (4) and (5) of section 343 and section 347E aforesaid the stand of the Corporation is that the Courts have been debarred from entertaining suits, applications or proceedings for injunction, against any order or notice for demolition and the order of demolition passed by the Commissioner, subject to appeals before the Appellate Tribunal and Administrator shall be deemed to be final and conclusive.
In spite of several pronouncements of this Court during the last four decades, the question as to whether the jurisdiction of the Court has been statutorily barred in respect of suits in connection with the orders passed or proceedings initiated for demolition of constructions, which have been made without sanction or by deviating from the sanctioned plans, has to be answered.
531 Section 9 of the Code of Civil Procedure, (hereinafter referred to as "the Code") says that Courts shall have jurisdiction to try all suits of civil nature "except suits of which their cognizance is either express Iyor impliedly barred".
According to the Corporation once the jurisdiction of the Court to try a suit in which the validity of any order passed under the provisions of the Corporation Act or the notice issued thereunder has been specifically barred and an internal remedy has been provided for redressal of the grievances of the persons concerned, there is no scope for Court to entertain a suit.
In the olden days the source of most of the rights and liabilities could be traced to the common law.
Then statutory enactments were few.
Even such enactments only created rights or liabilities but seldom provided forums for remedies.
The result was that any person having a grievance that he had been wronged or his fight was being affected, could approach the ordinary Civil Court on the principle of law that where there is a right there is a remedy ubi jus ibi remedium.
As no internal remedy had been provided in the different statutes creating rights or liabilities, the ordinary Civil Courts had to examine the grievances in the light of different statutes.
With the concept of the Welfare State, it was realised that enactments creating liabilities in respect of payment of taxes obligations after vesting of estates and conferring rights on a class of citizens, should be complete codes by themselves.
With that object in view, forums were created under the Acts themselves where grievances could be entertained on behalf of the persons aggrieved.
Provisions were also made for appeals and revision to higher authorities.
Then a question arose as to where a particular Act had created a right or liability and had also provided a forum for enforcement of such right or for protection from enforcement of a liability without any authority in law, whether a citizen could approach a Court.
It may be pointed out that many statutes have created certain rights or liabilities and have also provided the remedial measures in respect thereof.
But such statutes have not touched the common law rights of the citizen.
But there are some statutes, which in public interest affect even the common law rights or liabilities of toe citizen, which were in the nature of existing rights.
The distinction between the two types of rights or liabilities is subtle in nature but at the same time very vital.
In one of the earliest case of Volverhampton New Waterworks Co. vs Hawkesford; , , Willes, J, said: "There are three classes of cases in which a liability may be 532 established founded upon a statute.
One is, where there was a liability existing at common law, and that liability is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law: there, unless the statute contains words which expressly or by necessary implication exclude the common law remedy, and the party suing has his election to pursue either that or the statutory remedy.
The second class of cases is, where the statute gives the right to sue merely, but provides no particular form of remedy: there, the party can only proceed by action at common law.
But there is a third class, viz. where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it.
The present case falls within this latter class, if any liability at all exists.
The remedy provided by the statute must be followed, and it is not competent to the party to pursue the course applicable to cases of the second class.
" The same view was reiterated by the House of Lords in Neville vs London "Express" Newspaper Limited, (1919) Appeal Cases 368.
In Barraclough vs Brown, , it was said: "I do not think the appellant can claim to recover by virtue of the statute, and at the same time insist upon doing so by means other than those prescribed by the statute which alone confers the right.
" It was further pointed out "The right and the remedy are given uno flatu, and the one cannot be dissociated from the other." In the well known case of Secretary of State vs Mask & Co., AIR 1940 Privy Council 105, this question was considered in connection with Sea Customs Act (1878).
It was said: "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.
It is also well settled that even if jurisdiction is so excluded, the Civil Courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principle of judicial procedure.
" 533 But having enunciated the general principle in respect of ouster of the jurisdiction of the Civil Court it was said: "But, in their Lordships ' opinion, neither Sec, 32 nor the principle involved in the decision in 401 A 48, affect the validity of an Act of the Indian Legislature which creates an obligation and provides an exclusive Code for its determination such an obligation is not covered by sub section (2) of Section 32." In connection with the imposition of Terminal Tax on salt under the Punjab Municipal Act.
In Firm Seth Radha Kishan vs Administrator, Municipal committee.
Ludhiana; , , it was said that where a statute created a liability and provided a remedy, party aggrieved should pursue the remedy provided under the Act.
A Constitution Bench of this Court in Firm of Illuri Subbaya Chetty and Sons vs State of Andhra Pradesh, ; , considered the provisions of Madras General Sales Tax Act and the exclusion of the jurisdiction of the Civil Court.
It was pointed out that there was an express and unambiguous prohibition and no suit could be entertained by a Civil Court.
In connection with the Bombay Sales Tax Act the same view was reiterated by a Constitution Bench of this Court in M/s. Kamala Mills Ltd. vs State of Bombay ; In Ram Swarup and ors.
vs Shikar chand; , , a Constitution Bench examined the bar on the jurisdiction of the Civil Court in connection with the House and TenantsU.P. (Temporary) control of Rent and Eviction Act, and came to the conclusion that a special statute had excluded the jurisdiction in clear and unambiguous words and it had provided an adequate and satisfactory alternative remedy to a party.
That may be aggrieved by the relevant order and as such the jurisdiction of the Civil Court had been ousted.
This very question was examined in State of Kerala vs MI s N. Ramaswami Iyer and sons; , , in connection with the Travancore Cochin General Sales Tax Act and it was held that the jurisdiction of the Civil Court would be deemed to have been excluded because the legislature had set up a special tribunal to determine the question relating to rights or liabilities.
which had been created by the statute.
Again in connection with the provisions of the Evacuee Property Act, in Ram Gopal Redd), vs Additional Custodian Evacuee Property Hyderabad, ; and Custodian of Evacuee Property Punjab & Ors.
vs Jafran Begum, ; , it was held that complete machinery for adjudication of all claims had been provided under the Act and there being a bar on the jurisdiction of any court, the Act over rides other laws, including Section 9 of the Code of Civil Procedure and there was no scope for the Civil Court to entertain any suit.
The Constitution Bench in Dhuilabhai vs State of Madya Pradesh, AIR 1969 534 SC 78, said: "Where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court.
Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive.
In the latter case it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted and whether remedies normally associated with actions in civil courts are prescribed by the said statute or not." In connection with the Industrial Disputes Act, in The Premier Automobiles Ltd. vs Kamlakar Shantaram Wadke. ; = ; , it was pointed out that "the Civil Court will have no jurisdiction to try and adjudicate upon an industrial dispute, if it concerned enforcement of certain right or liability created only under the Act.
" The jurisdiction of the Civil Court in connection with the levy of octroi duty under the C.P. and Barar Municipalities Act, 1922 was examined by this Court in Bata Shoe Co. Ltd. vs Jabalpur Corporation, ; 1 9771 2 SCC 472, and held it was barred.
Whether the Court can hear and determine suits relating to levy of professional tax under the Punjab Municipal Act, 1971 was examined in the case of Munshi Ram vs Municipal Committee.
Chheharta, AIR 1979 SC 1250 = , and it was held: Where a Revenue Statute provides for a person aggrieved by an assessment thereunder, a particular remedy to be sought in a particular forum, in a particular way, it must be sought in that forum and in that manner, and all other forums and modes of seeking it are excludes.
" It was pointed out in Ram Singh vs Gram Panchayat, MehalKalan, ; = ; , that when by a special statute rights have been created and jurisdiction of the Court has been barred then the jurisdiction of the 535 Court to try such suits has been taken away.
In the case of Raja Ram Kumar Bhargava vs Union of India, ; = 1, it was said: ".
Wherever a right, not preexisting in common law is created by a statute and that statute itself provided a machinery for the enforcement of the right, both the right and the remedy having been created uno flatu and a finality is intended to the result of the statutory proceedings, then, even in the absence of an exclusionary provision the civil courts 'jurisdiction is impliedly barred.
" The jurisdiction of Civil Court to entertain a suit for ejectment was examined in Sushil Kumar Mehta vs GobindRam Bohra, ; , and it was held that the Rent Control Act was a complete Code and the jurisdiction to try a case for ejectment was exclusive under that Act.
With the increase in the number of taxing statutes, welfare legislations and enactments to protect a class of citizens, a trend can be noticed that most of such legislations confer decision making powers on various authorities and they seeks to limit or exclude Court 's power to review those decisions.
The result is that the power of the Court under section 9 of the Code is being denuded and curtailed by such special enactments, in respect of liabilities created or rights conferred.
This Court in the judgments referred to above has upheld the ouster of the jurisdiction of the Court on examination of two questions (1) Whether the right or liability in respect whereof grievance has been made, had been created under an enactment and it did not relate to a pre existing common law right? (2) Whether the machinery provided for redressal of the grievance in respect of infringement of such right or imposition of a liability under such enactment, was adequate and complete? The ouster of the jurisdiction of the Court was upheld on the finding that the rights or liabilities in question had been created by the Act in question and remedy provided therein was adequate.
But the situation will be different where a statute purports to curb and curtail a pre existing common law right and purports to oust the jurisdiction of the Court so far remedy against the orders passed under such statute are concerned.
In such cases, the courts have to be more vigilant, while examining the question as to whether an adequate redressal machinery has been provided, before which the, person aggrieved may agitate his grievance.
In the case of katikara Chintamani Dora vs Guatreddi Annamanaidu, ; , this Court after referring to the case of Desika Charyulu vs State of Andhra Pradesh, AIR 1964 SC 807, observed: 536 "It was pertinently added that this exclusion of the jurisdiction of the Civil Court would be subject to two limitations.
First, the Civil Courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure.
The second is as regards the exact extent to which the powers of statutory tribunals are exclusive.
The question as to whether any particular case falls under the first or the second of the above categories would depend on the purpose of the statute and its general scheme, taken in conjunction with the scope of the enquiry entrusted to the tribunal set up and other relevant factors.
" It was held that a suit for declaration that "the decision of the Settlement Officer/Tribunal holding certain properties to be an 'estate ' under section 3(2) (d) of the 1908 Act was void, was maintainable on the ground that the suit property was not an 'inam village '.
In Pyx Granite Co. Ltd. vs Ministry of Housing and Local Government, , the appellants sought a declaration of their common law right to quarry their land without the need to obtain planning permission under the Town and Country Planning Act, 1947.
In that connection it was said: "The appellant company are given no new right of quarrying by the Act of 1947.
Their right is a common law right and the only question is how far it has been taken away.
They do not uno flatu claim under the Act and seek a remedy elsewhere.
On the contrary, they deny that they come within its purview and seek a declaration to that effect." In spite of the bar placed on the power of the Court.
orders passed under such statutes can be examined on "jurisdictional question".
To illustrate , a special machinery has been provided for removal of the encroachments from public land ' under different enactments in different states and the jurisdiction of the Court has been barred in respect of the orders passed by such special tribunals or authorities constituted under such Acts.
Still a suit will be maintainable before a Court on a plea that the land in question shall not be deemed to be public land within the meaning of the definition of public land given in the Act in question, and as such provisions thereof shall not be applicable.
In the case of Anisminic Lid.
vs Foreign Compensation Commission, ; , a wide interpretation has been given to the word 'jurisdiction ' by the House of Lords.
It was pointed out that in many cases where although the Tribunal 537 has jurisdiction to enter upon an enquiry, it has done or failed to do something in the course of such enquiry which is of such a nature that its decision becomes a nullity.
By mere reference to different provisions of the Corporation Act it shall appear that the Act does not create any right or liability.
Chapter XVI of the Act only purports to regulate the erection of the buildings within the Corporation area, so that erections of the buildings within the Corporation area are systematic, planned and do not adopt the character of mushroom growth.
In view of the Provisions of the Act, whenever it is discovered that erection of any building or execution of any work has been commenced or is being carried or has been completed, either without sanction or contrary to the sanction or in contravention of any condition subject to which such sanction had been accorded, the Commissioner can make an order directing that such erection or work shall be demolished.
Any person aggrieved by an order has been given a right to prefer an appeal before the Appellate Tribunai and thereafter to the Administrator.
Subject to any order passed by the Appellate Tribunal and the Administrator, the order for demolition shall be deemed to be final and conclusive.
According to us, it cannot be urged that the provisions of the Act have created any right or liability and for enforcement thereof remedy has been provided under the Act itself.
The Act purports to regulate the common law right of the citizens to erect or construct buildings of their choice.
This right existed since time immorial.
But with the urbanisation and development of the concept of planned city, regulations, restrictions, on such common law right have been imposed.
But as the provisions of the Act intend to regulate and restrict a common law right, and not any right liability created under the Act itself, it cannot be said that the right and the remedy have become given uno flatu e.g. "in the same breath".
Most of the cases of this Court referred to above related to statutes creating rights or liabilities and providing remedies at the same time.
As such the principles enunciated therein, shall not be fully applicable in the present case.
In spite of the bar prescribed under sub sections (4) and (5) of section 343 and section 347E of the Corporation Act over the power of the Courts, under certain special circumstances, the Court can examine, whether the dispute falls within the ambit of the Act.
But once the Court is satisfied that either the provisions of the Act are not applicable to the building in question or the basic procedural requirements which are vital in nature, have not been followed, it shall have jurisdiction, to enquire and investigate while protecting the common law rights of the citizens.
Can a Court hold a suit to be not maintainable, although along with the plaint materials are produced to show that the building in question is not within the Corporation limits, or that the constructions were made prior to coming into force of the relevant provisions of 538 the Act? We are conscious of the fact that persons who make unauthorised constructions by contravening and violating the building bye laws or regulations often run to Courts, with pleas mentioned above, specially that no notice was issued or served on them, before the Corporation has ordered the demolition of the construction.
It is well known that in most of the cities building regulations and bye laws have been framed, still it has been discovered that constructions have been made without any sanction or in contravention of the sanctioned plan, and such constructions have continued without any intervention.
There cannot be two opinions that the regulations and bye laws in respect of buildings, are meant to serve the public interest.
But at the same time it cannot be held that in all circumstances, the authorities entrusted with the demolition of unauthorised constructions, have exclusive power, to the absolute exclusion of the power of the Court.
In some special cases where "jurisdictional error" on the part of the Corporation is established, a suit shall be maintainable.
According to us, (1)The Court should not ordinarily entertain a suit in connection with the proceedings initiated for demolition, by the Commissioner, in terms of section 343 (1) of the Corporation Act.
The Court should direct the persons aggrieved to pursue the remedy before the Appellate Tribunal and then before the Administrator in accordance with the provisions of the said Act.
(2)The Court should entertain a suit questioning the validity of an order passed under section 343 of the Act.
only if the Court is of Prima facie opinion that the order is nullity in the eyes of law because of any "jurisdictional error" in exercise of the power by the commissioner or that the order is outside the Act.
TEMPORARY INJUNCTION It need not be said that primary object of filing a suit challenging the validity of the order of demolition is to restrain such demolition with the intervention of the Court.
In such a suit the plaintiff is more interested in getting an order of interim injunction.
It has been pointed out repeatedly that a party is not entitled to an order of injunction as a matter of right or course.
, Grant of injunction is within the discretion of the Court and such discretion is to be exercised in favour of the plaintiff only if it is proved to the satisfaction of the Court that unless the defendant is restrained by an order of injunction, an irreparable loss or damage will be caused 539 to the plaintiff during the pendency of the suit.
The purpose of temporary injunction is, thus, to maintain the status quo.
The Court grants such relief according to the legal principles ex debite justitiae.
Before any such order is passed the Court must be satisfied that a strong primafacie case has been made out by the plaintiff including on the question of maintainability of the suit and the balance of convenience is in his favour and refusal of injunction would cause irreparable injury to him.
Under the changed circumstance with so many cases pending in Courts, once an interim order of injunction is passed, in many cases, such interim orders continue for months; if not for years.
At final hearing while vacating such interim orders of injunction in many cases, it has been discovered that while protecting the plaintiffs from suffering the alleged injury, more serious injury has been caused to the defendants due to continuance of interim orders of injunction without final hearing.
It is a matter of common knowledge that on many occasions even public interest also suffers in view of such interim orders of injunction, because persons in whose favour such orders are passed are interested in perpetuating the contraventions made by them by delaying the final disposal of such applications.
The court should be always willing to extent its hand to protect a citizen who is being wronged or is being deprived of a property without any authority in law or without following the procedure which are fundamental and vital in nature.
But at the same time the judicial proceedings cannot be.
used to protect or to perpetuate a wrong committed by a person who approaches the Court.
Power to grant injunction is an extraordinary power vested in the Court to be exercised taking into consideration the facts and circumstances of a particular case.
The Courts have to be more cautious when the said power is being exercised without notice or hearing the party who is to be affected by the order so passed.
That is why Rule 3 of Order 39 of the Code requires that in ail cases the Court shall, before grant of an injunction, direct notice of the application to be given to the opposite party, except where it appears that object of granting injunction itself would be defeated by delay.
By the Civil Procedure Code (Amendment) Act, 1976, a proviso has been added to the said rule saying that "where it is proposed to grant an injunction without giving notice of the application to the opposite party, the Court shall record the reasons for its opinion that the object of granting the injunction would be defeated by delay.
It has come to our notice that in spite of the aforesaid statutory requirement, the Courts have been passing orders of injunction before issuance of notices or hearing the parties against whom such orders are to operate without recording the reasons for passing such orders.
It is said that if the reasons for grant of injunction 540 are mentioned, a grievance can be made by the other side that Court has prejudged the issues involved in the suit.
According to us, this is a misconception about the nature and the scope of interim orders.
It need not be pointed out that any opinion expressed in connection with an interlocutory application has no bearing and shall not affect any party, at the stage of the final adjudication.
Apart from that now in view of the proviso to Rule 3 aforesaid, there is no scope for any argument.
When the statute itself requires reasons to be recorded, the Court cannot ignore that requirement by saying that if reasons are recorded, it may amount to expressing an opinion in favour of the plaintiff before hearing the defendant.
The imperative nature of the proviso has to be judged in the context of Rule 3 of Order 39 of the Code.
Before the Proviso aforesaid was introduced, Rule 3 said "the Court shall in all cases, except where it appears that the object of granting the injunction would be defeated by the delay, before granting an injunction, direct notice of the application for the same to be given to the opposite party".
The proviso was introduced to provide a condition, where Court proposes to grant an injunction without giving notice of the application to the opposite party, being of the opinion that the object of granting injunction itself shall be defeated by delay.
The condition so introduced is that the Court "shall record the reasons" why an ex parte order of injunction was being passed in the facts and circumstances of a particular case.
In this background, the requirement for recording the reasons for grant of ex parte injunction, cannot be held to be a mere formality.
This requirement is consistent with the principle, that a party to a suit, who is being restrained from exercising a right which such party claims to exercise either under a statute or under the common law, must be informed why instead of following the requirement of Rule 3, the procedure prescribed under the proviso has been followed.
The party who invokes the jurisdiction of the Court for grant of an order of restraint against a party, without affording an opportunity to him of being heard, must satisfy the Court about the gravity of the situation and Court has to consider briefly these factors in the ex parts order.
We are quite conscious of the fact that there are other statutes which contain similar provisions requiring the Court or the authority concerned to record reasons before exercising power vested in them.
In respect of some of such provisions it has been held that they are required to be complied with but non compliance there of will not vitiate the order so passed.
But same cannot be said in respect of the proviso to Rule 3 of Order 39.
The Parliament has prescribed a particular procedure for passing of an order of injunction without notice to the other side, under exceptional circumstances.
Such ex parte orders have far reaching effect, as such a conditions has been imposed that Court must record reasons before passing such order.
If it is held that the compliance of the proviso aforesaid is optional and not obligatory, then the introduction of the proviso by the Parliament shall be a futile exercise and that part of Rule 3 will be 541 a surplusage for all practical purpose.
Proviso to Rule 3 of Order 39 of the Code, attracts the principle, that if a statute requires a thing to be done in a particular manner, it should be done in that manner or not all.
This principle was approved and accepted in well known cases of Taylor vs Taylor. , Nazir Ahmed vs Emperor, AIR 1936 PC 253.
This Court has also expressed the same view in respect of procedural requirement of the Bombay Tenancy and Agricultural Lands Act in the case of Ramachandra Keshav Adke vs Govind Joti Chavare, ; As such whenever a Court considers it necessary in the facts and circumstances of a particular case to pass an order of injunction without notice to other side.
It must record the reasons for doing so and should take into consideration, while passing an order of injunction, all relevant factors, including as to how the object of granting injunction itself shall be defeated if an ex parte order is not passed.
But any such ex parte order should be in force upto a particular date before which the plaintiff should be required to serve the notice on the defendant concerned.
In the Supreme Court Practice 1993, Vol. 1, at page 514, reference has been made to the views of the English Courts saying: "Exparte injunctions are for cases of real urgency where there has been a true impossibility of giving notice of motion.
An ex parte injunction should generally be until a certain day, usually the next motion day.
" Accordingly we direct that the application for interim injunction should be considered and disposed of in the following manner: (i)The Court should first direct the plaintiff to serve a copy of the application with a copy of the plaint along with relevant documents on the counsel for the Corporation or any competent authority of the Corporation and the order should be passed only after hearing the parties.
(ii)If the circumstances of a case so warrant and where the Court is of the opinion, that the object of granting the injunction would be defeated by delay, the Court should record reasons for its opinion as required by proviso to Rule 3 of order 39 of the Code, before passing an order for injunction.
The Court must direct that such order shall operate only for a period of two weeks, during which notice along 542 with copy of the application, plaint and relevant documents should be served on the competent authority or the counsel for the Corporation.
Affidavit of service of notice should be filed as provided by proviso to Rule 3 of order 39 aforesaid If the Corporation has entered appearance, any such exparte order of injunction should be extended only after hearing the counsel for the Corporation.
(iii)While passing an ex parte order of injunction the Court shall direct the plaintiff to give an undertaking that he will not make any further construction upon the premises till the application for injunction is finally heard and disposed of.
In the result, the appeals are allowed to the extent indicated above.
In the circumstances of these cases, there shall be no order as to costs.
Appeals allowed. [/INST] In respect of some private dispute between two neighbors a writ application was filed in the High Court.
On the material produced in the case it was treated as a Public Interest Litigation and the High Court was to rind out a solution in respect (if unauthorised constructions alleged to have been made by different owners/occupiers/builders without sanctioned plans or by making deviations from the sanctioned plans.
The High Court wanted to ensure that such unauthorised constructions were not perpetuated on the basis of interim orders of injunction passed by the Civil Courts .
The High Court disposed of the petition holding that the owners/ occupiers/builders were to be given liberty to file fresh building plans and that the Municipal Corporation was to examine such building plans in accordance with law and that the Corporation was to seal and to demolish those constructions which were beyond the compoundable limits.
The High Court also directed that no civil suit would be entertained by any Court in Delhi in respect of any action taken or proposed to be taken by the Corporation with regard to the sealing and/or demolition of any building or any part thereof.
The High Court directed further that person aggrieved by an order of sealing or demolition had the right to file an appeal to the Appellate Tribunal under the Delhi Municipal Corporation Act, 1957.
522 523 Against the High Court 's order the present appeals were filed by special leave.
On the question, "whether the jurisdiction of the Court has been statutorily barred in respect of suits in connection with the orders passed or proceedings initiated for demolition of constructions, which have been made without sanction or by deviating from the sanctioned plans", allowing the appeals, this Court, HELD:1.1.
With the increase in the number of taxing statutes, welfare legislations and enactments to protect a class of citizens,a trend can be noticed that most of such legislations confer decision making powers on various authorities and they seek to limit or exclude Court 's power to review those decisions.
The result is that the power of the Court under section 9 of the Code is being denuded and curtailed by such special enactments, in respect of liabilities created or rights conferred.
The ouster of the jurisdiction of the Court is upheld on the finding that the rights or liabilities in question had been created by the Act in question and remedy provided therein Was adequate.
(535 D F) 1.2.The situation will be different where a statute purports to curb and curtail a pre existing common law right and purports to oust the jurisdiction of the Court so far remedy against the orders passed under such statute are concerned.
In such cases,the courts have to be more vigilant, while examining the question as to whether an adequate redressal machinery has been provided, before which the person aggrieved may agitate his grievance.
(535 G) 1.3.In spite of the bar placed on the power of the Court, orders passed under such statutes can be examined on "jurisdictional question".
A suit will be maintainable.
(536 F) Katikara Chiniamani Dora vs Guatreddi Annamanaidu, ; ; Desika Charyutttu vs State of Andhra Pradesh, AIR 1964 SC 807; PYX Granite Co. Ltd. vs Ministry of Housing and Local and Government, and Anisminic Ltd. vs Foreign Compensation Commission; , , relied on.
Wolverhampton New Waterworks Co. vs Hawkesford, [1859] 6 ; Neville vs London "Express" Newspaper Limited.
[1919] Appeal Cases 368; Baraclough vs Brown, [1897] Appeal Cases 615; Secretary of State vs Mask & Co., AIR 1940 P.C. 105; Firm Seth Radha Kishan vs Administrator.
Municipal committee, Ludhiana; , ; Finn of Illuri Subbayya Chetty and Sons vs State of Andhra Pradesh, ; ; M/s. Kamala Mills Ltd. vs State of Bombay, ; ; Ram Swarup and Ors.
vs Shikar Chand, ; ; State of Kerala vs M/s. N. Ramaswami Iyer and sons; , ; Rain Gopal Reddy vs Additional Custodian Evacuee Property, Hyderabad, [1966]3 SCR 214; Custodian of Evacuee Property, Punjab & Ors.
vs Jafran Begum, [1967]3 SCR 736; Dhulabhai vs Stale of Madhya Pradesh, ; ; The Premier Automobiles Ltd. vs Kamlaker Shantarm Wadke; , 1 SCC 496; Bata Shoe Co. Ltd. vs Jabalpur Corporation, ; ; Munshi Ram vs Municipal Commitee, Chheharta, AIR 1979 SC 1250= [1979]3 SCC 83; Rain Singh vs Grain Panchayat, Mehal Kalan; , SCC 364; Raja Ram Kumar Bhargava vs Union of India, ; and Sushil Kumar Mehta vs GobindRam Bohra, ; , referred to.
The Delhi Municipal Corporation Act purports to regulate the common law right of the citizens to erector construct buildings of their choice.
This right existed since time immemorial.
But with the urbanisation and development of the concept of planned city, regulations, restrictions, on such common law right have been imposed.
But as the provisions of the Act intend to regulate and restrict a common law right, and not any right or liability created under the Act itself, it cannot be said that the right and the remedy have been given unoflatu e.g. "in the same breath".
(537 E) 1.5.
In spite of the bar prescribed under sub sections (4) and (5) of section 343 and section 347E of the Corporation Act over the power of the Courts, under certain special circumstances,the Court can examine, whether the dispute falls within the ambit of the Act.
But once the Court is satisfied that either the provisions of the Act are not applicable to the building in question or the basic procedural requirements which are vital in nature, have not been followed, it shall have jurisdiction, to enquire and investigate while protecting the common law rights of the citizens.
(537 C) 1.6.
The regulations and bye laws in respect of buildings, are meant to 525 serve the public interest.
But at the same time it cannot be held that in all circumstances, the authorities entrusted with the demolition of unauthorised constructions, have exclusive power, to the absolute exclusion of the power of the Court.
In some special cases where "jurisdictional error" on the part of the Corporation is established, a suit shall be maintainable.
(538 C) 1.7.
The Court should not ordinarily entertain a suit in connection with the proceedings initiated for demolition by the Commissioner, in terms of section 343 (1) (of the Corporation Act.
The Court should direct the persons aggrieved to pursue the remedy before the Appellate Tribunal and then before the Administrator in accordance with the provisions of the said Act.
(538 D) 1.8.
The Court should entertain a suit questioning the validity of an order passed under section 343 of the Act, only if the Court is of prima facie opinion that the order is nullity in the eyes of law because of any "jurisdictional error" in exercise of the power by the Commissioner or that the order is outside the Act.
(538 E) 2.1.
A party is not entitled to an order of injunction as a matter of right or course.
Grant of injunction is within the discretion of the Court and such discretion is to he exercised in favour of the plaintiff only if it is proved to the satisfaction of the Court that unless the defendant is restrained by an order of injunction, an irreparable loss or damage will be caused to the plaintiff during the pendency of the suit.
(538 H) 2.2.The purpose of temporary injunction is, to maintain the status quo.
The Court grants such relief according to the legal principles ex debite justitiae.
Before any such order is passed the Court must be satisfied that a strong prima facie case has been made out by the plaintiff including on the question of maintainability of the suit and the balance of convenience is in his favour and refusal of injunction would cause irreparable injury to him.
(539B) 2.3. 'The Court should be always willing to extend its hand to protect a citizen who is being wronged or is being deprived of a property without any authority in law (or without following the procedure which are fundamental and vital in nature.
But at the same time the judicial proceedings cannot be used to protect or to perpetuate a wrong committed by a person who approaches the Court.
(539 1)) 526 2.4.
Power to grant injunction is an extra ordinary power vested in the Court to he exercised taking into consideration the facts and circumstances of a particular case.
The Courts have to be more cautious when the said power is being exercised without notice or hearing the party who is to he affected by the order so passed.
(539 E) 2.5.
In spite of the statutory requirement, in order 39, Rule 3 the Courts have been passing orders of injunction before issuance of notices or hearing the parties against whom such orders are to operate without recording the reasons for passing such orders.
It is said that if the reasons for grant of injunction are mentioned, a grievance can be made by the other side that Court has prejudged the issues involved in the suit.
This is a misconception about the nature and the scope of interim orders.
Any opinion expressed in connection with an interlocutory application has no bearing and shall not affect any party,, at the stage of the final adjudication.
Apart from that now in view of the proviso to Rule 3 of Order 39, there is no scope for any argument.
When the statute itself requires reasons to he recorded, the Court cannot ignore that requirement by saying that if reasons are recorded, it may amount to expressing an opinion in favour of the plaintiff before hearing the defendant (539 H, 540 H) 2.6.
Proviso to Rule 3 of Order39 of the Code, attracts the principle, that if a statute requires a thing to he done in a particular manner, it should be done in that manner or not all.
Taylor vs Taylor, (1875)1 Ch. D. 426; Nazir Ahmed vs Emperor, AIR 1936 PC 253 and Ramachandra Keshar Adke vs Gavind Joti Chavare; , , relied on.
Whenever a Court considers it necessary in the facts and circumstances of a particular case to pass an order of injunction without notice to other side, it must record the reasons for doing so and should take into consideration, while passing an order of injunction, all relevant factors, including as to how the object of granting injunction itself shall be defeated if an exparty order is not passed.
But any such exparty order should be in force up to a particular date before which the plaintiff should be required to serve the notice on the defendant concerned.
(541 C) Supreme Court Practice 1993, Vol. 1, at page 514, referred to.
527 2.8.The Court should first direct the plaintiff to serve a copy of the application with a copy of the plaint along with relevant documents on the counsel for the Corporation or any competent authority of the Corporation and the order should be passed only after hearing the parties.
(541 F) 2.9.If the circumstances of a case so warrant and where the Court is of the opinion, that the object of granting the injunction would be defeated by delay, the Court should record reasons for its opinion as required by proviso to Rule 3 of Order 39 of the Code, before passing an order for injunction.
The Court must direct that such order shall operate only for a period of two weeks, during which notice along with copy of the application, plaint and relevant documents should be served on the competent authority or the counsel for the Corporation.
Affidavit of service of notice should be filed as provided by proviso to Rule 3 of Order 39 aforesaid.
If the Corporation has entered appearance, any such ex parte order of injunction should be extended only after hearing the counsel for the Corporation.
(541 H, 542 A) 2.10.While passing an exparte order of injunction the Court shall direct the plaintiff to give an undertaking that he will not make any further construction upon the premises till the application for injunction is finally heard and disposed of.
(512 C) </s> |
<s>[INST] Summarize the following judgement: Appeal No. 2198 of 1986.
From the Judgment and order dated 17.12.1985 of the Punjab and Haryana High Court in R.S.A No. 1155 of 1977.
S.M. Ashri for the Appellant.
Ms. Kawaljit Kochar for J.D. Jain for the Respondents.
The Judgment of the Court was delivered by BHARUCHA,J.
This appeal by special leave challenges the judgment and 591 order of the Punjab & Harvana High Court dismissing the appeal filed before it by the appellant.
The suit relates to 9 Kanals 13 Marlas of land at village Qayampur.
The said land was owned by Rajinder Singh and Baldev Singh, the respondents, and was sold while they were still minors by their mother Gurkirpal, acting as their guardian, to the appellant under a registered sale deed dated 30th July, 1964.
Upon attaining majority the respondents sued the appellant for possession of the said land on the ground that the sale thereof having been made without the permission of the court was void.
The appellant in his written statement and at the time of hearing of the suit relied heavily upon the fact that the sale deed had been attested by the father of the respondents and that the sale should.
therefore, be deemed to have been a sale by the legal guardian of the respondents.
It was also contended that the sale had been for legal necessity and the benefit of the respondents.
The suit, it was also alleged, was barred by limitation because, the sale being voidable and not void, it had not been brought within three years of each of the respondents attaining majority.
The trial court framed appropriate issues and came to the conclusion that it had not been proved that the sale was for legal necessity or for the benefit of the respondents; that the sale by the respondent 's mother without the permission of the court was void; and that the sale was void and not voidable and the suit was, therefore, in time.
The appeals filed by the appellant before the Additional District Judge.
Ambala and the High Court failed.
Learned counsel for the appellant placed great reliance upon the fact that the sale deed had been attested by the father of the respondents and submitted that the sale deed should, therefore, be taken to have been entered into by the natural guardian of the respondents for legal necessity and their benefit.
Section 8 of the Hindu Minority and Guardianship Act sets out the powers of the natural guardian of a Hindu minor.
The natural guardian of a Hindu Minor has power, subject to the provisions of section 8, to do all acts which are necessary or reasonable and proper for the benefit of the minor or his estate.
The natural guardian, however, may not without the previous permission of the court sell any part of the immovable property of the minor.
Any disposal of immovable property which is not necessary or reasonable and proper for the benefit of the minor or is without the previous permission of the court is voidable at the instance of the minor.
In the instant case, there, is, as found by the trial court and affirmed in appeal, no evidence beyond the bare word of the appellant that the sale deed had been made for the benefit of the minor respondents and his evidence had been eroded in cross 592 examination so that there was no "reliable evidence on record to show that the alienation in dispute had been made for the legal necessity or for the benefit of the plaintiffs.
That the sale was effected without the permission of the court is not dispute.
The sale is, therefore, in any event, voidable.
The question is whether, in the circumstances of the case, it may be said that the sale was effected by the father and natural guardian of the respondents because he had attested the sale deed executed by the mother of the respondents.
In this behalf our attention was invited to this Court 's judgment in Jijabai Vithalrao Gajre vs Pathankhan and ors.
; , This was a case in which it was held that the position in Hindu law was that when the father was alive he was the natural guardian and it was only after him that the mother became the natural guardian.
Where the father was alive but had fallen out with the mother of the minor child and was living separately for several years without taking any interest in the affairs of the minor, who was in the keeping and care of the mother, it was held that, in the peculiar circumstances, the father should be treated as if nonexistent and, therefore, the mother could be considered as the natural guardian of the minor 's person as well as property, having power to bind the minor by dealing with her immovable property.
In the present case, there is no evidence to show that the father of the respondents was not taking any interest in their affairs or that they were in keeping and care of the mother to the exclusion of the father.
In fact, his attestation of the sale deed shows that he was very much existent and in the picture.
If he was, then the sale by the mother, notwith standing the fact that the father attested it, cannot be held to be a sale by the father and natural guardian satisfying the requirements of section 8.
The Provisions of section 8 are devised to fully protect the property of a minor, even from the depredations of his parents.
Section 8 empowers only the legal guardian to alienate a minor s immovable property provided it is for the necessity or benefit of the minor or his estate and it further requires that such alienation shall be effected after the permission of the court has been obtained.
It is difficult, therefore, to hold that the sale was voidable, not void, by reason of the fact that the mother of the minor respondents signed the sale deed and the father attested it.
In the result, the appeal is dismissed with no order as to costs.
G.S. Appeal dismissed. [/INST] The mother of the respondent minors, acting as their guardian, sold their land, while they were still minors, to the appellant under a registered sale deed dated July 30,1964.
The respondents, upon attaining majority, sued the appellant for possession of the said land on the ground that the sale thereof, having been made without the permission of the court, was void.
The appellant in his written statement and at the time of hearing of the suit contended that the sale deed had been attested by the father of the respondents and the. .ale should, therefore, he deemed to have been a sale by the legal guardian of the respondents.
It was also pleaded that the sale had been for legal necessity and the benefit of the respondents.
It was also alleged that the suit was barred by limitation because the sale was voidable and not void and the suit had not been brought within three years of each of the respondents attaining majority.
The trial court framed appropriate issues and came to the conclusion that it had not been proved that the sale was for legal necessity or for the benefit of the respondents, that the sale by the respondent 's mother without the permission of the court was void, and the sale was void and not voidable and the suit was, therefore, in time and was decreed.
590 The appeal filed by the appellant before the Additional Distt.
Judge and the High Court failed.
The appellant, therefore, preferred this appeal by special leave.
Dismissing the appeal, this court, HELD : 1.
The provisions of section 8 of the Hindu Minority and Guardianship Act, 1956 are devised to fully protect the property (.if a minor, even from the depredations of his parents.
Section 8 empowers only the legal guardian to alienate a minor 's immovable property provided it is for the necessity or benefit of the minor or his estate and it further requires that such alienation shall be effected after the permission of the Court has been obtained.
It was difficult, therefore, to hold that the sale, by reason of the fact that the mother of the minor respondents signed the sale deed and the father attested it, was voidable, not void.
(592 G) 3.
The attestation of the sale deed by the father showed that he was very much existent and in the picture.
If he was, then the sale by the mother, notwithstanding the fact that the father attested it, cannot he held to be sale by the father and natural guardian satisfying the requirements of section 8.
(592 E) Jijabai Vithalrao Gajre vs Pathankhan & Ors. ; , distinguished.
(662 A) </s> |
<s>[INST] Summarize the following judgement: minal Appeal No. 618 of 1985.
From the Judgment and Order dated 17.5.1984 of the Allahabad High Court in Criminal Appeal No. 564 of 1977.
R.L. Kohli, and C.P. Lal for the Appellant.
S.P. Pandey and A.S. Pundir for the Respondent.
The Judgment of the Court was delivered by 584 N.P. SINGH, J.
The appellant along with Radhey Shayam and Munni Lal, was put on trial for an offence under Section 302 read with Section 34 of the Penal Code, for having committed the murder of Gokaran Prasad on 24.11.1975 at about 5.00 P.M.
It is the case of the prosecution that the deceased along with his brother, Parbhu Dayal PW 1, on 24.11.1975, had one to the Court of Tehsildar at Sitapur to attend their case, which had been fixed for hearing.
The case was, however, postponed.
In the evening they were returning to village.
On Sitapur Lucknow Road.
at about 5.00 P.M. the three accused persons, all armed with Bankas, emerged from the field of Rani Saheba and ran towards to deceased.
PW 1 started shouting for help.
The deceased fell down on the brick stack.
It is said that the appellant Ram Asrey pressed down the deceased, while Radhey Shyam and Munni Lal gave the blows with Bankas.
The occurrence was witnessed by Parbhu Dayal, PW 1, Jagannath, PW 5, and Narain, PW 6.
In respect of the motive for the commission of the offence.
it is said that two years prior to the occurrence aforesaid, accused Radhey Shyam had erected a wall in front of the house of the deceased, who resisted and did not allow the wall to be constructed.
For that Radhey Shyam was prosecuted and because of that he bore a grudge against the deceased.
The First Information Report was lodged by PW 1 at about 6.45 P.M., in which he gave the details of the occurrence and named PW 5 and PW 6 as the eyewitnesses of the occurrence.
The Investigating Officer visited the spot, made the inquest and sent the body for post mortem, which was held the next day.
During post mortem examination, the following injuries were found "1.
Incised wound 7 cms.
x. 1 cm.
x bone deep on the right side of head 6 cms.
above the right eye brow.
Lacerated wound 4 cms.
x. 1.5 cms.
x scalp deep in the mid line of head 6 cms.
above the root of nose.
Lacerated wound 4 cms.
x 1.5 cms.
x bone deep on the left side of head 3 cms.
above left eye brow.
Lacerated wound 4.5 cms.
x 1 cm.
x bone deep on the outer part of left eye brow extending down on the outer side of the outer angle.
of left eye and below its level.
585 5.
Incised wound 8 cms.
x 3 cms.
x scalp deep on the back of head ,on the left side of middle line 5 cms.
behind the left ear.
Incised wound 11 cms.
x 3 cms.
x vertebrae bone deep 4 cms.
below the right ear and 2.5 cms.
below left angle of left lower jaw at the level of the body of third cervical vertebrae, underneath of injury oecsophagus.
Thyroid cartilage and neck vessels of both the sides out.
Incised wound 2.5 cms.
x.5 cm.
x muscle deep over the front of 1st Pharyanx region of right thumb.
Incised wound 9 cms.
x 2 cms.
x muscle deep over the palmar aspect of left hand starting from the web of left thumb and index finger going inner and upper side towards the wrist.
" According to the doctor, who held the post mortem examination, the incised wound might have been caused by weapon like Banka.
He, however, pointed out that Banka had a sharp edge on one side and blunt on the other.
He stated "Injury No. 2, 3, 4 might be caused by some blunt weapon.
Injury No. 4 might be caused by some blunt side of the banka.
As in my opinion blunt part of the banka is about 1 cm.
in width, injury No. 2 and 3 might be caused by sharp fall on the heap of Bajri.
Injury No. 2 and 3 might be caused by blunt part of bank a if its width was 1.4 cms.
" In cross examination he states "Injuries No. 2, 3 and 4 are likely to be caused by lathi.
There was a fraction of fractured bone below injury No. 2.
The injury No. 2 is likely to occur if heavy weight weapon is struck with considerable force.
The injury No. 3 might occur by fall on the Bajri.
If anyone fall with face side in addition to injury Nos. 2 and 3 other abrasions are likely to occur on the face.
" Again, in cross examination about injuries Nos. 2, 3 and 4, he has stated that they are likely to be caused with lathi portion.
586 The Trial Court on consideration of the evidence came to the conclusion that prosecution had failed to prove the case beyond reasonable doubt.
On that finding the accused persons were acquitted.
The State Government filed an appeal against the judgment of acquittal.
During the pendency of the appeal, the main accused Radhey Shyam died.
The High Court, however, after referring to the different facts and circumstances of the case, recorded a finding that the charge levelled against the two accused persons, namely, the appellant and Munni Lal, had been proved beyond reasonable doubt.
On that finding the High Court convicted the appellant along with Munni Lal, for an offence under Section 302 read with Section 34 of the Penal Code and sentenced each of them to undergo rigorous imprisonment for life.
This appeal, under Section 379 of the Criminal Procedure ( 'ode, has been filed on behalf of Ram Asrey, the appellant.
We are informed that Munni Lal has not preferred any appeal to this Court.
On behalf of the appellant it was urged that the Trial Court had rightly disbelieved the evidence of the three eye witnesses PW 1.
PW 5 and PW 6 because of the inherent improbabilities in their deposition and lack of consistency and there was no occasion for the High Court while hearing the appeal against acquittal to reverse the finding recorded about their credibility.
It was also pointed out that so far Jaoannath, PW 5, is concerned, he has been disbelieved not only by the Trial Court but even by the High Court saying that he has changed his statement from stage to stage, to make it consistent with the statement of PW 1.
The High Court has observed in respect of PW 5 "We may, therefore, exclude his testimony from consideration, not so much because he might not have been present at the spot but because there are elements in his testimony which make it unsafe to place reliatice on it having been once disbelieved by the Trial Court.
That is the true angle in which the evidence must be considered by this Court when dealing with an appeal against acquittal.
" It was urged that the same approach should have been adopted in respect of Narain PW 6, who claimed to have accompanied PW 5, PW 6, has stated that he had clone that day to the market of khairabad to get Salim Mistry for repairing his Chakki, but Salim Mistry was not available and when he was returning to village he met PW 5 in the market of Khairabad and both of them started for their village.
587 He has further stated that at about 5 P.M. he saw the deceased and PW Ion Sitapur Lucknow Road.
Then he claimed to have seen the accused persons coming out from the field of Rani Saheba.
According to him, this appellant held down the deceased, while the other two accused persons Radhey Shyam and Munni Lal struck the deceased with Bankas and caused his death.
The High Court has observed that if the testimony of PW 6 is examined in the light of surrounding circumstances, then it is consistent with the version of PW 1 and, as such, the evidence of PW 1 receives adequate corroboration.
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.
On behalf of the appellant, it was said about PW 1 that on his own statement, he lodged the First Information Report, on the basis of a report written by Lallu Ram PW 8 at the spot, which he took to Police Station Khairabad.
This aspect of the matter has been dealt with in the judgment under appeal.
We are in complete agreement.
That merely because PW 1 lodged the First Information Report on basis of a report prepared by PW 8, by itself shall not affect the prosecution version.
The matter would have been different.
if the accused persons had shown some oblique motive on the part of PW 8, who is said to have prepared the report.
The occurrence took place at about 5.00 P.M. and the First lnformation Report was lodged at 6.45 P.M. with in 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 6 as eye witnesses of the occurrence.
The Investigating Officer reached the place of occurrence at 9.00 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 be 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.
we are of the view that prosecution has been able to prove the case as disclosed in the First Information Report against the accused persons and there is no reason to reject the same.
The next question which has to be examined is as to whether so far the 588 appellant is concerned who, according to the prosecution case itself, has not given any Banka blow to the victim, but is said to have pressed down the deceased, before the other two accused persons Radhey Shyam and Munni Lal had given the blows, should have been held guilty for an offence under Section 302 read with Section 34 of the Penal Code.
It was pointed out that 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.
In this connection, reference was made to the injuries found on the person of the victim during the post mortem examination.
It was pointed out that the injuries were not consistent with the prosecution case that the other two accused persons caused those injuries with Bankas.
About injuries Nos. 2, 3 and 4 the Doctor, who held the post mortem examination, has clearly stated that they must have been caused by some blunt weapon.
In respect of injury No. 4, he has said that it might have been caused by the blunt side of the Banka.
This itself shows that amongst the two participants in tile occurrence.
They had different intentions.
One out of the two assailants i.e. Radhey Shyam and Munni Lal had used the back side of the Banka.
If one of the two assailants had used the back side of the Banka, then from this conduct it can be reasonably inferred that such assailant had not the intention to cause the death of the victim, otherwise there was no reason to use the back side of the Banka, instead of sharp side which in normal course could have caused the death of the victim.
However, so far the present appeal is concerned, we are not concerned with either of the two other accused persons.
But this circumstance can be taken into consideration for judging the role played by the appellant.
According, to us, 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 circum stances of the case, of course, it has to be 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.
Accordingly, we set aside the conviction of the appellant under Section 302 read with Section 34, as well as his sentence to imprisonment for life.
He is convicted under Section 304, Part 1, read with Section 34 of the Penal Code and sentenced to undergo rigorous imprisonment for ten years.
The appeal is accordingly allowed in part to the extent indicated above.
S.K. Appeal Partly allowed. [/INST] 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) </s> |
<s>[INST] Summarize the following judgement: iminal Appeal No.397 of 1993.
From the Judgment and Order dated 11.7.90 of the Calcutta High Court in Crl.
Revision No. 1453 of 1987.
D.N. Mukherjee, D. Sinha and J.R. Das for the Appellant.
Sukumar Guha and A.K. Sengupta for the Respondents.
The Judgment of the Court was delivered by AHMADI, J.
Special leave granted.
In this appeal by special leave two questions arise for our consideration, namely, (i) whether a Special Court constituted under Section 12A of the (hereinafter called 'the Act ') is empowered to exercise powers under sub section (5) of Section 167 of Code of Criminal Procedure, 1973 ( 'the Code ' for short) in relation to an accused person forwarded to it under clause (b) of sub section (1) of section 12AA of the Act? and (ii) whether a Special Court can, notwithstanding the fact that the charge sheet has been filed after the expiry of the period of six months from the date of arrest of the accused person or the extended period, take cognizance of the offence and proceed to try and punish the accused person? These two questions arise in the backdrop of the following facts.
A police party headed by an Inspector of Police raided the business premise 574 and godown of the respondents on March 16, 1984 and in the presence of respondent Faguni Dutta seized certain essential commodities stored in contravention of certain orders issued under section 3 read with section 5 of the Act.
The accused Falguni Dutta was arrested on the same day for the commission of an offence punishable under section 7(1) (a) (ii) of the Act but the charge sheet was submitted after the expiry of the period of six months from the date of arrest on September 30, 1986.
The learned Judge presiding over the Special Court Constitute of under section 12A of the Act took cognizance of the offence on March 13, 1987 on the basis of the charge sheet submitted under section 173 of the Code.
Thereupon the accused persons moved an application before the learned Special Judge for quashing the proceedings on the ground that since the case was triable as a summons case in view of section 12AA(1) (f) of the Act, clause (5) of section 167 of the Code was attracted which enjoined that the proceedings be dropped.
The learned Special Judge relying on a decision of a learned Single Judge of the High Court in Kanta Dev vs The State of West Bengal (1986) Calcutta Criminal Law Reporter 158 = (1986) 1 CHN 267 rejected the application on July 24, 1987 holding that the provision of section 167 (5) of the Code had no application to a case initiated for the commission of an offence punishable under section 7 (1) (a) (ii) of the Act.
We may incidentally point out that the same view was expressed in Babulal Agarwal vs State (1987) 1 CHN 218.
Being aggrieved by the rejection of the application the accused preferred a Revision Application to the High Court challenging the legality of the said order.
A learned single Judge of the High Court placing reliance on a Division Bench decision of the High Court of Andhra Pradesh in the case of Public Prosecutor, High Court of Hyderabad & etc.
vs Anjaneyulu and etc.
held that sub section (5) of section 167 of the Code stood attracted and the learned Special Judge ought to have stopped the further investigation on the expiry of six months and ought to have discharged the accused.
He, therefore, set aside the order of the learned Special Judge and also quashed the prosecution and discharged the accused.
It is against this order of the High Court that the present appeal is preferred.
We may incidently mention that when the learned Single Judge was disinclined to follow the earlier two decisions of other learned single Judges of the High Court the proper course was to refer the matter to a Division Bench for decision.
however, has now lost significance in view of the subsequent decision of the Division Bench in Jnan Prakash Agarwala vs State of WestBengal (1992) 1 CHN 213 taking a contrary view.
In the said case the Division Bench has taken the view which the learned Single Judge has taken in the present case.
We will deal with these decisions in some detail hereafter.
At the outset we deem it appropriate to notice the relevant provisions of the 575 concerned statutes.
The Act was enacted to provide, in the interest of the general public for the control of production, supply and distribution of, and trade and commerce in, certain commodities.
Section 3, inter alia, lays down that 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 and prohibiting the production, supply and distribution thereof and trade and commerce therein.
By section 4 it is provided that an order made under section 3, may, confer powers and impose duties upon the Central Government or the State Government or officers and authorities of the Central Government or State Government and may contain directions any State Government or to officers and authorities thereof as to the exercise of any such powers or the discharge of any such duties.
The Central Government is empowered by section 5 to direct that the power to make orders or issue notifications under section 3, shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable, inter alia, by such State Government, as may be specified in the direction.
In exercise of the power so conferred certain orders were issued by the State Government in regard to certain essential commodities from time to time.
Section 7 prescribes the penalties for the contravention of any order made under section 3.
The relevant portion of section 7 with which we are concerned reads as under: "7 (1) If any person contravenes any order made under section 3, (a) he shall be punishable, (i) in the case of an order made with reference to clause (i) of subsection (2) of that section, with imprisonment for a term which may extend to one year and shall also be liable to fine, and (ii)in the case of any other order, with imprisonment for a term which shall not be less than three months but which may extend to seven years and shall also be liable to fine.
In the present case the accused came to be charged under section 7 (1) (a) (ii) of the Act.
Having regard to the fact that the punishment prescribed for the said offence extends to seven years and fine, the case would fall within the definition of warrant case under section 2(x) of the Code.
This becomes evident if we read the definitions of 'summons case ' and ' warrant case ' together.
They are as under: 576 2 (w) Summons case means a case relating to an offence, and not being a warrant case.
2(x) Warrant case means a case relating to an offence, punishable with death, imprisonment for life or imprisonment for a term exceeding two years.
" However, by Amending Act 18 of 1981 the Legislature, for dealing more effectively with persons indulging in antisocial activities like hoarding and blackmarketing and for combating the evil of inflationary prices, considered it necessary to make special provisions for a temporary period of five years (extended by another five years),namely, to provide: (i) for the control, in a summary way of all offences under the Act; and (ii)for the constitution.
for the purposes of such trial, of Special Courts, consisting of a Single Judge.
To achieve this objective section 12A was amended with a view to empowering the State Government for the purpose of providing speedy trial of the offences under the Act to constitute as many Special Courts as may be necessary for such area or areas to be to be specified in the notification.
Section 12AA which too was inserted by the said Amending Act begins with a non obstance clause and provides that all offences under the Act shall be triable only by the Special Court constituted for the area in which the offence was committed or where there are more Special Courts than one in such area by one of them as may be specified in this behalf by the High Court.
Clause (b) of sub section (1) of section 12AA next provides that where a person accused of or suspected of the commission of an offence under this Act is forwarded to a Magistrate under sub section (2) or subsection (2A) of Section 167 of the Code, such Magistrate may authorise the detention of such person such custody as he thinks fit for a period.
not exceeding 15 days in the whole where such Magistrate is a Judicial Magistrate and 7 days in the whole where such Magistrate is an Executive Magistrate unless his detention for such period is unnecessary.
Clause (c) of that sub section is relevant for our purpose and may be extracted: "(c) The Special Court, may, subject to the provisions of clause (d) of this Section, exercise, in relation to person forwarded to it under clause (b), the said power which a Magistrate having jurisdic 577 tion to try a case may exercise under section 167 of the Code in relation to an accused person in such case who has been forwarded to him under this section.
" Sub clause (d)provides that no court other than the Special Court or the High Court shall release an accused on bail.
Sub clause (f) of this sub section is also relevant and reads as under: "(f) All offences under this Act shall be tried in a summary way and the provisions of sections 262 to 265 (both inclusive) of the Code shall.
as far as may be.
apply to such trioal; Provided that in the case of any conviction in a summary trial under this section it shall be lawful for the Special Court to pass such sentence of imprisonment for a term not exceeding two years.
" It will thus be seen that while the penalty provided for an offence under section 7(1) (a) (ii) extends to seven years and fine, by virtue of clause (f) of subsection (1) of section 12AA if the offence is tried in a summary way applying the provisions of sections 262 to 265 of the Code the penalty would be restricted by the proviso to a maximum of two years, which would, it is argued, bring the case within the meaning of a 'summons case ' as defined in section 2(w) of the Code, thereby attracting sub section (5) of section 167 of the Code.
It would be advantageous to reproduce sub section (5) of section 167 of the Code.
It reads as under: "If in any case triable by a Magistrate as a summons case, the investigation is not concluded within a period of six months from the date on which the accused was arrested, the Magistrate shall make an order stopping further investigation into the offence unless the officer making the investigation satisfies the Magistrate that for special reasons and in the interest of justice the continuation of the investigation beyond the period of six months is necessary.
" To complete reference to the provisions of the Act we may also state that section 10A posits that notwithstanding anything contained in the Code, every offence punishable under the Act shall be cognizable and non bailable.
Section 11 provides that cognizance of an offence under the Act shall be taken only on a written report.
Section 12AC makes the provisions of the Code applicable to proceedings be fore a Special Court unless otherwise provided.
These, in brief are 578 the relevant provisions of the Act and the Code with which we are concerned.
It may here be mentioned that section 12A was first inserted by Amendment Act of 1964.
It then empowered the Central Government to specify any order under section 3 to be a special order the contravention whereof may be tried summarily to which the provisions of sections 262 to 265 of the Code were made applicable.
The proviso stipulated that in the case of conviction in a summary trial it shall be lawful for the Magistrate to pass a sentence of imprisonment not exceeding one year, Subsequently by Amendment Act 18 of 198 1.
section 12A was substituted by the present provisions and new sections 12AA to 12AC were inserted.
The avowed object of these legislative changes was expeditious disposal of offences under the Act by Special Courts employing summary procedure and applying the provisions of the Code to such trials save as otherwise provided.
This enabled the Special Courts to take cognizance of the offences under the Act without a formal order of commitment.
It thus becomes clear from the plain language of the provisions introduced by Act 18 of 1981 that the legislature desired to ensure that all offences under the Act were tried by the Special Court Constituted under Section 12A in a summary manner applying the provisions of sections 262 to 265 of the Code and further provided that in case of conviction the sentence shall not exceed two years, bringing the offence within the definition of a summons case under the Code.
But for the insertion of section 12A in its present form and section 12AA, the offence under section 7 (1) (a) (ii) of the Act would have attracted the definition of a warrant case.
It is, therefore, obvious that the Amending Act 18 of 1981 has brought about a substantial change.
The position in law as emerging after the amendment of the Act by Act 18 of 1981 is crystal clear, namely, that on the constitution of special Courts all offences under the Act are triable only by the Special Court for the Area in which the offence has been committed.
Section 12AA (1) (b) provides that where a person accused of an offence under the Act is forwarded to a Magistrate under subsection (2) or sub section (2A) of section 167 of the Code, such Magistrate is empowered to authorise the detention of such person in such custody as he thinks fit for a period not exceeding 15 days in the whole where such Magistrate is a Judicial Magistrate and 7 days in the whole where he is Executive Magistrate.
Clause (c) of that sub section provides that the Special Court may exercise in relation to the person forwarded to it under clause (b), the same power which a Magistrate having jurisdiction to try a case may exercise under section 167 of the Code in relation to an accused person in such case who has been forwarded to him under that section.
Section 12AC says that the provisions of the Code shall apply to proceedings before a Special Court save as otherwise provided in the Act.
A conjoint reading of these provisions makes it clear, that after the constitution of 579 Special Courts all offences under the Act have to be tried by that court in a summary way by applying the provisions of sections 262 to 265 (both inclusive) of the Code.
The proviso places a fetter on the power of the Court in the matter of passing a sentence on conviction, namely, that notwithstanding the fact that section 7 (1) (a) (ii) prescribes a punishment extending upto seven years and fine, Special Court shall not pass a sentence of imprisonment for a term exceeding two years.
It is this proviso which attracts the definition of a summons case, the trial whereof must be undertaken in accordance with the procedure out lined in Chapter XX of the Code.
Chapter XXI of the Code deals with Summary Trials.
Section 262 of the Code which outlines the procedure for summary trials in terms states that the procedure specified in the Code for the trial of summons case shall be followed, except otherwise provided.
Section 16.7 (5) says that if in any case triable as a summons case, the investigation is not concluded within a period of six months from the date on which the accused came to be arrested.
the Magistrate shall make an order stopping further investigation into the offence unless the Magistrate, for special reasons and in the interests of justice considers it necessary to permit continuation of the investigation.
The prosecution in question being a summons case triable in a summary manner as per procedure outlined in sections 262 to 265 of the Code, which in turn attracts the procedure meant for summons case, it is obvious that the power conferred by sub section (5) of section 167 can be invoked by the Special Court by virtue of clause (c) of section 12AA (1) of the Act which in terms states that the Special Court may exercise the same powers which a Magistrate may exercise under section 167 of the Code.
Thus a special Court is expressly empowered by clause (c) of section 12AA (1) to exercise the same powers which a Magistrate having jurisdiction to try a case may exercise under section 167 of the Code in relation to an accused person who has been forwarded to him under that provision.
We have, therefore, no manner of doubt that the High Court was right in concluding that section 167 (5) of the Code was attracted in the present case and the Special Court was entitled to exercise the power conferred by that sub section.
That being so the view taken by the Division Bench of the Calcutta High Court in the case of Jnan Prakash (supra) insofar as it relates to the application of section 167 (5) to an offence under section 7 (1) (a) (ii) of the Act triable by the Special Court constituted under section 12A of the Act cannot be doubted.
That is also the view of the High Court of Andhra Pradesh in the case of Public Prosecutor, High Court of Hyderabad (supra).
Therefore, the Special Court can stop further investigation into the offence if the investigation is not concluded within a period of six month from the day of arrest of the accused person unless for special reasons and in the interest of justice the continuation of the investigation beyond that period is necessary.
In the present case the officer making the investigation had not sought the permission of the Special Court to continue with the investigation even after the expiry of six months.
The object of 580 this sub section clearly is to ensure prompt investigation into an offence triable as summons case to avoid hardship and harassment to the accused person.
Both the High Courts of Calcutta and Andhra Pradesh have taken the view that after the amendment of the Act by Act 18 of 1981 and the introduction of section 12AA the power conferred on the Magistrate under section 167 (5) of the code is exercisable by the Special Court constituted under section 12A of the Act.
We also concur with the High Court of Calcutta that the two decisions rendered by the learned Single Judges of that Court earlier in point of time did not lay down the correct law.
Similarly the Division Bench of the High Court of Andhra Pradesh was also right in holding that sub section (5) of section 167 of the Code would be applicable to prosecutions under the Act triable by the Special Court.
The taxes us to the question whether the Special Court can,beside directing stoppage of investigation, entertain and act on a charge sheet or a police report submitted under section 173 (2) of the Code in such cases.
The expression 1 police report ' has been defined under the Code to mean a report forwarded by a police officer to a Magistrate under sub section (2) of section 173 [section 21.
Section 173 lays down that every investigation under Chapter XII shall be completed without unnecessary delay and as soon as it is completed, the officer incharge of the police station shall forward to a Magistrate empowered to take cognizance of the offence on a police report, a report in the form prescribed by the State Government.
It will thus be seen that the police report under section 173(2) has to be submitted as soon as the investigation is completed.
Now, if the investigation has been stopped on the expiry of six months or the extended period, if any by the Magistrate in exercise of power conferred by sub section (5) of section 167 of the Code, the investigation comes to an end and, therefore, on the completion of the investigation section 173(2) enjoins upon the officer in charge of the police station to forward a report in the prescribed form.
There is nothing in sub section (5) of section 167 to suggest that if the investigation has not been completed within the period allowed by that sub section, the officer in charge of the police station will be absolved from the responsibility of filing the police report under section 173(2) of the Code on the stoppage of the investigation, The High Court of Andhra Pradesh rightly observed in paragraph 13 of the Judgment as under: "Under the new Code in addition to definition for investigation ' in section 2(h), a separate definition for 'police report ' is given by section 2(r).
This coupled with the newly introduced sub section (5) of section 167 brings out the distinction between investigation by the police and the police report on which a court is to take cognizance.
The report cannot now be said to be an integral part of 581 investigation.
The introduction of section 167 (5) in the Code, cannot have the effect of invalidating the investigation done within the period of six months or enabling the court to stopping the filing of police report under section 173 (2).
If the investigation done during the period of six months discloses an offence, a police report may be founded on it and the court can take cognizance of the same." in Hussainara Khantoon & Ors.
vs Home Secretary State of Bihar, Patna 1 9791 3 SCR 760 this Court held that the investigation done within the period of six months is not rendered invalid merely because the investigation is not completed and further investigation is stopped.
The exact words used are: ". . in such a case the Magistrate is bound to make an order stopping furthe r investigation in that event, only two courses would be open: either the police must immediately proceed to file a chargesheet, if the in vestigation conducted till then warrants such a course, or if no case for proceeding against the under trial prisoner is disclosed by the investigation, the undertrial must be released forthwith from detention.
" We, therefore ,concur with the view taken by the Andhra Pradesh High Court in this regard.
In the result we partly allow this appeal.
While we agree with the view taken by the High Court of Calcutta that in the case of an offence punishable under section 7(1) (a) (ii) of the Act which is tried by a Special Court constituted under section 12A, the provision of sub section (5) of section 167 of the Code gets attracted if the investigation has not been completed within the period allowed by that sub section but we find it difficult to sustain that part of the order of the High Court by which the order of the Special Court taking cognizance of the offence on the police report, i.e., charge sheet submitted under section 173 (2) of the Code came to be quashed.
We set aside that latter part of the order and hold that the Special Court was competent to entertain the police report restricted to six months investigation and take cognizance on the basis thereof.
We, therefore, direct that the Special Court will proceed with the trial from that stage onwards and complete the same as early as possible in accordance with law.
Appeal partly allowed. [/INST] On 16.3.1984, the police raided the business premise and godown of the respondents and sized certain essential commodities which were stored there in contravention of certain orders issued under section 3 read with section 5 of the .
On the same day the respondents were arrested for the commission of an offence punishable under section 7(1) (a) (ii) of the Act.
But chargesheet was submitted under section 173, Code of Criminal Procedure on 30.9.1986, after expiry of the period of six months.
The Special Court constituted under section 12A took cognizance of the offence on 13.3.1987 on the basis of the charge sheet.
The respondent No. 1 moved an application before the Special Court to quash the proceeding since the case was triable as a summon case in view of section 12AA (1) (f) of the , sub section (5) of Section 167 of Code of Criminal Procedure was attracted.
Relying on the decision in Kanta Dey vs The State of West Bengal (1986) Calcutta Criminal Law Reporter 158, the Special Court rejected the application holding that the provision of section 167 (5) of the Code had no application to a case initiated for the commission of an offence punishable under section 7(1) (a) (ii) of the Act.
571 Respondents ' revision application against the order of Special Court was allowed by single judge of the high Court.
The High Court relying on the decision in public Prosecutor, High Court of Hyderabad vs Anjaneyulu, , held that sub section (5) of section 167 of the Code stood attracted.
On the High court quashing the prosecution, the respondents were discharged.
The present appeal by special leave was filed by the State against the order of the High Court.
On the questions, 1 whether a Special Court constituted under "Section 12A of the is empowered to exercise powers under section 167 (5) of the Code of Criminal Procedure, 1973 in relation to an accused person forwarded to it under section 12AA (1) (b) of the Act and (ii) whether a Special Court can take cognizance of the offence and proceed to try and punish the accused person, notwithstanding the fact that the charge sheet is filed after expiry of the period of six months from the date of arrest of the accused person?", partly allowing the appeal, this Court, HELD: 1.1.
From the plain language of the provisions, introduced by Act 18 of 1981 the legislature desired to ensure that all offences under the Act were tried by the Special Court constituted under section 12A in a summary manner applying the provisions of sections 262 to 265 of the Code and further provided that in case of conviction the sentence shall not exceed two years, bringing the offence within the definition of a summons case under the Code.
But for the insertion of section 12A in its present form and section 12AA, the offence under section 7 (1) (a) (ii) of the Act would have attracted the definition of a warrant case.
(578 D) 1.2.
The avowed object of these legislative changes was expeditious disposal of offences under the Act by Special Courts employing summary procedure and applying the provisions of the Code to such trials save as otherwise provided.
This enabled the special Courts to take cognizance of the offences under the Act without a formal order of commitment.
(578 C) 1.3.
After the constitution of Special Courts all offences under the Act have to he tried by that court in a summary ways by applying the provision,% of section. .
262 to 265 (both inclusive) of the Code.
The proviso places a fetter on the power of the Court in the matter of passing a sentence on conviction, namely, notwithstanding the fact that section 7(1) (a ) (ii) prescribes a punishment extending upto seven years and fine, Special Court shall not pass a sentence of imprisonment for a term exceeding two years .
It is this proviso which attracts the definition of a summon case, the trial whereof must he 572 undertaken in accordance with the procedure outlined in Chapter XX of the Code.
(579 A B) 1.4.Section 167 (5)says that if in any case triable as a summons case,the investigation is wit concluded within a period of six months from the date on which tile accused came to he arrested, the Magistrate shall make an order stopping further investigation into the offence unless the Magistrate for special reasons and in the interest of justice considers it necessary.
to permit continuation of the investigation.
(579 C) 1.5.
The object of sub section clearly (5) of Section 167 is to ensure prompt investigation into all offence triable as summons case to avoid hardship and harassment to the accused person.
(646 C) 1.6.
The prosecution in question being a summons case triable in a summary manner as per procedure outlined in sections 262 to 265 of the Code which in turn attracts tile procedure meant for summons case, it is obvious that the power conferred by sub section (5) of section 167 can be invoked by the Special Court by virtue or clause (c) of section 12AA (1) of the Act which in terms states that the Special Court may exercise the same powers which a Magistrate may exercise under section 167 of the Code.
Thus a special Court is expressly empowered by clause (c) of section 12AA (1) to exercise the same powers which a Megistrate having jurisdiction to try a cast may exercise under section 167 of the Code in relation to an accused person who has been forwarded to him under that provision.
(579 1)) 1.7.
The High Court was right in concluding that section 167(5) of the Code was attracted in the present case and the Special Court was entitled to exercise the power conferred by that sub section.
(579 F) 1.8.
In the case of an offence punishable under section 7(i) (a) (ii) of the Act which is tried by a Special Court constituted under section 12A, the provision (of sub section (5) of section 167 of the Code get attracted if tile investigation has not been completed within the period allowed by that sub.section.
(582 F) 1.9.
The Special Court was competent to entertain the police report restricted to six months investigation and take cognizance on the basis thereof Therefore the Special Court is directed to proceed with the trial from that stage on wards and complete the same as early as possible in accordance 573 with law.
(582 G) Kanta Dev vs The State of west Bengal, (1986) Calcutta Criminal Law Reporter 158 (1986) 1 CHN 267 and Babulal Agarwal vs State, (1987) 1 CHN 218, overruled.
(639 B C) Jnan Prakesh Agarwala vs State of West Bengal, (1992) 1 CHN 218 and Public Prosecution High Court of Hyderabad & etc.
vs Ajnaneyulu and etc.
, , approved.
Hussainara Khantoon & Ors.
vs Home Secretary State of Bihar, Patna, ; , referred to.
(639 H, 647 F) </s> |
<s>[INST] Summarize the following judgement: Appeal No. 166 (NL) of 1983.
the Award dated 19.4.1982 of the Labour Court, Haryana at Faridabad in Reference No. 227 of 198 1.
R.K. Jain, R.P. Singh, Aseem Malhotra, Ashish Verma, Manoj Goel, R.K. Khanna and Ms. Abha R. Sharma for the Appellant.
Dr. Anand Prakash, Ghosh for M/s Fox Mandal & Co. and Som Mandal for the Respondent.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
This appeal by special leave is against the award of the Labour Court, Haryana at Faridabad dated April 19, 1982 which was published in the State Gazette on August 10, 1982.It upheld the termination of the appellant 's service as legal and valid.
The respondent, by its letter dated December 12, 1980 which was received by the appellant on December 19, 1980, intimated that the appellant wilfully absented from duty continuously for more than 8 days from December 3, 1980 without leave or prior information or intimation or previous permission from the management and, therefore, "deemed to have left the service of the company on your own account and lost your lien and the appointment with effect from December 3, 1980.
" In support thereof reliance was placed on clause 13 (2) (iv) of its Certified Standing Order.
The appellant averred that despite his reporting to duty on December 3, 1980 and everyday continuously thereafter he was prevented entry at the gate and he was not allowed to sign the attendance register.
He pleaded that he was not permitted to join duty without assigning any reasons.
His letter of December 3, 1980 was marked herein as Annexure 'A ' wherein he explained the circumstances in which he was prevented to join duty.
The Tribunal found that the appellant had failed to prove his case.
The action of the respondent is in accordance with the standing Orders and it is not a termination nor retrenchment under the for short 'the Act '.
The appellant in terms of standing orders lost his lien on his appointment and so is not entitled to reinstatement.
Clause 13 (2) (iv) standing order reads thus: "If a workman remains absent without sanctioned leave or beyond the period of leave originally granted or subsequently extended, he shall lose his lien on his 936 appointment unless.
(a) he returns within 3 calander days of the commencement of the absence of the expiry of leave originally granted or subsequently extended as the case may be; and (b) explains to the satisfaction of the manager/management the reason of his absence o r his inability to return on the expiry of the leave, as the case may.
The workman not reporting for duty within 8 calander days as mentioned above, shall be deemed to have automatically abandoned the services and lost his lien on his appointment.
His name shall be struck off from the Muster Rolls in such an eventuality.
" A reading thereof does indicate that if a workman remains absent without sanction of leave or beyond the period of the leave originally granted or subsequently extended the employee loses his lien on employment unless he returns to duty within eight calander days of the commencement of the absence or the expiry of leave either originally granted or subsequently extended.
He has to give a satisfactory explanation to the Manager/Management of his reasons for absence or inability to return to the duty on the expiry of the leave.
On completion of eight calander days ' absence from duty he shall be deemed to have abandoned the services and lost his lien on his appointment.
Thereafter the management has been empowered to strike off the name from the Muster Rolls.
Section 2(oo) of the Act defines 'Retrenchment ' means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include (a) voluntary retirement of the workman, or (b) retirement of the workman on reaching the age of superannuation of the contract of employment between the employer and the workman concerned contains a stipulation in that behalf, or (c) termination of the service of a workman on the ground of continued ill health.
" Section 25F prescribes mandatory procedure to be followed before the retrenchment becomes valid and legal and violation thereof visits with invalida 937 tion of the action with consequential results.
In Punjab Land Development and Reclamation Corporation Ltd., Chandigarh vs Presiding Officer, Labour Court, Chandigarh and Ors., the Constitution Bench considered the scope of the word 'retrenchment ' defined by s.2(oo) and held in para 71 at page 716 that "analysing the definition of retrenchment in Section 2(oo) we find that termination by the employer of the service of a workman would not otherwise have covered the cases excluded in Clauses (a) and (b) namely, voluntary retirement and retirement on reaching the stipulated age of retirement or on the grounds of continued ill health.
There would be no violational element of the employer.
Their express exclusion implies that those would otherwise have been included".
In para 77 at page 719 it was further held that "right of the employer and the contract of employment has been effected by introducing Section 2(oo)".
The contention of the management to terminate the service of an employee under the certified standing Orders and under the contracts of employment was negatived holding that the right of the management has been effected by introduction of section 2(oo) and section 25F of the Act.
The second view was that the right as such has not been effected or taken away, but only an additional social obligation has been imposed on the employer to abide by the mandate of section 25F of the Act to tide over the financial difficulty which subserves the social policy.
This court relied on the maxim Stat pro ratione valuntas populi; the will of the people stands in place of a reason.
In paragraph 82 at page 722 this court concluded that the definition in s.2(oo) of the Act of retrenchment means "the termination by the employer of the service of a workman for any reason whatsoever except those expressly excluded in the section".
Same view was taken by three benches of three Judges of this Court in State Bank of India vs Sri N. Sundara Mani; ; ; Delhi Cloth & General Mills Lid.
vs Shambhu Nath Mukherjee & Ors ; and Hindustan Steel Ltd. vs The Presiding Officer.
Labour Court ; and two benches of two judges in Robert D 'Souza vs Executive Engineer, Southern Railway and Anr. ; and H. D. Singh vs Reserve Bank of India and Ors.
[1985] 4 SCC 201 took the same view.
Therefore, we find force in the contention of Sri R. K. lain, the learned Senior counsel for the appellant that the definition 'retrenchment ' in S.2(oo) is a comprehensive one intended to cover any action of the management to put an end to the employment of an employee for any reason whatsoever.
We need not, however, rest our conclusion on this point as in our considered view it could be decided on the other contention raised by Sri Jain that the order is violative of the principles of natural justice.
We are impressed with that argument.
Before dealing with it, it is necessary to dispose of inter related contentions raised by Dr. Anand Prakash.
938 The contention of Dr. Anand Prakash that since this appeal was deleted from the constitution bench to be dealt with separately, the finding of the constitution bench deprived the respondent of putting forth the contention based on Cl. 13 of the certified standing order to support impugned action and the respondent is entitled to canvass afresh the correctness of the view of the constitution bench is devoid of force.
It is settled law that an authoritative law laid after considering all the relevant provisions and the previous precedents, it is no longer open to be recanvassed the same on new grounds or reasons that may be put forth in its support unless the court deemed appropriate to refer to a larger bench in the larger public interest to advance the cause of justice.
The constitution bench in fact went into the self same question vis a vis the right of the employer to fall back upon the relevant provision of the certified standing Orders to terminate the service of the workman/employee.
By operation of section 2(oo) the right of the employer under Cl.13(2) (iv), and the contract of employment has been effected.
Moreover in Ambika Prasad Mishra vs State of U.P. and Ors.
, ; at 72 23 para 5 & 6.
A constitution bench held that every new discovery or argumentative novelty cannot undo or compel reconsideration of a binding precedent.
It does not lose its authority 'merely ' because it was badly argued, inadequately considered and fallaciously reasoned.
In that case the ratio of this court on article 31A decided by 13 Judges bench in Keshwanand Bharti vs Union of India [1973] Suppl.
SCR was sought to be reopened but this court negatived the same.
His contention that expiry of eight days ' absence from duty brings about automatic loss of lien on the post and nothing more need be done by the management to pass an order terminating the service and per force termination is automatic, bears no substance.
The constitution bench specifically held that the right of the employer given under the standing Orders gets effected by statutory operation.
In Robert D ' Souza 's case (supra) in para 7, this court rejected the contention that on expiry of leave the termination of service is automatic and nothing further could be done.
It was further held that striking of the name from the rolls for unauthorised absence from duty amounted to termination of service and absence from duty for 8 consequitive days amounts to misconduct and termination of service on such grounds without complying with minimum prin ciples of natural justice would not be justified.
In Shambhunath 's case three Judges bench held that striking of the name of the workman for absence of leave itself amounted to retrenchment.
In H.D. Singh vs Reserve Bank of India & Ors.
(supra), this court held that striking of the name from the rolls amounts to an arbitrary action.
In State Bank of India vs Workmen of State Bank of India and Anr.[1991] 1 SCC 13, a two judge bench of this court to which one of us, K.R.S.,J. was a member was to consider the effect of discharge on one month 's notice or pay in 939 lieu thereof.
It was held that it was not a discharge simplicitor or a simple termination of service but one camouflaged for serious misconduct.
This court lifted the veil and looked beyond the apparent tenor of the order and its effect.
It was held that the action was not valid in law.
The principle question is whether the impugned action is violative of principles of natural justice.
In A.K. Kriapak and Ors.
vs Union of India & Ors., a Constitution bench of this court held that the distinction between quasi judicial and administrative order has gradually become thin.
Now it is totally clipsed and obliterated.
The aim of the rule of the natural justice is to secure justice or to put it negatively to prevent miscarriage of justice.
These rules operate in the area not covered by law validly made or expressly excluded as held in Col. J.N. Sinha vs Union of India & Anr.
[1971] 1 SCR 791.
It is settled law that certified standing orders have statutory force which do not expressly exclude the application of the principles of natural justice.
Conversely the Act made exceptions for the application of principles of natural justice necessary implication from specific provisions in the Act like Ss.25F; 25FF; 25FFF; etc, the need for temporary hands to cope with sudden and temporary spurt of work demands appointment temporarily to a service of such temporary workmen to meet such exigencies and as soon as the work or service are completed, the need to dispense with the services may arise.
In that situation, on compliance of the provisions of section 25F resort could be had to retrench the employees in conformity therewith particular statute or statutory rules or orders having statutory flavour may also exclude the application of the principles of natural justice expressly or by necessary implication.
In other respects the principles of natural justice would apply unless the employer should justify its exclusion on given special and exceptional exigencies.
The cardinal point that has to be borne in mind, in every case, is whether the person concerned should have a reasonable opportunity of presenting his case and the authority should act fairly, justly, reasonably and impartially.
It is not so much to act judicially but is to act fairly, namely ' the procedure adopted must be just, fair and reasonable in the particular circumstances of the case.
In other words application of the principles of natural justice that no man should be condemned unheard intends to prevent the authority to act arbitrarily effecting the rights of the concerned person.
940 It is a fundamental rule of law that no decision must be taken which will affect the right of any person without first being informed of the case and be given him/ her an opportunity of putting forward his/her case.
An order involving civil consequences must be made consistently with the rules of natural justice.
In Mohinder Singh Gill & Anr.
vs The Chief Election Commissioner & Ors.
at 308F the Constitution Bench held that 'civil consequence ' covers infraction of not merely property or personal right but of civil liberties, material deprivations and non pecuniary damages.
In its comprehensive connotion every thing that affects a citizen in his civil life inflicts a civil consequence.
Black 's Law Dictionary, 4th Edition, page 1487 defined civil rights are such as belong to every citizen of the state or country they include rights capable of being enforced or redressed in a civil action.
In State of Orissa vs Dr. (Miss) Binapani Dei & Ors., this court held that even an administrative order which involves civil consequences must be made consistently with the rules of natural justice.
The person concerned must be informed of the case, the evidence in support thereof supplied and must be given a fair opportunity to meet the case before an adverse decision is taken.
Since no such opportunity was given it was held that superannuation was in violation of principles of natural justice.
In State of West Bengal vs Anwar Ali Sarkar , per majority, a seven Judge bench held that the rule of procedure laid down by law comes as much within the purview of article 14 of the Constitution as any rule of substantive law.
In Maneka Gandhi vs Union of India,. 1, another bench of seven judges held that the substantive and procedural laws and action taken under them will have to pass the test under Art, 14.
The test of reason and justice cannot be abstract.
They cannot be divorced from the needs of the nation.
The tests have to be pragmatic otherwise they would cease to he reasonable.
The procedure prescribed must be just, fair and reasonable even though there is no specific provision in a statute or rules made thereunder for showing cause against action proposed to be taken against an individual, which affects the right of that individual.
The duty to give reasonable opportunity to be heard will be implied from the nature of the function to be performed by the authority which has the power to take punitive or damaging action.
Even executive authorities which take administrative action involving any deprivation of or restriction on inherent fundamental rights of citizens, must take care to see that justice is not only done but manifestly appears to be done.
They have a duty to proceed in a way which is free from even the appearance of arbitrariness, unreasonableness or unfairness.
They have to act in a manner which is patently impartial and meets the requirements of natural justice.
The law must therefore be now taken to be well settled that procedure prescribed for depriving a person of livelihood must meet the challenge of article 14.
941 and such law would be liable to be tested on the anvil of article 14 and the procedure prescribed by a statute or statutory rule or rules or orders effecting the civil rights or result in civil consequences would have to answer the requirement of article 14.
So it must be right,just and fair and not arbitrary, fanciful or oppressive.
There can be no distinction between a quasi judicial function and an administrative function for the purpose of principles of natural justice.
The aim of both administrative.
inquiry as well as the quasi .judicial enquiry is to arrive at a just decision and if a rule of natural justice is calculated to secure justice or to put it negatively, to prevent miscarriage of justice, it is difficult to see why it should be applicable only to quasi judicial enquiry and not to administrative enquiry.
It must logically apply to both.
Therefore, fair play in action requires that the procedure adopted must be just, fair and reasonable.
The manner of exercise of the power and its impact on the rights of the person affected would be in conformity with the principles of natural justice.
article 21 clubs life with liberty, dignity of person with means of livelihood without which the glorious content of dignity of person would be reduced to animal existence.
When it is interpreted that the colour and content of procedure established by law must be in conformity with the minimum fairness and processual justice, it would relieve legislative callousness despising opportu nity of being heard and fair opportunities of defence.
article 14 has a pervasive processual potency and versatile quality, equalitarian in its soul and allergic to discriminatory dictates.
Equality is the antithesis of arbitrariness.
It is, thereby, conclusively held by this Court that the principles of natural justice are part of article 14 and the procedure prescribed by law must be just, fair and reasonable.
In Delhi Transport Corpn.
vs D. T. C. Mazdoor Congress and Ors, [1991] Suppl.
1 SCC 600 this court held that right to public employment and its concomitant right to livelihood received protective umbrella under the can copy of articles 14 and 21 etc.
All matters relating to employment includes the right to continue in service till the employee reaches superannuation or until his service is duly terminated in accordance with just.
fair and reasonable procedure prescribed under the provisions of the constitution and the rules made under the provisions of the constitution and the rules made under proviso to article 309 of the Constitution or the statutory provisions or the rules, regulations or instructions having statutory flavour.
They must be conformable to the rights guaranteed in Part III and IV of the Constitution.
article 21 guarantees right to life which includes right to livelihood, the deprivation thereof must be in accordance with just and fair procedure prescribed by law conformable to articles 14 and 21 so as to be just, fair and reasonable and not fanciful, oppressive or at vagary.
The principles of natural 942 justice is an integral part of the Guarantee of equality assured by article 14.
Any law made or action taken by an employer must be fair,just and reasonable.
The power to terminate the service of an employee/workman in accordance with just, fair and reasonable procedure is an essential inbuilt of ' natural justice.
articles 14 strikes at arbitrary action.
It is not the form of the action but the substance of the order that is to be looked into.
It is open to the court to lift the veil and gauge the effect of the impugned action to find whether it is the foundation to impose punishment or is only a motive.
Fair play is to secure justice, procedural as well as substantive.
The substance of the order is the soul and the affect thereof is the end result.
It is thus well settled law that right to life enshrined under article 21 of the Constitution would include right to livelihood.
The order of termination of the service of an employee/workman visits with civil consequences of jeopardising not only his/her livelihood but also career and livelihood of dependents.
Therefore, before taking any action putting an end to the tenure of an employee/workman fair play requires that a reasonable opportunity to put forth his case is given and domestic enquiry conducted complying with the principles of natural justice.
In D. 7. C. vs D.
T.C. Mazdoor Congress and Ors.
(supra) the constitution bench, per majority, held that termination of the service of a workman giving one month 's notice or pay in lieu thereof without enquiry offended article 14.
The order terminating the service of the employees was set aside.
In this case admittedly no opportunity was given to the appellant and no enquiry was held.
The appellant 's plea put forth at the earliest was that despite his reporting to duty on December 3, 1980 and on all subsequent days and readiness to join duty he was prevented to report to duty, nor he be permitted to sign the attendance register.
The Tribunal did not record any conclusive finding in this behalf.
It concluded that the management had power under Cl. 13 of the certified Standing Orders to terminate with the service of the appellant.
Therefore, we hold that the principles of natural justice must be read into the standing order No. 13 (2) (iv).
Otherwise it would become arbitrary.
unjust and unfair violating articles 14.
When so read the impugned action is violative of the principles of natural justice.
This conclusion leads us to the question as to what relief the appellant is entitled to.
The management did not conduct any domestic enquiry nor given the appellant any opportunity to put forth his case.
Equally the appellant is to blame himself for the impugned action.
Under those circumstances 50 per cent of the back wages would meet the ends of justice.
The appeal is accordingly allowed.
The award of the Labour Court is set aside and the letter dated December 12, 1980 943 of the management is quashed.
There shall be a direction to the respondent to reinstate the appellant forthwith and pay him back wages within a period of three months from the date of the receipt of this order.
The appeal is allowed accord ingly.
The parties would bear their own costs.
N.P.V. Appeal allowed. [/INST] The respondent company terminated the appellant 's services on the ground that since he had willingly absented from duty continuously for more than 5 days from December 3, 1980, without leave or prior information of intimation or previous permission of the management, he had been deemed to have left the service of the company on his own and lost the lien and the appointment with effect from December 3, 1980.
It relied on clause 13(2) (iv) of the Certified Standing Order in support of its action.
The appellant 's plea that despite his reporting to duty on December 3, 1980 and every day continuously thereafter, he was prevented entry at the gate and was not allowed to sign the attendance register and that he was not permitted to join duty without assigning any reasons, was not accepted.
The Labour Court upheld the termination order as legal and valid.
It held that the appellant had failed to prove his case, that the action of the respondent was in accordance with the Standing Orders and it was not a termination nor retrenchment under the and that the appellant in terms of Standing Orders lost his lien on his appointment and was not entitled to reinstatement.
Allowing the appeal of the employee, this Court HELD:1.1.
The action of the management in terminating the appellant 's service is violative of the principles of natural justice.
Under clause 13 (2) (iv) of Certified Standing Orders, on completion of eight calendar days ' absence from duty an employee shall be deemed to have abandoned the services and lost his lien on his appointment.
Thereafter, the management is empowered to strike off the name from the Muster Rolls.
But it is not correct to say that expiry of eight days ' absence from duty brings about automatic loss of lien on the post and nothing more need be done by the management to pass an order terminating the service and per force termination is automatic.
The prin ciples of natural justice must be read into the Standing Order No. 13 (2) (iv).
Otherwise, it would become arbitrary, unjust and unfair violating Article 14.
Keshwanand Bharti vs Union of India, and State Bank of India vs Workmen of State Bank of India and Anr. ; , referred to. 1.2.
In the instant case,admittedly,the management did not conduct any domestic enquiry nor gave the appellant any opportunity to put forth his case.
932 The Labour Court did not record any findings on the appellant 's plea that despite his reporting to duty on December 3,1980 and on all subsequent days and readiness to, join duty he was prevented from reporting to duty, nor he was permitted to sign the attendance register, but held that the management had power under clause 13 of the Certified Standing Orders to terminate the service of the appellant.
Under the circumstances, the award of the Labour Court is set aside.
The respondent should reinstate the appellant forthwith with 50 per cent of the back wages.
Certified Standing Orders have statutory force which do not expressly exclude the application of the principles of natural justice.
Conversely, the made exceptions for the application of principles of natural justice by necessary implication from specific provisions in the Act like Sections 25F, 25FF, 25FFF etc.
The need for temporary hands to cope with sudden and temporary spurt of work demands appointment temporarily, to a service of such temporary workmen to meet such exigencies and as soon as the work or service is completed, the need to dispense with the services may arise.
In that situation, on compliance of the provisions of Section 25F resort could be had to retrench the employees in conformity therewith.
Particular statute or statutory rules or orders having statutory flavour may also exclude the application of the principles of natural justice expressly or by necessary implication.
In other respects, the principles of natural justice would apply unless the employer should justify the exclusion on given special and exceptional exigencies.
Col. J.N. Sinha vs Union of India & Anr., [1971] 1 S.C.R. 791, relied on.
Application of the principles of natural justice that no man should be condemned unheard intends to prevent the authority to act arbitrarily affecting the rights of the concerned person.
No decision must be taken which will affect the right of any person without first being informed of the case and be given him/her an opportunity of putting forward his/her case.
An order involving civil consequences must he made consistently with the rules of natural justice.
It is not so much to act judicially but to act fairly, namely, the procedure adopted must he just, fair and reasonable in the particular circumstances of the case.
The procedure prescribed for depriving a person of livelihood must meet the challenge of Article 14 of the Constitution and such law would be liable to be tested on the anvil of Article 14.
The procedure prescribed by a 933 statute or statutory rule or rules or orders affecting the civil rights or result in civil consequences would have to answer the requirement of the Article.
The manner of exercise of the power and its impact on the rights of the person affected would be in conformity with the principles of natural justice.
Article 14 has a pervasive processual potency and versatile quality, equalitarian it its soul and allergic to discriminatory dictates.
Equality is the antithesis of arbitrariness.
Therefore, the principles of natural justice are part of Article 14 and the procedure prescribed by law must be right, just, fair and reasonable and not arbitrary, fanciful or oppressive.
Mohinder Singh Gill & Anr.
vs The Chief Election Commissioner & Ors. ; State of Orissa vs Dr. (Miss) Binapani Dei & Ors.
, ; ; State of West Bengal vs Anwar Ali Sarkar, ; and Maneka Gandhi vs Union of India, [1978] 2 S.C.R. 621, relied on.
Blak 's law Dictionary 4th Edn.
p. 1487; referred to.
Article 21 of the Constitution clubs life with liberty, dignity of person with means of livelihood without which the glorious content of dignity of person would be reduced to animal existence.
When it is interpreted that the colour and content of procedure established by law must be in conformity with the minimum fairness and processual justice, it would relieve legislative callousness despising opportunity of being heard and fair opportunities of defence.
The order of termination of the service of an employee/workman visits with civil consequences of jeopardising not only his/her livelihood but also career and livelihood of dependents.
Therefore, before taking any action putting an end to the tenure of an employee/workman, fair play requires that a reasonable opportunity to put forth his case is given and domestic enquiry conducted complying with the principles of natural justice.
Delhi Transport Corpn.
vs D. T.C. Mazdoor Congress, and Ors., [1991] Suppl.
1 S.C.C. 600, relied on.
The aim of the rule of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice.
These rules operate in the area not covered by law validly made or expressly excluded.
There can be no distinction between a quasi judicial function and an administrative function for the purpose of principles of natural justice.
The aim of both administrative inquiry as well as the quasi judicial enquiry is to 934 arrive, at a just decision and if a rule of natural justice is calculated to secure justice or to put it negatively, to prevent miscarriage of justice, it must logically be applicable both to quasi judicial enquiry and administrative enquiry and not only to quasi judicial enquiry.
A. K. Kriapak and Ors.
vs Union of India & Ors. , relied on.
An authoritative law laid after considering all the relevant provisions and the previous precedents is no longer open to be recanvassed on new grounds or reasons that may be put forth in its support unless the Court deemed it appropriate to refer to a larger bench in the larger public interest to advance the cause of justice.
Ambika Prasad Mishra vs State of U. P. & Ors. 10 and Keshwanand Bharti vs Union of India, , relied on.
The Constitution Bench in fact went into the self same question visa vis the right of the employer to fall back upon the relevant provision of the Certified Standing Orders to terminate the service of the workman/employee.
Therefore, it is not correct to say that since the present appeal was deleted from the Constitution Bench to be dealt with separately, the finding of the Constitution Bench deprived the respondent of putting forth the plea based on clause 13 of the Certified Standing Order to support the action in question and the respondent is entitled to canvass afresh the correctness of the view of the Constitution Bench.
The definition of 'retrenchment ' in Section 2(oo) of the is a comprehensive one intended to cover any action of the management to put an end to the employment of an employee for any reason whatsoever.
Punjab Land Development and Reclamation Corpn.
Ltd., Chandigarh vs Presiding Officer, Labour Court, Chandigarh and Ors., ; State Bank of India vs Sri N. Sundara Mani; , ; Delhi Cloth & General Mills Ltd. vs Shambhu Nath Mukherjee & Ors., [1978] 1 S.C.R. 591; Hindustan Steel Ltd. vs The Presiding Officer, Labour Court, ; Robert D ' Souza vs Executive Engineer Southern Railway, and Anr., ; and H.D. Singh vs Reserve Bank of India & Ors., [1985] 4 S.C.C.201, referred to. 935 </s> |
<s>[INST] Summarize the following judgement: Appeal No. 159 of 1951.
Appeal by special leave from the judgment and order dated 13th of April, 1951, of the High Court of Judicature at Madras (Rajamannar C.J. and Somasundaram J.) in C.M.P. No. 122/15 of 1950.
M.C. Setalvad (C. R. Pattabhi Raman, with him) for the appellant.
C.K. Daphtary (M. Natesan, with him) for the respondent No.1 V.K.T. Chari, Advocate General of Madras (R. Ganapathi lyer, with him) for respondent No. 4. 1952.
March 17.
The Judgment of the Court was delivered by CHANDRASEKHARA AIYAR J.
This appeal arises as the result of special leave to appeal granted by this Court on the 1st of May, 1951, against an order of the Madras High Court dated 13th April, 1951, quashing certain proceedings of the Regional Transport Authority, Tanjore, and the Cen tral Traffic Board, Madras, dated 19th January, 1950, and 3rd March, 585 1950, respectively, and an order of the first respondent (the State of Madras) dated 7th November, 1950, and direct ing the issue to Messrs. Raman and Raman Ltd., (Petitioners before the High Court) of permits for the five buses in respect of which a joint application had been made original ly by them and one T.D. Balasubramania Pillai.
The present appellant, G. Veerappa Pillai, was the fourth respondent in the High Court.
The present first respondents (Messrs. Raman and Raman Ltd.) were the peti tioners before the High Court Present respondents Nos. 2, 3 and 4 were respectively respondents Nos. 1, 2 and 3 before the High Court.
The dispute is between the appellant and Messrs. Raman and Raman Ltd., who were competing bus proprietors in the Tanjore District; and it is over the issues of five perma nent permits for buses Nos.
M.D.O. 81, M.D.O. 230, M.D.O. 6, M.D.O. 7 and M. D.O. 759 on the route between Kumbakonam and Karaikal.
It has been a long drawn game with many moves, counter moves, advances and checkmates, both sides display ing unusual assiduity and skill in their manoeuvres for position.
But it is unnecessary to set out in great detail all the steps taken, as they have been narrated in the order of High Court and many of them are of insignificant rele vance for disposal of this appeal.
I shall state here only what is material.
The 'C ' permits for the five buses stood originally in the name of Balasubramania Pillai.
The buses were agreed to be purchased from him by Messrs. Raman and Raman Ltd., and there was a joint application by the transferor and trans feree on 10th March, 1944, for transfer of the ownership and of the 'C ' permits in the name of the purchasers.
Two days later, Veerappa Pillai, proprietor of the Sri Sathi Viias Bus Service, who is the appellant before us, applied for temporary permits to ply two of his own vehicles over the same route, stating that the vehicles of the two agencies which held the permits were mostly out of action.
It was a fact that out of the five buses sold 586 by Balasubramania Pillai, only two were then running; the other three were under repairs.
The permanent permits for the sold buses were suspended by order of the Secretary dated 28th March, 1944.
Temporary permits for buses M.D.O. 920, 894, 918, M.S.C. 7632 and 7482 had been issued to Veerappa Pillai during the same month.
Now we come to another chapter in the story.
Balasubra mania Pillai resiled from the joint application and repudi ated it as having been got from him by fraud.
The Secre tary, Road Traffic Board, thereupon refused to transfer the ownership on the 19th March, 1944, and this order was con firmed by the Board on 29th May, 1944, Balasubramania Pillai and Veerappa Pillai made a joint application on 10th April, 1944, for transfer of the buses and the original permits in favour of Veerappa Pillai who had on the same date agreed to purchase the vehicles.
The Secretary granted this applica tion on the same date Messrs. Raman and Raman Ltd., took the matter before the Central Road Traffic Board and they made an order on 16th August, 1944, upholding the issue of tempo rary permits to Veerappa Pillai for his buses M.D.O. 920, 894,918, M.S.C. 7632 and 7482, but setting aside the trans fer of registry of the original buses and the transfer of the permits relating to the same.
On an application by Veerappa Pillai to review its order dated 16th August, 1944, the Central Road Traffic Board allowed on 27th November, 1944, only the transfer of the ownership of the buses but not a transfer of the permits.
Yet another move in the game was this Veerappa Pillai filed a suit in the court of the Subordinate Judge, Kumbako nam, on 3rd October, 1944, for recovery of possession of the original five buses from Messrs. Raman and Raman Ltd., on the strength of his purchase from Balasubramania Pillai.
The Subordinate Judge appointed Veerappa Pillai as Receiver on 17th March, 1945, and the five disputed buses were deliv ered to him on 26th April, 1945.
Two of the buses M.D.O. 6 and 7 were repaired by him and put on the route under his temporary permits.
The suit was decreed in 587 his favour on 2nd May, 1946.
Later, he repaired the other three buses M.D.O. 759, 230 and 81 and began to run them on the same route under the temporary permits he held.
Veerappa Pillai was discharged from receivership on 18th September, 1946.
On the strength of the Sub Court decree, Veerappa Pillai again applied for a permanent transfer of the permits, and on 22nd July, 1946, the Central Road Traffic Board trans ferred the petition to the Regional Transport Authority with an intimation that it saw no objection to the issue of regular permits to Veerappa Pillai for the disputed buses or to their transfer in his name, provided there were valid permits in existence.
This view appears to have been modi fied later and on 2nd September, 1946, the Regional Trans port Officer directed the issue of temporary permits to the buses for the period from 3rd September, 1946, to 31st October, 1946, subject to the condition that the issue of the permits did not affect the rights of either party in the matter under dispute.
Thereupon, the Government was moved by Veerappa Pillai and also by Messrs. Raman and Raman Ltd., but the Government declined to interfere and the result was an order on 30th June, 1947, by the Regional Transport Authority to the following effect: " Since the subject matter is on appeal before the High Court, the matter will lie over pending the decision of the High Court.
The temporary permits are continued as is being done." A fresh petition by Veerappa Pillai to the Central Road Traffic Board, Madras, was unsuccessful, but a further appeal to the Government of Madras ended in his favour in an order dated 29th March, 1949.
The order is in these terms : "Shri Sathi Viias Bus Service, Porayar, Tanjore dis trict, have been permitted by the Regional Transport Author ity, Tanjore, to run their buses M.D.O. 6, 7, 81, 230 and 750 on the Kumbakonam Karaikal route on temporary permits from 1944 pending 588 the High Court 's decision on the question of permanent ownership of the buses.
Government consider it undesirable to keep these buses running on temporary permits for a long and indefinite period.
Further Sri Sathi Vilas Bus Service have secured the decision of the Sub Court, Kumbako nam, in their favour about the permanent ownership of the buses.
In the circumstances the Regional Transport Authori ty, Tanjore, is directed to grant permanent permits for the buses of Sri Sathi Vilas Bus Service, Porayar, referred to above in lieu of the existing temporary permits.
" On the basis of this Government order, permanent permits were issued in favour of Veerappa Pillai on 18th April, 1949.
Getting to know of this last order, Messrs. Raman and Raman Ltd.,approached the Government Madras with a petition praying for clarification of the order by making it expressly subject to the decision of the High Court regarding the title to the said five buses and that in the event of the High Court deciding the appeal in favour of Messrs. Raman and Raman Ltd. "the above said five permanent permits will be taken away from Veerappa Pillai and given to them." The Minister of Transport, who dealt with the matter, stated on the petition "that was my inten tion also.
" The High Court reversed the decree of the Sub Court on 2nd September, 1949, and came to the conclusion that the title of Messrs. Raman and Raman Ltd., to the five buses prevailed over that of Veerappa Pillai.
On 19th September, 1949, they applied to the Government for cancellation of the five permits issued to Veerappa Pillai and for grant of the same to them.
The Government declined to interfere as the Regional Transport Authority was the competent authority, vide order dated 16th November, 1949.
In their application to the Regional 'Fransport Authority dated 28th November, 1949, Messrs. Raman and Raman Ltd., asked for withdrawal of the permits.
In the meantime, that is on 14th October, 1949, Veerappa Pillai applied for renewal of his permanent permits held for his own 589 buses Nos.
M.D.O. 1357, 20, 1366, 1110, 1077, M.D.O. 1368 and M.S.C.7632, which had been substituted for the disputed buses as they had become unroadworthy and useless.
The application for renewal has under section 58, sub clause (2), of the Act to be treated as a fresh application for new permits.
This procedure was followed and on 22nd October, 1949, a notification was issued inviting objections against the renewal and giving 30th November, 1949, as the date of hearing.
No objections were received and the Secretary renewed the permits for two years from 1st January, 1950.
This order was dated 3rd January, 1950.
The Regional Trans port Authority dealing with the application of Messrs. Raman and Raman Ltd., dated 28th November, 1949, resolved on 19th January, 1950, that the permanent permits issued to Veerap pa Pillai should be cancelled, that the route should be declared vacant in respect of the five buses and fresh applications should be invited and dealt with on the merits.
The order further stated that "in the meanwhile Sri G. Veerappa Pillai and Raman and Raman will be given temporary permits for running two and three buses respectively on the route.
The permanent permits will be cancelled with imme diate effect.
Raman and Raman should put in the buses as quickly as possible.
Till then Sri Veerappa Pillai will be given temporary permits so as not to dislocate public traf fic.
" Both the parties were dissatisfied with this order and preferred appeals to the Central Road Traffic Board, Madras, which dismissed the appeal of Messrs. Raman and Raman Ltd., and restored the permanent permits of Veerappa Pillai by order dated the 3rd March, 1950.
Messrs Raman and Raman Ltd., moved the Government, but it declined to interfere by G.O., dated 7th November, 1950.
Thereupon, Messrs. Raman and Raman Ltd., moved the High Court on 4th December, 1950, under article 226 of the Constitution in Civil Miscellaneous Petition No. 12215 of 1950 for a writ of certiorari for quashing the orders and the proceedings of the 590 Regional Transport Authority, the Central Road Traffic Board, Madras, and the State of Madras dated 19th January, 1950, 3rd March, 1950, and 7th November, 1950, respectively, and for the issue of a writ of mandamus or other such appro priate directions to the first respondent to transfer, issue or grant "the five pucca permits in respect of the route Kumbakonam to Karaikkal to the petitioner herein" (Messrs. Raman and Raman Ltd.) It is on this petition that 'the order challenged in this appeal was made by the High Court.
The High Court took the view that throughout all the stages prior to the High Court 's decree, the parties, the transport authorities vested with the power to issue per mits, and the Government also proceeded upon the footing that the transfer of the permits was dependent on the title to the buses and that Veerappa Pillai obtained the temporary and permanent permits only in his capacity as transferee and not in his individual right.
To quote the learned Chief Justice:"the conduct of the parties, the attitude of the transport authorities including the Government are all explicable only on the assumption that the rights of parties were consequent on the ownership of the five vehicles in question.
The fourth respondent having obtained the benefit of temporary and permanent permits as a transferee from Balasubramania Pillai all this time cannot be heard now to say after the decision of this Court which has negatived his claim and upheld the claim of the applicant that the appli cant should not enjoy the fruits of his success.
" He further points out that the procedure laid down by the Motor Vehi cles Act and the rules for grant of fresh permits was not followed and that long before the application for renewal was allowed, the Regional Transport Authority had been informed of the decision of the High Court.
The order of the Central Road Traffic Board was in his opinion most unsatis factory, as it was based on a quibbling distinction between "withdrawal" and "cancellation" of the permits.
In his view, the orders complained against deprived Messrs. Raman and Raman Ltd., of the fruits of the 591 decree obtained by them at the hands of the High Court after much expenditure of time and money.
An examination of the relevant sections of the Motor Vehicles Act does not support the view that the issue of a permit for a bus which falls within the definition of a "stage carriage " is necessarily dependent on the ownership of vehicle.
All that is required for obtaining a permit is possession of the bus.
As ownership is not a condition precedent for the grant of permits and as a person can get a permit provided he is in possession of a vehicle which satisfies the requirements of the statute or the rules framed thereunder, we have to hold that the parties and the authorities were labouring under a misconception if they entertained a contrary view.
But the assumption on which they proceeded may perhaps be explained, if not justified, on the ground that it was supposed that the question of ownership of the vehicles had an important or material bearing on the question as to which of them had a preferen tialclaim for the permits.
It may well be it Was one of the factors to be taken into account and it seems to us that this was apparently the reason why the question of issue of permanent permits was postponed from time to time till we come to the order of the Government dated 29th March, on petitions presented by both the contestants.
If matters had stood as they were till the Government had made this order, something could have been said in favour of Messrs. Raman and Raman Ltd., in the event of their ultimate success in the High Court as regards the title to the five buses.
But the said order altered the situation.
In the order, the direction for the grant of permanent permits is not rested solely on the decision of the Sub Court in favour of Veerappa Pillai but another reason was also given, namely, that Government considered it undesirable to keep the buses running on temporary permits for a long and indefinite period.
In giving this reason, they were stating a policy.
77 592 As observed already, the High Court by their judg ment dated 2nd September, 1949, reversed the decree of the Subordinate Judge and dismissed Veerappa Pillai 's suit for possession of the buses based on his title.
If it were the law that the question of possession based on ownership was decisive as regards the grant of permits, and if no other circumstances were available to be taken into account when the question of the issue of permanent permits again came up for consideration, it would have been easy to hold that Messrs. Raman and Raman Ltd., had at least a preferential claim.
But unfortunately for them, both these requisites are not satisfied.
It has been point ed out already that nowhere do we find in the Act anything to indicate that the issue of permits depends on ownership.
Other circumstances which had a material bear ing as to which of them was entitled to the permits had come into existence since the date of the original joint application and were taken into account by the transport authorities and by the Government.
The order of 19th January, 1950, of the Regional Transport Authority sought to render rough and ready justice between the par ties by the adoption of what may be called a middle course.
The terms of the order have already been set out.
Before disposing of the appeals of both the parties, the Central Traffic Board appears to have called for a report from the Regional Transport Officer.
In this report, attention was drawn to the fact that all the five buses had been replaced by new vehicles and that the registration certificates had been cancelled as a result of the replacement.
After Balasubramania Pillai, it was Veerappa Pillai who was running the buses continuously on this route for nearly 5 years and he also obtained the privilege of securing the permanent permits.
The Central Traffic Board 's order of 3rd March, 1950, restoring the permanent permits of Veerappa Pillai was based on the fact that Messrs. Raman and Raman Ltd. asked for withdrawal of the permits and not their cancellation and that no opportunity had been given to Veerappa Pillai to show cause why his permits should not be cancelled; and 593 the procedure prescribed for cancellation was not followed.
When the Government was moved by Messrs. Raman and Raman Ltd., under section 64 (a) of the Motor Vehicles Act, they had before them a petition for withdrawal of the perma nent permits issued to Veerappa Pillai and for transfer or grant of five 'pucca permits ' relating to the five buses.
The Government granted stay of the appellate order of the Central Road Traffic Board pending disposal of the revision petition 'and called for a report from the subordinate trans port authorities.
Two important facts were brought to the notice of the Government in the report Messrs. Raman and Raman Ltd. did not file any objections to the renewal of the permits sought by Veerappa Pillai.
What is more important, they had no permits from the French authorities enabling them to run any buses on the portion of the route which lay in French territory.
It was further pointed out that there was no subsisting joint application to support the request for transfer and that the original permits in the name of Bala. subramanian had ceased to exist after 31st December 1944.
The Government had also before them two petitions dated 8th March, 1950, and 25th October, 1950, from Messrs Raman and Raman Ltd. and two petitions dated 29th March, 1950, and 8th June, 1950, from Veerappa Pillai.
It is on the basis of all these materials that the Government de clined to interfere with the decision of the Central Road Traffic Board.
It is contended for the appellant that in this state of affairs the High Court acting under Article 226 of the Constitution had no right to interfere with the orders of the transport authorities.
It is unnecessary for the disposal of this appeal to consider and decide on the exact scope and extent of the jurisdiction of the High Court under Article 226.
Whether the writs it can issue must be analogous to the writs of habeas corpus, mandamus, prohibition, quo warranto and certiorari specified therein and the power is subject to all the limitations, or restrictions 594 imposed on the exercise of this jurisdiction, or whether the High Court is at liberty to issue any "suitable directions or orders or writs untramelled ,by any condi tions, whenever the interests of justice so require, is a large and somewhat difficult problem which does not arise for solution now.
Mr. Setalvad appearing for the appellant urged two narrower grounds as sufficient for his purposes.
Firstly, he urged that however wide the jurisdiction of the High Court might be under Article 226, it could never exer cise its powers under the article in such a manner as to convert itself into a court of appeal sitting in judgment over every tribunal or authority in the State discharging administrative or quasi judicial functions.
Secondly, he maintained that the Motor Vehicles Act with the rules framed thereunder dealing with the grant of permits is a self contained code and that in respect of the rights and liabil ities created by such a statute the manner of enforcement must be sought within the statute itself.
It was further urged by him that in any event, the High Court could not substitute its own view or discretion for the view taken or discretion exercised by the specified authorities, even if it was erroneous or unsound.
Such writs as are referred to in Article 226 are obvi ously intended to enable the High Court to issue them in grave cases where the subordinate tribunals or bodies or officers act wholly without jurisdiction, or in excess of it, or in violation of the principles of natural justice, or refuse to exercise a jurisdiction vested in them, or there is an error apparent on the face of the record, and such act, omission, error, or excess has resulted in manifest injustice.
However extensive the jurisdiction may be, it seems to us that it is not so wide or large as to enable the High Court to convert itself into a Court of appeal and examine for itself the correctness of the decision impugned and decide what is the proper view to be taken or the order to be made Mr. Daphtary, who appeared for the respondent, said nothing to controvert this position.
His argument 595 was that if all along the authorities and the Government had proceeded upon a particular footing and dealt with the rights of the parties on that basis, it was not open to them afterwards to change front and give the go by altogether to the conception of the rights of parties entertained by them till then.
According to him, there was manifest injustice to his client in allowing them to do so and this was the reason which impelled the High Court to make the order which is the subject matter of challenge in this appeal.
The Motor Vehicles Act is a statute which creates new rights and liabilities and prescribes an elaborate procedure for their regulation.
No one is entitled to a permit as of right even if he satisfies all the prescribed conditions.
The grant of a permit is entirely within the discretion of the transport authorities and naturally depends on several circumstances which have to be taken into account.
The Regional Transport Authority and the Provincial Transport Authority are entrusted under section 42 with this power.
They may be described as administrative bodies exercising quasijudicial functions in the matter of the grant of per mits.
Under rule 8 of the Madras Motor Vehicles Rules the Regional Transport Authority is called the Road Traffic Board and the Provincial Transport Authority is called the Central Road Traffic Board.
These bodies or authorities are constituted by the Provincial ' Government.
The matters which are to be taken into account in granting or refusing a stage carriage permit are specified in section 47.
By delegation under rule 134 A, the Secretary of the Road Traf fic Board may exercise certain powers as regards the grant or refusal of stage carriage permits and under rule 136 there is an appeal to the Board from these orders.
Similar powers of delegation are vested in the Secretary to the Central Board and an appeal lies to the Central Board under rule 148(1).
From an original order of the Road Traffic Board there is an appeal to the Central Board and from the original orders of the Central Board to the Government, vide rules 147 and 148 An amendment introduced by the Madras Act XX of 1948 596 and found as section 64 A in the Act vests a power of revi sion in the Provincial Government.
Besides this specific provision, there is a general provision in section 43 A that the Provincial Government may issue such orders and direc tions of a general character as it may consider necessary to the Provincial Transport Authority or a Regional Transport Authority in respect of any matter relating to road trans port; and such transport authority shall give effect to all such orders and directions.
There is, therefore, a regular hierarchy of administrative bodies established to deal with the regulation of transport by means of motor vehicles.
Thus we have before us a complete and precise scheme for regulating the issue of permits, providing what matters are to be taken into consideration as relevant, and prescribing appeals and revisions from subordinate bodies to higher authorities.
The remedies for the redress of grievances or the correction of errors are found in the statute itself and it is to these remedies that resort must generally be had.
As observed already, the issue or refusal of permits is solely within the discretion of the transport authorities and it is not a matter of right.
We are accordingly of opinion that this was not a case for interference with the discretion that was exercised by the Transport Authorities paying regard to all the facts and the surrounding circumstances.
Further, it will be noticed that the High Court here did not content itself with merely quashing the proceedings, it went further and directed the Regional Transport Authority, Tanjore, "to grant to the petitioner permits in respect of the five buses in respect of which a joint application was made originally by the petitioner and Balasubramania Pillai and that in case the above buses have been condemned, the petitioner shall be at liberty to provide substitutes within such time as may be prescribed by the authorities.
" Such a direction was clearly in excess of its powers and jurisdic tion.
597 For the reasons given above, the appeal is allowed and the order of the High Court set aside.
Each party will bear their own costs of these proceedings throughout.
Appeal allowed.
Agent for respondent No. 1: M.S.K. Sastri.
Agent for respondent No. 4: P.A. Mehta. [/INST] The writs referred to in article 226 are intended to enable the High Court to issue them in grave cases where the subordinate tribunals or bodies or officers act wholly without jurisdiction, or in excess of it, or in violation of the principles of natural justice, or refuse to exercise a jurisdiction vested in them, or there is an error apparent on the face of the record and such act, omission or error or excess has resulted in manifest injustice.
However exten sive the jurisdiction may be, it is not so wide or large as to enable the High Court to convert itself into a court of appeal and examine for itself the correctness of the, deci sions impugned and decide what is the proper view to be taken or the order to be made.
The Motor Vehicles Act contains a complete and precise scheme for regulating the issue of permits, providing what matters are to be taken into consideration as relevant and prescribing appeals and revisions from subordinate bodies to higher authorities, and the issue or refusal of permits is solely within the discretion of the transport authorities; it is not a matter of right.
Where, in a dispute between two rival claimants for running through a particular route five buses, which each of them alleged he had purchased from a third person, the Central Road Traffic Board, Madras, after calling for a report from the Regional Transport Officer and considering several circumstances that had a material bearing on the case, restored the permanent permits which had been granted to one of the claimants, but on an application by the other claimant under article 226 of the Constitution to the High Court of Madras for a writ of certiorari quashing the orders of the Regional Transport Authority, the Central Road Traffic Board and the State of Madras, and for a writ of mandamus to the respondents to transfer, issue or grant 584 permanent permits to the petitioner, the High Court set aside the order of the Central Traffic Board, relying mainly on the fact that the petitioner 's title to the five buses had been established and directed the Regional Traffic Authority to grant to the petitioner permits in respect of the five buses: Held, that under the Motor Vehicles Act, the issue of a permit for a bus was not dependent on the ownership of the bus but on other considerations also, and as the Central Traffic Board had issued an order granting permits to one of the claimants after considering all circumstances the High Court acted erroneously in interfering with the Order of Traffic Board on an application under article 226 and in any event the order of the High Court issuing a direction to the Regional Transport Authority to grant permits to the other party was clearly in excess of its powers and jurisdiction.
The Motor Vehicles Act is a statute which creates new rights and liabilities and prescribes an elaborate procedure for their regulation.
No one is entitled to a permit as of right even if he satisfies all the prescribed conditions.
The grant of a permit is entirely within the discretion of the transport authorities and naturally depends on several circumstances which have to be taken into account. </s> |
<s>[INST] Summarize the following judgement: Appeals Nos. 380 to 389, 391 to 399, 401, 429 and 431 to 434 of 1958.
Appeals from the judgment and decree dated December 19, 1956, of the Allahabad High Court in Civil Misc.
Writs Nos.
1574, 1575, 1576, 1577, 1578, 1579,1444,1584,1586,1589, 1631, 1632, 1634, 1635, 1636,1694, 1695, 1697, 1704, 1707, 3726, 1647, 1948 and 1949 and 1956.
M. K. Nambiyar, Shyam Nath Kacker, J. B. Dadachanji, section N. Andley and Rameshwar Nath, for the appellants (in C. As.
380 385, 387 389, 391 399 and 401 of 1958). S.N.Kacker and J. B. Dadachanji, for the appellant (in C. A. No. 386/58).
Naunit Lal, for the appellants (in C. As.
429 & 431 434/58).
K. B. Asthana & G. N. Dikshit, for the respondents.
January 15.
The judgment of Das, C. J., and Sinha, J., was delivered by Das, C. J.
The judgment of Bhagwati, Subba Rao and Wanchoo, JJ., was delivered by Subba Rao, J. DAS, C. J. We have had the advantage of perusing the judgment prepared by our learned Brother Subba Rao and 'we agree with the order proposed by him, namely, that all the above appeals should be dismissed with costs, although we do not subscribe to all the reasons advanced by him.
The relevant facts and the several points raised by learned counsel for the appellants and the petitioners in support of the appeals have been fully set out in the judgment which our learned Brother will presently deliver and it is not necessary for us to set out the 12 same here.
Without committing ourselves to all the reasons adopted by our learned Brother, we agree with his following conclusions, namely, (1) that the Uttar Pradesh Transport Service (Development) Act, 1955 (Act IX of 1955), hereinafter referred to as the U. P. Act, did not, on the passing of the Motor Vehicles (Amendment) Act, 1956 (100 of 1956), hereinafter referred to as the Central Act, become wholly void under article 254(1) of the Constitution but continued to be a valid and subsisting law supporting the scheme already framed under the U. P. Act; (2) that, even if the Central Act be construed as amounting, under article 254(2), to a repeal of the U. P. Act, such repeal did not destroy or efface the scheme already framed under the U. P. Act, for the provisions of section 6 of the General Clauses Act saved the same; (3) that the U. P. Act did not offend the provisions of article 31 of the Constitution, as it stood before the Constitution (4th Amendment) Act, 1955, for.
the U. P. Act and in particular section 11(5) thereof provided for the payment of adequate compensation.
These findings are quite sufficient to dispose of the points urged by Mr. Nambiyar and Mr. Naunit Lal in support of the claims and contentions of their respective clients.
In view of the aforesaid finding that the U. P. Act did not infringe the fundamental rights guaranteed by article 31, it is wholly unnecessary to discuss the following questions, namely, (a) whether the provisions of 'Part III of the Constitution enshrining the fundamental rights are mere checks or limitations on the legislative competency conferred on Parliament and the State Legislatures by articles 245 and 246 read with the relevant entries in the Lists in the Seventh Schedule to the Constitution or are an integral part of the provisions defining, prescribing and conferring the legislative competency itself and (b) whether the doc trine of eclipse is applicable only to pre Constitution laws or can apply also to any post Constitution law which falls under article 13(2) of the Constitution.
As, however, our learned Brother has thought fit to embark upon a discussion of these questions, we desire to guard ourselves against being understood as 13 accepting or acquiescing in the conclusion that the doctrine of eclipse cannot apply to any post Constitution law.
A post Constitution law may infringe either a fundamental right conferred on citizens only or a fundamental right conferred on any person, citizen or non citizen.
In the first case the law will not stand in the way of the exercise by the citizens of that fundamental right and, therefore, will not have any operation on the rights of the citizens, but it will be quite effective as regards non ,citizens.
In such a case the fundamental right will, qua the citizens, throw a shadow on the law which will nevertheless be on the Statute Book as a valid law binding on non citizens and if the shadow is removed by a constitutional ,amendment, the law will immediately be applicable even to the citizens without being re enacted.
The decision in John M. Wilkerson vs Charles A. Rahrer (1) cited by our learned Brother is squarely in point.
In other words the doctrine of eclipse as explained by this Court in Bhikaji Narain Dhakras vs The State of Madhya Pradesh (2) also applies to a post Constitution law of this kind.
Whether a post Constitution law of the other kind, namely, which infringes a fundamental right guaranteed to all persons, irrespective of whether they are citizens or not, and which, therefore, can have no operation at all when it is enacted, is to be regarded as a still born law as if it had not been enacted at all and, therefore, not subject to the doctrine of eclipse is a matter which may be open to discussion.
On the findings arrived at in this case, however, a discussion of these aspects of the matter do not call for a considered opinion and we reserve our right to deal with the same if and when it becomes actually necessary to do so.
SUBBA RAO, J.
These twenty five appeals are by certificate under articles 132 and 133 of the Constitution granted by the High Court of Judicature at Allahabad and raise the question of the validity of the scheme of nationalization of State Transport Service formulated by the State Government and the consequential orders made by it.
(1) ; ; , (2) [1955] 2 S.C.R. 589.
14 The said appeals arise out Writ Petitions filed by he appellants in the Allahabad High Court challenging the validity of the U. P. Transport Services (Development) Act of 1955, being U. P. Act No. IX of 1955 (hereinafter referred to as the U. P. Act), and the notifications issued thereunder.
All the appeals were consolidated by order of the High Court.
The appellants have been carrying on business as stage carriage operators for a considerable number of years on different routes in Uttar Pradesh under valid, permits issued under the , along with buses owned by Government.
The U. P. Legislature, after obtaining the assent of the President on April 23, 1955, passed the U. P. Act and duly published it on April 24, 1955.
Under section 3 of the U. P. Act, the Government issued a notification dated May 17, 1955, whereunder it was directed that the aforesaid routes along with others should be exclucively served by the stage carriages of the Government and the private stage carriages should be excluded from those routes.
On November 12, 1955, the State Government published the notification under section 4 of the U. P. Act formulating the scheme for the aforesaid routes among others.
The appellants received notices under section 5 of the U. P. Act requiring them to file objections, if any, to the said scheme; and after the objections were received, they were informed that they would be heard by a Board on January 2, 1956.
On that date, the objections filed by the operators other than those of the Agra region were heard and the inquiry in regard to the Agra region was adjourned to January 7, 1956.
It appears that the operators of the Agra region did not appear on the 7th.
The notification issued under section 8 of the U. P. Act was pub lished in the U. P. Gazette on June 23, 1956, and on June 25, 1956, the Secretary to the Regional Transport Authority, Agra, sent an order purported to have been issued by the Transport Commissioner to the operators, of the Agra region prohibiting them from plying their stage carriages on the routes and also informing them that their permits would be transferred to other routes.
On July 7, 1956, a notice was sent to 15 filed Writ Petitions in the Allahabad High Court challenging the validity of the U. P. Act and the notifications issued thereunder.
The facts in Civil Appeal No. 429 of 1958 are slightly different from those in other appeals and they may be stated: The appellant 's application for renewal of his permanent permit was rejected in 1953; but, on appeal, the State Transport Authority Tribunal allowed his appeal on September 6,1956, and directed his permit to be renewed for three years beginning from November 1, 1953.
Pursuant to the order of the Tribunal, the appellant 's pert nit was renewed with effect from November 1, 1953, and it was made valid up to October 31, 1956.
The scheme of nationalisation was initiated and finally approved between the date of the rejection of the appellant 's application for renewal and the date when his appeal was allowed.
The appellant applied on October 11, 1956, for the renewal of his permit and he was informed by the Road Transport Authority, Allahabad, that no action on his application, under reference was possible.
The appellant 's contention, among others, was that the entire proceedings were taken behind his back and therefore the scheme was not binding on him.
The appellants in thirteen appeals, namely, Civil Appeals Nos.
387 to 389, 391 to 394, 396 to 399 and 401 and 429 were offered alternative routes.
Though they tentatively accepted the offer, presumably on the ground that it was the lesser of the two evils, in fact they obtained stay as an interim arrangement and continued to operate on the old routes.
The appellants filed applications for permission to urge new grounds in the appeals, which were not taken before the High Court.
The said grounds read : (i) That by reason of the coming into operation of the Motor Vehicles (Amendment) Act, No. 100 of 1956, passed by Parliament and published in the Gazette of India Extraordinary dated 31st December, 1956, the impugned U. P. Act No. IX of 1955 has become void.
(ii) That by reason of Article 254 of the Constitution of India, the said impugned Act No. IX of 1955, 16 being repugnant and inconsistent with the Central Act No. 100 of 1956, has become void since the coming into operation of the aforesaid Act No. 100 of 1956 ".
The judgment of the Allahabad High Court, which is the subject matter of these appeals, was delivered on December 19, 1956.
The Amending Act of 1956 was published on December 31, 1956.
It is therefore manifest that the appellants could not have raised the aforesaid grounds before the High Court.
Further, the grounds raise only a pure question of law not dependent upon the elucidation of any further facts.
In the circumstances, we thought it to be a fit case for allowing the appellants to raise the new grounds and we accordingly gave them the permission.
Mr. M. K. Nambiar, appearing for some of the appellants, raised before us the following points: (i) The Motor Vehicles (Amendment) Act (100 of 1956) passed by, the Parliament is wholly repugnant to the provisions of the U. P Act and therefore the latter became void under the provisions of Article 254(1) of the Constitution ; with the result that, at the present time, there is no valid law whereunder the Government can prohibit the appellants from exercising their fundamental right under the Constitution, namely, to carry on their business of motor transport; (ii) the scheme framed under the Act, being one made to operate in future and from day to day, is an instrument within the meaning of section 68B of the Amending Act, and therefore the provisions of the Amending Act would prevail over those of the scheme, and after the Amending Act came into force, it would have no operative force; and (iii) even if the U. P. Act was valid and continued to be in force in regard to the scheme framed thereunder, it would offend the provisions of article 31 of the Constitution, as it was before the Constitution (Fourth Amendment) Act, 1955, as, though the State had acquired the appellant 's interest in a commercial undertaking, no compensation for the said interest was given, as it should be under the said Article.
The other learned Counsel, who followed Mr. Nambiar, except Mr. Naunit Lal, adopted his argument.
Mr. Naunit Lal, in addition to the argument 17 advanced by Mr. Nambiar in regard to the first point, based his contention on the proviso to article 254(2) of the Constitution rather than on article 254(1).
He contended that by reason of the Amending Act,,, the U. P. Act was repealed in toto and, because of section 68B of the Amending Act, the operation of the provisions of the General Clauses Act was excluded.
In addition, he contended that in Appeal No. 429 of 1958, the scheme, in so far as it affected the appellant 's route was bad inasmuch as no notice was given to him before the scheme was approved.
We shall proceed to consider the argument advanced by Mr. Nambiar in the order adopted by him; but before doing so, it would be convenient to dispose of the point raised by the learned Advocate General, for it goes to the root of the matter, and if it is decided in his favour, other questions do not fall for consideration.
The question raised by the learned Advocate General may be posed thus: whether the amendment of the Constitution removing a constitutional limitation on a legislature to make a particular law has the effect of validating the Act made by it when its power was subject to that limitation.
The present case illustrates the problem presented by the said question.
The U. P. Legislature passed the U. P. Act on April 24, 1955, whereunder the State Government was authorized to frame a scheme of nationalization of motor transport.
After following the procedure prescribed therein, the State Government finally published the scheme on June 23, 1956.
The Constitution (Fourth Amendment) Act, 1955, received the assent of the President on April 27, 1955.
The State Government framed the scheme under the U. P. Act after the passing of the Constitution (Fourth Amendment) Act, 1955.
Under the said Amendment Act, el.
(2) of article 31 has been amended and cl.
(2A) has been inserted.
The effect of the amendment is that unless the law provides for the transfer of ownership or right to possession of any property to the State or to a Corporation owned or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or 3 18 requisition of property within the meaning of cl.
(2) of that Article and therefore where there is no such transfer, the condition imposed by cl.
(2), viz., that the law Should fix the amount of compensation or specify the principles on which and the manner in which the compensation is to be determined and given is not attracted.
If the amendment applies to the U. P. Act, as there is no transfer of property to the State, no question of compensation arises.
On the other hand, if the unamended Article governs the U. P. Act, the question of compensation will be an important factor in deciding its validity.
The answer to the problem so presented depends upon the legal effect of a consti tutional limitation of the legislative power on the law made in derogation of that limitation.
A distinction is sought to be made by the learned Advocate General between the law made in excess of the power conferred on a legislature under the relevant List in the Seventh Schedule and that made in violation of the provisions of Part III of the Constitution.
The former, it is suggested, goes to the root of the legislative power, whereas the latter, it is said, operates as a check on that power, with the result that the law so made is unenforceable, and as soon as the check is removed, the law is resuscitated and becomes operative from the date the check is removed by the constitutional amendment.
Mr. Nambiar puts before us the following two propositions in support of his contention that the law so made in either contingency is void ab initio: (i) the paramountcy of fundamental rights over all legislative powers in respect of all the Lists in the Seventh Schedule to the Constitution is secured by the double process of the prohibition laid by article 13(2) and the restrictions imposed by article 245, unlike the mere implied prohibition implicit in the division of power under article 246; and (ii) where the provisions of an enactment passed by a legislature after January 26, 1950, in whole or in part subject to the doctrine of severability are in conflict with the provisions of Part III, the statute, in whole or in part, is void ab initio.
This question was subjected to judicial scrutiny by this 19 Court, but before we consider the relevant authorities, it would be convenient to test its validity on first principles.
The relevant Articles of the Constitution read as follows: Article 245: "(1)Subject to the provision of this Constitution, Parliament may make laws for the whole or any part of the territory Of India, and the Legislature of a State may make laws for the whole or any part of the State.
" Article 246: " (1) Notwithstanding anything in clauses (2) and (3) Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the" Union List ").
(2) Notwithstanding anything in clause (3), Parliament and, subject to clause (1), the Legislature of any State also, have power to make.
laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the " Concurrent List").
(3) Subject to clauses (1) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the " State List ").
(4) Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List.
" Article 13: " (1) All laws in force in the territory of India immediately before the commencement of this Constitution, in so far as they are inconsistent with the provisions of this Part, shall, to the extent of such inconsistency, be void.
(2) The State shall Dot make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention be void." 20 Article 31 (Before the Constitution (Fourth Amendment) Act, 1955): " (1) No person shall be deprived of his property save by authority of law.
(2) No property, movable or immovable, including any interest in, or in any company owning, any commercial or industrial undertaking, shall be taken possession of or acquired for public purposes under any law authorising the taking of such possession or such acquisition, unless the law provides for compensation for the property taken possession of or acquired and either fixes the amount of the compensation, or specifies the principles on which, and the manner in which, the compensation is to be determined and given The combined effect of the said provisions may be stated thus: Parliament and the Legislatures of States have power to make laws in respect of any of the matters enumerated in the relevant lists in the Seventh Schedule and that power to make laws is subject to the provisions of the Constitution including article 13, i.e., the power is made subject to the limitations imposed by Part III of the Constitution.
The general power to that extent is limited.
A Legislature, therefore, has no power to make any law in derogation of the injunction contained in article 13.
Article 13(1) deals with laws.in force in the territory of India before the commencement of the Constitution and such laws in so far as they are inconsistent with the provisions of Part III shall, to the extent of such inconsistency be void.
The clause, therefore, recognizes the validity of, the pre Constitution laws and only declares that the said laws would be void thereafter to the extent of their inconsistency with Part III; whereas cl.
(2) of that article imposes a prohibition on the State making laws taking away or abridging the rights conferred by Part III and declares that laws made in contravention of this clause shall, to the extent of the contravention, be void.
There is a clear distinction between the two clauses.
Under el.
(1), a pre Constitution law subsists except to the extent of its inconsistency with the provisions of Part III; whereas, no post Constitution law 21 can be made contravening the provisions of Part III, and therefore the law, to that extent, though made, is a nullity from its inception.
If this clear distinction is borne in mind, much of the cloud raised is dispelled.
When cl.
(2) of article 13 says in clear and unambiguous terms that no State shall make any law which takes away or abridges the rights conferred by Part III, it will not avail the State to contend either that the clause does not embody a curtailment of the power to legislate or that it imposes only a check but not a prohibition.
A constitutional prohibition against a State making certain laws cannot be whittled down by analogy or by drawing inspiration from decisions on the provisions of other Constitutions; nor can we appreciate the argument that the words " any law " in the second line of article 13(2) posits the survival of the law made in the teeth of such prohibition.
It is said that a law can come into existence only when it is made and therefore any law made in contravention of that clause presupposes that the law made is not a nullity.
This argument may be subtle but is not sound.
The words " any law " in that clause can only mean an Act passed or made factually, notwithstanding the prohibition.
The result of such contravention is stated in that clause.
A plain reading of the clause indicates, without any reasonable doubt, that the prohibition goes to the root of the matter and limits the State 's power to make law; the law made in spite of the prohibition is a still born law.
Cooley in his book " Constitutional Limitations" (Eighth Edition, Volume I), states at page 379: " From what examination has been given to this subject, it appears that whether a statute is constitutional or not is always a question of power; that is, a question whether the legislature in the particular case, in respect to the subject matter of the act, the manner in which its object is to be accomplished, and the mode of enacting it, has kept within the constitutional limits and observed the constitutional conditions." The Judicial Committee in The Queen.
vs Burah (1) observed at page 193 as under (1) (1878) L.R. 5 I. A. 178.
22 The established courts of Justice, when a question arises whether the prescribed limits have been exceeded, must of necessity determine that question ; and ,the only way in which they can properly do so, is by ;looking to the terms of the instrument by which, affirmatively, the legislative powers were created, and by which, negatively, they are restricted.
" The Judicial Committee again in Attorney General for Ontario vs Attorney General for Canada (1) crisply stated the legal position at page 583 as follows: ". . . if the text is explicit the text is con clusive, alike in what it directs and what it forbids." The same idea is lucidly expressed by Mukherjea, J., as he then was, in K. C. Gajapati Narayan Deo vs The State of Orissa (2).
It is stated at page 11 as follows: " 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, questions do arise as to whether the legislature in a particular case has or has not, in respect to the subject_matter of the statute or in the method of enacting it, transgressed the limits of its constitutional powers.
" The learned Judge in the aforesaid passage clearly accepts the doctrine that both the transgression of the ambit of the entry or of the limitation provided by the fundamental rights are equally transgressions of the limits of the State 's constitutional powers.
It is, therefore, manifest that in the construction of the constitutional provisions dealing with the powers of the legislature, a distinction cannot be made between an affirmative provision I and a negative provision; for, both are limitations on the power.
The Constitution affirmatively confers a power on the legislature to make laws within the ambit of the relevant entries in the lists and negatively prohibits it from making laws infringing the fundamental rights.
It (1) (2) ; 23 goes further and makes the legislative power subject to the prohibition under article 13(2).
Apparent wide power is, therefore, reduced to the extent of the prohibition.
If articles 245 and 13(2) define the ambit of the power to legislate, what is the effect of a law made in excess of that power ? The American Law gives a direct and definite answer to this question.
Cooley in his " Constitutional Limitations " (Eighth Edition, Volume I) at page 382 under the heading " Consequences if a statute is void " says : " When a statute is adjudged to be unconstitutional, it is as if it had never been. . . .
And what is true of an act void in toto is true also as to any part of an act which is found to be unconstitutional, and which, consequently, is to be regarded as having never, at any time, been possessed of any legal force.
" In Rottschaefer on Constitutional Law, much to the same effect is stated at page 34: " The legal status of a legislative provision in so far as its application involves violation of constitutional provisions, must however be determined in the light of the theory on which Courts ignore it as law in the decision of cases in which its application produces unconstitutional results.
That theory implies that the legislative provisions never had legal force as applied to cases within that clause.
" In " Willis on Constitutional Law ", at page 89: " A judicial declaration of the unconstitutionality of a statute neither annuls nor repeals the statute but has the effect of ignoring or disregarding it so far as the determination of the rights of private parties is concerned.
The Courts generally say that the effect of an unconstitutional statute is nothing.
It is as though it had never been passed. . . . . " Willoughby on Constitution of the United States Second Edition, Volume I, page 10: " The Court does not annul or repeal the statute if it finds it in conflict with the Constitution.
It simply refuses to recognize it, and determines the rights of 24 the parties just as if such statute had no application. . . .
The validity of a statute is to be tested by the constitutional power of a legislature at the time of its enactment by that legislature, and, if thus tested, it is beyond the legislative power, it is not rendered valid, without re enactment, if later, by constitutional amendment, the necessary legislative power is granted.
I An after acquired power cannot, ex proprio vigore, validate a statute void 'When enacted '.
" However, it has been held that where an act is within the general legislative power of the enacting body, but is rendered unconstitutional by reason of some adventitious circumstance, as, for example, when a State legislature is prevented from regulating a matter by reason of the fact that the Federal Congress has already legislated upon that matter, or by reason of its silence is to be construed as indicating that there should be no regulation, the act does not need to be re enacted in order to be enforced, if this cause of its unconstitutionality is removed.
" For the former proposition, the decision in Newberry vs United States (1) and for the latter proposition the decision in John M. Wilkerson vs Charles A. Rahrer (2) are cited.
In Newberry 's Case the validity of the Federal Corrupt Practices Act of 1910, as amended by the Act of 1911, fixing the maximum sum which a candidate might spend to procure his nomination at a primary election or convention was challenged.
At the time of the enactment, the Congress had no power to make that law, but subsequently, by adoption of the 17th Amendment, it acquired the said power.
The question was whether an after acquired power could validate a statute which was void when enacted.
Mr. justice McReynolds delivering the opinion of the court states the principle at page 920 : " Moreover, the criminal statute now relied upon ante dates the 17th Amendment, and must be tested by powers possessed at time of its enactment.
An (1) ; ; (2) ; ; 25 after acquired power cannot, ex proprio vigore, validate a statute void when enacted.
" In Wilkerson 's Case (1) the facts were that in June 1890, the petitioner, a citizen of the United States and an agent of Maynard, Hopkins & Co., received from his principal intoxicating liquor in packages.
The packages were shipped from the State of Missouri to various points in the State of Kansas and other States.
On August 9, 1890, the petitioner offered for sale and sold two packages in the State of Kansas.
The packages sold were a portion of the liquor shipped by Maynard, Hopkins & Co. It was sold in the same packages in which it was received.
The petitioner was prosecuted for violating the Prohibitory Liquor Law of the State of Kansas; for, under the said law, "any person or persons who shall manufacture, sell or barter any in toxicating liquors, shall be guilty of a misdemeanor ".
On August 8, 1890, an Act of Congress was passed to the effect that intoxicating liquors transported into any State should upon arrival in such State be subject to the operation and effect of the laws of such State.
It will be seen from the aforesaid facts that at the time the State Laws were made, they were valid, but they did not operate upon packages of liquors imported into the Kansas State in the course of interstate commerce, for the regulation of inter State commerce was within the powers of the Congress; and that be fore the two sales in the Kansas State, the Congress made an Act making intoxicating liquors transported into a State subject to the laws of that State, with the result that from that date the State Laws operated on the liquors so transported.
Under those circumstances, the Supreme Court of the United States held : " It was not necessary, after the passage of the Act of Congress of August 8, 1890, to re enact the Law of Kansas of 1899, forbidding the sale of intoxicating liquors in that State, in order to make such State Law operative on the sale of imported liquors." The reason for the decision is found at page 578: (1) ; ; 4 26 This is not the case of a law enacted in the unauthorized exercise of a power exclusively confided to Congress, but of a law which it was competent for the State to pass, but which could not operate upon articles occupying a certain situation until the passage of the Act of Congress.
That Act in terms removed the obstacle, and we perceive no adequate ground for adjudging that a re enactment of the State Law was required before it could have the effect upon imported which it had always had upon domestic property.
A reference to these decisions brings out in bold relief the distinction between the two classes of cases referred to therein.
It will be seen from the two decisions that in the former the Act was Void from its inception and in the latter it was valid when made but it could not operate on certain articles imported in the course of inter State trade.
On that distinction is based the principle that an after acquired power cannot, ex proprio vigore, validate a statute in one case, and in the other, a law validly made would take effect when the obstruction is removed.
The same principle is enunciated in Carter vs Egg and Egg Pulp Marketing Board (1).
Under section 109 of the Australian Constitution " when a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid. " Commenting on that section, Latham, C. J., observed at page 573: " This section applies only in cases Where, apart from the operation of the section, both the Commonwealth and the State Laws which are in question would be valid.
If either is invalid ab initio by reason of lack of power, no question can arise under the section.
The word " invalid " in this section cannot be interpreted as meaning that a State law which is affected by the section becomes ultra vires in whole or in part.
If the Commonwealth law were repealed the State law would again become operative.
" We shall now proceed to consider the decisions of this Court to ascertain whether the said principles are (1) ; 27 accepted or departed from.
The earliest case is Keshavan Madhava Menon vs The State of Bombay (1).
There the question was whether a prosecution launched under the Indian Press (Emergency Powers) Act, 1931, before the Constitution could be continued after the Constitution was passed.
The objection taken was that the said law was inconsistent with fundamental rights and therefore was void.
In the context of the question raised, it became necessary for the Court to consider the impact of article 13(1) on the laws made before the Constitution.
The Court, by a majority, held that article 13(1) of the Indian Constitution did not make existing laws which were inconsistent with fundamental rights void ab initio, but only rendered such laws ineffectual and void with respect to the exercise of the fundamental rights on and after the date of the commencement of the Constitution and that it had no retrospective effect.
Das, J., as he then was, observed at page 233: " It will be noticed that all that this clause declares is that all existing laws, in so far as they are inconsistent with the provisions of Part III shall, to the extent of such inconsistency, be void.
Every statute is prima facie prospective unless it is expressly or by necessary implications made to have retrospective operation.
" At page 234, the learned Judge proceeded to state: " They are not void for all purposes but they are void only to the extent they come into conflict with the fundamental rights.
In other words, on and after the commencement of the Constitution no existing law will be permitted to stand in the way of the exercise of any of the fundamental rights.
Therefore, the voidness of the existing law is limited to the future exercise of the fundamental rights. . .
Such laws exist for all past transactions and for enforcing all rights and liabilities accrued before the date of the Constitution.
" At page 235, the same idea is put in different words thus : ". . . . .Article 13(1) only has the effect of (1) ; 28 nullifying or rendering all inconsistent existing laws ineffectual or nugatory and devoid of any legal force or binding effect only with respect to the exercise Of fundamental rights on and after the date of the commencement of the Constitution.
" At page 236, the learned Judge concludes: " So far as the past acts are concerned the law exists, notwithstanding that it does not exist with respect to the future exercise of fundamental rights." Mahajan, J., as he then was, who delivered a separate judgment, put the same view in different phraseology at page 251 : " The effect of Article 13(1) is only prospective and it operates in respect to the freedoms which are infringed by the State subsequent to the coming into force of the Constitution but the past acts of a person which came within the mischief of the law then in force are Dot affected by Part III of the Constitution." The learned Judge, when American law was pressed on him in support of the contention that even the pre Constitution law was void, observed thus, at page 256 : " It is obvious that if a statute has been enacted and is repugnant to the Constitution, the statute is void since its very birth and anything done under it is also void and illegal.
The courts in America have followed the logical result of this rule and even convictions made under such an unconstitutional statute have been set aside by issuing appropriate writs.
If a statute is void from its very birth then anything done under it, whether closed, completed, or inchoate, will be wholly illegal and relief in one shape or another has to be given to the person affected by such an unconstitutional law.
This rule, however, is not applicable in regard to laws which were existing and were constitutional according to the Government of India Act, 1935.
Of course, if any law is made after the 25th January, 1950, which is repugnant to the Constitution, then the same rule will have to be followed by courts in India as is followed in America and even convictions made under such an unconstitutional law 29 will have to be set aside by resort to exercise of powers given to this court by the Constitution.
" Mukherjea J., as he then was, in Behram Khurshed Pesikaka vs The State of Bombay (1) says at page 652 much to the same effect: " We think that it is not a correct proposition that constitutional provisions in Part 11I of our Constitution merely operate as a check on the exercise of legislative power.
It is axiomatic that when the lawmaking power of a State is restricted by a written, fundamental law, then any law enacted and opposed to the fundamental law is in excess of the legislative authority and is thus a nullity.
Both these declarations of unconstitutionality go to the root of the power itself and there is no real distinction between them.
They represent but two aspects of want of legislative power.
The legislative power of Parliament and the State Legislatures as conferred by articles 245 and 246 of the Constitution stands curtailed by the fundamental rights chapter of Constitution.
A mere reference to the provisions of article 13(2) and articles 245 and 246 is sufficient to indicate that there is no competency in Parliament or a State Legislature to make a law which comes into clash with Part 111 of the Constitution after the coming into force of the Constitution.
" The effect of the decision may be stated thus: The learned judges did not finally decide the effect of article 13(2) of the Constitution on post Constitution laws for the simple reason that the impugned law was a pre Constitution one.
article 13(1) was held to be prospective in operation and therefore did not affect the preexisting laws in respect of things done prior to the Constitution.
As regards the post Constitution period, article 13(1) nullified or rendered all inconsistent existing laws ineffectual, nugatory or devoid of any legal force or binding effect with respect to the exercise of the fundamental rights.
So far as the past acts were concerned, the law existed, notwithstanding that it did not exist with respect to the future exercise of the said rights.
As regards the pre Constitution laws, (1) 30 this decision contains the seed of the doctrine of eclipse developed by my Lord the Chief Justice in Bhikaji Narain Dhakras vs The State of Madhya Pradesh (1) where it was held that as the pre Constitution law was validly made, it existed for certain purposes even during the post Constitution period.
This principle has no application to post Constitution laws infringing the fundamental rights as they would be ab initio void in toto or to the extent of their contravention of the fundamental rights.
The observations of the learned judges made in the decision cited above bring out the distinction between pre and post Constitution laws which are repugnant to the Constitution and the impact of article 13 on the said laws.
In Behram Khurshed Pesikaka 's Case(2), this Court considered the legal effect of the declaration made ' in the case of The State of Bombay vs F. N. Balsara (3) that clause (b) of section 13 of the Bombay Prohibition Act (Bom.
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 and held that it was to render part of section 13(b) of the Bombay Prohibition Act inoperative, ineffective and ineffectual and thus unenforceable.
Bhagwati, J., at page 620, cited all the relevant passages from textbooks on Constitutional Law and, presumably, accepted the view laid down therein to the effect that an unconstitutional Act in legal contemplation is as though it had never been passed.
Jagannadhadas, J., at page 629, noticed the distinction between the scope of cls.
(1) and (2) of article 13 of the Constitution.
After citing a passage from " Willoughby on Constitution of the United States ", the learned Judge observed : " This and other similar passages from other treatises 'relate, however, to cases where the entire legislation is unconstitutional from the very commencement of the Act, a situation which falls within the scope of article 13(2) of our Constitution.
They do not directly cover a situation which falls within (1) ; (2) (3)[1951] S.C. R. 682.
31 article 13(1). . .
The question is what is the effect of article 13(1) on a pre existing valid statute, which in respect of a severable part thereof violates fundamental rights.
Under article 13(1) such part is, " void " from the date of the commencement of the Constitution, while the other part continues to be valid.
Two views of the result brought about by this voidness are possible, viz., (1) the said severable part becomes unenforceable, while it remains part of the Act, or (2) the said part goes out of the Act and the Act stands appropriately amended pro tanto.
The first is the view which appears to have been adopted by my learned brother, Justice Venkatarama Aiyar, on the basis of certain American decisions.
I feel inclined to agree with it.
This aspect, however, was not fully presented by either side and was only suggested from the Bench in the course of arguments.
We have not had the benefit of all the relevant material being placed before us by the learned advocates on either side.
The second view was the basis of the arguments before us.
It is, therefore, necessary and desirable to deal with this case on that assumption." This passage shows that his opinion though a tentative one was that the severable part became unenforceable while it remained part of the Act.
But the learned Judge made an incidental observation that the American view applied to cases that fall within the scope of article 13(2) of the Constitution, i.e., the entire legislation would be unconstitutional from the very commencement of the Act.
Venkatarama Aiyar, J., founded his decision on a broader basis.
At page 639, the learned Judge observed: " Another point of distinction noticed by American jurists between unconstitutionality arising by reason of lack of legislative competence and that arising by reason of a check imposed on a competent Legislature may also be mentioned.
While a statute passed by a Legislature which had no competence cannot acquire validity when the Legislature subsequently acquires competence, a statute which was within the competence of the Legislature at the time of its enactment but which infringes a, constitutional 32 prohibition could 'be enforced 'Proprio vigore when once the prohibition is removed.
" On the basis of this distinction, the learned Judge held that article 13(1) of the Constitution only placed a check on a competent legislature and therefore the word " void " in that article meant " relatively void ", i.e., the law only condemned the Act as wrong to individuals and refused to enforce it against them.
In support of the said conclusion the learned Judge cited a passage from " Willoughby on the Constitution of the United States ".
A comparison of the passage cited with that in the text book discloses that one important sentence which makes all the difference to the legal position is omitted by mistake and that sentence is " An after acquired power cannot ex proprio vigore validate a statute void when enacted ".
The second paragraph in the extract on which the learned Judge placed reliance and also the decision relied upon, by him did not support his conclusion.
As already stated, the decision and the passage dealt not with a case where the State had no power to make the law, but with a case where the law lay dormant till a law of the Federal Congress removed the conflict between the State Law and the Federal Law.
That case may by analogy be applied to article 13(1) in respect of laws validly made before the Constitution but cannot be invoked in the case of a statute which was void when enacted.
By a subsequent order, this Court granted the review and reopened the case to enable the :Bench to obtain the opinion of a larger Bench on the Constitutional points raised in the judgment delivered by the learned Judges.
That matter came up before a Con stitutional Bench, and Mahajan, C. J., who was a party to the decision in Keshavan Madhava Menon 's Case (1) explained the majority view therein on the meaning of the word " void " in article 13(1) thus, at page 651: " The majority however held that the word "void" in article 13(1), so far as existing laws Were concerned, could not be held to obliterate them from the statute book, and could not make such laws void altogether, because in its opinion article 13 had not been given any (1) ; 33 retrospective effect.
The majority however held that after the coming into force of the Constitution the effect of article 13(1) on such repugnant laws was that it nullified them, and made them ineffectual and nugatory and devoid of any legal force or binding effect.
It was further pointed out in one of the judgments representing the majority view, that the American rule that if a statute is repugnant to the Constitution the statute is void from its birth, has no application to cases concerning obligations incurred or rights accrued in accordance with an existing law that was constitutional in its inception, but that if any law was made after the 26th January, 1950, which was repugnant to the Constitution, then the same rule shall have to be followed in India as followed in America.
The result therefore of this pronouncement is that the part of the section of an existing law which is unconstitutional is not law, and is null and void.
For determining the rights and obligations of citizens the part declared void should be notionally taken to be obliterated from the section for all intents and purposes, though it may remain written on the statute book and be a good law when a question arises for determination of rights and obligations incurred prior to 26th January, 1950, and also for the determination of rights of persons who have not been given fundamental rights by the Constitution.
Thus, in this situation, there is no scope for introducing terms like " relatively void " coined by American Judges in construing a Constitution which is not drawn up in similar language and the implications of which are not quite familiar in this country.
" The learned Judge, as we have already pointed out, rejected the distinction made by Venkatarama Aiyar, J., between lack of legislative power and the abridgment of the fundamental rights.
Though that question did not directly arise, the learned Judge expressed his view on the scope of article 13(2) at page 653 thus: " The authority thus conferred by Articles 245 and 246 to make laws subjectwise in the different Legislatures is qualified by the declaration made in 5 34 article 13(2).
That power can only be exercised subject to the prohibition contained in article 13(2).
On the construction of article 13(2) there was no divergence of opinion between the majority and the minority in Keshava Madhava Menon vs The State of Bombay (supra).
It was only on the construction of article 13(1) that the difference arose because it was felt that that article could not retrospectively invalidate laws which when made were constitutional according to the Constitution then in force.
" Das, J., as he then was, in his dissenting judgment differed from the majority on other points but does not appear to have differed from the aforesaid views expressed by Mahajan, C. J., as regards the scope of Keshava Madhava Menon 's Case on the meaning of the word " void " in article 13(1).
This judgment is therefore an authority on two points and contains a weighty observation on the third : (i) when the law making power of a State is restricted by written fundamental law, then any law opposed to the fundamental law is in excess of the legislative authority and is thus a nullity; (ii) even in the case of a statute to which article 13(1) applies, though the law is on the statute book and be a good law, when a question arises for determination of rights and obligations incurred prior to January 26, 1950, the part declared void should be nationally taken to be obliterated from the section for all intents and purposes ; and (iii) on the construction of article 13(2), the law made in contravention of that clause is a nullity from its inception.
The next case is a direct one on the point and that is Sag hir Ahmad vs The State.
of U. P. (1).
There, the U.P.Road Transport Act (11 of 1951) was passed enabling the State to run stage carriage service on a route or routes to the exclusion of others.
Under that Act, the State Government made a declaration extending the Act to a particular area and issued a notification setting out what purported to be a scheme for the operation of the stage carriage service on certain routes.
At the time the said Act was passed, the State had no such power to deprive a citizen of his (1) ; 35 right to carry on his transport service.
But after the Act, article 19(1) was amended by the Constitution (First Amendment)Act, 1951, enabling the State to carry on any trade or business either by itself or through, corporations owned or controlled by the State to the.
exclusion of private citizens wholly or in part.
One of the questions raised was whether the amendment of the Constitution could be invoked to validate the earlier legislation.
The Court held that the Act when passed was unconstitutional and therefore it was still born and could not be vitalised by the subsequent amendment of the Constitution removing the constitutional objections but must be re enacted.
At page 728, Mukherjea, J., as he then was, who delivered the judgment of the Court, has given the reasons for the said view : " As Professor Cooley has stated in his work on Constitutional Limitations (Vol. 1, page 304 note.) " a statute void for unconstitutionality is dead and cannot be vitalised by a subsequent amendment of the Constitution removing the constitutional objection but must be re enacted ".
We think that this is sound law and our conclusion is that the legislation in question which violates the fundamental right of the appellants under article 19(1) (g) of the Constitution and is not shown to be protected by clause (6) of the article, as it stood at the time of the enactment, must be held to be void under article 13(2) of the Constitution.
" This is a direct authority on the point, without a dis senting voice, and we are bound by it.
The decision given in Bhikaji Narain 's Case, (1) is strongly relied upon by the learned Advocate General in support of his contention.
Shortly stated, the facts in that case were: Before the Constitution, the C. P. & Berar Motor Vehicles (Amendment) Act, 1947 (C. P. III of 1948) amended the (Central Act IV of 1939) and conferred extensive powers on the Provincial Government including the power to create a monopoly of the motor transport business in its favour to the exclusion of all motor transport operators.
It was contended by the affected parties that by reason of article 13(1) of the Constitution, (1) ; 36 the Act became void.
On behalf of the State, it was argued that the Constitution (First Amendment) Act, 1951, and the Constitution (Fourth Amendment) Act, 1955, had the effect of removing the inconsistency and the Amendment Act III of 1948 became operative again.
This Court unanimously accepted the contention of the State.
This decision is one given on a construction of article 13(1) of the Constitution and it is no authority on the construction and scope of article 13(2) of the Constitution.
The reason for the decision is found in the following passages in the judgment, at page 598: " . . . . on and after the commencement of the Constitution the existing law, as a result of its becoming inconsistent with the provisions of article 19(1)(g) read with clause (6) as it then stood, could not be permitted to stand in the way of the exercise of that fundamental right.
Article 13(1) by reason of its language cannot be read as having obliterated the entire operation of the inconsistent law or having wiped it out altogether from the statute book . . .
In short, article 13(1) had the effect of nullifying or rendering the existing law which had become inconsistent with article 19(1) (g) read with clause (6) as it then stood ineffectual, nugatory and devoid of any legal force or binding effect only with respect to the exercise of the fundamental right on and after the date of the commencement of the Constitution.
Therefore, between the 26th January, 1950, and 18th June, 1951, the impugned Act could not stand in the way of the exercise of the fundamental right of a citizen under Article 19(1)(g).
The true position is that the impugned law became, as it were, eclipsed, for the time being, by the fundamental right The American authorities refer only to post Constitution laws which were inconsistent with the provisions of the Constitution.
Such laws never came to life but were still born as it were Such laws were not dead for all purposes.
They existed for the purposes of pre Constitution rights and liabilities and they remained operative, even after the Constitution, as against non citizens.
It is only as 37 against the citizens that they remained in a dormant or moribund condition." The aforesaid passages are only the restatement of the law as enunciated in Keshavan Madhava Menon 's a Case(1) reaffirmed in Pesikaka 's Case (2) and an extension of the same to meet a different situation.
A pre Constitution law, stating in the words of Das, J., as he then was, exists notwithstanding that it does not exist with respect to the future exercise of the fundamental rights.
That principle has been extended in this decision, by invoking the doctrine of eclipse.
As the law existed on the statute book to support pre Constitution acts, the Court held that the said law was eclipsed for the time being by one or other of the fundamental rights and when the shadow was removed by the amendment of the Constitution, the impugned Act became free from all blemish or infirmity.
The Legislature was competent to make the law with which Pesikaka 's Case (2) was concerned at the time it was made.
It was not a case of want of legislative power at the time the Act was passed, but one where in the case of a valid law supervening circumstances cast a cloud.
To the other class of cases to which article 13 (2) will apply, the views expressed by the American authorities, by Mahajan, J., as he then was, in Pesikaka 's Case, and by Mukherjea, J., as he then was, in Saghir Ahmad 's Case (3 ) directly apply.
To the facts in Bhikaji Narain 's Case, (4) the principle laid down in Keshavan Madhava Menon 's Case is attracted.
But it is said that the observations of the learned Judges are wide enough to cover the case falling under article 13 (2) of the Constitution and further that a logical extension of the principle laid down would take in also a case falling under article 13(2).
The first contention is based upon the following passage: But apart from this distinction between pre Constitution and post Constitution laws, on which however we need not rest our decision, it must be held that these American authorities could have no application to our Constitution.
All laws existing or future (1) ; (2) , (3) ; (4) ; 38 which are inconsistent with the provisions of Part III of our Constitution, are by express provisions of article 13 rendered void to the extent of such inconsistency.
Such laws were not dead for all purposes.
They existed for the purposes of pre Constitution rights and liabilities and they remained operative, even after the Constitution, as against non citizens.
It is only as against the citizens that they remained in a dormant or moribund condition.
" The first part of the said observation states nothing more than the plain import of the provisions of article 13(1) and (2), namely, that they render laws void only I to the extent ' of such inconsistency.
The second part of the observation directly applies only to a case covered by article 13(1), for the learned Judges say that the laws exist for the purposes of pre Constitution rights and liabilities and they remain operative even after the Constitution as against non citizens.
The said observation could not obviously apply to post Constitution laws.
Even so, it is said that by a parity of reasoning the post Constitution laws are also void to the extent of their repugnancy and therefore the law in respect of non citizens will be oil the statute book and by the application of the doctrine of eclipse, the same result should flow in its case also.
There is some plausibility in this argument, but it ignores one vital principle, viz., the existence or the non existence of legislative power or competency at the time the law is made governs the situation.
There is no scope for applying the doctrine of eclipse to a case where the law is void ab initio in whole or in part.
That apart, in the present case we do not base our decision on that article
31(1) infringed by the Act, applies to all persons irrespective of whether they are citizens or non citizens, and.
therefore the entire law was void ab initio.
That judgment, therefore, does not support the respondent as it has bearing only on the construction of article 13(1) of the Constitution.
In Ram Chandra Palai vs State of Orissa (1), this Court followed the decision in Bhikaji Narain 's Case (2) in the case of a pre Constitution Act.
In Pannalal (1) (2) ; 39 Binjraj vs Union of India (1), Bhagwati, J., quoted, with approval the extract from Keshavan Madhava Menon 's Case (2), wherein it was held that article 13(1) has only the effect of nullifying or rendering all inconsistent existing laws ineffectual or nugatory or devoid of any legal force or binding effect only with respect to the fundamental rights on or after the commencement of the Constitution.
The learned Advocate General relied upon certain decisions in support of his contention that the word " void " in articles 13(1) and 13 (2) means only " unenforceable " against persons claiming fundamental rights, and the law continues to be in the statute book irrespective of the fact that it was made in infringement of the fundamental rights.
The observations of Mukherjea, J., as he then was, in Chiranjit Lal Chowdhuri vs The Union of India (3) are relied on and they are: " Article 32, as its provisions show, is not directly concerned with the determination of constitutional validity of particular legislative enactments.
What it aims at is the enforcing of fundamental rights guaranteed by the Constitution, no matter whether the necessity for such enforcement arises out of an action of the executive or of the legislature. . . . .
The rights that could be enforced under article 32 must ordinarily be the rights of the petitioner himself who complains of infraction of such rights and approaches the court for relief.
" He also relies upon the, decision of Das, J., as he then was, in The, State of Madras vs Srimathi ChamPakam Dorairajan (4), wherein the learned Judge states thus, at page 531 : " The directive principles of the State Policy, which by article 37 are expressly made unenforceable by a Court, cannot override the provisions found in Part III which, notwithstanding other provisions, are expressly made enforceable by appropriate Writs, Orders or directions under article 32." Basing his argument on the aforesaid two observations, (1) ; (2) ; (3) ; , 899.
(4) ; , 40 it is contended that in the case 'of both the directive principles and the fundamental rights, it must be held that the infringement of either does not invalidate the law, but only makes the law unenforceable.
This argument, if we may say so, mixes up the Constitutional invalidity of a statute with the procedure to be followed to enforce the fundamental rights of an individual.
The Constitutional validity of a statute depends upon the existence of legislative power in the State and the right of a person to approach the Supreme Court depends upon his possessing the fundamental right, i.e., he cannot apply for the enforcement of his right unless it is infringed by any law.
The cases already considered supra clearly establish that a law, whether pre Constitution or post Constitution, would be void and nugatory in so far as it infringed the fundamental rights.
We do not see any relevancy in the reference to the directive principles; for, the legislative power of a State is only guided by the directive principles of State Policy.
The directions, even if disobeyed by the State, cannot affect the legislative power of the State, as they are only directory in scope and operation.
The result of the aforesaid discussion may be summarized in the following propositions: (i) whether the Constitution affirmatively confers power on the legislature to make laws subject wise or negatively prohibits it from infringing any fundamental right, they represent only two aspects of want of legislative power; (ii) the Constitution in express terms makes the power of a legislature to make laws in regard to the entries in the Lists of the Seventh Schedule subject to the other provisions of the Constitution and thereby circum cribes or reduces the said power by the limitations laid down in Part III of the Constitution; (iii) it follows from the premises that a law made in derogation or in excess of that power would be ab initio void wholly or to the extent of the contravention as the case may be ; and (iv) the doctrine of eclipse can be invoked only in the case of a law valid when made, but a shadow is cast on it by supervening constitutional inconsistency or,supervening existing statutory 41 inconsistency; when the shadow is removed, the impugned Act is freed from all blemish or infirmity.
Applying the aforesaid principles to the present case, we hold that the validity of the Act could not be tested on the basis of the Constitution (Fourth Amendment) Act, 1955, but only on the terms of the relevant Articles as they existed prior to the Amendment.
We shall now proceed to consider the first contention of Mr. Nambiar.
He contends that the Motor Vehicles (Amendment) Act (100 of 1956) passed by Parliament was wholly repugnant to the provisions of the U. P. Act and therefore the law became void under the provisions of article 254(1) of the Constitution, with the result that at the present time there is no valid law whereunder the State can prohibit the appellants exercising their fundamental right under the Constitution, namely, carrying on the business of motor transport.
Mr. Naunit Lal bases his case on the proviso to article 254(2) of the Constitution rather than on cl.
(1) thereof.
He contends that by reason of the Amending Act, the U. P. Act was repealed in toto; and because of Section 68B, the operation of the provisions of the General Clauses Act saving things done under the repealed Act was excluded.
The learned Advocate General attempted to meet the double attack by pressing on us to hold that there was no repugnancy at all between the provisions of the Central Act and the U. P. Act and therefore the U. P. Act had neither become void nor was repealed by necessary implication by the Central Act.
We shall now examine the provisions of article 254(1) and 254(2).
Article 254: "(1) If any provisions 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 6 42 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.
(2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his as sent, prevail, in that State.
Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State.
" Article 254(1) lays down a general rule.
Clause (2) is an exception to that Article and the proviso qualifies the exception.
If there is repugnancy between the law made by the State and that made by Parliament with respect to one of the matters enumerated in the Concurrent List, the law made by Parliament shall prevail to the extent of the repugnancy and the law made by the State shall, to the extent of such repugnancy, be void.
Under cl.
(2), if the Legislature of a State makes a provision repugnant to the provisions.
of the law made by Parliament, it would prevail if the legislation of the State received the assent of the President.
Even in such a case, Parliament may subsequently either amend, vary or repeal the law made by the Legislature of a State.
In the present case, the Uttar Pradesh Legislative Assembly, after obtaining the assent of the President on April 23, 1955, passed the U. P. Act.
Parliament subsequently passed the Motor Vehicles (Amendment) Act (100 of 1956).
Therefore, both the clauses of article 254 would apply to the situation.
The first question is whether the provisions of the Union law, i.e., the Motor Vehicles (Amendment) Act (100 of 1956), are repugnant to the provisions of the U. P. Act and if so to 43 what extent.
Before we proceed to examine the provisions of the two Acts, it may be convenient to notice the law pertaining to the rule of repugnancy.
Nicholas in his Australian Constitution, 2nd Edition, page 303, refers to three tests of inconsistency or repugnancy : "(1) There may be inconsistency in the actual terms of the competing statutes; (2) Though there may be no direct conflict, a State law may be inoperative because the Commonwealth law, or the award of the Commonwealth Court is intended to be a complete exhaustive code; and (3) Even in the absence of intention, a conflict may arise when both State and Commonwealth seek to exercise their powers over the same subject matter.
" This Court in Ch.
Tika Ramji vs The State of Uttar Pradesh (1) accepted the said three rules, among others, as useful guides to test the question of repugnancy.
In Zaverbhai Amaidas vs The State of Bombay (2), this Court laid down a similar test.
At page 807, it is stated: " The principle embodied in section 107(2) and Article 254(2) is that when there is legislation covering the same ground both by the centre and by the Province, both of them being competent to enact the same, the law of the Centre should prevail over that of the State.
" Repugnancy between two statutes may thus be ascertained on the basis of the following three principles: (1) Whether there is direct conflict between the two provisions ; (2) Whether Parliament intended to lay down an exhaustive code in respect of the subject matter replacing the Act of the State Legislature; and (3) Whether the law made by Parliament and the law made by the State Legislature occupy the same field.
We shall now examine the provisions of both the Acts in some detail in order to ascertain the extent of the repugnancy between them.
The Scheme of (1) ; (2) [1955] 1 S.C.R. 799.
44 the U. P. Act may be summarized thus: Under the U. P. Act " State Road Transport Service " is defined to mean transport service by a public service vehicle owned by the State Government.
Under section 3: " Where the State Government is of the opinion that it is necessary in the interests of the general public and for subserving the common good, or for maintaining and developing efficient road transport system so to direct, it may, by notification in the official Gazette declare that the road transport services in general, or any particular class of such service on any route or portion thereof as may be specified, shall be run and operated exclusively by the State Government, or by he state Government in conjunction with railways or be run and operated partly by the State Government and partly by others under and in accordance with the provisions of the Act".
After the publication of the notification under section 3, the State Government or, if the State Government so directs, the Transport Commissioner publishes in such manner as may be specified a scheme as to the State Road Transport Service providing for all or any of the matters enumerated in cl (2) of section 4.
Clause (2), of section 4 directs that, among others, the scheme should 'provide the particulars of the routes or portions thereof over which and the date on which the State Transport Service will commence to operate, the roads in regard to which private persons may be allowed to operate upon, the routes that will be 'served by the State Government in conjunction with railways , the curtailment of the routes covered by the existing permits or transfer of the permits to other route or routes.
Section 5 enjoins the Transport Commissioner to give notice to the permit holder requiring him to lodge a statement in writing whether he agrees to the transfer of the permit and in cl.
(2) thereof, it is prescribed that in case he accepts the transfer, he is nit entitled to any compensation, but if he does not agree to the transfer,his permit will be cancelled subject to his right to get compensation under the Act.
Under section 6 any person whose interests are affected may within 30 days from the publication of the scheme, file objections 45 on it before the Transport 'Commissioner who shall forward them to the Board constituted under section 7, consisting of the Commissioner of a Division, Secretary to Government in the Transport Department and the Transport Commissioner.
The Board shall consider the objections, if any, forwarded under section 6 and may either confirm, modify or alter the scheme.
The Scheme so confirmed or modified or altered under section 7 shall be published in the Official Gazette.
Any scheme published under section 8 may at any time be cancelled or modified or altered by the State Government.
Section 10 gives the consequences of the publication under section 8.
Section 11 provides compensation for premature cancellation of permits or curtailment of route or routes, as may be determined in accordance with the principles specified in Schedule 1.
In Schedule 1, compensation is payable as follows: " (1) For every complete month or Rupees one part of a month exceeding fifteen days of hundred.
the unexpired period of the permit.
(2) For part of a month not exceed Rupees ing fifteen days of the unexpired fifty.
period of a permit.
Provided always that the amount of compensation shall in no case be less than rupees two hundred.
" Section 12 authorises the State Government, in a case where the permit has been cancelled, to purchase the motor vehicle covered by it if the holder of the permit offers to sell, upon terms and conditions laid down in Schedule 11 provided the vehicle is of the type of manufacture and model notified by the State Government and provided secondly that the vehicle is mechanically in a sound condition or otherwise declared fit by the Transport Commissioner or his nominee.
Sections 13 to 18 provide for a State Machinery for the development of motor transport industry.
Sections 19 to 22 are provisions which are consequential in nature.
Shortly stated, under the U. P. Act the State Government initiate a scheme providing for the nationalization of the road transport in whole or in part; the objections filed by the persons affected by the scheme are heard by a 46 Board of three officers appointed by the State Government; the Board after hearing the objections may confirm, modify or alter the scheme; the scheme so confirmed may be cancelled, modified or altered by ,the State Government by following the same procedure adopted for framing the original scheme; and the holders of permits cancelled may be given new ' permits if they choose to accept and if not they will be paid such compensation as prescribed under the Act.
Under the Amendment Act 100 of 1956, whereby a new chapter was inserted in the of 1939, the procedure prescribed is different.
Under section 68 A of that Act, 'State Transport Undertaking ' is defined to mean any undertaking providing road transport service, where such undertaking is carried on by, (i) the Central Government or a State Government; (ii) any Road Transport Corporation established under section 3 of the Road Transport Corporation Act, 1950; (iii) the Delhi Transport Authority established under section 3 of the Delhi Road Transport Authority Act, 1950; and (iv) any municipality or any corporation or company owned or controlled by the State Government.
Under section 68C, the State Transport Undertaking initiates a scheme if it is of opinion that for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service, it is necessary in the public interest that road transport service in general, or any particular class of such service in relation to any area or route or portion thereof should be run and operated by the State Transport Undertaking, whether to the exclusion complete or partial, of other persons or otherwise.
Section 68D says that any person affected by the Scheme may file objections to the said Scheme before the State Government; the State Government may, after considering the objections and after giving an opportunity to the objectors or their representatives and the representatives of the State Transport Undertaking to be heard in the matter, approve or modify the Scheme.
Any Scheme published may at any time be cancelled or modified by the State Transport Undertaking following the same procedure; for the purpose of giving effect 47 to the Scheme, the Regional Transport Authority, inter alia, may cancel the existing permits or modify the terms of the existing permits.
Section 68G lays down the principles and method of determination of compensation.
Under that section compensation is, payable for every completed month or part of a month exceeding fifteen days of the unexpired period of the permits at Rs. 200 and for part of a month not exceeding fifteen days of the unexpired period of the permit at Rs. 100.
Under the Amending Act, the gist of the provisions is that the Scheme is initiated by the State Transport Undertaking carried on by any of the four institutions mentioned in section 68A, including the State Government; objections are filed by the affected parties to the Scheme, the affected parties and the Undertaking are heard by the State Government, which, after hearing the objections, approves or modifies the Scheme.
There is no provision for transfer of permits to some other routes, or for the purchase of the buses by the State Government.
Compensation payable is twice that fixed under the U. P. Act.
One important thing to be noticed is that the U. P. Act is prospective, i. e., comes into force only from the date of the passing of the Amending Act and the procedure prescribed applies only to schemes that are initiated under the provisions of the U. P. Act.
A comparison of the aforesaid provisions of the U. P. Act and the Amending Act indicates that both the Acts are intended to operate, in respect of the same subject matter in the same field.
The unamended of 1939 did not make any provision for the nationalization of transport services, but the States introduced amendments to implement the scheme of nationalization of road transport.
Presumably, Parliament with a view to introduce a uniform law throughout the country avoiding defects found in practice passed the Amending Act inserting Chapter IV A in the .
This object would be frustrated if the argument that both the U. P. Act and the Amending Act should co exist in respect of schemes to be framed after the Amending Act, is accepted.
Further the authority to initiate 48 the scheme, the manner of doing it, the authority to hear the objections, the principles regarding payment of compensation under the two Acts differ in import ant details from one another.
While in the U. P. Act the scheme is initiated by the State Government, in the Amendment Act, it is proposed by the State Transport Undertaking.
The fact that a particular undertaking may be carried on by the State Government also cannot be a reason to equate the undertaking with the State Government; for under section 68A the undertaking may be carried on not only by the State Government but by five other different institutions.
The undertaking is made a statutory authority under the Amending Act with a right to initiate the scheme and to be heard by the State Government in regard to objections filed by the persons affected by the scheme.
While in the U. P. Act a Board hears the objections, under the Amending Act the State Government decides the disputes.
The provisions of the scheme, the principles of compensation and the manner of its payment also differ in the two Acts.
It is therefore manifest that the Amending Act occupies the same field in respect of the schemes initiated after the Amending Act and therefore to that extent the State Act must yield its place to the Central Act.
But the same cannot be said of the schemes framed under the U. P. Act before the Amending Act came into force.
Under article 254(1) " the law made by Parliament, whether passed before or after the law made by the Legislature of such State. . shall prevail and the law made by the legislature of the State shall, to the extent of the repugnancy, be void." Mr. Nambiar contends that, as the U. P. Act and the Amending Act operate in the same field in respect of the same subject matter, i. e., the nationalization of bus transport, the U. P. Act becomes void under article 254(1) of the Constitution.
This argument ignores the crucial words " to the extent of the repugnancy " in the said clause.
What is void is not the entire Act but only to the extent of its repugnancy with the law made by Parliament.
The identity of the field may relate to the pith and substance of the subject matter 49 and also the period of its. operation.
When both coincide, the repugnancy is complete and the whole of the State Act becomes void.
The operation of the Union Law may be entirely prospective leaving the State Law to be effective in regard to thing already, done.
Sections 68C, 68D and 68E, inserted by the Amending Act, clearly show that those sections are concerned only with a scheme initiated after the Amending Act came into force.
None of the sections, either expressly or by necessary implication, indicates that the schemes already finalised should be reopened and fresh schemes be framed pursuant to the procedure prescribed thereunder.
Therefore, under article 254(1), the law under the U. P. Act subsists to support the schemes framed thereunder and it becomes void only in respect of schemes framed under the Central Act.
A similar question arose in the context of the application of article 13(1) to a pre Constitution law which infringed the fundamental rights given under the Constitution.
In Keshavan Madhava Menon 's Case (1), which we have referred to in a different context the question was whether Indian Press (Emergency Powers) Act, 1931, was void as infringing the provisions of article 13(1) of the Constitution;, and the Court held that the said Act was valid and would continue to be in force to sustain a prosecution launched for an act done be fore the Constitution.
In the words of Das, J., as he then was: " Such laws exist for all past transactions and for enforcing all rights and liabilities accrued before the date of the Constitution." (p. 234).
" So far as the past acts are concerned the law exists, notwithstanding that it does not exist with respect to the future exercise of fundamental rights.", (pp. 235 236).
Article 13(1), so far as it is relevant to the present in quiry, is pari materia with the provisions of article 254(1) of the Constitution.
While under article 13(1) all the pre Constitution laws, to the extent of their inconsistency with the provisions of Part III, are void, under (1) ; 7 50 article 254(1) the State Law to the extent of its repugnancy to the law made by,Parliament is void.
If the pre Constitution law exists for the post Constitution period for all the past transactions, by the same parity of reasoning, the State law subsists after the making of the law by Parliament, for past transactions.
In this view, both the laws can co exist to operate during different periods.
The same decision also affords a solution to the question mooted, namely, whether if the law was void all the completed transactions fall with it.
Mahajan, J., as he then was, draws a distinction between a void Act and a repealed Act vis a vis their impact on past transactions.
At page 251, the learned Judge says: The expression is void " has no larger effect on the statute so declared than the word " repeal ".
The expression " repeal " according to common law rule obliterates a statute completely as if it had never been passed and thus operates retrospectively on past transactions in the absence of a saving clause or in the absence of provisions such as are contained in the Interpretation Act , 1889, or in the , while a provision in a statute that with effect from a particular date an existing law would be void to the extent of the repugnancy has no such retrospective operation and cannot affect pending pro secutions or actions taken under such laws.
There is in such a situation no necessity of introducing a saving clause and it does not need the aid of a legislative provision of the nature contained in the Interpretation Act or the .
To hold that a prospective declaration that a statute is void affects pending oases is to give it indirectly retrospective operation and that result is repugnant to the clear phraseology employed, in the various articles in of the Constitution.
" The said observation directly applies to a situation created by Art.254(1).
As the U. P. Act was void from the date of the Amending Act, actions taken before that date cannot be affected.
In whichever way it is looked at, we are satisfied that in the present case, the scheme already framed subsists and the 51 State law exists to sustain it even after the Parliament made the law.
In this view we reject the contention of Mr. Nambiar based on Art 254(1)of the Constitution.
The alternative argument advanced by Mr. Naunit Lal may now be considered.
It is not disputed that under the proviso to article 254(2), the Parliament can repeal the law made by the Legislature of a State and that Parliament can repeal the repugnant State law whether directly or by necessary implication.
Assuming that Parliament in the present case by enacting the Amending Act repugnant to the State law with respect to the same subject matter i. e., nationalization of road transport, impliedly repealed the State law, would it have the effect of effacing the scheme already made ? If there was a repeal, the provisions of section 6 of the of 1897 are directly attracted.
The relevant part of section 6 of the reads: " Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder.
" The express words used in clause (b)certainly take in the scheme framed under the repealed Act.
It was a thing duly done under the repealed Act.
But it is said that a comparison of the provisions of section 6 with those of section 24 would indicate that anything duly done excludes the scheme.
Section 24 deals with the continuation of orders, schemes, rules, forms or bye laws.
made or issued under the repealed Act.
But that section applies only to the repeal of a Central Act but not a State Act.
But the exclusion of the scheme is sought to be supported on the basis of the argument that in the case of a repeal of a Central Act, both the sections apply and, in that context, a reasonable 52 interpretation would be to exclude what is specifically provided for from the general words used in section 6.
Whatever justification there may be in that context, there is none when we are concerned with the repeal of a State Act to which section 24 does not apply.
In that situation, we have to look to the plain words of section 6 and ascertain whether those words are comprehensive enough to take in a scheme already framed.
We have no doubt that a scheme framed is a thing done under the repealed Act.
A further contention is raised on the basis of the provisions of section 68B to achieve the same result, namely, that the said section indicates a different intention within the meaning of section 6 of the .
Section 68B reads: " The provisions of this Chapter and rules and orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in Chapter IV of this Act or in any other law for the time being in force or in any instrument having effect by virtue of any such law.
" This section embodies nothing more than the bare statement that the provisions of this Act should prevail notwithstanding the fact that they are inconsistent with any other law.
We have expressed our view that the provisions of this Act are prospective in.
operation and, therefore, nothing in those sections, which we have already analysed, is inconsistent with the provisions of the State law in regard to its operation with respect to.
transactions completed thereunder.
Assuming without deciding that the word 'instrument ' in section 68B includes a scheme, we do not see any provisions in the Act which are inconsistent with the scheme framed under the State Act.
The provisions starting from section 68C only contemplate a scheme initiated after the Amending Act came into force and therefore they cannot obviously be inconsistent with a scheme already framed under the State Act before the Amending Act came into force.
We, therefore, hold that section 6 of the saves the scheme framed under the U. P. Act.
The next contention of the learned Counsel Mr. 53 Nambiar, namely, that the scheme being a prescription for the future, it has a continuous operation even after the Amending Act became law, with the result that after the Amending Act, there was no valid law to sustain it, need not detain us; for, we have held that the State law subsists even after the Amending Act to sustain the things done under the former Act.
This leads us to the contention of the learned Advocate General that even if the Constitution (Fourth Amendment) Act, 1955, could not be relied on to sustain the validity of the U. P. Act, there was no deprivation of property of the appellants within the meaning of the decisions of this Court in The State of West Bengal vs Subodh Gopal Bose (1); Dwarkadas Shrinivas of Bombay vs The Sholapur Spinning & Weaving Co. Ltd. (2) and Saghir Ahmad 's Case (3).
Those cases have held that cls.
(1) and (2) of article 31 relate to the same subject matter and that, though there is no actual transfer of property to the State, if by the Act of the State, an individual has been substantially dispossessed or where his right to use and enjoy his property has been seriously impaired or the value of the property has been materially reduced, it would be acquisition or taking possession within the meaning of el.
(2) of the said Article.
After a faint attempt to raise this question, the learned Advocate General conceded that in view of the decision in Saghir Ahmad 's Case he could not support his argument to the effect that the State did not deprive the petitioners of their interest in a commercial undertaking.
In the said case, this Court held in express terms that U. P. Transport Act, 1951, which, in effect prohibited the petitioners therein from doing their motor transport business deprived them of their property or interest in a commercial undertaking within the meaning of article 31(2) of the Constitution.
Mukherjea J., as he then was, observed at page 728 : " It is not seriously disputed on behalf of the respondents that the appellants ' right to ply motor vehicles for gain is, in any event, an interest in a (1) ; (2) ; (3) ; 54 commercial undertaking.
There is no doubt also that the appellants have been deprived of this interest." The learned Judge proceeded to state at page 729 : " In view of that majority decision it must be taken to be settled now that clauses (1) and (2) of article 31 are not mutually exclusive in scope but should be, read together as dealing with the same subject, namely, the protection of the right to property by means of limitations on the State 's.powers, the deprivation contemplated in clause (1) being no other than acquisition or taking possession of the property referred to in clause (2).
The learned Advocate General conceded this to be the true legal position after the.
pronouncements of this Court referred to above.
The fact that the buses belonging to the appellants have not been acquired by the Government is also not material.
The property of a business may be both tangible and intangible.
Under the statute the Government may not deprive the appellants of their buses or any other tangible property but they are depriving them of the business of running buses on hire on public roads.
We think therefore that in these circumstances the legislation does conflict with the provisions of article 31(2) of the Constitution and as the requirements of that clause have not been complied with, it should be held to be invalid on that ground.
The above observations are clear and unambiguous and they do not give scope for further argument on the subject.
It follows that if the Act does not provide for compensation, the Act would be invalid being in conflict with the provisions of article 31(2) of the Constitution.
The next question is whether in fact the provisions of article 31(2) of the Constitution, before the Constitution (Fourth Amendment) Act, 1955, were complied with.
Under article 31(2) no property shall be taken possession of or acquired save for a public purpose and save by authority of law which provides for compensation for the property so acquired or requisitioned and either fixes the amount of the compensation or specifies the principles on which, and the manner in which, the compensation is to be determined and 55 given.
In The State of West Bengal vs Mrs. Bela Banerjee (1), Patanjali Sastri, C. J., has defined the meaning of the word I compensation ' at page 563, as under " While it is true that the legislature is given the discretionary power of laying down the principles which should govern the determination of the amount to be given to the owner for the property appropriated, such principles must ensure that what is determined as payable must be compensation, that is, a just equivalent of what the owner has been deprived of.
Within the limits of this basic requirement of full indemnification of the expropriated owner, the Constitution allows free play to the legislative judgment as to what principles should guide the determination of the amount payable.
Whether such principles take into account all the elements which make up the true value of the property appropriated and, exclude matters which are to be neglected, is a justiciable issue to be adjudicated by the Court.
, This, indeed, was not disputed.
" On the basis of the aforesaid principle, Mr. Nambiar contends that the U. P. Act does not provide for com pensation in the sense of giving the operator deprived of his interest a just equivalent of what he has been deprived of, or fix any principles to guide the determination of the amount payable.
The U.P. Act, the argument proceeds, does not provide at all for compensation payable in respect of the interest of the operator in a commercial undertaking, but only gives compensation for the unexpired period of the permit.
On the other hand, the learned Advocate General contends that the appellants would be entitled only to just equivalent of the interest that they are deprived of, namely, the interest in a commercial undertaking and that the cumulative effect of the provisions of the U. P. Act is that just equivalent of the said interest is given.
As it is common case that what the Act should give is just compensation for the interest of the operator in a commercial undertaking, we Shall now examine the provisions of the U. P. Act to ascertain whether it (1) ; 56 provides a quid pro quo for the interest the operator is deprived of The provisions of the U. P. Act relating to compensation pay usefully be read at this stage: Section 5 : " (1) Where the scheme published under section 4 provides for cancellation of any existing permit granted under Chapter IV of the , or for the transfer of such permit to any other route or routes the Transport Commissioner shall cause notice thereof to be served on the permit holder concerned and on any other persons to whom in his opinion special notice should be given.
The notice shall also require the permit holder to lodge a statement in writing within the period to be specified.
therein whether he agrees to the transfer of the permit.
(2) If the permit holder agrees to the transfer of his permit, he shall, provided the permit is actually so transferred ultimately, be not entitled to claim com pensation under section 11 but the transference of the permit shall be deemed to be in lieu of compensation and complete discharge therefor of the State Government.
Where, however, the permit holder does not agree to the transfer, the permit shall, without prejudice to the right of the permit holder to get compensation under the said section be liable to be cancelled.
" Section 11 :" (1) Where in pursuance of the Scheme published under section 8 any existing permit granted under Chapter IV of the , is or is deemed to have been cancelled or the route or routes covered by it are curtailed or are deemed to have been curtailed, the permit holder shall, except in cases where transfer of the permit has been agreed to under sub section (2) of section 5; be entitled to receive and be paid such compensation by the State Government for and in respect of the premature cancellation of the permit or, as the case may be, for curtailment of the route or routes covered by the permit as may be determined in accordance with the principles speci fied in Schedule I. (2) The compensation payable under this section shall be due as from the date of order of cancellation 57 of the permit or curtailment of the route covered by the permit.
(3) There shall be paid by the State Government on the amount of compensation determined under subsection (1) interest at the rate of two and one half per cent.
from the date of order of cancellation or curtailment of route to the date of determination of compensation as aforesaid.
(4)The compensation payable under this section shall be given in cash.
(5) The amount of compensation to be given in accordance with the provisions of sub section (1) shall be determined by the Transport Commissioner and shall be offered to the permit holder in full satisfaction of the compensation payable under this Act and if the amount so offered is not acceptable to the permit holder, the Transport Commissioner may within such time and in such manner as may be prescribed refer the matter to the District Judge whose decision in the matter shall be final and shall not be called in question in any Court.
" Section 12: " Where a permit granted under Chapter IV of the , has been cancelled or the route to which the permit relates has been curtailed in pursuance of the scheme published under section 8, the State Government may if the holder of the permit offers to sell, choose to purchase the motor vehicles covered by the permit upon terms and conditions laid down in Schedule II: Provided, firstly, that the vehicle is of a type, manufacture and model notified by the State Government; and Provided, secondly, that the vehicle is in a mechanically sound condition and is otherwise declared fit by the Transport Commissioner or his nominee.
SCHEDULE I. "Paragraph 1: The compensation payable under section 11 of the Act for cancellation of a contract carriage or stage carriage or public carrier 's permit under clause (e) of sub section (1) of section 10 of the 8 58 Act shall be computed for every ' vehicle covered by the permit as follows, namely: (1) For every complete month or part Rupees One Rupees of a month exceeding fifteen hundred days of one the unexpired period of the permit.
(2) For part of a month not exceeding Rupees fifteen days of the unexpired period fifty of a permit.
Provided always that the amount of compensation shall in no case be less than rupees two hundred.
Paragraph 2: The compensation payable under section 1 1 for curtailment of the route or routes covered by a stage carriage or public carrier permit under clause (d) of sub section (1) of section 10 of the Act shall be an amount computed in accordance with the following formula: Y x A R In this formula Y means the length in mile by which the route is curtailed.
A means the amount computed in accordance with Paragraph 1 above.
R means the total length in miles of the route covered by the permit.
" The aforesaid provisions constitute an integrated scheme for paying compensation to the person whose permit is cancelled.
The gist of the provisions may be stated thus: The scheme made by the State Government may provide for the cancellation of a permit, for curtailment of the route or routes or for transfer of the permit to other routes.
Where a transfer of the permit is accepted by the operator, he will not be entitled to any compensation; if he does not accept, compensation will be paid to him with interest in respect of the premature cancellation of the permit, or as the case may be for the curtailment of the route or routes covered by the permit.
The amount of compensation to be ' given shall be deter mined by the Transport Commissioner in accordance with the provisions of the Act, and if the amount so 59 offered is not acceptable to the permit holder, the Transport Commissioner may, within such time and in such manner as may be prescribed, refer the matter to the District Judge whose decision in the matter shall he final.
There is also a provision enabling the Government to purchase the motor vehicles covered by the permit, if the holder of the permit offers to sell and if the vehicles satisfy the specifications laid down in the Act.
The question is whether these provisions offer a quid pro quo for the interest of the petitioners in the commercial undertaking i.e., business in motor transport.
Let us examine the question from the standpoint of a business deal.
If the transport business is sold, the seller gets his value for the assets minus the liabilities and for his good will.
In the case of a scheme framed under the Act, the assets are left with the holder of the permit and under certain con ditions the State purchases them.
As the scheme is a phased one, it cannot be said, though there will be difficulties, that the assets cannot be sold to other operators.
If a permit is not cancelled but only transferred to another route, it may be assumed that if the transfer is voluntarily accepted by the permit holder, he is satisfied that the route given to him is as good as that on which he was doing his business.
On the other hand, if he chooses to reject the transfer of his permit to another route and takes compensation, the question is whether the compensation provided by section 11 is anything like an equivalent or quid pro quo for the interest in the commercial undertaking acquired by the State.
If cl.
(5) of section 11 had not been there, we would have had no hesitation to hold that a flat rate of Rs. 100 or less irrespective of the real loss to the holder would not be compensation within the meaning of article 31(2).
But, in our view, section 11(5) gives a different complexion to the entire question of compensation.
Under that clause., a permit holder aggrieved by the amount of compensation given by the Transport Commissioner may ask for referring the matter to the District Judge for his decision in regard to the adequacy of the compensation.
This clause is susceptible of both a strict as well as a 60 liberal interpretation.
If it is strictly construed, it may be held that what the District Judge can give as compensation is only that which the Transport Commissioner can, under the provisions of section 11(1) i. e., at the rates mentioned in the Schedule.
But a liberal interpretation, as contended by the learned Advocate General, can be given to that clause without doing violence to the language used therein and that interpretation will carry out the intention of the legislature.
If the jurisdiction of the District Judge relates only to the calculation of figures, the said clause becomes meaningless in the present context.
Section 11 read with the Schedule gives the rate of compensation, the rate of interest, the dates from which and up to which the said compensation is to be paid with interest.
The duty of calculating the said amount is entrusted to the Transport Commissioner who will be a fairly senior officer of the Government.
If he made any mistake in mere calculations, he would certainly correct it if the permit holder pointed out the mistake to him.
In the circumstances, is it reasonable to assume that the legislature gave a remedy for the permit holder to approach the District Judge for the mere correction of the calculated figures ? It is more reasonable to assume that the intention of the legislature was to provide prima facie for, compensation at flat rate and realising the inadequacy of the rule of thumb to meet varying situations, it entrusted the duty of the final determination of compensation to a judicial officer of the rank of a District Judge.
The provisions of section 11(5), in our view, are certainly susceptible of such.
an inter pretation as to carry out the intention of the legislature indicated by the general scheme of the provisions.
The crucial words are " if the amount so offered is not acceptable to the permit holder ".
The amount offered is no doubt the amount calculated in accordance with s.11(1).
But a duty is cast on the Transport Commissioner to refer the matter to the District Judge if the amount offered is not acceptable to the permit holder.
The word" acceptable" is of very wide connotation and it does not limit the objection only to the wrong calculation under section 11(1).
The permit holder may 61 not accept the amount on the ground that compensation offered is inadequate and is not a quid pro quo for the interest of which he is deprived.
It is therefore for the District Judge, on the evidence adduced by both the parties, to decide the proper compensation to be paid to him in respect of the right of which he is deprived by the cancellation of the permit.
The language of section 11(5) not only bears the aforesaid construction but also carries out the intention of the legislature, for it cannot be imputed to the legislature that it intended to deprive a valuable interest by giving a nominal amount to the permit holder.
Section 11(5) speaks of the time limit within which such reference may be made to the District Judge, but no such rule has been brought to our notice.
We hope and trust that, without standing on any such technicality, the Transport Commissioner, if so required, will refer the matter of compensation to the District Judge.
Having regard to the entire scheme of compensation provided by the Act, we hold that the Act provided for adequate compensation for the interest acquired within the meaning of article 31(1) of the Constitution.
It is said that out of the twenty five appeals appellants in thirteen appeals had accepted to take a transfer of the permits to different routes; but on behalf of the appellants it is denied that the acceptance was unequivocal and final.
They say that it was conditional and that, as a matter of fact, they have not been plying the buses on the transferred routes and indeed have been operating them only on the old routes.
In these circumstances, we cannot hold that the said appellants accepted the alternative routes.
If they or some of them choose to accept any alternative routes, they are at liberty to do so, in which event they will not be entitled to any compensation.
Lastly, the learned Counsel for the appellants contends that el.
(2) of section 3 of the U. P. Act infringes their fundamental rights under article 31(2) inasmuch as it prevents them from questioning the validity of the scheme on the ground that it is not for public purpose.
Section 3 reads: 62 (1) Where the State Government is of the opinion that it is necessary in the interest of the general public and for subserving the common good, or for maintaining and developing efficient road transport system so to direct, it may, by notification in the official Gazette declare that the road transport services in general, or any particular class of such service on any route or portion thereof as may be specified, shall be run and operated exclusively by the State Government, or by the State Government in conjunction with railways or be run and operated partly by the State Government and partly by others under and in accordance with the provisions of this Act.
(2) The notification under sub section (1) shall be conclusive evidence of the facts stated therein.
" The argument of the learned Counsel on the interpretation of this section appears to be an after thought; for the records do not disclose that the appellants attempted to question the said fact before the Government and they were precluded from doing so on the basis of cl.
(2) of section (3).
We are not, therefore, prepared to allow the appellants to raise the contention for the first time before us.
The last contention, which is special to Civil Appeal No. 429 of 1958, is that during the crucial period when the scheme of nationalization was put through, the appellant had no permit, it having been cancelled by the order of the appropriate tribunal; but subsequently, after the scheme was finalised, the said order was set aside by the Appellate Tribunal retrospectively and therefore the order of the State Government made behind the back of the appellant does not bind him.
The appellant 's permit was not renewed by the Regional Transport Authority.
Against the said order, he preferred an appeal to the State Transport Tribunal, which by an order dated September 6, 1956, allowed the appeal and directed that the appellant 's permit be renewed for three years beginning from November 1, 1953.
In disposing of the appear the State Transport Tribunal observed: " We are told that in the meantime this route has been notified and the Government buses are plying 63 on it.
The effect of this order will be that the appellant shall be deemed to be in possession of a valid permit and he shall have to be displaced after following the usual procedure prescribed by the U. P. Road Transport Services (Development) Act.
" Pursuant to their order, it appears that the Regional Transport Authority renewed his permit on October 11, 1956 with effect from November 1, 1953 to October 31, 1956.
In the circumstances, as the petitioner was not a permit holder when the Government made the order, no relief can be given to him in this appeal.
This order will not preclude the appellant in Civil Appeal No. 429 of 1958, if he has any right, to take appropriate proceedings against the State Government.
In the result, all the appeals are dismissed with one set of costs to the State of Uttar Pradesh.
Appeals dismissed. [/INST] These appeals impugned the constitutionality of the Uttar Pradesh Transport Service (Development) Act, 1955 (U. P. IX Of 1955), passed by the State Legislature after obtaining the assent of the President, and the validity of the scheme of nationalisation framed and the notifications issued by the State Government under it.
The appellants as permit holders under the , were plying buses on different routes in Uttar Pradesh along with buses owned by the State Government.
The State Government issued a notification under section 3 Of the impugned Act directing that the said routes along with others should be exclusively served by the State buses, and followed up that notification by others under ss 4 and 8 of the Act.
The appellants moved the High Court under article 226 of the Constitution challenging the validity of the said Act and the notifications thereunder.
The High Court rejected their petitions and thereafter came into force the Motor Vehicles (Amendment) Act (100 Of 1956), inserting Ch.
IVA into the Act, which provided for nationalisation of transport services.
The contentions raised on behalf of the appellants were, (1) that the passing of the Amending Act made the impugned Act wholly void under article 254(1) Of the Constitution, (2) that the scheme framed under the impugned Act fell within the purview of section 68B of the Amending Act and ceased to be operative and (3) that even 'assuming that the impugned Act was valid in so far as the scheme was concerned, it violated article 31 as it stood before the Constitution (Fourth Amendment) Act, 1955.
A further contention on the basis of the proviso to article 254(2) was that the impugned Act stood wholly repealed by the Amending Act, section 68B of the latter excluding the operation of the General Clauses Act.
It was contended, inter alia, on behalf of the State that the amendment of article 31 by the Constitution (Fourth Amendment) Act, 1955, having removed, before the scheme under the impugned Act had 9 yet been framed, the constitutional limitation which that Article had imposed on the Legislature when it passed the impugned Act, had the effect of validating that Act passed by it at a time when it was subject to the limitation.
Held, (per curiam), that the Uttar Pradesh Transport Service (Development) Act, 1955, did not, on the passing of the Motor Vehicles (Amendment) Act, 1956 (100 of 1956), become wholly void under article 254(1) Of the Constitution but continued to be a valid and subsisting law supporting the scheme already framed under the U.P. Act.
Even assuming that the Amending Act had the effect, under article 254(2), of repealing the State Act, such repeal could not nullify the scheme already framed under that Act, for the provisions of section 6 of the General Clauses Act would operate to save it.
Nor could it be said, having regard to the provisions of the impugned Act and particularly section II(5) thereof, that it offended article 31 of the Constitution as it stood before the Constitution (Fourth Amendment) Act, 1955, by failing to provide for the payment of adequate compensation.
Per Das, C.J., and Sinha J.
There was no reason why the doctrine of eclipse as explained in Bhikaji Narain Dhakras vs The State of Madhya Pradesh, ; , could not also apply to a post Constitution law that infringed a fundamental right conferred on citizens alone.
Such a law, though shadowed and rendered ineffective by the fundamental right so far as the citizens were concerned, would remain effective so far as noncitizens were concerned.
The moment the shadow was removed by a constitutional amendment, the law would apply to citizens without re enactment.
John M. Wilkerson vs Charles A. Rahrer, ; ; ; and Bhikaji Nayain Dhakras vs The State of Madhya Pradesh, ; , referred to.
The question whether a post Constitution law that infringed a fundamental right guaranteed to all persons, citizens or noncitizens ' would be subject to that doctrine should, however, be left open.
Held, (per Bhagwati, Subba Rao and Wanchoo, jj.), that it was apparent from the provisions of articles 254, 246 and 13 of the Constitution, read together, that the power of Parliament and the State Legislature to make laws with regard to any of the matters enumerated in the relevant list in the Seventh Schedule was subject to the provisions of the Constitution including article 13.
There was a clear distinction between the two clauses of article I3.
Under cl.
(1), pre Constitution law subsisted except to the extent of its inconsistency with the provisions of Part III whereas under Cl.
(2) any post Constitution law contravening those provisions was a nullity from its inception to the extent of such contravention.
The words "any law" in the second line of 2 Cl.
(2) meant an.
Act factually passed in spite of the prohibition contained therein, and did not pre suppose that the law made was not a nullity.
That prohibition went to the root and limited the State 's power of legislation and law made in spite of it was a still born one.
In construing the constitutional provisions relating to the powers of the legislature embodied in articles 245 and 13(2) of the Constitution, no distinction should be made as between an affirmative and a negative provision, for both are limitations on that power.
K. C. Gajapati Narayan Deo vs The State of Orissa, ; , referred to.
A distinction, well recognised in judicial decisions, had, however, to be made in judging the effect of law made in transgression of the limits fixed by articles 245 and I3(2), between an Act that was void from its inception and one that, though valid when made, was rendered unconstitutional later on.
On that distinction was based the principle that an after acquired power could not validate a statute and a law validly made could take effect when the obstruction was removed.
A review of the relevant authorities and judicial decisions clearly established, (1) that affirmative conferment of power to make laws subject wise and the negative prohibition from infringing any fundamental rights were but two,,aspects of want of legislative power, (2) that by expressly making the power to legislate on the entries in the Seventh Schedule subject to other provisions of the Constitution, that power was subjected to the limitations laid down in Part III of the Constitution, (3) that, therefore, a law in derogation or in excess of such power would be void ab initio either wholly or to the extent of the contravention and that (4) the doctrine of eclipse could be invoked only in the case of a law that was valid when made but was rendered invalid by a supervening constitutional inconsistency.
Newberry vs United State, ; 65 L. Ed. 9I3; John M. Wilkerson vs Charyles A. Rahrer, (1891) 140 U. section 545; ; ; Carter vs Egg and Egg Pulp Marketing Board, ; ; Keshavan Madhava Menon vs The State of Bombay, ; ; Behram Khurshed Pesikaka vs The State Of Bombay, [1955) 1 S.C.R. 589; Saghir Ahmed vs The State of U. P. ; ; Ram Chandra Balai vs State of Orissa, and Pannalal Binjraj vs Union of India; , , referred to and discussed.
The tests of repugnancy between two statutes, one passed by the Parliament and the other by the State Legislature, were, (1) whether there was a direct conflict between them, (2) whether Parliament intended to lay down an exhaustive code in respect of the subject matter replacing the Act of the State Legislature, and (3) whether both the laws occupied the same field.
A comparison of the provisions of the two Acts indicated 11 that both were intended to operate in respect of the same subject matter and the same field but only in respect of the schemes initiated after the Amending Act had come into force, the latter Act having no retrospective effect.
The State Act must, therefore, yield place to the Central Act to that extent and become void only in respect of schemes framed under the Central Act.
Keshavan Madhava Menon vs The State of Bombay, [1951] S.C.R. 228, applied. </s> |
<s>[INST] Summarize the following judgement: Appeal No. 1452 of 1987.
From the Judgment and Order dated 10.7.1986 of the Kamataka High Court in I.T.R.C. No. 198 of 1987.
WITH C.A. Nos. 4462/89, 1822, 1902, 1465/87, 675, 658, 4461/89, 6093/90, 6204/ 90, 6092.
and 6092 A of 1990.
H. Salve, P.H. Parekh, Ms. Meenakshi Grover, R. Nariman, Ms. R. Gill and Ms. Simi Kr.
for the Appellants.
B.B. Ahuja, Ranbir Chandra and Ms. A. Subhasini for the Respondent.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY J.
These appeals are preferred against the judgment of the Karnataka High Court answering the question referred to it, at the instance of the revenue, in favour of the revenue and against the assessee.
The question referred under section 256 of the Income Tax Act, 196 1, read as follows: "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum of Rs. 1, 79, 742 could not be disallowed under section 40 (c) of the Income Tax Act, 1961." (The above question related to Assessment Year 1974 75.
The question referred for A.Y. 1975 76 was identical except in the matter of amount).
Since the facts in all the appeals are identical it would be sufficient to notice the facts in C.A. Nos. 6092 and 6092A/90 (Prakash Beedies (P) Lid.
vs Commr.
of Income Tax.
Karnataka, Bangalore).
Prior to 15.7.1992, a partnership firm called K.M. Anand Prabhu & Sons, Mangalore, consisting of three partners K.M. Vishnudas Prabhu, K.M. Ramdas Prabhu and K.M. Shankar Prabhu was engaged inter alia in the business of manufacturing and sale of beedies under the brand name 'Mangalore Prakash Beedies '.
On May 20, 1972 a Private limited company called Prakash Beedies 609 Limited (the assessee appellant herein), was incorporated with its registered off ice at Manoalore.
One of its objects was to take over business of the aforesaid firm.
Under an agreement dated July 15, 1972 between the firm and the company, the firm sold its rights and assets to the company on the terms and conditions set out therein.
Clause 4(a) of the agreement, which alone is material for the purposes of these appeals reads: "(a) For the use of the trade name the Company shall pay royalty to the Vendor at the rate of 10ps.
for every thousand beedies sold by the Company by using the trade name of the Vendor.
The royalty shall be worked out at the end of each quarter ending on March, June, September and December, on the sales made during each quarter.
The royalty fixed hereby shall not be varied for a period of one year and may be reviewed and/or revised thereafter wards from time to time".
The assessee was making payments to the firm every year on account of royalty in terms of said clause.
The three partners aforesaid of the firm were also the directors of the assessee company.
For the assessment years 1974 75 and 1975 76, the assessee claimed deduction of the amount paid by it to the firm on account of royalty in terms of clause 4(a) of the agreement.
The amounts paid during the accounting years relevant to the said assessment years were Rs. 3, 16, 526 and Rs. 3, 95, 742 respectively.
The I.T.O. allowed the deductions as claimed.
In exercise of the powers conferred on him by Section 263, the Commissioner of Income Tax initiated (suo moto) proceedings for revising the said assessments in so far as the aforesaid deductions were concerned.
After hearing the assessee, he passed orders on September 16, 1976 whereunder he disallowed payments to the firm over and above the ceiling prescribed in Section 40(c).
The assessee preferred appeals to the Tribunal against the orders of the I.T.O, The appeals were allowed and the orders of the I.T.O. restored.
On reference, the High Court answered to question in the negative i.e., in favour of the revenue and against the assessee, on the following reasoning : the three directors of the assessee company were also the partners in the firm to which royalty payments were made.
In law, a firm has no separate legal existence; it is not a juristic person or a distinct legal entity.
It is merely a collection or association of the individuals for carrying 610 on a business.
Merely because the firm is an assessable entity under the Income Tax Act it does not follow that it is a juristic or legal entity.
It must, therefore, be held that the payments made to the firm are in reality payments made to the directors.
Such payments clearly attract and fall within the mischief of Section 40(c).
The Commissioner was right in saying so and the opinion of the Tribunal to the contrary is unsustainable in law.
In these appeals, S/Shri Harish N.Salve and Rohinton Nariman assailed the correctness of the view taken by the High Court.
They submitted firstly that the payments were made not to the directors of the assessee but to a firm which was a separate entity.
A payment to a firm is not ipso facto a payment to the partners, directly or indirectly.
In a firm there may be other partners besides the directors of the assessee company.
It may also happen that the firm has no income to distribute because of the losses incurred by it which are set off against the income so received.
The High Court was in error in holding that payment to a firm is a payment to the partners.
Assuming that a partnership firm is not a separate juristic entity distinct from its partners, even so the payments were made to the said three persons not in their capacity as directors (qua directors) but in consideration of a valuable right parted by them in favour of the assessee company.
Such payments do not and cannot fall within the mischief of Section4O(c).
Section 40(c) was never intended to take in such payments.
A company may take on lease the house of its directors for its legitimate business purposes and pay rent which is reasonable having regard to the market conditions, or it may pay even less than the market rate of rent.
Whether the rent paid by the company to its director in such a case falls within Section 40(c), ask the counsel.
Another illustration given by the counsel is where a director supplies raw material to the assessee company for a price which is the appropriate market price.
Would such payment also fall under section 40(c), they ask.
The Budget speech of the Finance Minister in the Parliament, while introducing the said provision, is relied upon in support of their contention.
It is also argued that the words "remuneration, benefit or amenity" occurring in Section 40(c) must be read having regard to the context in which they occur applying the principle NOSCITORA SPCOOS (recognition of associated words).
If so read, the payments in question can never fall within the ambit of the said words.
Shri Ahuja, the learned counsel for the Revenue justified the reasoning and approach of the High Court having regard to the clear language employed in clause (c).
The genuineness or validity of the agreement between the assessee company and the firm is not disputed.
The factum of payments made on account of royalty in terms of clause 4(a) of the said agreement is also not disputed.
It is also 611 not disputed that in the beedi trade, brand name carries significant business value.
It is necessary to keep this factual context in mind while examining the question at issue.
Section 40(c) read as follows during the relevant assessment years "40.
Notwithstanding anything to the contrary in sections 30 to 39, the following amounts shall not be deducted in computing the income charge able under the head" profits and gains of business or profession", (a). . (b). . (c) in the case of any company (i) any expenditure which results directly or indirectly in the provision of any remuneration of benefit or amenity to director or to a person who has a substantial interest in the company or to a relative of the director or of such person, as the case may be, (ii) any expenditure or allowance in respect of any assets of the company used by any person referred to in sub clause (i) either wholly or partly for his own purposes of benefit, if in the opinion of the Income tax Officer any such expenditure or allowance as is mentioned in sub clause (i) and (ii) is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by or accruing to it therefrom, so, however, that the deduction in respect of the aggregate of such expenditure and allowance in respect of any one person referred to in sub clause (i) shall, in no case, exceed (A) where such expenditure or allowance relates to a period exceeding eleven months comprised in the previous year, the amount of seventy two thousand rupees; (B) where such expenditure of allowance relates to a period not exceeding eleven months comprised in the previous year, an amount calculated at the rate of six thousand rupees for each month or part thereof comprised in that period: 612 Provided that in case where such person is also and employee of the company for any period comprised in the previous year, expenditure of the nature referred to in clauses (i), (ii), (iii) and (iv) of the second proviso to clause (a) of sub section (5) of section 40A shall not be taken into account for the purposes of sub clause (A) or subclause (B), as the case may be; (iii) * * * * Explanation.
The provisions of this clause shall apply notwithstanding that any amount not to be allowed under this clause is included in the total income of any person referred to in sub clause (i);" The Budget speech of the Finance Minister, in so far as it mentions the reasons for introduction of clause (c) of Section 40, reads as follows: "I am firmly of the view that the fiscal instrument must be deployed to discourage payment of high salaries and remunerations which go ill with the norms of egalitarian society.
I accordingly propose to impose a calling on the remuneration of company employees which would be deductible in the computation of taxable profits.
The ceiling is being set at Rs. 5,000 per month.
Together with the existing ceiling of Rs. 1,000 per month in the case of perquisites, the allowable overall ceiling on remuneration and perquisites, for purposes of taxation, will be at Rs. 6,000 per month. . . " The object behind the provision undoubtedly was to discourage and disallow "payment of high salaries and remunerations which go ill with the norms of egalitarian society".
The provision was, of course, not confined to the directors. ' It took in relatives of directors, persons having substantial interest in the company and their relatives.
The clause vested in the I.T.O. the power to determine whether any such expenditure or allowances as is mentioned in the said clause was excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by or accruing to it therefrom.
In addition to it, a ceiling was also prescribed beyond which such expenditure or allowance could not go in any event.
At this juncture, it would be appropriate to notice the provision contained in sub section (2) of Sec 40A. Clause, A provides that where the assessee incurs any expenditure in respect of which payment has been made or is to be made to any 613 person referred to in clause (b) of the sub section, and the Income tax Officer is of the opinion that such expenditure is excessive or unreasonable having regard to the fair market value of the goods, services or facilities for which the payment is made or the legitimate needs of the business or profession of the assessee or the benefit derived by or accruing to him therefrom, so much of the expenditure as is so considered by him to be excessive or unreasonable shall not be allowed as a deduction.
Clause (b) mentions the categories of persons to whom the provision in clause (a) applies.
It includes directors of the company and their relatives among others.
Clause b) also takes in any payment to any company, firm, association of persons or Hindu undivided family of which a director, partner or member, as the case may be, has substantial, interest in the business or profession of the assessee.
In short, the net is cast very wide to ensure that excessive or unreasonable payments are not made to the persons in control of the affairs of the assessee in the name of paying for the goods, services and facilities rendered, supplied or extended by them, as the case may be.
That the payments made by the assessee company to the firm on account of royalty in terms of clause (4) (a) of the agreement fall within the meaning of the expression 'expenditure ' in sub clause (i) of clause (c) is not disputed.
The observations in CIT, Bombay.
vs M/s. Indian Engineering and Commercial Corporation Private Uinited (Civil Appeal Nos. 1583 and 1584 (NT) of 1977 decided on 13.4.1993 by us reported in ; do not say otherwise.
That case arose under Section 40(A) (5).
The payments in question were made to the directors by way of commission on sales.
The question was whether the said payments fell within sub clause (ii) of clause (a) of sub section (5) of section 40(A).
It was held that they did not.
While holding so it was observed that it is difficult to say that payment of certain cash amount by way of commission on sales, directly to an employee, can be said to fall within the words 'where the assessee incurs any expenditure which results directly or indirectly '.
" The said observations were made in response to the Revenue 's argument that the said payment constituted 'perquisites ' within the meaning of sub clause (ii) of clause (a) of Section 40(A) (5).
The observations are clearly confined to the said sub clause and have no relevance to any other provision in the Act.
The observations cannot be read dissociated from their context.
Coming back to the provisions of Section 4O(c) and the facts of the case before us the only question is whether the royalty payments to the firm fell within clause (c).
We assume for the purpose of this argument that in this case, payments to firm were payments to partners.
Even so, we think that the said payments did not fall within clause (C).
The payments were made in consideration of a valuable right parted by the partners/ directors of the assessee company in favour of the assessee.
SO long a,, the agreement whereunder the said payments were made is not held to be a mere 614 device or a mere screen, the said payments cannot be treated as payments made to the directors as directors (qua directors).
The payments were made by way of consideration for allowing the assessee to use a valuable right belonging to them viz., the brand name.
Such a payment may be liable to be scrutinised under subsection (2) of Section 40(A), but it certainly did not fall within the four corners of Section 40(c).
In T. T Ltd. vs LTO., Bangalore 1, a Bench of Karnataka High Court comprising D.M. Chandrashekhar, CJ.
and E.S. Venkataramiah,J. has taken a view which accords with the one taken by us.
Speaking for the Bench, E.S. Venkataramiah, J. (as he then was) observed: "A close reading of the above provision shows that section 40(c) refers to an expenditure in curred by making periodical payments to person mentioned in that clause apparently for any personal service that may be rendered by him.
It cannot have any reference to payments made by the assessee for all kinds of "services or facilities" referred to in section 4OA(2) (a).
It is argued that the proviso thereto suggests that any expenditure incurred for any kind of service which is referred to in the main part of section 40A (2) (a) and the expenditure referred to in section 40(c) belong to the same category.
This contention is not correct.
The expression "services" in section 40A (2) (a) is an expression of wider import. . .
If the remuneration, benefit or amenity referred to in section 40(c) is treated as the same as what is paid in return for "the goods, services or facilities" then irrespective of the fair market value of the goods, services and facilities provided by a person who may be a director or a person who has a substantial interest in the company or a relative of the director or of such person, as the case may be, only a maximum of Rs. 72,000 can be allowed to be deducted in computing the income of the company in any one year.
We do not think that Parliament ever intended that such a result should follow.
The goods, services and facilities referred to in section 40A (2) (a) are those which have a market value and which are commercial in character.
Many of the services and facilities referred to above are those which are nowadays provided by independent organisations. ' The said decision has been followed by the Punjab and Haryana High Court in Commissioner of Income Tax, Patiala vs Avon Cycles (P) Ltd. , The Calcutta High Court has also taken a similar view in India Jute Co. Ltd vs 615 Commr of Income Tax Mr. Ahuja, learned counsel for the Revenue submitted that the argument of the assessee that only the payments made to directors as directors fall within clause (c) and not the other payments, becomes inapt when the payments are made to the relative,,, of the directors or to persons holding substantial interest in the assessee company or their relatives.
The ceilinG prescribed in clause (c) cannot also be applied to such persons says the counsel.
The answer perhaps lies in the clause itself in the power vested in the I.T.O. to determine whether any expenditure or allowance is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by the assessee or accruing therefrom.
Any payment to a relative of a director or other persons mentioned in clause (c) will necessarily be examined applying the above test and if it is found that they are unwarranted, unreasonable or excessive, they will be disallowed.
Since such a situation does not arise herein, we need not pursue the argument further.
For the above reasons, we are of the opinion that the judgment under appeal cannot be sustained.
It must he held that the payments in question did not fall within section 40(c).
Accordingly, the appeals are allowed, the judgment of the High Court is set aside and the question referred to the High Court is answered in the affirmative, i.e., in favour of the assessee and against the revenue.
No costs.
U.J. R. Appeal allowed. [/INST] A partnership firm consisting of three partners was engaged inter alia in the business of manufacturing and sale of beedies under the brand name "Mangalore Prakash Beedies".
On May 20,1972 a private limited company called prakash beedies Ltd. the assessee appellant was incorporated.
One of its objects was to take over the business of the aforesaid firms which it did under an agreement dated 15 July 1972 whereby the firms sold its rights and assets to the company.
For the use of the trade name, a royalty at 10p.
for every 1000 beedies was to be paid by the company to the firm.
This payment was made ever year by the assesse on account of royalty.
The three partners of the firms were also directors of the company.
The relevant assessment years were 1974 75 and 1975 76.
The facts in the other appeals are similar.
The assessee claimed deduction of the amount paid by it as royalty.
The ITO allowed the deductions as claimed.
The CIT in stio motu proceedings disallow the aforesaid deductions.
On appeal, the tribunal restored the order of the ITO.
On reference, the High Court answered in fan,our of the revenue as the three directors of the assessee company were also partners in the firm.
It held that in law, a firm is merely a collection or association of individuals for carrying on a business.
Merely because the firm is an assessable entity, under the Income Tax Act, it does not follow that it is a juristic or legal entity.
It must therefore be held that the payments to the firm were in reality made to the 607 directors, thus attracting section 40 (c).
Before this Court, it was contended for the assessee that payment to a firm is not ipso fact payment to the partners, directly or indirectly.
In any event, the payments were made to the three persons not in their capacity of directors (qua directors).
but in consideration of a valuable right parted by them in favour of the assessee company.
section 40(c) was never intended to take in such payments.
They relied on the budget speech of the Finance Minister and argued that the principle of interpretation noscitor a sociis must be applied to the words "remuneration, benefit or amenity".
The genuineness or validity of the agreement, the factum of payments as royalty, and that the brand name carries significant business value was not disputed.
The question before this Court was whether the royalty payments fail within section 40(c).
Allowing the appeal, this Court, HELD : 1.
Even assuming that the payments to firm were payments to partners, the said payments did not fall within section 40(c).
The payment, . were made In consideration of a valuable right parted by the firm/partners/ directors of the assessee company in favour of the assessee.
So long as the agreement whereunder the said payments were made is not held to be a mere device or a mere screen, the said payments cannot be treated as payments made to the directors (qua directors).
(613 H, 614 A) The payments were made by way of consideration for allowing the to use a valuable right belonging to them viz. the brand name.
Such a payment may be liable to be scrutinised under sub section.
(2) of section 40 (A), but it certainly did not fall within the four corners of section 40(c).
(614 A) T.T. (Pvt.) Ltd. vs ITO Bangalore , approved.
CIT Patiale vs Avon Cycles (p) Ltd. and India Jute Co. Ltd. vs CIT , referred to. 2.
The power vested in the ITO is to determine whether any expenditure of allowance is excessive or unreasonable having regard to the legitimate business needs of the company and the benefit derived by the assessee or 608 accruing therefrom.
Any payment to a relative of a director or other persons mentioned in clause (c) will necessarily be examined applying the above test and if it is found that they are unwarranted, unreasonable or excessive, they will be disallowed.
Such a situation does not arise herein.
(615 C) CIT, Bombay vs M/s. Indian Engineering and Commercial Corporation (p) Ltd. [1983] distinguished.
JT 683. </s> |
<s>[INST] Summarize the following judgement: iminal Appeal No '400 of 1993.
From the Judgment land order dated 3.6.
1992 of the Punjab and Haryana High Court in Criminal Revision No. 443 of 1990.
P. Chadambaram, Mukul Rohtagi, Ms. Bina Gupta and Ms. Monika Mohil for the Appellants.
N.N. Goswamy, Y.D. Mahajan and N.D. Garg for the Respondent.
The Judgments of the Court were delivered by K. RAMASWAMYJ: Special leave granted.
The appellant, accused No. 2 in p.
(CBI) No. 40/2, dated February 18, 1985, F.I.R. No. RC No. 2 to 4/1983 dated March 4,1983 and P.S. SPE/CBI/CTU (E) I/New Delhi, Dist.
Delhi and four other namely, V.P. Anand, Baldev Raj Sharma, Bansi La] and Ranjit KumarMarwah are accused in the said case.
It is the prosecution case that the accused hatched a conspiracy at Chandigarh to cheat Punjab National Bank for short 'PNB '.
In furtherance thereof V.P. Anand floated three New Link Enterprises and M/s. Moonlight Industries in the name of Baldev Raj Sharms, his employee and M/s. Guru Nanak Industries in the name of Bansi Lal, yet another employee.
He opened current accounts in their respective names in the P.N.B. at Chandigarh.
In furtherance of the conspiracy and in confabulation with V.P. Anand, the appellant, Ajay Aggarwal, a non resident Indian at Dubai who is running M/s. Sales International, Dubai, agreed to and got credit facility by way of Foreign Letters of Credit Nos.
4069 p, 4070 p and 4084 p, issued proforma invoices of the said concern and addresses to PNB through Guru Nanak Industries and New Link Enterprises.
Ranjit Marwah, the 5th accused, Manager of P.N.B., In charge, of foreign exchange department confabulated with the accused, issued Foreign Letter of Credit in violation of import policy.
The Bills of Lading were addressed to PNB at Chandigarh.
The cable confirmation of P.N.B. was sent to M/ s Sales International by P.N.B., Chandigarh for confirmation of discrepancy.
The appellant had confirmed correctness thereof in the name of V.P. Anand.
Placing reliance thereon authority letter was issued by P.N.B., Chandigarh and cables were sent subsequent thereto to remit the amounts to Emirates National Bank Ltd. through Irving Trust Company.
V.P. Anand was present on September 16, 1981 at Dubai and at his instance the Emirats National Bank, Dubai informed the 551 P.N.B., Chandigarh that the discrepancy in the document adeptable to V.P. Anand and claimed to have inspected the goods on board in vessel, M.V. Atefeh.
On receipt of the information from the Sales International, Dubai, full amount in US Dollars 4, 39,200 was credited against all the three Letters of Credit on discount basis.
During investigation it was found that Vessel M.V. Atefeh was a nonexistent one and three Foreicn Letters of Credit were fabricated on the basis of false and forged shipping documents submitted by the appellant, Ajay Aggarwal to the Emirates National Bank, Dubai.
Thus the P.N. B. was cheated of an amount of Rs. 40,30,329.
Accordingly charge sheet was laid against the appellant.
and others for offences punishable under sections 120B read with Sections 420 (Cheating), 468 (Forgery) and 471 using as genuine (Forged documents), I.P.C.
The Chief Judicial Magistrate, Chandigarh by his order dated January 11, 1990 discharged all, the accused of the offences on the ground that conspiracy and the acts done in furtherance thereof had taken place outside India and, therefore the sanction under section 188 Criminal Procedure Code, 1973 for short the 'Code ' is mandatory.
Since no such sanction was produced the prosecution is not maintainable.
On revision, the High Court of Punjab and Haryana in Criminal Revision No. 443 of 1990 by order dated June 3, 1992 held, that the conspiracy had taken place at Chandigarh.
The overt acts committed in pursuance of that conspiracy at Dubai constituted offences under sections 420, 467 and 471, I.P.C., are all triable at Chandigarh without previous sanction of the central Govt.
The order of discharge, therefore, was set aside and the appellant and other accused were directed to be present through their counsel in person in the Trial Court on July 17,1992 to enable the court to take further proceedings in accordance with law.
This appeal has been filed by the appellant alone under article 136 of the constitution.
Sri Chidambaram, learned Senior counsel contended that the appellant was not a privy to the conspiracy.
He was an N.I.R. businessman at Dubai.
He never visited Chandigarh.
Even assuming for the sake of argument that conspiracy had taken place and all act committed in furtherance thereof were also at Dubai.
The transaction through, bank is only bank to bank transaction.
Even assuming that some of the offences were committed in India since as per the prosecution case itself that part of the conspiracy and related offences were committed at Dubai, by operation of Section 188 read with the proviso thereto with a non obstanti clause, absence of sanction by the Central Govt.
knocks of the bottom of the jurisdiction of the courts in India to take cognisance of or to enquire into of try the accused.
He placed strong reliance on 1.
Fakhrulla khan and Ors.
vs Emperor AIR 1935 Mad. 326, In re M.L. Verghese AIR 1947 MAD.
352, kailash Sharma vs State [1973] Crl.
Law Journal 1021 and K. Satwant Singh vs State of Punjab ; Sri Goswami, the learned senior counsel for the respondents contended that the conspiracy to cheat.
PNB was hatched at Chandigarh.
All the accused committed 552 overt acts in furtherance.
All the accused committed overt acts in furtherance on the conspiracy at Chandigarh and, therefore, the sanction of the Central Govt.
is not necessary.
The High Court had rightly recorded those findings.
There is no need to obtain sanction under section 188 of the Code.
The diverse contentions give rise to the primary question whether the sanction of the Central Govt.
as required under proviso to section 188 of the Code is necessary.
Section 188 of the Code reads thus "Offence committed outside India when an offence is committed outside India (a) by a citizen of India, whether on the high seas or elsewhere; or (b) by a person, not being such citizen, on any ship or aircraft registered in India, he may be dealt with in respect of such offence asif it had been committed at any place within India at which he may be found: Provided that, notwithstanding anything in any of the preceding sections of this Chapter, no such offence shall be inquired into or tried in India except.
with the previous sanction of the Central Government".
Section 3, IPC prescribes punishment of offences committed beyond, but which by law may be tried with, India, It provided that any person liable, by any Indian law, to be tried for an offence committed beyond India shall be dealt with according to the provisions of this Code for any act committed beyond India in the same manner as if such act had been committed within India.
Section 4 extends its territorial operation postulating that IPC shall apply to any offence committed by (1) any citizen of India in any place without any beyond India; (2) any person on any ship or aircraft registered in India wherever it may be.
Explanation in this section the word offence ' includes every act committed outside India which, if committed in India, would be punishable under this Code. 553 Illustration A, who is a citizen of India, commits a Murder in Uganda.
He can be tried and convicted of murder in any place in India in which he may be found.
The Code of Criminal Procedure extends to whole of India except the State of Jammu & Kashmir and except chapters 8, 10 and 11, the other provisions of the Code shall not apply to the State of Nagaland and to the tribal area.
However, the State Govt. has been empowered, by a notification, to apply all other provisions of the Code or any of them to the whole or part of the State of Nagaland and such other tribal areas, with supplemental, incidental or consequential modifications, as may be specified in the notification.
Therefore, the Code also has territorial operation.
The Code is to consolidate and amend the law relating to criminal procedure.
Section 188 was suitably amended pursuant to the recommendation made by the Law Commission.
Chapter VIII deals with jurisdiction of the courts in inquiries and trials.
Section 177 postulates that every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed but exceptions have been engrafted in subsequent sections in the Chapter.
Section 179 provides venue for trial or enquiry at the place where the act is done or consequences ensued.
So inquiry or trial may be had by a Court within whose local jurisdiction such thing has been done or such consequence has ensued.
Section 188 by fiction dealt offences conumitted by a citizen of India or a foreigner outside India or on high seas or elsewhere or on any ship or aircraft registered in India.
Such person was directed to be dealt with, in respect of such offences, as if be had committed at any place within India at which he may be found.
But the proviso thereto puts and embargo that notwithstanding anything in any of the preceding sections of this Chapter have been done such offences shall not be inquired into or tried in India except with the previous sanction of the Central Govt.
Judicial power of a State extends to the punishment of all offences against the municipal laws of the State by whomsoever committed within the territory.
It also has the power to punish all such offences wherever committed by its citizen.
The general principle of international law is that every person be it a citizen or foreigner who is found within a foreign State is subjected to, and is punishable by, its law.
Otherwise the criminal law could not be administered according to any civilised system of jurisprudence.
Sections 177 to 186 deal with the venue or the place of the enquiry or trial of crimes.
Section 177 reiterates the well established common law rule that the proper and ordinary situs for the trial of a crime is the area of jurisdiction in which the acts occurred and are alleged to constitute the crime.
But this rule is subject to several well recognised exceptions and some of those exceptions have been engrafted in subsequent sections in the chapter of the Code.
554 Therefore, the provisions in Chapter VIII are elastic and not peremptory.
In consequence there with Sections 218 to 223 of the code would also deal with exceptions engrafted in the Code.
Therefore, they do permit enquiry or trial of a particular offence along with other offences at a common trial in one court so that the court having jurisdiction to try an offence gets jurisdiction to try other offence committed or consequences thereof has ensued.
The procedure is hand maid to substantive justice, namely, to bring the offenders to justice to meet out punishment under IPC or special law as the case may be, in accordance with the procedure prescribed under the Code or special procedure under that Act constituting the offence.
The question is whether prior sanction of the Central Govt.
Is necessary for the offence of 'conspiracy under proviso to section 188 of the Code to take cognizance of an offence punishable under section 120 B etc.
I.P.C. or to proceed with trial.
In Chapter VA, conspiracy was brought on statute by the Amendment Act, 1913 (8 of 1913).
Section 120 A of the I.P.C. defines 'conspiracy ' to mean that when two or more persons agree to do, or cause to be done an ilegal act, or an act which is not illegal by illegal means such an agreement is designated as "criminal conspiracy".
No agreement except an agreement to commit an offence shall amount to a criminal conspiracy, unless some act besides the agreement is done by one or more parties to such agreement in furtherance thereof.
Section 120 B of the I.P.C. prescribes punishment for criminal conspiracy.
It is not necessary that each conspirator must know all the details or the scheme nor be a participant at every stage.
It is necessary that they should agree for design or object of the conspiracy.
Conspiracy is conceived as having three elements: (1) agreement (2) between two or more persons by whom the agreement is effected , and (3) a criminal object, which may be either the ultimate aim of the agreement, or may constitute the means, or one of the means by which that aim is to be accomplished.
It is immaterial whether this is found in the ultimate objects.
The common law definition of criminal conspiracy was stated first by Lord Denman in jones case that an indictment for conspiracy must "charge a conspiracy to do an unlawful act by unlawful means" and was elaborated by Willies, J. on behalf of the judges while referring the question to the House of Lords in Mulcahy vs Reg and the House of Lords in unanimous decision reiterated in Quinn vs Leathem ; at 528) as under: A conspiracy consists not merely in the intention of two or more, but in the agreement.
of two or more to do ,in unlawful act, or to do a lawful act by unlawful means.
So long as such a design rests in intention only it is not indictable, When two agree to carry it into 555 effect, the very plot is an act in itself, and the act of each of the parties, promise against promise, actus contra actum, capable of being enforced, if lawful, punishable of for a criminal object or for the use of criminal means".
This Court in B. G. Barsay vs The State of Bombay [1962] 2 SCR at 229, held "The (list of the offence is an agreement to break the law.
The parties to such an agreement will be guilty of criminal conspiracy, though the illegal act agreed to be done has not been done.
So too, it is an ingredient of the offence that all the parties should agree to do a single illegal act.
It may comprise the commission of a number of acts.
Under section 43 of the Indian Penal Code, an act would be illegal if fit is an offence or if it is prohibited by law".
In Yashpal vs State of Punjab the rule was laid as follows "The very agreement, concert or league is the ingredient of the offence.
It is not necessary that all the conspirators must know each and every detail of the conspiracy as long as they are co participators in the main object of the conspiracy.
There may be so many devices and techniques adopted to achieve the common goal of the conspiracy and there may be division of performances in the chain of actions with one object to achieve the real end of which every collaborator must be aware and in which each one of them must be interested.
There must be unity of object or purpose but there may be plurality of means sometimes even unknown to one another, amongst the conspirators.
In achieving the goal several offences may be committed by some of the conspirators even unknown to the others.
The only relevant factor is that all means adopted and illegal acts done must be and purported to be in furtherance of the object of the conspiracy even though there may be sometimes misfire or over shooting by some of the conspirators".
In Mohammed Usman.
Mohammad Hussain Manivar & Anr.
vs State of Maharashtra ; , it was held that for an offence under section 120B IPC, the prosecution need not necessarily prove that the conspirators expressly 556 agreed to do or cause to be done the illegal act.
the agreement may be proved by necessary implication.
In Noor Mohammed Yusuf Momin vs State of Maharashtra ; , it was held that section 120 B IPC makes the criminal conspiracy as a substantive offence which offence postulates an agreement between two or more persons to do or cause to be done an act by illegal means.
If the offence itself is to commit an offence, no further steps are needed to be proved to carry the agreement into effect.
In R. K. Dalmia & Anr.
vs The Delhi Administration It 963] 1 SCR 253, it was further held that it is not necessary that each member of a conspiracy must know all the details of the conspiracy.
In Shivanarayan Laxminarayan & Ors.
State of Mahrashtra & Ors. , this court emphasized that a conspiracy is always hatched in secrecy and it is impossible to adduce direct evidence of the same.
The offence can be only proved largely from the inferences drawn from acts or illegal omission committed by the conspirators in pursuance of a common design.
The question then is whether conspiracy is continuing offence.
Conspiracy to commit crime it self is punishable as a substantive offence and every individual offence committed pursuant to the conspiracy is separate and distinct offence to which individual offenders are liable to punishment, independent of the conspiracy.
Yet, in our considered view, the agreement does not come to an end with its making, but would endure till it is accomplished or abandoned or proved abortive.
Being a continuing offence, if any acts or omissions which constitutes an offence, are done in India or outside its territory the conspirators continuing to be parties to the conspiracy and since part of the acts were done in India, they would obviate the need to obtain sanction of the Central Govt.
all of them need not be present in India nor continue to remain in India.
In lennart Schussler & Anr.
vs Director of Enforcement & Anr. ; , a Constitution Bench of this Court was to consider the question of conspiracy in the setting of the facts, stated thus "A. 2 was the Managing Director of the Rayala Corporation Ltd. Which manufactures Halda Typewriters.
A. 1 was an Export Manager of ASSAB.
A. 1 and A.2 conspired that A.2 would purchase material on behalf of his Company from ASSAB instead of M/s Atvidaberos, which provided raw material.
A.2 was to over invoice the value of the goods by 40 per cent of true value and that he should be paid the difference of 40 per cent on account of the aforesaid over invoicing by crediting it to A.2 's personal account at Stockholm in a Swedish Bank and requested A. 1 to help him in opening the account in Swenska Handles Banken, Sweden and to have further 557 deposits to his personal account from ASSAB.
A. 1 agreed to act as requested by A.2 and A.2 made arrangements with ASSAB to intimate to A. 1 the various amounts credited to A.2 's account and asked A. 1 to keep a watch over the correctness of the account and ' to further intimate to him the account position from time to time through unofficial channels and whenever A. 1 come to India.
A. 1 agreed to comply with this request.
This agreement was entered into between the parties in the year 1963 at Stockholm and again in Madras in the year 1965.
The question was whether Sec.
120 B of the Indian Penal Code was attracted to these facts".
Per majority, Jaganmohan Reddy, J. held that the gist of the offence defined in section 120 A IPC, which is itself punishable as a substantive offence is the very agreement between two or more persons to do or cause to be done an illegal act or legal act by illegal means, subject, however, to the proviso that where the agreement is not an agreement to commit an offence, the agreement does not amount to a conspiracy unless it is followed up by an overt act done by one or more persons in pursuance of such an agreement.
There must be a meeting of minds in the doing of the illegal act or the doing of a legal act by illegal means.
in furtherance of the conspiracy, certain persons are induced to do an unlawful act without the knowledge of the conspiracy or the plot they cannot be held to be conspirators, though they may be guilty of an offence pertaining to the specific unlawful act.
The offence of conspiracy is complete when two or more conspirators have agreed to do or cause to be done an act which is itself an offence, in which case no overt act need be established.
It was contended in that regard that several acts which constitute to make an offence under section 120 B may be split up in parts and the criminal liability of A. 1 must only be judged with regard to the part played by him.
He merely agreed to help A.2 to open an account in the Swedish Bank, having the amounts lying to the credit of A.2 with Atvidaberg to that account and to help A.2 by keeping a watch over the account.
Therefore, it does not amount to a criminal conspiracy.
While negating the argument, this court held thus: "It appears to us that this is not a justifiable contention, because what has to be seen is whether the agreement between A. 1 and A.2 is a conspiracy to do or continue to do something which is illegal and, if it is, it is immaterial whether the agreement to do any of the acts in furtherance of the commission of the offence do not strictly amount to an offence.
the entire agreement must be viewed as a whole and it has to be ascertained as to what in fact the conspirators intended to do or the object they wanted to achieve".
558 Thus, this court, though not in the context of jurisdictional issue, held that the agreement not illegal at its inception would become illegal by subsequent conduct and an agreement to do an illegal act or to do a legal act by illegal means, must be viewed as a whole and not in isolation.
It was also implied that the agreement shall continuing till the object is achieved.
The agreement does not get terminated by merely entering into an agreement but it continues to subsist till the object is either achieved or terminated or abandoned.
In Abdul Kader vs State AIR 1964 Bombay 133, a conspiracy was formed in South Africa by appellants to cheat persons by dishonestly inducing them to deliver money in the Indian currency by using forced documents and the acts of cheating were committed in India.
When the accused were charged with the offence of conspiracy, it was contended that the conspiracy was entered into and was completed in South Africa and, therefore, the Indian Courts had no jurisdiction to try the accused for the offence of conspiracy.
The Division Bench held that though the conspiracy was entered in a foreign country and was completed as soon as the agreement was made, yet it was treated to be a continuous offence and the persons continued to be parties to the conspiracy when they committed acts in India.
Accordingly, it was held that the Indian Courts had jurisdiction to try the offence of conspiracy.
In U.S. vs Kissal ; , Holmes, J. held that conspiracy is a continuous offence and stated "is a perversion of natural thought and of natural language to call such continuous co operation of a cinema to graphic series of distinct conspiracies rather than to call it a single one. a conspiracy is a partnership in criminal purposes.
That as such it may have continuation in time.
is shown by the rule that overt act by one partner may be the act of all without any new agreement specifically directed to that act".
In Ford vs U. section ; at 620 to 622, Tuft, C.J. held that conspiracy is a continuing offence.
In Director of public Prosecutions vs Door and Ors.
1973 Appeal Cases 807 (H.L.), the five respondents hatched a plan abroad, i.e. Belgium and Morocco and worked out the details to import cannabis into the United States via England, In pursuance thereof two vans with cannabis concealed in them were shipped from Morocco to Southampton; the other van was traced at Liverspool, from where the vans were to have been shipped to America and the cannabis in it was found.
They were charged among other offences with conspiracy to import dangerous drugs.
At the trial, the respondents contended that the Courts in England had no jurisdiction to try them on the count of conspiracy since the conspiracy had been entered into abroad.
While rejecting the contention, Lord Wilberforce held (at page 817) "The present case involves international elements the accused are 559 aliens and the conspiracy was initiated abroad but there can be no question here of any breach of any rules of international law if the) are prosecuted in this country.
Under the objective territorial principle ( use the terminology of the Harward Research in Inter national Law) or the principle of University (For the prevention of the trade in narcotics falls within this description)or both, the courts of this country have a clear right, if not a duty, to prosecute in accordance with our municipal law.
The position as it is under the international law it not, however, determinative of the question whether, unde r our municipal law, the acts committed amount to a crime.
That has to be decided on different principles.
If conspiracy to import drugs were a statutory offence, the question whether foreign conspiracies were included would be decided upon the terms of the statute.
Since it is (if at all) a common law offence, this question must be decided upon principle and authority In my opinion, the key to a decision for or against the offence charged can be found in an answer to the question why the common law treats certain actions as crimes.
And one answer must certainly be because the actions in question are a threat to the Queen 's peace or as we would now perhaps say, to society.
Judged by this test, there is every reason for, and none that I can see against, the prosecution.
Con spiracies are intended to be carried into effect, and one reason why, in addition to individual prosecution of each participant, conspiracy charges are brought is because criminal action organised and executed, in concert is more dangerous than an individual breach of law.
Why, then, restrain from prosecution where the relevant concert was, initially, formed outside the United Kingoom?.
The truth is that, in the normal case of a conspiracy carried out, or partly carried out, in this country, the location of the formation of the agreement is irrelevant; the attack upon the laws of this country is identical wherever the conspirators happened to commit; the "conspiracy" is a complex formed indeed, but not separately completed, at the first meeting of the plotters".
Viscount Dilhorne at page 823 laid the rule that: "a conspiracy does not end with the making of the agreement.
It will continue so long as there are two or more parties to it intending to carry out the design.
It would be highly unreal to say that the conspiracy to carry out the Gunpower plot was completed when the conspirators met and agreed to the plot at Catesby".
561 in my view, be considered contrary to the rules of international comity for the forces of law and order in England to protect the Queen 's peace by arresting them and putting them in trial for conspiracy whether they are British subjects or foreigners and whether or not conspiracy is a crime under the law of the country in which the conspiracy was born".
At page 835 it was held that the respondents conspired together in England notwithstanding the fact that they were abroad when they entered into the agreement which was the essence of the conspiracy.
That agreement was and remained a continuing agreement and they continued to conspire until the offence they were conspiring to commit was in fact committed.
Accordingly, it was held that the conspiracy, though entered into abroad, was committed in England and the courts in England and jurisdiction.
The ratio emphasizes that acts done in furtherance of continuing conspiracy constitute part of the cause of action and performance of it gives jurisdiction for English Courts to try the accused.
In Trecy vs Director of Public Prosecutions 1971 Appeal Cases 537 at 563 to ,(H. L.).
the facts of the case were that the appellant therein posted in the Isle of Wright a letter written by him and addressed to Mrs. X in West Germany demanding money with menaces.
The letter was received by Mrs. X in West Germany.
The appellant was charged with black mail indictable section 21 of the Theft Act, 1968.
While denying the offence, it was contended that the courts in England were devoted of jurisdiction.
Over ruling the said objection, Lord Diplock at page 562 observed: "The State is under a correlative duty to those who owe obedience to its laws to protect their interests and one of the purposes of criminal law is to afford such protection by determining by threat of punishment conducted by other persons which is calculated to hand to those interests.
Comity gives no right to a State to insist that any person may with immunity do physical acts in its own territory which have harmful consequences to persons within the territory of another state.
It may be under no obligation in comity to punish those acts itself, but it has no ground from complaint in international law if the State in which the harmful consequences had their effect punishes, when they do enter its territories, persons who did such acts".
Prof. Williams, Glanville in his article "Venue and the Ambit of Criminal Law at 528 stated thus: 562 "Sometimes the problem of determining the place of the crime is assisted by the doctrine of the continuing crime.
Some crimes are regarded as being of a continuing nature, and they may accordingly be prosecuted in any jurisdiction in which they are partly committed the partial commission being, in the eye of the law, a total commission '.
In the context of conspiracy under the caption inchoate crimes" It was stated: "The general principle seems to be that jurisdiction over an inchoate crime appertains to the State that would have had jurisdiction had the crime been consummated".
Commenting upon the ratio laid down in Board of Trade vs Owen [1957] Appeal Cases 602, he stated at page 534 thus "The seems to follow owen as logical corollary that our courts will assume jurisdiction to punish a conspiracy entered into abroad to commit a crime here.
Although the general principle is that crime committed abroad do not become punishable here merely because their evil effects occur here, there may be an exception for inchoate crimes aimed against persons in this country.
Since conspiracy is the widest and vaguest of the inchoate crimes, it seems clearly that the rule for conspiracy must apply to more limited crimes of incitement and attempt also".
At page 535 he further stated that "the rule of inchoate crimes is therefore an exception from the general principle of territorial jurisdiction.
The crime is wholly committed in the State A, yet is justiciable also in State B".
At page 535 he elucidated that "certain exceptions are recognised or suggested".
Lord Tucker in own 's case (supra) illustrated that a conspiracy D 2 England to violate the laws of a foreign country might be justiciable here if the preferments the conspiracy charged would produce a public mischief within the State or injure a person here by causing him damage, abroad".
At page 536 be stated that "as another exception from the rule in Board of, Trade vs Owen (supra it seems from the earlier decision that a conspiracy entered into here will be punishable if the conspirators contem plates that the illegality may be performed either within British jurisdiction or abroad even though, in the event, the illegality is performed abroad".
His statement of law now receives acceptance by House of Lords in Doot 's case.
563 In Halsbury 's Law of England, third edition, vol.
10, page 327, para 602, while dealing with continuing offence it was stated as under: "A criminal enterprise may consist of continuing act which is done in more places than one or of a series of acts which are done in several places.
In such cases, though there is one criminal enterprise, there may be several crimes, and a crime is committed in each place where a complete criminal act is performed although the act may be only a part of the enterprise".
It was further elucidated in para 603 that: "What constitutes a complete criminal act is determined by the nature of the crime.
Thus, as regards continuing acts, in the case of sending by post or otherwise a libellous or threatening letter, or a letter to provoke a breach of the peace, a crime is committed, both where the letter is posted or otherwise sent, and also where it is received, and the venue may be laid in either place.
Archbold in Criminal Pleadings, Evidence and Practice, 42nd edition (1985) Chapter 23, in para 28 32 at p. 2281, Wright on Conspiracies and Agreements at pages 73 74, Smith on Crimes at page 239 and Russel on Crime, 12th edition, page 613 stated that conspiracy is a continuing offence and liable to prosecution at the place of making the agreement and also in the country where the acts are committed.
Thus, an agreement between two or more persons to do an illegal act or legal acts by illegal means is criminal conspiracy.
If the agreement is not an agreement to commit an offence, it does not amount to conspiracy unless it is followed up by an overt act done by one or more persons in furtherance of the agreement.
The offence is complete as soon as there is meeting of minds and unity of purpose between the conspirators to do that illegal act or legal act by illegal means.
Conspiracy itself is a substantive offence and is distinct from the offence to commit which the conspiracy is entered into.
It is undoubted that the general conspiracy is distinct from number of separate offences committed while executing the offence of conspiracy.
Each act constitutes separate offence punishable, independent of the conspiracy.
The law had developed several or different models or technics to broach the scope of conspiracy.
One such model is that of a chain, where each party performs even without knowledge of other a role that aids succeeding parties in accomplishing the criminal objectives of the conspiracy.
An illustration, of a single conspiracy, its parts bound together as links in a chain, is 564 the process of procuring and distributing narcotics or an illegal foreign drug for sale in different parts of the (,lobe.
In such a case, smugglers, middlemen and retailers are privies to a single conspiracy to smuggle and distribute narcotics.
The smugglers knew that the middlemen must sell to retailers , and the retailers knew that the middlemen must buy of importers of someone or another.
Thus the conspirators at one end of the chain knew that the unlawful business would not, and could not, stop with their buyers, and those at the other end knew that it had not begun with their settlers.
The accused embarked upon a venture in all parts of which each was a participant and an abettor in the sense that, the success of the part with which he was immediately concerned, was dependent upon the success of the whole.
It should also be considered as a spoke in the hub.
There is a rim to bind all the spokes to gather in a single conspiracy.
It is not material that a rim is found only when there is proof that each spoke was aware of one another 's existence but that all promoted in furtherance of some single illegal objective.
The traditional concept of single agreement can also accommodate the situation where a well defined group conspires to commit multiple crimes so long as all these crimes are the objects of the same agreement or continuous conspiratorial relationship, and the conspiracy continues to subsist though it was entered in the first instance.
Take for instance that three persons hatched a conspiracy in country 'A ' to kill 'D ' in country 'B ' with explosive substance.
As far as conspiracy is concerned, it is complete in country 'A ' one of them pursuant thereto carried the explosive substance and hands it over to third one in the country 'B ' who implants at a place where 'D ' frequents and got exploded with remote control. 'D ' may be killed or escape or may be diffused.
The conspiracy continues till it is executed in country 'B ' or frustrated.
Therefore, it is a continuing act and all are liable for conspiracy in country 'B ' though first two are liable to murder with aid of section 120 B and the last one is liable under section 302 or 307 IPC, as the case may be.
Conspiracy may be considered to be a march under a banner and a person may join or drop out in the march without the necessity of the change in the text on the banner.
In the comity of International Law, in these days, committing offences on international scale is a common feature.
The offence of conspiracy would be a useful weapon and there would exist no conflict in municipal laws and the doctrine of autrefoes convict or acquit would extend to such offences.
The comity of nations are duty bound to apprehend the conspirators as soon as they set their feet on the country territorial limits and nip the offence in the bud.
A conspiracy thus, is a continuing offence and continues to subsist and committed wherever one of the conspirators does an act or series of acts.
So long aits performance continues, it is a continuing offence till it is executed or rescinded or frustrated by choice or necessity.
A crime is complete as soon as the agreement is made, but it is not a thing of the moment.
It does not end with the making of the 565 agreement.
It will continue so long as there are two or more parties to it intending to carry into effect the design.
Its continuance is a threat to the society against which it was aimed at and would be dealt with as soon as that jurisdiction can properly claim the power to do so.
The conspiracy designed or agreed abroad will have the same effect as in India, when part of the acts, pursuant to the agreement are agreed to be finalised or done, attempted or even frustrated and vice versa.
In K. Satwant Singh vs The State of Punjab ; , a Constitution Bench of this Court was to consider as to when section 188 of the Code would be applicable to a case.
The facts therein was that the appellant had cheated the Govt.
of Burma whose office was at Shimla punishable under section 420 IPC.
The accused contended that the part of the act was done at Kohlapur where payment was to be made and on that basis the court at Shimla had no jurisdiction to try the offence without prior sanction of the political agent.
Considering that question this court held that if the offence of cheating was committed outside British India, the sanction would be necessary but on facts it was held that: "It seems to us, on the facts established in this case, that no part of the offence of cheating was committed by the appellant outside British India.
His false representation to the Govt.
of Burma that money was due to him was at a place in British India which induced that govt.
to order payment of his claims.
In fact, he was paid at Lahore at his own request by means of cheques on the Branch of the Imperial Bank of India at Lahore.
The delivery of the property of the Govt.
of Burma, namely, the money, was made at Lahore, a place in Brithsh India, an d we cannot regard, in the circumstances of the present case, the posting of the cheques at Kohlapur either as delivery of property to the appellant at Kohlapur or payment of his claims at Kohlapur.
The entire argument founded on the provisions of section 188 of the Code, therefore, fails.
Far from helping the appellant the ratio establishes that if an offence was committed in India the need to obtain sanction under section 188 is obviated.
In Purshottamdas Dalmia vs Stale of West Bengal ; , this court, when the appellant was charged with offences punishable under sections 120B, 466 and 477, the appellant contended that offence of conspiracy was entered into at Calcutta the offences of using the forged documents was committed at Madras.
Therefore, the court at Calcutta had no jurisdiction to try the offence under section 471 read with section 466, EPC, even though committed in pursuance of the conspiracy and in course of the same transaction.
This court held that the desirability of trying the offences of alit 566 he overt acts committed in pursuance of a conspiracy together is obvious and sections 177 and 239 of the Code leave no manner of doubt that the court which has the jurisdiction to try the offence of criminal conspiracy has also the jurisdiction to try all the overt acts committed in pursuance of it even though outside its territorial jurisdiction.
In LN.
Mukherjee vs The State of Madras ; , it was further held that the court having jurisdiction to try the offences committed in pursuance of the conspiracy, has also the jurisdiction to try the offence of criminal conspiracy, even though it was committed outside its territorial jurisdiction.
This view was further reiterated in R.K. Dalmia vs Delhi Administration ; at 273 and Banwari Lal Jhunjhunwala and Ors.
vs Union of India and Anr.
1963] supp.
2 SCR 338.
Therein it was held that the court trying an accused for offence of conspiracy is competent to try him for offences committed in pursuance of that conspiracy irrespective of the fact whether or not overt acts have been committed within its territorial jurisdiction.
The charges framed therein under section 409 read with sections 120B, 420, IPC and section 5(1) (D) read with section 5(2) of the Prevention of Corruption Act were upheld.
Thus we hold that sanction under section 188 is not a condition precedent to take cognizance of the offence.
If need be it could be obtained before trial begins.
Conspiracy was initially hatched at Chandigarh and though itself is a completed offence, being continuing offence, even accepting appellant 's case that he was at Dubai and part of conspiracy and overt acts in furtherance thereof had taken place at Dubai and partly at Chandigarh; and in consequence thereof other offences had been ensued.
Since the.
offences have been committed during the continuing course of transaction culminated in cheating P.N.B. at Chandigarh, the need to obtain sanction for various offences under proviso to section 188 is obviated.
Therefore, there is no need to obtain sanction from Central Govt.
The case may be different if the offences were committed out side India and are completed in themselves without conspiracy.
Perhaps that question may be different for which we express no opinion on the facts of this case.
The ratio in Fakhruila Khan has no application to the facts in this case.
Therein the accused were charged for offences under section 420, 419, 467 and 468 and the offences were committed in native State, Mysore.
As a result the courts in British India i.e. Madras province had no jurisdiction to try the offence without prior sanction.
Equally in Verghese 's case the offences charged under section 409, IPC had also, been taken place outside British India.
Therefore, it was held that the sanction under s, 188 was necessary.
The ratio in Kailash Sharma 's case is not good at law.
The appeal is accordingly dismissed.
R.M. SAHAI J.
While agreeing with Brother Ramaswamy, J., I propose to add a few words.
Prosecution of the appellant under Section 120B read with Section 420 and 471 of the Indian Penal Code (in brief 'IPC ') was assailed for 567 absence of sanction under Section 188 of the Criminal Procedure Code (in brief 'Cr. P. C. ').
Two submissions were advanced, one that even though criminal conspiracy was itself an offence but if another offence was committed in pursuance of it outside India then sanction was necessary; second an offence is constituted of a number of ingredients and even if one of them was committed outside the country Section 188 of the Cr.
P.C. was attracted.
Language of the section is plain and simple.
It operates where an offence is committed by a citizen of India outside the country.
Requirements are, therefore, one commission of an offence; second by an Indian citizen; and third that it should have been committed outside the country.
Out of the three there is no dispute that the appellant is an Indian citizen.
But so far the other two are concerned the allegations in the complaint are that the conspiracy to forge and cheat the bank was hatched by the appellant and others in India.
Whether it was so or not, cannot be gone into at this stage.
What is the claim then? Two fold one the appellant was in Dubai at the relevant time when the offence is alleged to have been committed.
Second, since the bills of lading and exchange were prepared and were submitted to the Emirates National Bank at Dubai and the Payment too was received at Emirates National Bank in Dubai, the alleged offence of forgery and cheating were committed outside India.
Is that so? Can the offence of conspiracy or cheating or forgery on these allegations be said to have been committed outside the country? Substantive law of extra territory in respect of criminal offences is provided for by Section 4 of the IPC and the procedure to inquire and try it is contained the Section 188 Cr.
P.C. Effect of these sections is that an offence committed by an Indian citizen, outside the country is deemed to have been committed in India.
Proviso to Section 188 Cr.
P.C. however provides the safeguard for the NRI to guard against any unwarranted harassment by directing, "that, notwithstanding anything in any of the preceding sections of this Chapter, no such offence shall be inquired into or tried in India except with the previous sanction of the Central Government.
" Since the proviso begins with a non obstinate clause its observance is mandatory.
But is would come into play only if the principal clause is applicable, namely, it is established that an offence as defined in clause 'n ' of Section 2 of the Cr.
P.C. has been committed and it has been committed outside the country.
What has to be examined at this stage is if the claim of the appellant that the offence under Section 120B read with Section 420 and Section 471 of the IPC were committed outside the country.
An offence is defined in the Cr.
P.C. to mean an 568 act or omission made punishable by any law for the time being in force.
None of the offences for which the appellant has been charged has residence as one of its ingredients.
The jurisdiction to inquire or try vests under Section 177 in the Court in whose local jurisdiction the offence is committed.
It is thus the commission of offence and not the residence of the accused which is decisive of jurisdiction.
When two or more persons agree to do or cause to be done an illegal act or an act which is illegal by illegal means such agreement is designated a criminal conspiracy under Section 120A of the IPC.
The ingredients of the offence is agreement and not the residence.
meeting of minds of more than two persons is the primary requirement.
Even if it is assumed that the appellant was at Dubai and he entered into an agreement with his counterpart sitting in India to do an illegal act in India the offence of conspiracy came into being when agreement was reached between the two.
The two minds met when talks oral or in writing took place in India.
Therefore, the offence of conspiracy cannot be said to have been committed outside the country.
In Mobarik Ali Ahmed vs The State of Bombay. ; this court while dealing with the question of jurisdiction of the Courts to try an offence of cheating committed by a foreign national held that the offence of cheating took place only when representation was made by the accused sitting in Karachi to the complaints sitting in Bombay.
The argument founded on corporeal presence was rejected and it was observed: "What is, therefore, to be seen is whether there is any reason to think that a foreigner not corporeally present at the time of the commission of the commission of the offence does not fall within the range of persons punishable therefor under the Code.
It appears to us that the answer must be in the negative unless there is any recognised legal principle on which such exclusion can be founded or the language of the Code compels such a construction".
If a foreign national is amenable to jurisdiction under Section 179 of the Cr.
P.C. a NRI cannot claim that the offence shall be deemed to have been committed outside the country merely because he was not physically present.
Preparation of bill of lading at Dubai or payment at Dubai were not isolated acts.
They were part of chain activities between the appellant and his associates with whom he entered into agreement to cheat the bank at Chandigarh.
Any isolated act or omission committed at Dubai was insufficient to constitute an offence.
The illegal act of dishonestly inducing the bank at Chandigarh was committed not by preparation of bill at Dubai but its presentation in pursuance of agreement to cheat.
The submission thus founded was on residence or on preparation of bills of lading or encashment at Dubai are of no consequence.
569 Nor is there any merit in the submission that even part of the offence would attract Section 189 as the section operates when offence is committed outside India.
An offence is committed when all the ingredients are satisfied.
The section having used the word offence it cannot be understood as part of the offence.
Section 179 Cr.
P.C. empowers a court to try an offence either at a place where the offence is committed or the consequences ensue.
On the allegations in the complaint the act or omissions were committed in India.
In any case the consequence of conspiracy, cheating and forging having taken place at Chandigarh the offence was not committed outside the country therefore the provisions of Sec.
188 Cr.
P.C. were not attracted.
ORDER For reasons given by us in our concurring but separate orders the appeal fails and is dismissed.
Parties shall bear their own costs.
Appeal dismissed. [/INST] The prosecution case was that the appellant, a non resident Indian at Dubai, hatched a conspiracy along with four others to cheat the Bank at Chandigarh.
in furtherance of the conspiracy, the appellant got credit facility by way of Foreign Letters of Credit and issued proforma invoices of his concern and addressed to the Bank through the establishments of other accused.
The Manager of the Bank, another accused, in confabulation with 544 the appellant and other accused, being in charge of foreign exchange department, issued Foreign letter of Credit in violation of import policy.
The Bills of Lading were addressed to the Bank.
The cable confirmation of the Bank was sent to appellant 's concern at Dubai for confirmation of discrepancy.
The appellant confirmed correctness thereof.
Placing reliance thereon, authority letter was issued by the Bank and cables were sent subsequent thereto to remit the amount .
to the Dubai Bank through one Irving Trust Company, At the instance of accused Anand, The Dubai Bank informed the Bankat Chandigarh that the discrepancy in the document adaptable to accused Anand and claimed to have inspected the goods on board in the vessel.
On receipt of the information from the appellant 's concern at Dubai, full amount is US Dollars 4,39,200 was credited against all the three Letters of Credit on discount basis.
The investigation established that the vessel was a non existent one and three Foreign Letters of Credit were fabricated on the basis of false and forged shipping documents submitted by the appellant to the Dubai Bank.
Thus the Bank at Chandigarh was cheated of an amount of Rs. 40,30,329.
The accused were charge sheeted under section read with sections 420, 468, and 471, IPC.
The Trial Court discharged all the accused of the offenses on the ground that conspiracy and the acts done in furtherance thereof had taken place outside India and as no sanction under section 188, Code of Criminal Procedure 1973 was produced, the prosecution was not maintainable.
The High Court in revision held that the conspiracy took place at Chandigarh and the overt acts committed In pursuance of that conspiracy at Dubai constituted offences under sections 420,467 and 471 IPC., and they were triable at Chandigarh without previous sanction of the Central Govt.
The High Court setting aside the order of discharge of the trial Court, directed to continue further proceedings in accordance with law.
That order of the High Court was challenged under this appeal under Article 136 of the Constitution.
The appellant contended that he was not a privy to the conspiracy and the conspiracy did not take place at Chandigarh; and that even assuming that some of the offences were committed in India, by operation of section 188 read with the proviso thereto with a non obstanti clause, absence of sanction by the 545 Central Govt.
barred the jurisdiction of the Courts in India to take cognisance of or to enquire into or try the accused.
The respondents submitted that the conspiracy to cheat the Bank was hatched at Chandigarh; that all the accused committed over acts in furtherance of the conspiracy at Chandigarh and therefore, the sanction of the Central Govt.
was not necessary.
Dismissing the appeal, this Court, HELD: Per K. Ramaswarmy, J. 1.01.
Judicial power of a State extends to the punishment of all offences against the municipal laws of the State by whomsoever committed within the territory.
It also has the power to punish all such offences wherever committed by its citizen.
The general principle of international law is that every person be it a citizen or foreigner who is found within a foreign State is subjected to, and is punishable by, its law.
Otherwise the criminal law could not be administered according to any civilised system of jurisprudence.
(553F) 1.02.
Conspiracy may he considered to be a march under a banner and a person may join or drop out in the march without the necessity of the change in the text on the banner.
In the comity of International Law, in these days, commiting offences on international scale is a common feature.
The offence of conspiracy would be a useful weapon and there would exist no contact in municipal laws and the doctrine of autrefois convict or acquit would extend to such offences.
The comity of nations are duty bound to apprehend the conspirators as soon as they set their feet on the country territorial limits and nip the offence in the bud.
(564 F G) 2.01.
Section 120 A of the I.P.C. defines 'conspiracy ' to mean that when two or more persons agree to do, or cause to be done an illegal act, or an act which is not illegal by illegal means such an agreement is designated as criminal conspiracy".
No agreement except an agreement to commit an offence shall amount to a criminal conspiracy, unless some act besides the agreement is done by one or more parties to such agreement in furtherance thereof.
(557 C) 546 2.02.
Section 120 B of the I.P.C. prescribes punishment for criminal conspiracy.
It is not necessary that each conspirator must know all the details of the scheme nor be a participant at every state.
It is necessary that they should agree for design or object of the conspiracy.
Conspiracy is conceived as having three elements: (1) agreement (2) between two or more persons by whom the agreement is effected; and (3) a criminal object, which may be either the ultimate aim of the agreement, or may constitute the means, or one of the means by which that aim is to be accomplished.
It is immaterial whether this is found in the ultimate objects.
(554 E) 2.03.
Conspiracy to commit a crime itself is punishable as a substantive offence and every individual offence committed pursuant to the conspiracy is separate and distinct offence to which individual offenders are liable to punishment, independent of the conspiracy.
(556 D) 2.04.
The agreement does not come to an end with it .
making, but would endure till it is accomplished or abandoned or proved abortive.
Being a continuing offence, if any acts or omissions which constitute an offence are done in India or outside its territory the conspirators continuing to be parties to the conspiracy and since part of the acts were done in India, they would obviate the need to obtain sanction of the Central Govt.
All of them need not he present in India nor continue to remain in India.
(556 E) 2.05.
An agreement between two or more persons to do an illegal act or legal acts by illegal means is criminal conspiracy.
If the agreement is not an agreement to commit an offence, it does not amount to conspiracy unless it is followed up by an overt act done by one or more persons in furtherance of the agreement.
The offence is complete as soon as there is meeting of minds and unity of purpose between the conspirators to de that illegal act or legal act by illegal means.
Conspiracy itself is a substantive offence and is distinct from the offence to commit which the conspiracy is entered into.
It is undoubted that the general conspiracy is distinct from number of separate offences committed while executing the offence of conspiracy.
Each act constitutes separate offence punishable, independent of the conspiracy.
(563 F G) "Jones 'Case, 1832 B & A D 345; Mulcahy vs Reg., (1868) L.R. ; Quinn vs Leathem, ; at 528; B.G. Barsay.
vs The State of Bombay, ; Yashpal vs The State of Punjab, ; Mohammed Usman, Mohamned Hussain Manivar & Anr.v.
State of Maharashtra, [1981] 3SCR 68;Noor 547 Mohammad Yasuf Monin vs State of Maharashtra, ; ; R.K. Dalmia & Anr.
vs The Delhi Administration, ; ; Shivanarayan Laxminarayan & Ors.
vs State of Maharashtra & Ors.
and Lennari Schussler & Anr.
vs Director of Enforcement & Anr., 1197012SCR 760, referred to. 2.06.
A conspiracy is a continuing offence and continues to subsist and committed wherever one of the conspirators does an act or series of facts.
So long as it ; performance continues, it is a continuing offence till it is executed or rescinded or frustrated by choice or necessity A crime is complete as soon as the agreement is made, but it is not a thing of the moment It does not end with the making of the agreement.
It will continue so long as there are two or more parties to it intending to carry into effect the design.
Its continuance is a threat to the society against which it was aimed at and would be dealt with as soon as that jurisdiction can properly claim the power to do so.
The conspiracy designed or agreed abroad will have the same effect as in India,.
when part of the acts, pursuant to the agreement are agreed to be finalised or done, attempted or even frustrated and vice versa.
(564 H, 565 A) Abdul Kader vs State.
AIR 1964 Bombay 133; U.S. vs Kissal, ; ; Ford vs U.S., ; at 620 to 622; Director of Public Prosecutions vs Doot and Ors., (1973) Appeal Cases 807 (H.L); Treacy vs Director of Public Prosecutions, (1971) Appeal Cases 537 at 563 (H.L.) and Board of Trade vs Owen.
(1957) Appeal Cases 602, referred to.
Prof. Williams, Glanville: "Vanue and the Ambit of Criminal Law", at 528; Halsbury 's Law of England, third edition Vol.
page 327, Para 6O2; Archobold:Criminal pleadings.
Evidence and Practice 42nd edition, [1985] Chapter 23, In para 28 32 at page 2281; Writ: Conspiracies and Agreements, at pages 73 74; Smith: Crimes, at page 239 and Russel; Crime, 12th edition, page 613, referred to. 2.07.
Sanction under section 188 is not a condition precedent to take cognizance of the offence.
If need be it could he obtained before trial begins.
Conspiracy was initially hatcher at Chandigarh and though its elf is a completed offence, being continuing offence, even accepting appellant 's case that he was at Dubai and part of conspiracy and overt acts in furtherance 548 thereof had taken place at Dubai and partly at Chandigar and in consequence thereof other offences had been ensued.
Since the offences have been committed during the continuing course of transaction culminates in cheating P.N.B. at Chandigarh, the need to obtain sanction for various officer under proviso to section 188 is obviated.
Therefore, there is no need to obtain sanction from Central Govt.
The case may he different if the offences were committed out side India and are completed in themselves without conspiracy.
(566 D E) K. Satwant Singh vs The State of Punjab, ; ; In Re M. L Verghese, AIR 1947 Mad. 352; T. Fakhulla Khan and Ors.
vs Emperor, AIR 1935 Mad. 326; Kailash Sharma vs State, 1973 Crl.
law journal 1021, distinguished.
Purshottamdas Dalmia vs State of Bengal, ; ; L.N. Mukherjee vs The State of Madras, ; ; R.K. Dalmia vs Delhi Administration ; at 273; Banwari Lal Jhunjhunwala and Ors vs Union of India and Anr., [1963] Supp. 2 SCR 338, referred to.
Per R.M. Sahai, J. (Concurring) 1.1.
Language of the section 188, Code of Criminal Procedure is plain and simple.
It operates where an offence is committed by a citizen of India outside the country.
Requirements are, therefore, one commission of an offence; second by an Indian citizen; and third that it should have been committed outside the country.
(567 D) 1.2.
Substantive law of extra territory in respect of criminal offences is provided for by Section 4 of the IPC and the procedure to inquire and try it is contained in Section 1 88 Cr.
P.C. Effect of these sections is that an offence committed by an Indian citizen outside the country is deemed to have been committed in India.
(567 E) 1.3.
Since the proviso to Section 188, Cr.
P.C. begin .
with a non obstinate clause its observance is mandatory.
But it would come into play only if the principal clause is applicable, namely, it is established that an offence as defined in dause 'n 'of Section 2 of the Cr.
P.C. has been committed and it has been committed outside the country.
(567 G) 549 1.4.
What has to be examined at this stage is if the claim of the appellant that the offence under Section 120B read with Section 420 and Section 471 of the IPC were committed outside the country.
An offence is deemed in the Cr.
P.C. to mean an Act or omission made punishable by any law for the time being in force.
None of the offences for which the appellant has been charged has residence as one of its ingredients.
(567 H, 568 A) 1.5.
The jurisdiction to inquire or try vests under Section 177 in the Court in whose local jurisdiction the offence is committed.
It is thus the commission of offence and not the residence of the accused which is decisive of jurisdiction.
When two or more persons agree to do or cause to be done an illegal act or an act which is illegal by illegal means such agreement is designated a criminal conspiracy under Section 120A of the IPC.
The ingredients of the offence is agreement and not the residence.
Meeting of minds of more than two persons is the primary requirement Even if it is assumed that the appellant was at Dubai and he entered into an agreement with his counterpart sifting in India to do an illegal act in India the offence of conspiracy came into being when agreement was reached between the two.
The two minds met when talks oral or in writing took place in India.
Therefore, the offence of conspiracy cannot be said to have been committed outside the country.
(568 B C) 1.6.
If a foreign national is amenable to jurisdiction under Section 179 of the Cr.
P.C. a NRI cannot claim that the offence shall be deemed to have been committed outside the country merely because he was not physically present (568 F) Mobarik Ali Ahmed vs The State of Bombay, ; , referred to.
An offence is committed when all the ingredients are satisfied.
The section having used the word 'offence ' it cannot be understood as part of the offence.
Section 179 Cr.
P.C. empowers a court to try an offence either at a place where the offence is committed or the consequences ensue.
On the allegations in the complaint the act or omissions were committed in India.
In any case the consequence of conspiracy, cheating and forging having taken place at Chandigarh the offence was not committed outside the country therefore the provisions of Sec.
188 Cr.
P.C. were not attracted.
(569 B) </s> |
<s>[INST] Summarize the following judgement: Appeal No.241 of 1993.
From the Judgment and Order dated 9.10.1991 of the Punjab and Haryana High Court in Civil Writ Petition No. 5727 of 1991.
Harish N. Salve Jagdish Singh Kuhar, and A.K. Mahajan for the Appellant.
Ujagar Singh, Ms. Naresh Bakshi R.S. Yadav and G.K. Bansal for the Respondents.
The Judgment of the Court was delivered by S.C. AGRAWAL ,J.
: This appeal relates to the inter se seniority of the appellant and respondent No. 3 in the punjab Superior Judicial Service (hereinafter referred to as 'The Service ').
The appellant and respondent No. 3 were both appointed to the Service on May 26, 1986 on the basis of selection by direct recruitment.
The appellant belongs to the general category whereas respondent No. 3 is a Mazhbi Sikh, which is a Schedule Caste in Punjab.
The recruitment to the Service is governed by Punjab Superior Judicial Service Rules, 1963 (hereinafter referred to as 'The Rules ').
By Rule 8 A, which was inserted in the rules by notification dated June 14,1977, the instructions issued by the State Government from time to time in relation to reservation of appointments or posts for Scheduled Castes and Backward Classes were made applicable for the purpose of making appointments to the posts in the Service.
The orders of the State Government relating to persons belonging to Scheduled Castes in this regard which have a bearing in this appeal are as follows (1) Letter dated June 6, 1974 from the Secretary to the Government of Punjab, Welfare of Scheduled Castes and Backward Classes Department to all Heads of Department etc.
It was communicated that it had been decided to increase the percentage of reservation in direct recruitment in all services from 20% to 25% in the case of members of Scheduled Castes and from 2% to 5% in the case of members belonging to Backward Classes.
In the said letter, it was also indicated 599 that the vacancies to be reserved for the members of Scheduled Castes in a lot of 100 vacancies would be at the points specified below 1, 5, 9, 13, 17, 21, 25, 29, 33, 37, 41, 45, 49, 53, 57, 61, 65, 69, 73, 77, 8 1, 85, 89, 93 and 97 and so on.
It was also directed that the Roster already existing would not be abondoned, but would now be maintained in continuation from the vacancy in the existing Roster last filled up according to the new pattern of reservation that has been prescribed in the earlier paragraphs in the said letter.
(2) Circular dated November 19,1974 relates to carrying forward of reservation for members of Scheduled Castes/Backward Classes.
It was directed that "the reservation should be carried forward from vacancy to vacancy in the same block until a Scheduled Caste or a Backward Class person, as the case may be, is appointed or promoted in the same block.
It was further directed that if all the vacancies in any block determined on the basis of prescribed Roster are filled up by other category person due to non availability of Scheduled Castes or Backward Classes persons, the reservation should be carried forward to the subsequent blocks.
The said letter required that the reservation should be carried forward from vacancy to vacancy in each block and from block to block until the carried forward vacancies are filled up by the members of the Scheduled Castes or Backward Classes.
It was also provided that only one reserved vacancy out of the carried forward vacancies should be filled in a block of appropriate Roster in addition to the normal reserved point of the block.
(3) Letter dated May 5, 1975, from the Secretary to the Government, Punjab, Welfare of Scheduled Castes & Backward Classes Department addressed to all Heads of Departments etc.
It was communicated that the Government have decided that henceforth, 50% vacancies of the quota reserved for Scheduled Casstes should be offered to Balmikis and Mazhbi Sikhs, if available, as a first preference from amongst the Scheduled Castes candidates.
(4) Letter dated.
April 8, 1980 addressed by the Under Secretary to the Government of Punjab, Welfare Department Reservation Cell, to all Heads of Departments etc.
The position with regard to the implementation of instructions regarding reservation for Mazhbi Sikhs and Balmikis under the letter dated May 5, 1975 was clarified as follows "i) Combined merit list can be disturbed while giving appointment 600 to the candidate belonging to Balmikis and Mazhbi Sikhs.
ii) On the basis of 50% reservation the first reserved vacancy can be offered to Balmikis and Mazhbi Sikhs although his name may be below in the merit list.
iii)On the basis of 50% reservation, Balmikis and Mazhbi Sikhs 1, 3, 5 and so on reserved vacancies shall go to the candidates of these castes if available and 2,4, 6 and so on reserved vacancies shall go to other Scheduled Castes candidates.
It is clarified here that these instructions are to be implemented when the names of the candidates of Balmikis and Mazhbi Sikhs are included in the merit list after selection.
If no candidate belonging to these communities has been selected or less candidate selected then the reserved vacancy should be filled up from amongst the other Scheduled Castes candidates meaning thereby no reserve vacancy reserved for Balmkis and Mazhbi Sikhs should be carried forward." After the introduction of Rule 8 A in the Rules, four persons were appointed by way of direct recruitment to the Service in the year 1979.
One out of them, Shri Balwant Rai, belonged to a Scheduled Caste (other than Balmikis or Mazhbi Sikhs).
Thereafter, in 1981, one post fell vacant but no person belonging to a Scheduled Caste 'could be selected and the candidate belonging to general category was appointed against the said post.
In the year 1982, selection was made for two posts but only one person could be selected and he also belonged to the general category and no person belonging to a Scheduled Caste was available for appointment.
In 1986, six persons including the appellant and respondent No.3 were appointed on the basis of direct recruitment.
Out of those six persons, four belonged to the general category and two belonged to Scheduled Caste.
One of the two persons was Shri G.S. Sarma who belonged to a Scheduled Caste other then Balmikis or Mazhbi Sikhs.
In the merit list for the said selection the appellant was placed at No. 1, Shri G.S. Sarma was at No. 2 and respondent No. 3 was at No. 5.
As per the Roster, Shri G.S. Samra was placed at Point No.7, the appellant at Point No.8 and respondent No. 3 at Point No. 9.
After joining the Service, Shri G.S. Samra resigned from the same and had ceased to be a member of the Service prior to April 1, 1988.
In the tentative seniority list of the members of the Service as on April 1, 601 1988, the appellant was placed at Serial No. 52 and respondent No. 3 was placed at Serial No.53.
Respondent No.3 submitted a representation against his placement in the seniority list and claimed that he should be placed against the post reserved for Scheduled Caste at Serial No. 5 in the Roster and on that basis he should be given the seniority of the year of 198 1.
He also submitted that since he is a Mazhbi Sikh, he is entitled to preference over Shri G.S. Samra who belonged to a Scheduled Caste other than Balmikis and Mazhbi Sikhs, and he claimed that he should have been placed at Point No.7 in the Roster and Shri G.S. Samra should have been placed at Point No. 9 and on that basis also respondent No. 3 is senior to the appellant.
Representation was also invited from the appellant.
in this regard.
After considering the said representations the High Court, on its administrative side, decided that the respondent No. 3 was entitled to be placed above Shri G.S. Samra in view of the Circular Letter dated May 5, 1975 and that he should have been placed against Point No. 7 in the roster and Shri G.S. Samra should have been placed against Point No.9 in the Roster.
On that basis the seniority list was revised and respondent No.3 was placed at Serial No. 52 while the appellant were placed at Serial No. 53.
Feeling aggrieved by the revision in the seniority, the appellant filed a writ petition in the High Court which was dismissed by the High Court by judgment and order October 9, 199 1.
This appeal is directed against the said judgment of the High Court.
There is no dispute that appellant has been rightly assigned Point No. 8.
If Respondent No. 3 has to be assigned Point No.7 as found by the High Court, then he would be senior to the appellant but if Respondent No. 3 is assigned Point No. 9 then appellant would be senior to Respondent No. 3 It is, therefore, necessary to determine whether respondent No. 3 is entitled to be placed at Point No. 7 in the Roster in place of Shri G.S. Samra who should be placed at Point No.9 or that the respondent no.3 should be assigned Point No.9 of the Roster.
The said question requires consideration of the various orders relating to reservation for Scheduled Castes to which reference has been made earlier.
As indicated earlier by letter dated June 6, 1974 points 1, 5, 9, 13, 17, 21, 25, 29, 33, 37,41, 45, 49, 53, 57, 6 1, 65, 69, 73, 77, 81, 85, 89, 93 and 97 in the Roster are reserved for members of Scheduled Castes.
By letter dated May 5, 1975, 50% of the vacancies of the quota reserved for Scheduled Castes are required to be offered to Balmikis and Mazhbi Sikhs, if available, as a first preference from amongst the Scheduled Castes candidates.
In view of the clarifications contained in the letter dated April 8, 1980 on the basis of 50% reservation the first reserved vacancy can be offered to Balmikis and Mazhbi Sikhs although his name may be below in the merit list and on the basis of 50% reservation, amongst the vacancies reserved for Scheduled Caste, vacancies 1, 3, 5 and so on would go to Balmikis and Mazhbi Sikhs, if available, and reserved vacancies 2, 4, 6 and so on would go to other Scheduled 602 Castes candidates.
It has also been clarified that if no candidate belonging to the communities of Balmikis and Mazhbi Sikhs was selected or less number of candidates were selected then the reserved vacancies should be filled up amongst the other Scheduled Castes candidates and that no vacancy reserved for Balmikis and Mazhbi Sikhs should be carried forward.
In view of the aforesaid clarifications out of the posts reserved for Scheduled Castes in the Roster, there was reservation for Balmikis and Mazhbi Sikhs on the posts against the following points in the Roster 1, 9, 17, 25, 33, 41, 49, 57, 65, 73, 81, 89, and 97.
There was reservation for members of Scheduled Castes other than Balmikis and Mazhbi Sikhs on the posts against the following points in the Roster: 5, 13, 21, 29, 37, 45, 53, 61, 69, 77, 85, and 93.
The learned counsel for the appellant has urged that since these orders relating to reservation for Scheduled Castes became applicable to the Service with effect from June 14, 1977, when Rule 8 A was inserted, all appointments to the Service after June 14, 1977 have to be made in accordance with these orders.
The submission is that the first appointment, by direct recruitment, of a person belonging to the Scheduled Castes was of Shri Balwant Rai made in 1979.
That was at point No. 1 in the Roster.
That should have gone to a Balmiki or a Mazhbi Sikh but since no person belonging to those communities was available, Shri Balwant Rai, who belongs to a Scheduled Caste other than Balmikis and Mazhbi Sikhs, was appointed.
It has been further urged that in view of the clarification contained in the letter dated April 8.
1980, a vacancy reserved for Balmikis and Mazhbi Sikhs is not required to be carried forward and the Balmikis and Mazhbi Sikhs cannot claim reservation in respect of the next vacancy at Point No. 5 which was reserved for Scheduled Castes other than Balmikis and Mazhbi Sikhs and they can only claim the vacancy that was reserved for Balmikis or Mazhbi Sikhs at point No.9.
It was submitted that Shri G.S. Samra who belonged to a Scheduled Caste other than Balmikis and Mazhbi Sikhs was entitled to be appointed against the reserved vacancy at Point No.5 reserved for a candidate belonging to a Scheduled Caste other than Balmikis and mazhbi Sikhs but since at the time of selections that were made in the years 1981 and 1982, no person belonging to a Scheduled Caste was available.
The vacancy at Point No. 5 reserved for Scheduled Castes was carried forward to point No. 7 and Shri G.S. Samra had to be adjusted at point No.7 in the Roster.
The submission is that respondent No. 3, being a Mazhbi Sikh, could not claim to be placed at point No. 7 in the Roster against a vacancy which was reserved for a candidate belonging to a Scheduled Castes other than Balmikis and 603 Mazhbi Sikhs and he could be only placed against the vacancy at point No.9 in the Roster.
The learned counsel for the respondent No.3 on the other hand has urged that in view of the order dated May 5, 1975, 50% vacancies of the quota reserved for Scheduled Castes have to be offered to Balmikis and Mazhbi Sikhs and since Shri Balwant Rai belonging to a Scheduled Caste other than Balmikis and Mazhbi Sikhs had been appointed in 1979, the next post should go to Balmikis and Mazhbi Sikhs, and on that basis, respondent No.3 was entitled to be appointed against the second post at point No. 7 of the Roster and Shri G.S. Samra could only be appointed against third post at point No.9 in the roster.
In the alternative, it was urged that the order dated April 8, 1980 could only have prospective operation with effect from the date of issue of the said order and the sub roster indicated by the said order could be given effect to only from that date and on that basis the first post reserved for Scheduled Castes should go to Balmikis or Mazhbi Sikhs and on that basis also respondent No.3 was entitled to be placed against point No.7 in the 100point roster and Shri G.S. Samra against point No.9 in the said roster.
From a parusal of the letter dated April 8,1980, we find that it gives clarifications on certain doubts that had been created by some Departments in the matter of implementation of the instructions contained in the earlier letter dated May 5,1975.
Since the said letter dated April 8,1980 is only clarificatory in nature, there is no question of its having an operation independent of the instructions contained in the letter dated May 5, 1975 and the clarifications contained in the letter dated April 8, 1980 have to be read as a part of the instructions contained in the earlier letter dated May 5, 1975.
In this context it may be stated that according to the principles of statutory construction a statute which is explanatory or clarificatory of the earlier enactment is usually held to be restrospective.
(See: Craies on Statute Law, 7th Ed., p. 58).
It must, therefore, be held that all appointments against vacancies reserved for Scheduled Castes made after May 5, 1975 (after May 14, 1977 in so far as the Service is concerned), have to be made in accordance with the instructions as contained in the letter dated May 5, 1975 as clarified by letter dated April 8, 1980.
On that view, the appointment of Shri Balwant Rai in 1979 has to be treated to be an appointment made under the said instructions and operation of these instructions cannot be postponed till April 8, 1980.
If the matter is considered in this light then the sub roster as indicated in the letter dated April 8, 1980 would have to be applied in respect of the post on which Shri Balwant Rai was appointed in 1979 and the said appointment has to be regarded as having been made against the vacancy at point No 1.
in the the roster which was reserved for Balmikis or Mazhbi Sikhs but since no Balmiki or Mazhbi 604 Sikh was selected for that post, the said vacancy was assigned to Shri Balwant Rai who belonged to a scheduled Caste other than a Balmiki or Mazhbi Sikh.
The said vacancy which was reserved for Balmikis or Mazhbi Sikhs could not be carried forward in view of the directions contained in the letter dated April 8, 1980.
The next post reserved for Scheduled Castes at point No. 5 in the roster was meant for a person belonging to a Scheduled Caste other than Balmikis and Mazhbi Sikhs.
In the selections that were made in 1981 and 1982 no person belonging to a Scheduled Caste was selected and, therefore, posts at Points nos.
5 and 6 in the Roster became available to candidates in the general category and the vacancy at Point no.5 reserved for Scheduled Castes was carried forward to point No.7 In 1986, two persons belonging to Scheduled Castes, namely Shri G.S. Samra and respondent No.3 were selected.
Shri G.S. Samra belonged to a Scheduled Caste other than Balmiki and Mazhbi Sikh whereas respondent No. 3 was a Mazhbi Sikh.
Since the post at point No.5 which had been carried forward to point No.7 was reserved for a candidate belonging to a Scheduled Caste other than Balmiki or Mazhbi Sikh it had to be assigned to Shri G.S. Samra falling in that category and respondent No. 3 who was a azhbi Sikh could only be appointed against the reserved vacancy at point No.9 in the Roster.
Respondent No. 3 can not claim that the vacancy at Point No.7 should be assigned to him.
If respondent No.3 is adjusted against the vacancy at Point No. 9 in the Roster, he has to be placed in seniority below the appellant who was appointed against point No. 8 in the Roster.
In the judgment under appeal, the High Court has placed reliance on the instructions dated March 6, 1961 and the decision of this Court in Jagjit Singh vs State of Punjab, ; The instructions dated March 6, 1961 deal with a situation where the services of a Government Servant belonging to Scheduled Castes/Tribes and Backward Classes are terminated and a resultant vacant occurred.
It has been directed as under "With a view to safeguard the interests of the members of the Scheduled Castes/Tribes and Backward Classes, it has been decided that if the services of a Government Servant belonging to Scheduled Castes/Tribes or Backward Classes are terminated, the resultant vacancy should not be included in the normal pool of vacancies to be filled in accordance with the Block System but should be filled up on ad hoc basis from the candidates belonging to these castes and classes.
In other words the intention is that the posts vacated by members of Scheduled Castes/Tribes and Backward classes should remain earmarked and be filled up by members belonging to these Classes.
" 605 In Jagjit Singh 's case, this Court was dealing with appointments to the Punjab Civil Service (Executive Branch).
These selection was made for appointment against 12 vacancies in the said Service and other vacancies in the Allied Services.
Two of the vacancies in the Punjab Civil Service were reserved for Scheduled Castes candidates.
Three persons were selected from among the members of Scheduled Castes.
The appellant in the said appeal was at third place in the merit list of the Scheduled Castes candidates.
The first two candidates on the merit list were appointed and the appellant was appointed on the post of "A" Class Tehsildar in one of the Allied Services.
Subsequently, one of the two candidates who had been appointed to the Punjab Civil Service resigned his office and a question arose as to whether the appellant was entitled to be appointed to the Punjab Civil Service against the vacancy arising on account of resignation of the Scheduled Castes candidate who had been appointed earlier.
The appellant laid his claim for such appointment on the basis of the instructions contained in the circular of March 6, 196 1.
The said claim of the appellant was upheld by this Court and it was held that the resultant vacancy caused by resignation of one of the Scheduled Castes candidate should have gone to the appellant.
The Circular dated March 6, 1961 and the decision in Jagjit Singh vs State of Punjab (supra) do not have a bearing on the question in controversy in the instant case because here there is no dispute that the respondent No.3 has been appointed against the post reserved for members of Scheduled Castes and the question is about the inter se placement of two persons appointed against vacancies reserved for Scheduled Caste candidates.
The Circular dated March 6, 1961 does not deal with the said question and it has to be dealt with on the basis of the instructions contained in the orders dated May 5, 1975 and April 8, 1980.
For the reasons aforementioned the appeal is allowed, the judgment and the order of the High Court dated October 9, 1991 is set aside.
The Civil Writ Petition filed by the appellant in the High Court is allowed and it is declared that respondent No.3 can only be treated to have been appointed against the vacancy at Point no.9 in the Roster and on that basis he must be placed below the appellant in the seniority list.
Respondent No.2 is directed to revise the seniority list of the members of the Service accordingly.
The appellant would be entitled to conse quential benefits if any, accruing to him as a result of such revision in the seniority.
The parties are left to bear their own costs.
N.V.K. Appeal allowed. [/INST] Recruitment to the Punjab Superior Judicial Service was governed by the Punjab Superior Judicial Service Rules, 1963.
Rule 8 A inserted in the said rules by notification dated June 14, 1977 provided that instructions issued by the State Government from time to time in relation to reservation of appointments for posts for Scheduled Castes and Backward Classes were applicable for appointments to posts in the Service.
The Secretary to the Government of Punjab, Welfare of Scheduled Castes and Backward Classes Department by letter dated June 6, 1974 Informed all Heads of Department etc.
that it had been decided to increase the percentage of reservation in direct recruitment in all services from 20% to 25 % in the case of members of Scheduled Castes and from 2% to 5 % in the case of members belonging to Backward Classes, and Indicated the vacancies to be reserved for the members of Scheduled Castes in a lot of 100 vacancies and specified the points.
It also directed that the Roster already existing would not be abandoned, but would now be maintained in continuation from the vacancy in the existing Roster last filled up according to the new pattern of reservation.
Circular dated November 19, 1974 made provision for carrying forward of reservation for members of Scheduled Castes/Backward Classes, and directed that the reservation should be carried forward form vacancy to vacancy in the same block until a Scheduled Caste or a Backward Class person is appointed or promoted in the same block, and that the reservation should be carried from vacancy to vacancy in each Mock and from block to block until the carried forward vacancies are filled up.
594 By letter dated May 5,1975 the Secretary to the Government, Welfare Department Communicated to all Heads of Department ; that the Government has decided that henceforth, 50% vacancies of the quata reserved for Scheduled Castes should be offered to Balmikis and Mazhbi Sikhs as a first preference from amongst the Scheduled Castes candidate, .
The Under Secretary, Welfare Department Reservation Cell by his letter dated April 8,1980, clarified the position with regard to the implementation of instructions regarding reservation for Mazhbi Sikhs and Balmikis contained in the aforesaid letter dated May 5,1975, the Clarification was to the effect that : (1) the combined merit list can be disturbed while giving appointment to the candidate belonging to Balmikis and MazhbiSikhs; (ii) the first reserved vacancy can he offered to Balmikis and Mazhbi Sikhs although their name may be below in the merit list, and (iii) on the basis of 50% reservation Bal mikis and Mazhbi Sikhs 1,3,5 and so on reserved vacancies shall go to the candidates of these castes if available and 2,4,6 and so on reserved vacancies shall go to other Scheduled Castes candidates.
After introduction of Rule 8 A in the Punjab Superior Judicial Service Rules, four persons were appointed by way of direct recruitment to the Service in the year 1979.
One of them, Shri Balwant Rai, belonged to a Scheduled Caste (other then Balmikis or Mazhbi Sikhs).
Thereafter, in 1981 one post fell vacant but no person belonging to a Scheduled Caste could be selected and candidate belonging to general category was appointed against the said post In 1982, selection was made for two posts but only one person could he selected and he also belonged to the general category and no person belonging to a Scheduled Caste was available for appointment.
In 1986, six persons including the appellant and respondent No. 3 were appointed on the basis of direct recruitment.
Out of those six persons, four belonged to the general category and two belonged to Scheduled Castes.
One of the two persons was Shri G.S. Samra who belonged to a Scheduled Caste other than Balmikis or Mazhbi Sikh.
In the merit list for the said selection the appellant was placed at No. 1, Shri G.S. Samra at No. 2, and respondent No. 3 at No. 5.
As per the Roster, Shri G.S. Samra was placed at Point No. 7, the appellant at Point No. 8 and respondent No. 3 at Point No. 9.
After joining the Service, Shri G.S. Samra resigned and had ceased to be a member of the service prior.
to April, 1, 1988.
In the tentative seniority list as on April 1, 1988,the appellant was placed at serial No. 52 and respondent No.3 was placed at serial No. 53.
Respondent 595 No. 3 submitted a representation against his placement in the seniority list and claimed that he should be placed against the post reserved for scheduled castes at Serial No. 5 in the Roster and on that basis be given the seniority of the year of 1981, and that since he is a Mazhbi Sikh, he is entitled to preference over Shri G.S. Samra who belonged to a Scheduled Caste other than Balmikis and Mazhbi Sikhs, and he claimed that he should have been placed at Point No. 7 in the Roster and Shri G.S. Samra should have been placed at Point No. 9 and on that basis also respondent No. 3 is senior to the appellant.
Representation was also invited from the appellant in this regard.
After considering the representations the High Court decided that respondent No. 3 was entitled to he placed above Shri G.S. Samra in view of the Circular Letter dated May 5, 1975 and that he should have been placed against Point No. 7 in the roster and Shri G.S. Samra should have been placed against Point No. 9 in the Roster, In the revised seniority list Respondent No. 3 was placed at Serial No. 52 while the appellant was placed at Serial No. 53.
Aggrieved by the aforesaid decision the appellant filed a Writ petition in the High Court which was dismissed.
The appellant appealed to this Court and contended that the first appointment, by direct recruitment, of a person belonging to the Scheduled Castes was of Shri Balwant Rai made in 1979, that was at Point No. 1 in the Roster, and should have gone to a Balmiki or Mazhbi Sikh but since no person belonging to these communities was available Shri Balwant Rai who belonged to a Scheduled Caste was appointed.
Relying on the clarification contained in the letter dated April 8, 1980 it was submitted that the vacancy at Point No. 5 reserved for Scheduled Castes was to be carried forwarded to point No. 7 and Shri G.S. Samra had to he adjusted at Point No. 7 in the Roster, that respondent No.3 being a Mazhbi Sikh could not claim to be placed at Point No. 7 against a vacancy which was reserved for a candidate belonging to Scheduled Castes other than Balmikis and Mazhbi Sikhs and that he could the before be only placed against the vacancy at Point No. 9 in the Roster.
The appeal was contested on behalf of Respondent No. 3 who urged that in view of the order dated May 5,1975,50% vacancies of the quota reserved for Scheduled Castes have to be offered to Balmikis and Mazhbi Sikhs and since Shri Balwant Rai belonging to a Scheduled Coste other than Balmikis & Mazhbi Sikhs had been appointed in 1979, the next post should go to Balmikis and Mazhbi sikhs, and on that basis, respondent No. 3 was entitled to be appointed against the second post at point No.7 of the Roster and Shri 596 GS.
Samra could only be appointed against third post at Point No. 9 in the Roster.
It was also urged that the clarification contained in the letter dated April 8, 1980 could only have prospective operation with effect from the date of its issue, and the sub roster indicated therein could be given effect to only from that date, and on that basis also respondent No3 was entitled to be placed against Point No. 7 in the 100 point roster and Shri GS.
Samra against Point No. 9 in the said roster.
Allowing the appeal and setting aside the judgment of the High Court, this Court, HELD : 1. (a).
There is no dispute in the instant case, that respondent No3 has been appointed against the post reserved for members of Scheduled Castes and the question is about the inter se placement of two persons appointed against vacancies reserved for Scheduled Caste candidates.
The Circular dated March 6, 1961 does not deal with the said question and it has to be dealt with on the basis of the instructions contained in the orders dated May 5,1975 and April 8,1980.
(605 E) Jagjit Singh vs State of Punjab, ; , explained and distinguished.
1.(b).
Respondent No.3 can only be treated to have been appointed against the vacancy at point No. 9 in the Roster and on that basis he must be placid below the appellant in the seniority list.
Respondent No 2 is directed to revise the seniority list of the members of the Service accordingly.
The appellant would be entitled to consequential benefits accruing as a result of revision in the seniority.
(605 F) 2.
The letter dated April 8, 1980 gives clarifications on certain doubts that had been created by some Departments in the matter of implementation of the instructions contained in the earlier letter dated May 5,1975.
Since the said letter dated April 8, 1980 is only clarificatory in nature there is no question of its having an operation independent of the instructions contained in the letter dated May 5, 1975 and the clarifications contained in the letter dated April 8,1980 have to be read as a part of the instructions contained in the earlier letter dated May 5, 1975.
(603 E) 3.
A statute which is explanatory or clarificatory of the earlier enactment is usually held to be retrospective.
597 Craies on Statute Law 7th Edn.
p. 58, relied on.
(603 F) 4.
All appointments against vacancies reserved for Scheduled Castes made after May 5,1975 (after May 14,1977 in so far as the Punjab Superior Judicial Service is concerned) have to be made in accordance with the instructions as contained in the letter dated May 5, 1975 as clarified by letter dated April 8, 1980.
(603 F) 5.
The appointment of Shri Balwant Rai in 1979 has to be treated to be an appointment made under the said instructions and operation of these instructions cannot be postponed till April 8, 1980.
The sub roster as indicated in the letter dated April 8, 1980 would have to be applied in respect of the post on which Shri Balwant Rai was appointed in 1979 and the said appointment has to be regarded as having been made against the vacancy at Point No. 1 in the roster which was reserved for Balmikis or Mazhbi Sikhs but since no Balmiki or Mazhbi Sikh was selected for that post, the said vacancy was assigned to Shri Balwant Rai who belonged to a Scheduled Caste other than a Balmiki or Sikh.
(603 H, 604 A) 6.
The vacancy at Point No. 1 which was reserved for Balmikis or Mazhbi Sikhs could not he carried forward in view of the directions contained in the letter dated April 8, 1980.
(604 A) 7.
The next post reserved for Scheduled Castes at Point No. 5 in the roster was meant for a person belonging to a Scheduled Caste other than Balmikis and Mazhbi Sikhs.
(604 A) 8.
In the selections that were made in 1981 and 1982 no person belonging to a Scheduled Caste was selected and, therefore, posts at Point Nos. 5 and 6 in the Roster became available to candidates in the general category and the vacancy at Point No. 5 reserved for Scheduled Castes was carried forward to point No. 7.
(604 B) 9.
In 1986, two persons belonging to Scheduled Castes, namely Shri G.S Samra and respondent No. 3 were selected.
(604 B) 10.
Since the post appoint No. 5 which had been carried forward to point No. 7 was reserved for a candidate belonging to a Scheduled Caste other than Balmiki or Mazhbi Sikh it had to be assigned to Shri G.S. Samra falling in that category and respondent No.3 who was a Mazhbi Sikh could only be ap 598 pointed against the reserved vacancy at Point No. 9 in the Roster.
Respondent No.3 can not claim that the vacancy at Point No.7 should be assigned to him.
If respondent No.3.
is adjusted against the vacancy at Point No.9 in the Roster, he has to be placed in seniority below the appellant who was appointed against Point No. 8 in the Roster.
(604 C) </s> |
<s>[INST] Summarize the following judgement: DICTION: Civil Appeal No. 8670 of 1983.
From the JudGment and Order dated 3. 9. 1982 of the Punjab and Haryana HiGh Court in ReGular First Appeal No. 1 105 of 198 1.
WITH C.A. Nos. 8634 to 86 58/83 and 8660 62/83, 8665 to 8669/83 and 8671 72/ 83 Prem Prasad Juneja and R.S. Sodhi for the Appellants.
H.M. Singh for G.K. Bansal for the Respondents.
648 The Judgment of the Court was delivered by K. RAMASWAMY, J.
The common questions of law arose for decision in these appeals.
Hence they are disposed of together.
Notification under section 4 (1) of the Land Acquisition Act 1 of 1984 was published in the Punjab State Gazette on January 27, 1978 acquiring 89 acres 4 canals and 12 marlas of land situated in Dhuri village for public purpose, namely to set up new Mandi Township.
The. appellants claimed at the rate of Rs. 30.000 per Bighabut Land Acquisition Officer after classifying the lands into six blocks A to F, awarded market value ranging between Rs. 30,000 to Rs. 6,000 acre.
On reference under section 18 of the Act, the District Judge, Sangrur in his judgment dated May 13, 1981 disagreed with the classification and found that all the lands are possessed of the same quality.
Relying on sale deeds, exhibit p 3 dated September4,1972, p 5 dated June 14,1976, p 2 dated February 23, 1977 and p 4 dated July 15, 1977, all small extents, he calculated at an average of Rs. 1300 per Biswa and awarded to the lands belonging to Jaswant Kaur Baldev Singh and Gurdev Singh at the rate of Rs. 1,000 per Biswael finding that their lands are abutting Abadi (village) and for the rest awarded at the rate of Rs. 800 per Biswa with statutory solatium at 15% and interest of 6% per annum on enhanced compensation.
Dissatisfied therewith the State filed the appeals and against disallowed claims, the claimants in one batch filed appeals and in another batch filed cross objections.
The learned Single Judge relied on exhibit p3 and p 5 filed by the claimants and exhibit R 4 and R 6 filed by the State as comparable instances and calculated the average which worked out at Rs. 750 per Biswa.
He found that the lands are possessed of potential value for further building purposes.
Therefore, he carved out belting at a depth of 100 ft. from the main road to those lands, deducted 1/3rd towards developmental charges and awarded the market value at the rate of Rs. 750 to the land situated abutting to the main road to the depth of 100 ft. and for the balance lands at the rate of Rs.500 per Biswa.
The State appeals were allowed and of the claimants and cross objection were dismissed.
The Division Bench confirmed the judgment of the learned Single Judge.
The claimants filed these appeals by special leave.
In the first batch no witness has been examined, but in the second batch witnesses were said to have been examined in proof of these documents but their evidence was not made part of the record.
Equally of the sale deeds.
It is seen that the documents in the second batch p top 1 include those filed in the first batch.
exhibit p 5 is dated Sept. 4, 1972, in which 20 Biswas of land was sold for Ice Factory.
It was situated in the town itself.
The price fetched therein was Rs. 20,000 Therefore, it worked out at the rate of Rs. 1,000 per Biswa.
exhibit p10 is dated August 25, 1975, 7 Biswas of land in Dhaula village was sold for Rs. 649 75,000 which works out at rate of Rs. 1071 per Biswa.
exhibit p 7 is dated June 14,.
1976,3 Bighas 16 Biswas of land situated at Dhularoad side was sold for Rs. 4,500 which works out at the rate of Rs. 1285 per Biswa.
Ex.p 8 dated June 15, 1977 is for 4 Biswas of land at Dhula road sold for Rs. 4,000 which works out at Rs. 1,000 per Biswa.
exhibit p 4 is dated Feb. 23, 1977,3 Biswas of land in the heart of the town Dhuri was sold for Rs. 6,000 which works out to Rs. 2,000 per Biswa.
exhibit p 6 is dated may 18,1977, one Bigha7 Biswas were sold for Rs. 1,000, which works out to Rs. 370 per Biswa.
This land is away from the town and also from the acquired land.
exhibit p 9 is dated July 12, 1977, 15 Biswas of land were sold for Rs. 24,000 working out at the rate of Rs. 1,600 per Biswa.
Based thereon it was contended that exhibit p 9 fetches the highest market value and is nearer to the date of notification and would offer comparable price.
The High Court ought to have fixed market value at that rate.
The High Court committed illegality in relying on two sale deeds of the claimants and two mutation entries on behalf of the state in working out the average.
Therefore, fixation of the market value is illegal.
The mutations are not admissible as neither sale deeds were filed not any body connected with them are examined.
The question, therefore, is whether these sale transactions would reflect the prevailing market value of the land of the total extent of 90 acres.
It is seen that in the first batch no one was examined to prove the documents.
In the second batch though witnesses were said to have been examined, the evidence is not on record.
Neither the reference court nor the High Court discussed the evidence and no finding was given.
So we do not have the advantage of any findings in that behalf.
The state filed 5 mutation entries which were marked.
The sale entries exhibit
R 6 is of October 4,1977 and exhibit R 5 of November 13, 1977.
The rates of lands in Saledeeds executed between March 7, 1977 to November 13, 1977, i.e. R 2 on 7.3.77, R 3 on 8.6.77, R 4 on 31.8.77 and R 5 on 30.11.77 work out between Rs. 83 to Rs. 450 per Biswa.
It is settled law that to determine the market value of the land under section 23(1) of the Act the sales of the land under requisition, if any, or the sales in the neighbourhood lands that possessed of same or similar potentialities or fertility or other advantageous features would furnish basis to determine just and fair market value on the premise of hypothetical willing vendor and willing vendee.
The willing vendor who would offer the land and willing vendee who would agree to purchase the land as a prudent man in normal market conditions as on the date of the notification or near about the date of the notification is the acid test.
It is also settled law that the sale and purchase of lands at a throw away price at arm 's length or depressed sales or fecal of sales brought into existence in quick succession to inflate the market value would not offer any basis to determine just market value.
In order to adjudge whether sales are bonafide sales between willing vendor and 650 willing vendee and whether the consideration mentioned in deed was, in fact and really passed on under transaction '.
whether the lands covered by sale deeds and relied on, possessed of same or similar potentialities or fertilities or advantageous features would be brought on record only by examining the vendor or the vendee or if neither of them is available, the attesting witness who has personal knowledge of the bargain and passing of the consideration are mandatory.
Vide Periyar & Pareekanni Rubbers Ltd. vs State of Kerala wherein this court surveyed the entire case Law in that respect.
Since none has been examined in the first batch the sale transactions referred to either by the state or by the claimants cannot be relied upon.
In the second batch since the evidence has not been referred to by the courts below nor discussed by them nor we have the advantage to go through the same, we cannot rely on the same to further enhance the market value.
Therefore, we are left with no option.
but to reject those sale deeds.
Moreover, except exhibit p 9 all other sale deeds are of very small extents.
This court consistently has taken the view in Collecior of Lakhimpur vs Bhuban Chandra Dutta AIR 1971 SC 2015 Mirza Naushery voan Khan & Anr.
vs Collector (Land Acquisition).
Hyderbad ; ; Rain Rattan & Ors.
vs State of U. P. Smt.
Kaushalya Devi Bogra & Ors.v.
Land Acquisition officer, Aurangabad & Anr. ; ; Padma.
Uppal vs State of Punjab & Ors.
; , Administrator General of West Bengal vs Collector.
Varanasi ; and Special Tehsildar, Land Acquisition vs A. Mangala Glowri [1991]4 SCC 218 that sale deeds of small extents being retail price do not offer comparable basis to fix compensation when large block of land is acquired.
To an intending bonafide purchaser if such block of 90 acre is offered for sale, would he agree to purchase at retail price or far less value? Under no circumstance he would agree to purchase at retail prices mentioned above.
In view of the settled legal position the saledeeds, sought to be relied upon, do not give us any basis to determine the market value.
Every endeavour would be made to fix fair and reasonable market value.
If sale transactions relate to the lands under acquisition and if found to be genuine and bonafide transaction between willing vendor and vendee then it may be considered but reasonable margin must be given in fixing whole sale price.
Therefore, all the documents except p 9 are rejected.
The next contention is that the sale deed exhibit p 9 by which 15 Biswas were sold for Rs. 24,000 which works out at the rate of Rs. 1,600 per Biswa and whether this hiohest price should be given to the appellants.
As stated earlier we have no evidence before us as to under what circumstances this document came to be executed and what is the distance between the lands and for what purpose the land was sold and what is the 651 comparable nature of the land, fertility and potentialities of the land, etc.
The contention relying on state of Madras v.A.M.Ranjan & Anr.
[1976] 3SCR35 that highest value should be fixed cannot be accepted in view of the consistent late.
view of this court.
In Collector of lakhimppur 's case (supra), this court accepted the principle of average, but however, rejected the small extent of the lands arid enhancement based on the average at Rs. 15,000 per Bigha was reduced to Rs. 10.000 per Bicha.
In Smt.
Kausalya Devi 's case (supra), this court noted that large extent of land in the developed Aurangabad town was acquired for Medical College, accepted the principle of average worked out by the reference court, varying between Rs. 2.25 to Rs. 5.00 per sq. yard and this court ultimately fixed the market value at the rate of Rs. 1.50 per sq. yard.
In Administrator General of West Bengal 's case (supra) this court upheld rejection of the small plots of lands and accepted two sale deeds of large extent working out the average rate at Rs. 500 per Decimal and ultimately reference court fixed the market value at the rate of Rs. 200 per Decimal.
It is, therefore, clear that the court in the first instance has to determine as to which of the sale deeds are relevant, proximate in point of time and offer comparable base to determine market value.
Thereafter the average price has to be worked out.
It would be seen that this court has taken consistent view of working out average and further deductions have been made in fixing just and fair market value when large chunk of the land was acquired.
We respectfully agree and adhere to the principle and we find no compelling reason to divert the stream or arrest the consistence.
The question then is whether the reduction of the market value by the learned Single Judge is warranted on facts and under law.
In his judoment the learned Judge found that the acquired lands are situated between railway line on the one side and link road going from Dhuri to Sarona on the other side.
On the third side it is surrounded by the in habited area of Dhuri town.
A small portion in Khasra No. 2585 was abutting the Dhola road and the rest of the acquired land is just behind the inhabited area.
While acquiring these lands the Govt.
have excluded the built up area.
He also found that there is tendency of extension of Abadi village towards acquired lands.
Therefore, he found that the lands arepossessed of "Potential value for being housed for urban purpose in the near future and, therefore, had to be valued as such" Thus we have the evidence that the lands are possessed of potential value for being used for building purposes.
In fact, the acquisition itself is for construction of Mandi Township.
The principle of belting is perfectly legal and unexception 652 ble as the lands abutting the main road upto a specified depth, depending on actual material on record, would fetch higher market rate than the lands situated a interior area.
However, on facts of this case the belting is not warranted for the reason that as seen on three sides there exist roads and abutting the village.
As per the plan as found by the High Court there exists a road cutting across the acquired lands.
Therefore, there is not only access on three sides but also to interior lands.
Thus in our view belting and fixation of differential rates of value is not justified.
The next question is what would be the reasonable and just market value the lands were likely to fetch.
In view of the fact that there is no evidence available and since the High Court found that the lands are possessed of potential value the rate of Rs. 1,000 per Biswa as awarded by civil court to the lands abutting abadi and the lands upto a depth of 100 ft is upheld.
In view of the preceding finding we hold that the fixation of uniform rate of Rs. 1,000 per Biswa is legal.
It is seen that this acquired land of 90 acres is undoubtedly undeveloped area and necessarily requires development by laying the roads, parks, drainage, lighting and other civic amenities.
In Brig.
Sahib Singh Kalha & Ors.
vs Amritsar Improvement Trust & Ors. and Administrator General of West, Bengal 's case (supra) this court deducted 53% of the undeveloped lands towards developmental charges while fixing market value at decimal rate etc.
towards amenities.
In Special Tehsildar Land Acquisition, Vishakapatnam 's case,(supra) this court made deduction at 1/3rd.
The appellant placed reliance on Bhagwathula Swamnana & Ors.
vs Special Tahsildar Land Acquisition.
Visakhapatnam ; where this court did not deduct any land towards developmental charges.
But in that case it was found that the lands acquired are situated in fully developed area.
On those circumstances this court did not deduct any land towards developmental charges.
It is seen that the consistent view of this court now is that deduction of at least 1/3rd is necessary towards developmental charges.
Therefore, we uphold deduction of 1/3rd towards development charges from the market value and determine the market value at Rs. 670 per Biswa.
The learned judge while deducting 1/3rd fixed market value at Rs. 759 of frontage lands and Rs. 500 to interior land.
Rs. 750 is obvious mistake, but the state did not take any action to have itch corrected not filed appeals.
Fixation of Rs. 750 per Biswa of lands from road upto a depth of 100 ft. became final.
So we cannot interfere or correct it in claimants appeal.
But for the rest of the lands we award Rs. 670 per Biswa.
with solatium at 15% and interest at 6% on the enhanced market value from the date of taking possession till date of payment.
653 The appeals are accordingly allowed to the above extent.
In the circum stances parties are directed to bear their own costs. [/INST] Notification under section 4 for acquisition of 89 Acres 4 Kanals and 12 Marlas of land in a village in Punjab, published on January 27, 1978.
Appellants claimed compensation Rs. 30,000 per Bigha i.e. Rs. 1500 per Biswa, on the ground that 15 Biswas of land situated near the acquired land had been sold on July 12,1977, for Rs. 24,000 which works out to Rs. 1600 per Biswa.
Land Acquisition Collector classified the acquired land In 6 blocks and awarded Market Value ranging between Rs. 30,000 to Rs, 6000 per acre.
In reference under Section 18, the District Judge disagreed with classification.
The learned Judge, relying on sale deeds dated September 4,1972, June 14, 1976, February 23, 1977 and July 15, 1977, all for small extents, awarded compensation @ Rs. 800 for the rest of land, besides solatium and interest.
Appeals filed in the High Court by State of Punjab and by one batch of claimants.
Another batch of claimants filed cross objections.
The learned Single Judge allowed appeals filed by the State and dismissed appeals and cross objections of the claimants.
Market Value was determined, on working out average price on the basis of sale deeds dated September 4,1972 and June 14, 1976 filed by claimants and mutation entries dated August 31, 1977 and October 4,1977 filed by the State.
Belting was carved at depth of 100 Ft.
from main road and deduction of 1/3rd was made towards development charges.
Consequently market value determined @ Rs. 750 per Biswa for land abutting main road and @ Rs. 500 per Biswa for the rest of land.
Judgment and order of the learned Single Judge was confirmed by Division Bench.
Claimants, by special leave petition filed appeals for higher compensation.
This court determined market value at Rs. 1000 per Biswa and allowing the appeals to that extent, HELD It is settled law that to determine market value of the land, the sales of land under requisition if any or the sales in the neighborhood lands, 646 that possessed of same or similar features or fertility or other advantageous features would furnish basis to fix just and fair market value.
(649 E) The price for which the willing vender would offer the land and willing vendee would agree to purchase it, as a prudent man in normal market conditions, as on date of notification or near about the date, is acid test to fix market value.
Sales and purchases of land at throw away price at arms length or depressed sales or facade of sales made in quick succession to inflate market value do not offer any basis to determine just Market Value.
(649 F) In order to adjudge, whether sales are bonafide, whether consideration mentioned in the deed was infect and really passed, whether the lands covered by sale deeds and relied on possessed of same or similar potentialities or fertilities or advantageous features would be brought out on record only by examination of the vendor or the vendee or if neither of them is available, the attesting witness, who has personal knowledge of the bargain and passing of consideration.
Hence it is mandatory.
(650 A) Periyar & Pareekanni Rubbers Ltd. vs State of Kerala: Sale deeds of small extents being retail price do not offer comparable basis to fix compensation, when large block is acquired.
If sale transactions relate to the lands under acquisition and if found to be genuine and bonafide transactions, then it may be considered but reasonable margin must be given in fixing wholesale price.
(650 E) Collector of Lakhimpur vs Bhuban Chandra Dutta AIR 1971 SC 2015; Mirza Nausherwoan Khan & Another vs Collector (Land Acquisition) Hyderabad ; ; Ram Rattan & Others vs State of Uttar Pradesh ; Smt.
Kaushalya Devi Bogra & Others vs Land Acquisition Officer, Aurangabad Others ; ; Administrator General of West Bengal vs Collector Varanasi ; and Special Tehsildar Land Acquisition vs A Mangal Gowri Court in the first instance has to determine as to which of the sale deeds are relevant, proximate in point of time and offer comparable base to 647 determine market value.
The after average price has to be worked out and the contention that highest value should be fixed cannot he accepted.
(651 D) State of Madras vs A.M. Ranjan & Another ; ; Collector of Lakhimpur vs Bhuban Chandra Dutta AIR 1971 SC 2015; Sint.
Kaushalva Devi Bogra & Others vs Land Acquisition Officer, Aurangabad & Another ; and Administrator General of West Bangal vs Collector, Varanasi ; The Principle of belting is perfectly legal and unexceptionable, as the lands abutting the main road up to a specified depth depending on factual material on record, would fetch higher market value than lands situated in interior area.
(652 A) If the acquired land is undeveloped, deduction of at least 1/ 3rd, is necessary towards development charges.
(652 F) Brig.
Sahib Singh Kalha & Others vs Amritsar Improvement Trust & Others ; Administrator General of West Bengal vs Collector Varanasi ; ; Special Tehsildar, Land Acquisition vs A. Mangal Gowri ; and Bhagwathula Swamnanna & Others vs Special Tehsildar Land Acquisition Visakhapatnam ; </s> |
<s>[INST] Summarize the following judgement: Appeal No. 2544 of 1993.
From the judgment and Order dated 7.5.
1992 of the Calcutta High Court in Appeal No. Nil of 1992 in Matter No. 21 of 1991.
P.S, Poti, and S.K. Nandy for the Appellant.
K. Parasaran, A.K. Ganouli, G.K. Banerjee and.
Som Mandal for the Respondent.
R.M. SAHAI, J.
The short and the only question of law that arises for consideration in this appeal is if an appeal was maintainable against an order passed by the Learned Single Judge under Section 39(1) of the either under Section 39(2) of the Act or under the Letters patent jurisdiction.
Facts are not in dispute.
Since the State did not appoint any arbitrator as provided for in clause 25 of the agreement despite letters by the respondent to the Chief Engineer, Public Works Department (P.W.D) and the Secretary P.W.D. the respondent approached the High Court and a Learned Single Judge by order dated 6th September, 1991 revoked the authority of the Chief Engineer to act as an arbitrator and directed one Shri D.K. Roy Chowdhury to act as the sole arbitrator as suggested by the respondent.
Against this order State filed an appeal which has been dismissed by the Division Bench upholding the objection of the respondent as not maintainable.
It has been held that the appeal was not maintainable either under Section 39(2) or under Letters Patent.
It is the correctness of this view that has been assailed in this appeal.
Section 39 of the came up for consideration in Union of India vs Mohindra Supply Company [19621 3 S.C.R. 497.
The Court after going into detail and examining various authorities given by different High [Courts held that no, second appeal lay under Section 39 (2) against a decision given by a Learned Single Judge under Section 39(1).
In respect of the jurisdiction under Letters Patent the Court observed that since was 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 3 9 debarring an, second appeal from an order passed in appeal under sub section (1) the 'conclusion was 643 inevitable that it was so done with a view to restrict the right of appeal within strict limits defined by Section 39 '.
Therefore, so far the second part is concerned, namely, the maintainability of the appeal under Letters Patent it stands concluded by this decision.
The Learned counsel for the appellant vehemently argued that since the decision by the Supreme Court was in respect of an appeal directed against an order passed by a Learned Single Judge in exercise of appellate jurisdiction no second appeal lay but that principle could not be applied where the order of Learned Single Judge was passed not in exercise of appellate jurisdiction but original jurisdiction.
The argument appears to be without any substance as Sub section (1) of Section 39 which 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 decrees of the Court passing the order: An order (i) superseding an arbitration; (ii) on an award stated in 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 arbitratio n 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 Small Cause 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.
" 644 provides that an appeal could lie only from the orders mentioned in the subsection itself Since the order passed by Learned Singe 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.] Reliance was placed on certain orders passed by this Court and it was urged that settlement of dispute under clause 25 of the agreement being in exclusive domain of the Chief Engineer the High Court was not empowered to appoint anyone else.
The submission is devoid of any merit.
It is not made out from the agreement.
Rather clause 25 itself permits appointment of another arbitrator if the Chief Engineer fails or omits to act as such.
Relevant portion of the agreement is extracted below "Should the Chief Engineer be for any reason unwiling or unable to act as such Arbitrator such questions and disputes shall be referred to an Arbitrator to be appointed by the Arbitrator shall be final, conclusive and binding on all the parties to this contract.
" In one of the decisions given by this Court the order of the High Court was set aside as the dispute being technical in nature the appointment of anon technical arbitrator was not justified.
Here in this the High Court has appointed a retired Chief Engineer and not a non technical man.
No allegation has been made against him.
Therefore, the order of the learned Single Judge also does not suffer from any infirmity.
In the Circumstances the view taken by the Division Bench dismissing the appeal as not maintainable appears to be well founded.
The appeal accordingly fails and is dismissed with costs.
S.K. Appeal dismissed. [/INST] 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 </s> |
<s>[INST] Summarize the following judgement: 6 etc.
Civil Appeal No. 1527 from the Judgment and Order dated 7.8.1984 of the Andhra Pradesh High Court in Writ petition No. 8173 of 1984.
A.K. Ganguly.
M.B. Shetye, A. Subha Rao, B, Kanta Rao, T.V.S.N. Chari, Ms. Bharathi Reddy and Ms. Promila for the appearing parties.
as amended by Act 24 of 1994, providing for imposition of entertainments tax it) respect of entertainments held in cinema theatres located in the State of Andhra Pradesh.
The Act has been enacted to provide for the levy of taxes on amusements and other attainments.
Prior to January 1. 1984, Section 4 of the Act provided for levy of entertainment tax at a rate fixed on the basis of percentage of the payment made by a person for admission to any entertainment.
In addition, there was a provision in Section 4 A for levy of a fixed amount, by way of "show tax", for each show.
By Act 59 of 1976, Section 4 C was introduced in the Act and Section 5 of the Act was substituted.
under Section 4 C, it was provided that in respect of entertain 623 ments held within tile jurisdiction of any local authority whose population did not exceed 25,000, a tax for every entertainment show would be levied, not on the basis of each payment for admission, but at a certain percentage of the gross collection capacity per show.
The percentages for such levy were fixed according to the population of the local authority within the jurisdiction of which the entertainments were held. 'Gross collection capacity per show was defined in the Explanation to Section 4 C to mean the notional aggregate of all payments for admission the proprietor would realise per show, if all the seats or accommodation as determined by the licensing authority under the Andhra Pradesh Cinemas (Regulation) Act, 1966 in respect of the place of entertainment are occupied, and calculated at the maximum rate of payments for admission as determined by the said licensing authority.
The levy of tax in the manner as prescribed under Section 4 C could be dispensed with if the proprietor of the theatre opted for the composition scheme contemplated by Section 5 whereunder it was open to a proprietor to enter into an agreement with the prescribed authority to compound the tax payable under Section 4 C for a fixed sum which was to be arrived at in accordance with the formula prescribed under Section 5.
According to this formula, the tax was payable on the basis of a percentage of the gross collection capacity per show for the fixed rounds of shows for the whole year and the number of shows was fixed on the basis of the number of shows exhibited in the previous year.
This arrangement continued till December 31, 1983, whereafter the provisions of Sections 4.4 A and 5 were amended by Act No. 24 of 1984.
The provisions of Sections 4,4 A and 5, as amended by Act 24 of 1984, were as follows "Section 4.
(1) There shall be levied and paid to the State Government a tax on the gross collection capacity on every show (hereinafter referred to as the entertainments tax) in respect of entertainments held in the theatres specified in column (2) of the table below and located in the located areas specified in the corresponding entry in column (1) of the said table, calculated at the rates specified in the corresponding entry in column (3) thereof.
THE TABLE __________________________________________________________ Local Area.
Theatre Rate of tax on the gross collection ca pacity per show _________________________________________________________ (1) (2) (3) _________________________________________________________ 624 (a) Municipal corporations (i)Air conditioned 29 per cent and the Secunderabad Cantonment area and (ii) Air cooled 28 per cent the contiguous area (iii)Ordinary 25 per cent thereof.
(other than air conditioned and air cooled) (b) Selection grade muni (i) Air conditioned 28 per cent cipalities and contiguors area of (ii)Air cooled 27 per cent two Kilometres (iii)ordinary (other 24 per cent thereof.
than air conditioned 27 per cent and air cooled) (c) Special tirade munici (i) Air conditioned 27 per cent palities and contiguous (ii) Air cooled 26 per cent area of two Kilometres (iii) Ordinary 23 per cent thereof.
(other than air conditioned and air cooled) (d) First grade munici palities and conti. (i) Air conditioned 26 per cent guous area of two (ii) Air cooled 25 per cent Kilometres thereof.
(iii) Ordinary (other 22 per cent than air conditioned and air cooled) (e) Second grade munici All categories 21 per cent palities and contiguous area of two Kilometres thereof.
(f) Third grade municipalities, All categories 20 per cent and contiguous area of two Kilometres thereof.
(g) Gram panchayats, selec (i) Permanent and 19 per cent tion grade gram panchayats, semi permanent 20 per cent townships and any other (ii) Touring and local areas.
temporary Explanation.
For the purpose of this section and section 5, the term 'gross collection capacity per show ' shall mean the notional aggregate of all payments for, admission, the proprietor would realise per show if all the seats or accommodation as determined by 625 the licensing authority under the Andhra Pradesh Cinemas (Regulation) Act, 1955, in respect of the place of entertainment are occupied and calculated at the maximum rate of payments for admission as determined by the said licensing authority.
The amount of tax under sub section (1) shall be payable by the proprietor on the actual number of shows held by him in a week." "Section 4 A. (1) In addition to the tax under Section 4, there shall be levied and paid to the State Government in the case of entertain ments held in the local areas specified in column (1) of the Table below, a tax calculated at the rates specified in the corresponding entry in column (2) thereof; THE TABLE Local Areas Rate of tax for every show (a) Municipal Corporation and the Six rupees Secunderabad cantonment area and contiguous area of two Kilometers thereof.
(b) Selection grade, Special grade and the Six rupees first grade municipalities and contiguous area of two kilometers thereof.
(c) Second grade and Third grade Four rupees municipalities and contiguous area of two kilometers thereof.
(d) Gram Panchayats, selection grade Two rupees.
gram panchayats, townships and any other local areas.
(2) The tax leviable under sub section (1) shall be recoverable from the proprietor.
(3) The provisions of this Act other than Sections 4, 6 and 13 shall, so far as may be, apply in relation to the tax payable under subsection (1) as they apply in relation to th e tax payable under Section 4 " 626 "Section 5.
( 1) In lieu of the tax payable under section 4.
in the case of the entertainments held in the theatres specified in column (2) of the table below and located in the local areas specified in the corresponding entry in column (1) of the said table, the proprietor thereof may, at his option and subject to such conditions as may be prescribed, pay the amount of tax to the State Government every week as specified in the corresponding entry in column (3) thereof : THE TABLE Local Area Theatre Amount of tax (1) (2) (3) (a) Municipal corpora (i) Air conditioned 24 per cent tions and the of the gross Secunderabad canton collection capacity ment area and the per show multi contiguous area of plied by 22 two kilometrers thereof.
(ii) Air cooled 23per cent of the gross collection capacity per show multiplied by 22.
(iii) Ordinary 20 per cent of the (other than air gross collection conditioned and capacity per show air cooled) multiplied by 22 (b)Selection grade muni (i) Air conditi 23 per cent of the cipalities and contiguous aned gross collection area of two kilometrers show multiplied by thereof.
(ii) Air cooled 22 per cent of the gross collec tion capacity per show multiplied by 22.
(iii) Ordinary 19 per cent of the (other than air gross collection conditioned and capacity per air cooled show multiplied by 22.
(c)Special grade munici (i) Air conditi 22 per cent of the 627 palities and contiguous oned gross show multi area of two kilo lied by 21.
metrers thereof.
(ii) Air cooled 21 per cent of the gross collection capacity per show multiplied by 21.
(iii) Ordinary 18 per cent of the (other than air gross collection conditioned and capacity per show air cooled) multiplied by 21.
(d)First grade municipali (i) Air conditi 21 per cent of ties and contiguous oned gross show area of two kilo multilied by 21.
metrers thereof.
(ii) Air cooled 20 per cent of the gross collection capacity per show multiplied by 21.
(iii) Ordinary 17 per cent of the (other than air gross collection conditioned and capacity per show air colled) multiplied by 21.
(e) Second grade muni All cate ores 16 per cent of the cipalities and conti gross collection guors area of two capacity per Kilometres there of show.
(f) Third grade muni All categores 15 per cent of the cipalities and gross Collection contiguous area of capacity per show two Kilometres multiplied by 17.
thereof.
(g) Gram panchayats, (i) Permanent 15 per cent of the selection grade gram and semi gross collection panchayats, townships permanent capacity per and any other show multi local areas.
plied by 14.
(ii) Touring 14 per cent of the and temporary gross collection capacity per show multiplied by 7. 628 Explanation.
For the purposes of computing the gross collection capacity per show in respect of any place of entertainment, the maximum seating capacity or accommodation and the maximum rate of payment for admission determined by the licensing authority under the Andhra Pradesh Cinemas (Regulation) Act, 1955, as on the date when the proprietor is permitted to pay tax under this section shall be taken into account.
(2)The amount of tax under sub section (1) shall be payable by the proprietor irrespective of the actual number of shows held by him in a week.
(3)Any proprietor who opts to pay tax under this section shall apply in the prescribed form to the prescribed authority to be permitted to pay the tax under this section.
(4)On being so permitted, such proprietor shall pay the tax for every week as specified in sub section (1).
(5)The option permitted under this section shall continue to be in force till the end of the financial year in which such option is permitted.
(6)It shall be lawful for the prescribed authority to vary the amount of tax payable by the proprietor under sub section (1) during the period of option permitted under this section any time, if there is an increase in the gross collection capacity per show in respect of the place of entertainment by virtue of an upward revision of the rate of payment for admission therein or of the seating capacity or accommodation thereof or where the local area in respect of which permission is granted is upgraded or if it is found for any reason that the amount of tax has been fixed lower than the correct amount.
(7)Every proprietor who has been permitted to pay the tax under this section shall intimate to the prescribed authority forthwith such increase in the gross collection capacity per show in respect of the place of entertainment, failing which it shall be open to the pre scribed authority by giving fifteen days notice to cancel the option so permitted.
629 (8)Where a proprietor fails to pay the amount of tax on the due date, such amount of tax shall be recoverable with interest calculated at such rate as may be prescribed.
(9) The amount of tax due under this section shall be rounded of to the nearest rupee and for this purpose, where such amount contains part of a rupee consisting of paise, then if such part if fifty paise or more it shall be increased to one rupee and if such part is less then fifty paise, it shall be ignored.
" As a result of the said amendments, the earlier mode of levy of tax on the basis of the percentage of each payment for admission prescribed in Section 4 was replaced by a mode similar to that provided in Section 4 C, i.e., on the basis as prescribed percentage of the gross collection capacity per show.
In the table appended below sub section (1) of section 4 rates were fixed on the basis of a percentage of the gross collection capacity per show varying with the category of the local area in which the theatre was situated as well as on the nature of the theatre, viz. air conditioned and air cooled or ordinary (other than air conditioned and air cooled) or permanent, semi permanent including touring and temporary theatres.
In the Explanation to sub section (1) of section 4, the term gross collection capacity per show ' was defined in the same terms as in the Explanation to Section 4 C, to mean the full collection per show if all the seats in the theatre are occupied.
In sub section (2) of section 4, it was specifically provided that the amount of tax under sub section (1) shall be payable by the proprietor on the actual number of shows held by him in a week.
Section 5 gave an option to the proprietor to pay a weekly consolidated amount irrespective of the number of shows actually held by him and the said amount was fixed on the basis of the prescribed number of shows per week.
The number of shows varied with the nature of the theatre as well as the category of the local area in which it was situate.
In section 4 A, a fixed amount was leviable by way of show tax on each show.
A number of writ petitions were filed in the High Court to challenge the validity of sections 4, 4 A and 5 of the Act, as amended by Act 24 of 1984.
The said writ petitions were decided by a division bench of the High Court by judgment dated July 19, 1984.
The constitutional validity of the provisions was challenged on three grounds, viz. : (i) the levy of entertainment tax on the basis of gross collection capacity without reference to the actual amount collected or the actual number of tickets sold or the number of persons admitted was ultra vires the legislative power 630 conferred on the State Legislature under entry 62 of List II of the Seventh Schedule; (ii) section 4 was hit by Article 14 of the Constitution inasmuch as by treating unequals as equals, it gave rise to discrirmination amongst different theatres situate within the same local area; and (iii) the levy of entertainment tax under section 4 being exproprietory amounts to an unreasonable restriction on the right guaranteed to the petitioners by Article 19 (1) of the Constitution, and was not saved by clause (6) of Article 19.
Relying upon the decisions of this Court in Western India Theatres vs Contonment Board, 1959 Supp. 2 SCR 63, Y. V. Srinivasamurthy vs State of Mysore, AIR 1959 SC 894, and State of Bombay vs R.M.D. Chamarbaugwala, ; , the High Court has held that the State Legislature was competent to levy the impugned tax under entry 62 of list 11 of the Seventh Schedule to the Constitution since the said head of legislative power empowers imposition of tax upon entertainments and amusements and not on the persons entertained or the persons provided amusement and it has to be paid by the persons who provides the entertainment or amusement.
The High Court further held that so long as the tax levied retains the character of entertainment tax, the Legislature is competent to adopt such basis or such measure, or such method of levy, as it thinks appropriate.
The High Court rejected the contention that the only method in which Legislature can levy the entertainment tax is that prescribed in the old Section 4, i.e., on the basis of the payment of admission.
The challenge on the around of Article 14 was negatived by the High Court on the view that wide discretion is allowed to the Legislature in the matter of classification and in the matter of selection of persons to be taxed and that the two fold classification made by section 4 could not be said to be either discriminatory or arbitrary much less could it be said that it metes out hostile discrimination to certain theatres.
The High Court also observed that since it was not possible to predicate absolute equality between two theatres, and also because the situation and economics of each theatre are different, it is impossible to expect, or call upon the Legislature to evolve such classification which would meet every conceivable case and which would not result in prejudice even to a single theatre.
It was observed that different rates have been prescribed for different local areas and for different types of theatres, i.e. ordinary, air cooled and air conditioned and the Legislature took note of the fact that rate of occupancy in villages will be lower compared to towns, and similarly, in bigger towns there will be greater rate of occupancy, and finally in cities, the rate of occupancy would be even higher and it could not be said that this expectation was unrealistic, or seunreasonable as to call for interference by the court.
As regards the challenge based on Article 19 (1) (g), the High Court has taken note of the letter dated July 26, 1983 addressed by the Andhra Pradesh Film Chamber of Commerce, to the Hon 'ble Chief Minister of Andhra Pradesh wherein the exhibitors not only asked 631 tax which suggestion was accepted by the Government with certain modifications varying from 2 to 4% over the rates suggested by the Association.
The High Court observed that the rates of tax that were prescribed under section 4 based on an average expected occupancy rate of less than 50 per cent to 66 per cent, could not be said to be either unreasonable or exproprietory.
The High Court, however, held that the agreements which had already been entered into by the proprietors of cinema theatres under section 5, as it stood prior to January 1, 1984, would be effective and valid for the period for which they were entered into.
The High Court has also observed that merely because the form for exercise of option, as contemplated under sub section (3) of section 5, had not been prescribed, it could not be said that section 5 had not come into operation or was unenforceable and that it was open for the proprietor to send an intimation on an ordinary paper and the authority would be bound to treat it as proper intimation.
The High Court rejected the contention that section 5 was discriminatory inasmuch as it did not provide for reduction of the composition amount in case of reduction of seating capacity of a theatre, during the period of one year for which the option was exercised although under sub section (6) of section 5 the provision had been made for enhancement of the composition amount in case the seating capacity/accommodation or the rates of payment for admission were enhanced.
The High Court observed that section 5 was only optional and no one was compelled to be governed by it or to opt for the composition scheme contained in section 5 and that according to the said scheme the option once exercised was in force till the end of the financial year in which such option was permitted and that if a person opts to be governed by section 5 he does so with his eyes open and he must be deemed to have accepted all the conditions and features of the scheme and it was not open to him to say that he would avail of the beneficial provisions of the scheme, while rejecting those features which are not advantageous to him.
C.A.Nos.
4642 47/84,193 221/85,222/85, 223/85,224 28/85. 229, 232 34/ 85, 1468/85 and 1469 70/85 have been filed against the said decision of the High Court dated July 19, 1984.
C.A. Nos. 5722/85, 1527/86, and SLP (C) No. 3127/ 85 have been filed against the decision of the High Court dated August 7, 1984 which is based on the earlier decision dated July 19, 1984 and similarly C.A. Nos.
1858/89 and 4798/89 are directed against the decisions dated February 12, 1986 and March 30, 1998 based on the earlier decision dated July 19, 1984.
During the pendency of these appeals, the Act was amended by A.P. Act 23 of 1988 and A.P. Act 16 of 1991 whereby the Tables below Sections 4,4 A and 5 were substituted and sub Section (6 A) was inserted in Section 5 whereby 632 provision was made for reduction of the amount of tax payable by the proprietor during the financial year if there is a reduction in the seating capacity or in the accommodation of the place of entertainment at any time during the period of six months commencing from the 1st day of April and ending with 30th day of September or from the 1st day of October and ending with 31st day of March of any financial year.
The learned counsel appearing for the appellants have assailed the constitutional validity of sections 4 and 5 on two grounds, viz. : (1) that the impugned provisions do not fall within the ambit of the legislative power conferred on the State Legislature under Entry 62 of List II of the Seventh Schedule of the Constitution , and (2) that the impugned provisions were violative of the right to equality guaranteed under Article 14 of the Constitution inasmuch as they treated unequals as equal by imposing tax at a uniform rate on a particular class of cinema theatres irrespective of their location and occupancy.
While considering the question as to legislative competence of the State Legislature, it is necessary to bear in mind that the impugned provisions provide fir imposition of a tax and a tax has two distinct elements, viz., subject of the tax and the measure of the tax.
The subject of the tax is the person, thing or activity on which the tax is imposed, and the measure of the tax is the standard by which the amount of tax is measured.
The competence of the Legislature to enact a law imposing a tax under a particular head of the legislative list has to be examined in the context of the subject of the tax.
If the subject of the tax falls within the ambit of the legislative power conferred by the head of legislative entry, it would be within the competence of the Legislature to impose such a tax.
It is, therefore, necessary to examine the scope of the legislative entry, viz., Entry 62 of List II, which is invoked in support of the competence of the State Legislature to impose the tax and ascertain whether the subject of the tax imposed by the impugned provisions falls within the ambit of the said entry.
Entry 62 of List 11 is as follows "62.
Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling The said entry is in pari materia with entry 50 of the Provincial List in the Seventh Schedule to the Government of India Act, 1935.
Construing the said entry, this Court, in the Western India Theatres vs Cantonment Board (supra), has rejected the contention that the entry contemplates a law imposing taxes on persons who receive or enjoy the luxuries or the entertainments or the amusements 633 and has held "The entry contemplates luxuries, entertainments and amusements as objects on which the tax is to be imposed. . .
The entry, a,,, we have said, contemplates a law with respect to the matters regarded as objects and law which imposes tax on the act of entertaining is within the entry whether it falls on the giver or the receiver of that entertainment." (p.69) In that case, the Cantonment Board had imposed entertainment tax of Rs. 10 per show on the cinema houses of the appellant in the said appeal and Rs. 5 per show on others.
Upholding the said imposition this Court has held "It is a tax imposed on every show, that is to say, on every instance of the exercise of a particular trade, calling or employment.
If there is no show, there is no tax. .
The impugned tax is a tax on the entertainment resulting in a show".
(p. 69 70) Similarly, in Y. V. Srinivasamurthy vs State of Mysore (supra), upholding the provisions of the Mysore Cinematograph Shows Act, 1951 enacted under the Constitution, which authorised levy of tax on conematograph shows at rates prescribed in a rising scale according to the seating accommodation and the cities where the cinematograph show was held, this Court following the decision in Western India Theatres case (supra) held that the said Act was validly enacted in exercise of the legislative power conferred by entry 62 of List II.
In the instant case, we find that prior to the enactment of Act 24 of 1984, Section 4 provided for levy of entertainment tax on the basis of each payment for admission to the cinema theatre and under Section 4 C, in respect of entertainments held within the jurisdiction of a local authority whose population did not exceed 25,000 the tax was levied on the basis of the prescribed percentage of the gross collection capacity per show.
In other words, there were two modes for levy of the tax, one on the basis of the actual number of persons admitted to each show and the other on the basis of the percentage of the gross collection capacity per show.
As a result of the amendments introduced by Act 24 of 1984, the system for levy of tax on the basis of number of persons actually admitted to each show was dispensed with and the tax was to be levied on the basis of the percentage of the gross collection capacity per show and different percentages were prescribed depending on the type of the theatre and the nature of the local area where it was situated.
Under section 5, an option was given to pay a tax on the basis of the 634 prescribed percentage fixed for a fixed number of shows in a week irrespective of the number of shows actually held.
It is not disputed that the tax as it was being levied prior to January 1, 1984, i.e, before the amendment of Section 4 by Act 24 of 1984, was a tax on entertainment falling within the ambit of entry 62 of List 11.
The question is whether the alteration in the said mode of levy of tax by Act 24 of 1984 has the effect of altering the nature of the tax in a way that it has ceased to be a tax on entertainments and falls beyond the field of legislative competence conferred on the State Legislature by Entry 62 of List 11.
In our view, the said question must be answered in the negative.
The fact that instead of tax being levied on the basis of the payment for admission made by the persons actually admitted in the theatre it is being levied on the basis of the gross collection capacity per show calculated on the basis of the notional aggregate of all the payments for admission which the proprietor would realise per show if all the seats or accommodation in respect of the place of entertainment are occupied and calculated at the maximum rate of payments for admission, would not, in our opinion, alter the nature of the tax or the subject matter of the tax which continues to be a tax on entertainment.
The mode of levy based on 'per payment for admission ' prescribed under Section 4(1) prior to amendment by Act 24 of 1984 necessitated enquiry into the number of shows held at the theatre and the number of persons admitted to a cinematheatre for each show and gave room for abuse both on the part of proprietor as well as other officers incharge of assessment and collection of tax.
The mode of levy or measure of the tax prescribed under section 4(1), and substituted by Act 24 of 1984, is a more convenient mode of levy of the tax inasmuch as it dispenses with the need to verify or enquire into the number of persons admitted to each show and to verify the correctness or otherwise of the return submitted by the proprietor containing the number of persons admitted to each show and the amount of tax collected.
Prior to the enactment of Act 24 of 1984, tax was leviable on the basis of either of the two modes under Section 4(1) and4 C.
On an examination of the rates prescribed under both the modes, the High Court found that under the system of consolidated levy prescribed under Section 4 C the proprietor could break even if the average rate of occupancy was 40%.
As regards the rates prescribed under Section 4 and 5 as amended by Act 24 of 1984, the High Court has observed that the said rates are based on an average expected occupancy rate of less than 50% or 66% depending upon the area in which the theatre is situated.
This would mean that the entertainment tax that would be collected over and above the average occupancy rate would constitute the profit of the proprietor.
In the circumstances, it cannot be said that the adoption of the system of consolidated levy in Section 4(1) as amended by Act 24 of 1984 alters the nature of tax and it has ceased to be a tax on entertainments.
635 It has been urged that since both the modes of levy of tax were prevalent prior to the enactment of Act 24 of 1984, an option should have been given to the proprietor of a cinema theatre to choose between either of the two modes and that under the impugned provisions the choice is confined to two modes of assessment under the same system of consolidated levy based on the gross collection capacity per show, one on the basis on the gross collection capacity per show, under Section 4(1) and other on the basis of gross collection capacity per show for a prescribed number of shows per week under section 5.
We find no substance in this contention.
Once it is held that tax on entertainment could be levied by either of the two modes, viz., per payment of admission or gross collection capacity per show, it is for the legislature to decide the particular mode or modes of levy to be adopted and whether a choice should be available to the proprietor of the cinema theatre in this regard.
The legislature does not transgress the limits of its legislative power conferred on it under Entry 02 of List 11 if it decides that consolidated levy on the basis of gross collection capacity per show shall be the only mode for levy of tax on entertainments.
We are, therefore, unable to accept the contention urged on behalf of the appellants that the impugned provisions contained in Section 4 and 5 as amended by Act 24 of 1984 are ultra vires the legislative power conferred on the State Legislature under Entry 62 of List II.
The challenge to the impugned provisions on the basis of Article 14 is grounded on the principle that discrimination would result if unequals are treated equally are reliance is placed on the decision of this Court in K. T Moopil Nair vs The State of Kerala & Anr, ; It has been urged that under section 4, as substituted by Act 24 of 1984, a uniform rate has been prescribed for cinema theatres of a particular class situate in different parts of the same local area although the average rate of occupancy in the cinema theatres located in different parts of the same local area is not the same and a cinema theatre which is located in the central part of the local area would have better rate of occupancy as compared to a theatre located in a remote part and further that the occupancy in the theatre depends on various of the factors which have not been taken into account.
We find it difficult to accept the contention.
Article 14 enjoins the State not to deny to any person equality before the law or the equal protection of the laws.
The phrase "equality before the law" contains the declaration of equality of the civil rights of all persons within the territories of India.
It is a basic principle of republicanism.
The phrase "equal protection of laws" is adopted from the Fourteenth Amendment to U.S. Constitution.
The right 636 conferred by Article 14 postulates that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed.
Since the State, in exercise of its governmental power, has, of necessity, to make laws operating differently on different groups of persons within its territory to attain particular ends in giving effect to its policies, it is recognised that the State must possess the power of distinguishing and classifying persons or things to be subjected to such laws.
It is, however, required that the classification must satisfy two conditions namely, (i) it is founded on an intelligible differentia which distinguishes those that are grouped together from others; and (ii) the differentia must have a rational relation to the object sought to be achieved by the Act.
It is not the requirement that the classification should be scientifically perfect or logically complete.
Classification would be justified if it is not palpably arbitrary.
[See: Re Special Courts Bill, at pp.
534 5361.
It there is equality and uniformity within each group, the law will not be condemned as discriminative, thou oh due to some fortuitous circumstance arising out of a peculiar situation some included in a class get and advantage over others, so long as they are not singled out for special treatment.
[See: Khandige Sham Bhat vs Agricultural Income Tax Officer, ; at p. 8 171 Since in the present case we are dealing with a taxation measure it is necessary to point out that in the field of taxation the decisions of this Court have permitted the legislature to exercise an extremely wide direcretion in classifying items for tax purposes, so long as it refrains from clear and hostile discrimination against particular persons or classes.
[See: East India Tobacco Co. vs State of A.P., 19631 1 SCR 404, at p. 411, P.M. Ashwathanarayanan Shetty vs State of karnataka, 1988, Supp.
3 SCR 155, at p. 188, Federation of Hotel & Restaurant Association of India vs Union of India, , at p. 949, Kerala Hotel & Restaurant Association vs State of Kerala, ; , at p. 530, and Gannon Dunkerley and Co. vs State of Rajasthan, , at p. 3971.
Reference, in this context, may also be made to the decision of the U.S. Supreme Court in San Antonio Independent School District vs Bodrigues, 41 at p. 41, wherein Justice Stewart, speaking for the majority has observed "No scheme of taxation, whether the tax is imposed on property, income or purchases of goods and services, has yet been devised which is free of all discriminatory impact.
In such a complex arena in which no perfect alternatives exist, the court does well not to impose too rigorous a standard of scrutiny lest all local fiscal schemes become subjects of criticism under the Equal Protection Clause.
" 637 Just a difference in treatment of persons similarly situate leads of discrimination, so also discrimination can arise if persons who are unequals, i.e. differently placed, are treated similarly.
In such a case failure on the part of the legislature to classify the persons who are dissimilar in separate categories and applying the same law, irrespective of the differences, brings about the same consequence as in a case where the law makes a distinction between persons who are similarly placed.
A law providing for equal treatment of unequal objects, transactions or persons would be condemned as discriminatory if there is absence of rational relation to the object intended to be achieved by the law.
In K T Moopil Nair vs State of Kerala (supra), this Court was dealing with a law providing for imposition of uniform land tax at a flat rate without having regard to the quality of the land or its productive capacity.
The law was held to be violative of Article 14 of the constitution of the ground that lack of classification had created inequality.
The said decision in K. T Moopil Nair 's case (supra) has been explained by this Court is Jalan Trading Co. (Pvt.) Ltd. vs Mill Mazdoor Union, ; , in the context of challenge to the validity of section 10 of the providing for payment of a minimum bonus of 4% by all industrial establishments irrespective of the fact whether they were making profit.
This Court held that the judgment in Moopil Nair 's case (supra) has not enunciated any broad proposition that when persons or objects which are unequals are treated in the same manner and are subjected to the same burden or liability discrimination inevitably results.
It was observed : "It was not said by the Court in that case that imposition of uniform liability upon persons, objects or transactions which are unequal must of necessity lead to discrimination.
Ordinarily it may be predicated of unproductive agricultural land that it is incapable of being put to profitable agricultural use at any time.
But that cannot be so predicated of an industrial establishment which has suffered loss in the accounting year, or even over several years successively.
Such an establishment may suffer loss in one year and make profit in another. " (p.35) It was further observed "Equal treatment of unequal objects, transactions or persons is not liable to be struck down as discriminatory unless there is simulta 638 neously absence of a rational relation to the object intended to be achieved by the law." (p.36) The limitations of the application of the principle that discrimination would result if unequals are treated as equal, in the field of taxation, have been pointed out by this Court in Twyford Tea Co. Ltd. & Anr.
vs The State of Kerala & Anr., [1970] 3SCR 383, wherein tax at a uniform rate was imposed on plantations.
Hidayatullah, CJ, speaking for the majority, while upholding the tax, has observed "It may also be conceded that the uniform tax falls more heavily on some plantations than on others because the profits ,ire widely discrepant.
But does that involve a discrimination ? If the answer be in the affirmative hardly any tax direct or indirect would escape the same ensure for taxes touch purses of different lengths and the very uniformity of the tax and its equal treatment would become its undoing.
The rich and the poor pay the same taxes irrespective of their incomes in many instances such as the sales tax and the profession tax etc." (pp.
389 390) It was further observed : "The burden is on a person complaining of discrimination.
The burden is proving not possible 'inequality ' but hostile 'unequal ' treatment.
This is more so when uniform taxes are levied.
It is not proved to us how the different plantations can be said to be hostilely or unequally treated.
A uniform wheel tax on cars does not take into account the value of the car, the mileage it runs, or in the case of taxis, the profits it makes and the miles per gallon it delivers.
An ambassador taxi and a fiat tasi give different out turns in terms of money and mileage.
Cinemas pay the same show fee.
We do not take a doctrinaire view of equality." (p.393 94) In the instant case, we find that the legislature has prescribed different rates of tax by classifying theatres into different classes, namely, air conditioned, air cooled, ordinary (other than air conditioned and air cooled), permanent and semipermanent and touring and temporary.
The theatres have further been categorized on the basis of the type of the local area in which they are situate.
It cannot, therefore, be said that there has been no attempt on the part of the legislature to classify the cinema theatres taking into consideration the differentiating circum 639 stances for the purpose of imposition of tax.
The grievance of the appellants is that the classification is not perfect.
What they want is that there should have been further classification amongst the theatres falling in the same class on the basis of the location of the theatre is each local area.
We do not think that such a contention is well founded.
In relation to cinema theatres it can be said that the attendance in the various cinema theatres within a local area would not be uniform and would depend on factors which may very from time to time.
But this does not mean that cinema theatres in a particular category of local area will always be at a disadvantage so as to be prejudicely affected by a uniform rate as compared to cinema theatres having a better location in the local area.
It is, therefore, not possible to accept the contention that the impugned provisions are violative of right to equality guaranteed under Article 14 of the Constitution on the basis that unequals are being treated equally.
Another contention that has been urged on behalf of the appellants is that while provision was made under sub section (6) of section 5 for enhancement of the amount of tax in the event of increase in the amount of gross collection capacity, there was no corresponding provision for reduction for the amount of tax in the event of reduction in the gross collection capacity.
The said provision for enhancement contained in sub section (6) of section 5 relates to the cases where the proprietor of a cinema theatre opts for payment of weekly consolidated amount.
Since the proprietor has the option to opt for the said scheme he cannot complain that the scheme suffers from inequality on account of absence of a corresponding provision for reduction of amount of tax.
In any event the said grievance has how been removed by the introduction of sub section (6 A) in section 5 by amendments, introduced in the Act by A.P. Act 23 of 1988 and A.P. Act 16 of 199 1.
In the result, we find no merit in these appeals and the special leave petition and they are accordingly dismissed.
The parties are, however, left to bear their own costs.
V.P.R. Appeals dismissed. [/INST] Prior to January 1, 1984, the Andhra Pradesh Entertainment Tax Act, 1989, in Section 4, provided for levy of entertainment tax at a rate fixed on the has is of percentage of payment made by a person for admission to any entertainment.
In section 4 C, in respect of entertainments held within the jurisdiction (if any local authority where population did n(it exceed 25, 000.
tax was levied at a certain percentage of the gross collection capacity per show and the percentage for such levy were fixed according to the population of the local authority within the jurisdiction of which the entertainment held.
The Amending Act 24 of 1984, replaced the earlier mode of levy of tax prescribed in Section 4 and introduced a mode of levy of tax on the has is of a prescribed percentage of the gross collection capacity per show.
The rates 617 were fixed on the basis of a percentage of the gross collection capacity per show varying with the category of the local area in which the theatre was situated as well as on the nature of the theatre, viz. air conditioned air cooled or (other than air conditioned and air cooled)or permanent,semi permanent including touring and temporary the atres.
The proprietor was given an option to pay a weekly consolidated amount irrespective of the number of shows actually held by him and the said amount was fixed on the basis of the prescribed number of shows per week.
The number of show. .
varied with the nature of the theatre as well as the category of the local area in which it was situate.
A fixed amount was also leviable by way of show tax on each show.
Before the High Court, a number of writ petitions were filed challenging the validity of sections 4,4 A and 5 of the Andhra Pradesh Entertainments Tax Act, 1939, as amended by Act 24 of 1984, on the grounds that (i) the levy of entertainment tax on the basis of gross collection capacity without reference to the actual amount collected or the actual number of tickets sold or the number of persons admitted was ultra vires the legislative power conferred on the State Legislature under Entry 62 of List 11 of the Seventh Schedule of the Constitution; (ii) section 4 was hit by Article 14 of the Constitution, as it gave rise to discrimination amongst different theatres situate within the same local area; and that (iii) the levy of entertainment tax under section 4 being exproprietory amounted to an unreasonable restriction on the right guaranteed to the petitioners by Article 19(1) (g) of the Constitution and was not saved under Article 19(6).
Relying upon the decisions in Western India Theatres vs Cantonment Board. [1959] Supp. 2 SCR 63; Y.V. Srinivasamurthy vs State of Mysor.
AIR 1959 SC 894 and State of bombay vs R.M.D. Chamarbaugwala.
A. I. R. the High Court dismissing the writ petitions held that the State Legislature was competent to levy the tax under Entry 62 of List 11 of the Seventh Schedule; that as the tax levied retained the character of entertainment tax, the Legislature was competent to adopt such basis or such measure, or such method of levy; that wide discretion was allowed to the Legislature in the matter of classification and in the matter of selection of persons to be taxed and that the two fold classification made by section 4 was neither discriminatory nor arbitrary or it did not mete out hostile discrimination to certain theatres; that the rates of tax that were prescribed under section 4 based on an average expected occupancy rate of less than 50 per cent to 66 per cent, was neither unreasonable nor expropriatory; that section 5 was only optional and no) one was compelled to be governed by it or to opt for the composition scheme and if a person opted to be governed by section 5, he must be deemed 618 to have accepted all the conditions and features of the scheme.
During the pendency of these appeals Special leave petition in this court the Act of 1939 was amended by A.P. Act 23 of 1988 and A.I. Act 16 of 1991, whereby the Tables below sections 4, 4 A and 5 were substituted and subsection (6A) was inserted in section 5.
Before this Court the appellants and the petitioners reiterated two contentions raised before the High Court while assailing the constitutional validity of sections 4 and 5 of the Act, namely, (1) that the impugned provisions did not fall within the ambit of the legislavite power conferred on the St .Ate Legislature under Entry 62 of List 11 of the Seventh Schedule of the Constitution; (ii) that the impugned provisions were violative of Article 14 of the Constitution, as they provided for imposing tax at a uniform rate (in a particular class of Cinema theaters irrespective of their location and occupancy.
Dismissing the appeal and the Special Leave petition, this Court, HELD: 1.1.
While considering the question as to legislative competence of the State Legislature, it is necessary to bear in mind that the impugned provisions provide for imposition of a tax and a tax has two distinct elements viz., subject of the tax and the measure of the tax.
The subject of the tax is the person, think or activity on which the tax is imposed, and the measure of the tax is the standard by which the amount of tax is measured.
(632 1)) 1.2.
The competence of the Legislature to enact a law imposing a tax under a particular head of the legislative list has to be examined in the context of the subject of the tax.
It the subject of the tax falls within the ambit of the legislative power conferred by the head of legislative entry, it would be within the competence of the Legislature to impose such as tax.
(632 E) 1.3.
Prior to the enactment of Act 24 of 1984, there were two modes for levy of the tax, one on the basis of the actual number of persons admitted to each show and the other on the basis of the percentage of the grows collection capacity per show.
As a result of the amendments introduced by Act 24 of 1984, the system for levy of tax on the basis of number (of persons actually admitted to each show was dispensed with and the tax was to be levied on the basis of the percentage of the gross collection capacity per show and different percentages were prescribed depending on the type of the theatre and the 619 nature of the local area where it was situated.
(633 F H) 1.4.
The question whether the alteration in the said mode of levy of tax by Act 24 of 1984 has the effect of altering the nature of the tax in a way that it has ceased to he a tax on entertainments and falls beyond the field of legislative competence conferred (in the State Legislature by Entry 62 of List 11, must he answered in the negative. 'The fact that instead of tax being levied on the basis of the payment for admission made by the persons actually admitted in the theater it is being levied on the basis of the gross collection capacity per show calculated on the basis of the notional aggregate of all the payments fair admission which the proprietor would realise per show if all the seats or accommodation in respect of the place of entertainment are (occupied and calculated at the maximum rate of payments for admission, would not alter the nature of the tax or the subject matter of the tax which continues to he a tax on entertainment.
(634 B D) 1.5.
The mode of levy based on 'per payment for admission ' proscribed under Section 4(1) prior to amendment by Act 24 of 1984 necessitated enquiry into the number of shows held at the theatre and the number of persons admitted to a cinema theatre for each show and gave room for abuse both on the part of proprietor as well as other officers incharge of assessment and collection of tax.
The mode of levy or measure of the tax prescribed under section 4(1),as substituted by Act24 of 1984, is a more convenient mode of levy of the tax inasmuch as it dispenses with the need to verify or enquire into the number of persons admitted to each show and to verify the correctness or otherwise of the returns submitted by the proprietor containing the number of persons admitted (A) each show and the amount of tax collected.
(634 E) 1.6.
On an examination of the rates prescribed under both the modes it is found that under the system (of consolidated levy prescribed under Section 4 C, the proprietor could break even if the average rate of occupancy was 40%.
As regards the rates prescribed under Sections 4 and 5 as amended by Act 24 of 1984 they are based on an average expected occupancy rate of less than 50% or 66% depending upon the area in which the theatre is situated.
This would mean that the entertainment tax that would be collected over and above the average occupancy rate would constitute the profit of the proprietor.
In the circumstances, it cannot be said that the adoption of the system of consolidated levy in Section 4(1) as amended by Act 24 of 1984 alters the nature of tax and it has ceased to be a tax on entertainments.
(634 F H) 620 1.7.
Once it is held that tax #in entertainment could be levied either of the two modes, viz., per payments of admission or gross collection capacity per show, it is for the legislature to decide the particular mode or modes of levy to be adopted and whether a choice should he available to the proprietor of the cinema theatre in this regard.
The legislature does not transgress the limit: of its legislative power confer red on it under Entry 62 of List 11 if it decides that consolidated levy on the basis of gross collection capacity per show shall be the only mode for levy of tax on entertainments (635 C) 1.8.
The impugned provisions contained in Sections 4 and 5 as amended by Act 24 of 1984 are not ultra vires the legislative power conferred on tile State Legislature under Entry 62 of List 11.
(635 D) Western India Theatres vs Cantonment Board, [1959] Supp. 2 SCR 63 and Y. V Srinivasamurthy vs State of Mysore AIR 1959 SC 894, explained. 2.01.
The right conferred by Article 14 postulates that all persons similarly circumstanced shall he treated alike both in privileges conferred and liabilities imposed, Since the State, in exercise of its governmental power, has, of necessity, to make laws operating differently on different groups of persons within its territory to attain particular ends in giving effect to its policies, it is recognised that the State must possess the power of distinguishing and classifying persons or things to be subjected to such laws.
It is, however, required that the classification must satisfy two conditions, namely, (i)it is founded on an intelligible different is which distinguishes those that are grouped together from others; and (ii) the differential must have a rational relation to the object sought to be achieved by the Act.
It is not the requirement that the classification should be scientifically perfect or logically complete.
Classification would be justified if it is not palpable arbitrary.
(636 A C) Re Special Courts Bill, at pp.
534 536 and Khandige Sham Bhat vs Agricultural Income Tax Officer, ; at p. 817.
followed.
In the field of taxation the legislature exercises an extremely wide discretion in classifying items for the purposes, so long as it refrains from clear and hostile discrimination against particular persons or classes.
(636 E) 621 East India Tobacco Co vs State of A.P. ; at p. 411; P.M. Ashwathanarayana Shetty vs State of Karnataka.
[1988] Supp.3 SCR 155 at p.m 188; Federation of Hotel & Restaurant Association of India vs Union of India, at p. 949, Kerala Hotel & Restaurant Association vs State of Kerala; , at p. 530: Gannon Dunkerley, and Co. vs State of Rajasthan, at 397; and San Antonio Independent School District vs Bodriques; , at p. 41, referred to.
just as a difference in the treatment of persons similarly situate leads to discrimination ', so also discrimination can arise if persons who are unequals, i.e. differently placed.
are treated similarly.
In such a case failure on the part of the legislature to classify the persons who are dissimilar in separate categories and applying the same law, irrespective of the differences brings about the same consequence as in a case where the law makes a distinction between persons who are similarly placed.
A law providing for equal treatment of unequal objects transactions or persons would he condemned as discriminatory if there is absence of rational relation to the object intended to he achieved by the law.
(637 A B) K. T Moopil Nair vs The State of Kerala & Anr.
, ; , distinguished.
Jalan Trading Co. (pvt.) Ltd. vs Mill Mazdoor Union, ; and Twyford Tea Co. Ltd. & Anr vs The State of Kerala & Anr., ; , referred to.
In the instant case, the legislature has prescribed different rates of tax by classifying theatres in the different classes, namely, air conditioned,air cooled, ordinary (other than air conditioned and air cooled), permanent and semi permanent and touring and temporary.
The theatre% have further been categorized on the basis (of the type of the local area in which they are situate.
It cannot, therefore, be said that there has been no attempt on the part of the legislature to classify the cinema theatres taking into consideration the differentiating circumstances for the purpose of imposition of tax.
(638 G H) 2.05.
In relation to cinema theatres it can he said that the attendance in the various cinema theatres within a local area would not be uniform and would depend on factors which may vary from time to time.
But this does not mean that cinema theatres in a particular category of local area will always 622 be at a disadvantage so as to be prejudicially affected by a uniform rate as compared to cinema theatres having a better location in the same local area.
The contention that the impugned provisions are violative of right to equality guaranteed under Article 14 (if the Constitution on the basis that unequals are being treated equally cannot be accepted.
(639 B C) 3.
The provision for enhancement contained in sub section (16) of section 5 relates to the cases.
There the proprietor of a cinema theatre opts for payment of weekly consolidated amount.
Since the proprietor has the option to opt for the said scheme he cannot complain that the scheme suffers from inequality.
on account of absence of a corresponding provision for reduction of amount of tax.
(639 E) </s> |
<s>[INST] Summarize the following judgement: (Civil) No. 71 of 1992.
WITH Writ Petition (Civil) No. 323 of 1993.
Under Article 32 of the Constitution of India.
J.P. Bhatacharjee, N.R. Choudhry and Somnath Mukherjee for the Petitioners in W.P.No. 71/93.
S.N. Mukherjee for the Petitioners in W.P. No. 323/93.
Ms. B. Sunita Rao for V.K. Verma for the Respondents.
The Judgment of the Court was delivered by R.M.SAHAI,J.
Casual labourers of South Eastern Railway, alleged to have been appointed between 1964 69 and retrenched between 1975 78 have approached this Court for a direction to opposite parties to include their names in the 753 live casual labourer register after due screening and give them reemployment according to their seniority.
Further prayer is to restrain the opposite parties from filling vacancies from open market.
Basis of their claim is two fold, one circulars issued by the Railway Board on 8th June and 18th June, 1981 laying guideline regarding recruitment, retrenchment and employment of the casual labourers, second Judgments delivered by this Court in 1985 and 1987 directing the opposite parties to prepare a scheme and absorb the casual labourers in accordance with their seniority.
Issuing of circulars by the Railway Board or decisions by this Court could not and has not been disputed.
Nor it is disputed that in pursuance of the orders passed by this Court the opposite parties framed a scheme in 1987 for employing retrenched casual labourers.
On 2.3.
1987 a letter was issued from the Railway Establishment addressed to the General Managers for employing casual labourer retrenched before 1981 if they satisfied the requirements mentioned therein which is extracted below: "Pursuant to directions given by the Hon 'ble Supreme Court in their order dated 23.2.1987, in W.P. No. 332 of 1986, the Ministry desire that the cases of project casual labour who had worked as such before 1. 1.81 and who were discharged due to completion of work or for want of further work, may also be considered for the purpose of implementation of the scheme contained in the Ministry 's letter of even No. dated 1.6.84 and 25.6.84 as modified in the letter dated 11.9.1986.
Representation along with documentary proof reaching the office mentioned above after 31.3.1987 of those which are incomplete and also those not made with reference to these instructions, will not be considered".
The petitioners who claim to have been retrenched due to completion of Halda project appear to have made a representation in 1990 to the authorities.
The representation runs as under "Respected sir, 1, on behalf of the Fetrenched Labour Congress Union I.O. 754 Tamluk Rly.
Station.
Midnaporoe, beg to humbly submit that the above quoted Circulars are not obeyed by DEN (Con).
TMZ DIZHA.
S.E. Rly.
KGP and they do not follow the orders of they Supreme Court, High Court of Calcutta and Central Administrative Tribunal, Calcutta Bench.
As a result of their indifference, the project casual labour who are retrenched from service on or before 1.1.1981 are in great difficulties and they are not getting scope of absorption.
All the applications deposited in the office of the DEN (CON) KGI in terms of Memo No. PD/E/A/579/A/837 in reference to CE/ C/GRC dated 25.5.1987 are to be approved.
In such circumstances, I beg to request you to intervene in the matter as expeditiously as humble.
Needless to say, if your grievances are not sympathetically admitted and the retrenched labour be not absorbed.
We shall have no alternative way except launching vigorous movement in the next stage.
Your faithfully, (BHUDEV JALUA)" The representation does not give any detail.
It is not mentioned if the scheme was given due publicity or not.
No explanation is given as to why the petitioners did not approach till 1990.
Nor it is stated if any of the casual labourer Not it is stated if any of the casual labourer of the project were reemployed or not.
It is vague and was lacking in material particulars.
Two questions arise, one, if the petitioners are entitled as a matter of law for reemployment and other if they have lost their right, if any, due to delay.
Right of casual labourer employed in projects, to be reemployed in railways has been recognized both by the Railways and this Court.
But unfortunately the petitioners did not take any step to enforce their claim before the Railways except sending a vague representation nor did they even care to produce any material to satisfy this Court that they were covered in the scheme framed by the Railways.
It was urged by the learned counsel for petitioners that they may be permitted to produce their identify cards etc.
, before opposite parties who may accept or reject the same after 755 verification.
We are afraid it would be too dangerous to permit this exercise.
A writ is issued by this Court in favour of a person who has some right.
And not for sake of roving enquiry leaving scope for maneuvering.
Delay itself deprives a person of his remedy available is law.
In absence of any fresh cause of action or any legislation a person who has lost his remedy by lapse of time loses his right as well.
From the date of retrenchment if it is assumed to be correct a period of more than 15 years has expired and in case we accept the prayer of petitioner we would be depriving a host of others who in the meantime have become eligible and are entitled to claim to be employed.
We would have been persuaded to take a sympathetic view but in absence of any positive material to establish that these Petitioners were in fact appointed and working as alleged by them it would not be proper exercise of discretion to direct opposite parties to verify the correctness of the statement made by the petitioners that they were employed between 1964 to 1969 and retrenched between 1975 to 1979.
The writ petitions accordingly fail and are dismissed.
But there shall be no orders as to costs.
U.R. Petitions dismissed. [/INST] The petitioners claimed to he casual labourers of the South Eastern Railway appointed between 1964 69 and retrenched between 1975 78.
They prayed (1) for inclusion of their names in the live casual register and reemployment according to their seniority, and (2) for restraining the filling of vacancies from the open market.
They relied on two circulars issued by the Railway Board laying down guidelines for the recruitment, retrenchment and employment of casual labourers.
They also relied on two judgments of this court in 1985 and 1987 which directed the preparation of a scheme and absorption of casual labourers in accordance with their scheme.
A scheme was framed in 1987 for employing casual labourers retrenched before 1981 subject to demonstrating suitability before 31st March, 1987.
In 1990 the petitioners made their representation to be considered.
The questions before this court were (a) whether the petitioners were entitled as a matter of law to reemployment and (b) if they had lost their right, if any, due to delay.
752 Dismissing the petitions, this court, HELD 1.
Right of casual labourers employed in projects to be reemployed in railways has been recognised both by the Railways and this Court.
But the petitioners only sent in a vague representation, and there was absence of positive material that they were in fact appointed and working as claimed.
(754 G) 2.
A writ is issued by this court in favour of a person who has some right and not. for the sake of a roving enquiry leaving scope for manoeuver.
Delay itself deprives a person of big remedy available in law.
In the absence of any fresh cause of action of any legislation, a person who has lost his remedy by lapse of time loses his right as well.
(755 A) 4 In any event, more than 15 years have expired, and a host of others who have in the meantime become eligible and entitled to claim to be employed would he deprived if the petitioners ' claim were accepted.
(755 B) </s> |
<s>[INST] Summarize the following judgement: Appeal No. 2684 (NM) /93 etc.
From the Judgment and Order dated 2.4.
92/ 27.4.
92 of the Bombay High Court in W.P. No. 27 of 1990.
658 Harish N. Salve, R.P. Bhatt, A.K. Ganguli, Dr. Nitin Kantawala, Ms. Hemantika Wahi, T.V.S.N. Chari, Ms Tanuja Sheel, Mrs. Sheela section Rao, P. Parmeswar and E.C. Agrawala, Ranjit Kumar, R. Venkataramani, Mrs. M. Qamaruddin, Abhijat P. Medh for the appearing parties.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY,J.
Leave granted.
Heard counsel for the parties.
These appeals arise from the common judgment and order of the Bombay High Court in a batch of writ petitions.
The question is whether the photographic machinery imported by the appellants falls under Customs Tariff Heading No. 98.01.
If it falls under it, it is entitled to a concessional rate of duty.
If not, it is chargeable to a higher duty.
The was enacted by Parliament with a view to consolidate and amend the law relating to customs duties.
It repealed the Indian Tariff Act, 1934 and Indian Tariff (Amendment) Act, 1949.
Section 2 says that the rates at which duties and customs shall be levied under the are those specified in the First and Second Schedules.
Section 3 levies additional duty equal to excise duty.
Chapter 98 was introduced in the Schedule with effect from February 28, 1986.
It relates to "Project Imports; Laboratory Chemicals; Passengers Baggage, Personal Importation by air or post; Ship Stores".
Chapter 98 provides a concessional rate of duty in respect of articles and items specified therein.
Chapter Note (1) declares, "this chapter is to be taken to apply to all goods which satisfy the conditions prescribed therein, even though they may be covered by a more specific heading elsewhere in this Schedule." In other words, if a particular article mentioned in Chapter 98 also falls under some other chapter/ heading, still such item will be governed by chapter 98 and not by that other chapter/heading.
So far as photographic machinery is concerned, it is not disputed that it falls under chapter 90 where the rate of duty is far higher.
Chapter Note (2) which is of crucial relevance herein reads "Heading No. 98.01 is to be taken to apply to all goods which are imported in accordance with the regulations made under section 157 of the (52 of 1962) and expressions used in this heading shall have the meaning assigned to them in the said regulations.
(emphasis added) 659 Heading 98.01 (Sub Heading 9801.00), being relevant for our purpose, must also be set out: Heading Sub Description of Rate of duty No. heading article Standard No. Prefential Areas 98.01 98.01.00 All items of machinery 60% including prime movers, instruments, apparatus and appliance, control gear and transmission equipment, auxiliary equipment (including those required for research and development purposes, test and quality control), as well as all components (whether finished or not) or raw materials for the manufacture of the aforesaid items and their components required for the intial setting up of a unit, or the substantial expansion of an existing unit, of a specified : (1)Industrial plant, (2) irrigation project, (3) power project, (4) mining project, (5) project for the exploration or oil or other minerals, and (6) such other projects as Central Government may, having regard to the economic development of the country notify in the official Gazette in this behalf; and spare parts, other raw materials (including semifinished material) or consumable stores not exceeding 10% of the value of the goods specified.
above 660 provided that such spare parts, raw materials or consumable stores are essential for the maintenance of the plant or project mentioned in to 6 above.
" (emphasis added) The expression "industrial plant" is not defined in the or, for that matter, in the .
Chapter Note (2) of Chapter 98, which it must be emphasized is apart of statute itself, says that the expressions used in heading No. 98.01 shall have the meaning assigned to them by the regulations made under Section 157 of the and further that heading No. 98.01 shall apply to all goods which are imported in accordance with such regulations.
As contemplated by Chapter Note (2) of Chapter 98 of the , the Central Government framed the Project Imports Regulations under Section 157 of the , contained in notification No. 230/86 Cus.
dated April 3, 1986.
They came into force on the same day.
Regulation (1) of these Regulations says that they shall be called "Project Imports Regulations, 1986" and shall come into force on April 3, 1986.
Regulation (2) says that the said Regulations shall apply for assessment and clearance of goods falling under heading No. 98.01.
Regulation (3) defines certain expressions including the expression "industrial Plant".
The definition reads as follows: "Industrial Plant" means an industrial system designed to be employed directly in the performance of any process or series of processes necessary for manufacture production or extraction of a commodity, but does not include (i) establishments designed to offer services of any description such as hotels, hospitals, photographic studios, photographic film pro cessing laboratories, photocopying studios, laundries, garages and workshops; or (ii)a single machine or a composite machine, within the meaning assigned to it, in Notes 3 and 4 to section XVI of the said Firs t Schedule.
" A perusal of the definition of "industrial plant" makes it clear that it seeks to exclude industrial systems meant for "establishment designed to offer services of 661 any description".
It mentions certain service establishments by way of illustration.
Photographic studios and photographic film processing laboratories happen to be mentioned specifically as some of the establishments designed to offer services.
Once the Project Imports Regulations came into force, the Customs authorities refused to treat the photographic equipment imported by the appellants and others as "industrial plant" falling under heading 98.01 of the customs Tariff Act.
They sought to levy duty thereon under Chapter 90.
In view of the refusal of the Customs authorities to treat the photographic machinery imported by them as "industrial plant" within the meaning of Chapter 98, the appellants approached the Bombay High Court by way of the batch of writ petitions.
Their contention was that until April 3, 1986, photographic machinery was included within the expression "industrial plant" occurring in heading 98.01 as well as in tariff heading 84.66 of the old tariff.
This fact was affirmed by the Government of India when a doubt was raised in their letter bearing No.F 526/52/83 Cus.
(T.U.) dated November 4, 1988.
Even according to the normal meaning and connotation of the expression "industrial plant", photographic machinery falls within its purview.
This is the sense in which the said expression is used in the Tariff Entry 98.0 1.
If so, the ambit and field of the said expression cannot be cut down by a regulation made under Section 157 of the .
If any particular machinery or equipment is to be excluded from the purview of the "industrial plant", it can and should be done only by the Act itself but not by a subordinate legislation like regulations.
It was submitted that the 1986 regulations are outside the purview of Section 157 and are incompetent.
The contentions were negatived and writ petitions dismissed by the Division Bench.
In these appeals, S/Sri Harish Salve and Kantawaala urged the following contention : (1) A perusal of the discloses its scheme.
The Act specifies the articles and things subjected to duty as also the rate to duty.
Specification of articles is not left to be done by a delegate.
It is true that power of exemption is conferred upon the Central government under Section 25 of the , but it is relevant to notice that a notification of exemption issued under Section 25 is required to be laid on the floor of both the houses of parliament by Section 159 of the Act.
This shows the close control which the Parliament intended to exercise over the specification of articles and the rate of duty thereon.
The Regulations made under Section 157 are not subject to Parliament 's scrutiny in the sense that they are not required to be laid on the floor of the houses of Parliament under Section 159.
Evidently, Regulations were not supposed to deal 662 with any matters of substance.
(2) While enacting Section 157, Parliament could never have contemplated delegating, to the Board, the power to cut down the field and ambit occupied by the provisions of the or .
Regulations made by the Board stand on an inferior footing to the rules made by the Central Government under Section 156.
The regulation making power was intended to be utilised for the purpose of providing procedural and peripheral provisions but certainly not for making a substantive provision cutting down the content and ambit of the provisions of the Act.
(3) Even if it is held for some reason that such a power was intended to be and was delegated to the Board, it would be bad since it amounts to excessive delegation of legislative power.
Regulation (3) of the new.
Regulations which defines the expression "industrial plant" is clearly outside the province of regulation making power conferred by Section 157.
The legislative history of tariff entry 98 militates against any such power being exercised by the Board.
The Board cannot take away what the Parliament has given.
The regulation in effect have the effect of amending the provision in the Act.
They take away under the garb of defining the expression "industrial plant" ', the beneficial rate of duty provided by Parliament in the interest of industrial progress of the country.
The Regulations are inconsistent with the provisions of the .
S/Sri Ganguly and T.V.S.N. Chari, learned counsel appearing for the Central Government, on the other hand, fully supported the validity of the said regulations.
They pointed out that the validity of chapter Note (2) was not questioned before the High Court has been expressly recorded in the judgment under appeal.
They submitted that the appellants should not be permitted to do so at this stage.
Once Chapter Note (2) is taken as good, the challenge to the 1986 Regulations must fail.
The said note is not bad as amounting to excessive delegation of legislative power.
In short, they refuted each and every submission made by the learned counsel for the appellants.
and are complimentary.
to each other.
Section 157 of the confers upon the Central Board of Excise and Customs (constituted under the ) the power to make regulations "consistent with this Act and Rules, generally to carry out the purposes of this Act".
Sub section (2) particularises certain matters with respect to which regulations can be made.
The specification of certain matters in sub section (2) is without prejudice to the generality of the power conferred by 663 Sub section (1).
This is consistent with the standard legislative practice.
Section 157 reads; " 157.
Central power to make regulations.
(1) Without prejudice to any power to make regulations contained elsewhere, in this Act, the Board may make regulations consistent with this Act and the rules,generally to carry out the purposes of this Act.
(2) In particular and without prejudice to the generality of the foregoing power such regulations may provide for all or any of the following matters, namely (a) the form of a bill of entry, shipping bill, bill of export, import manifest, import reports, export manifest, export report, bill or transshipment, boat note and bill of coastal goods; (b) the conditions subject to which the transshipment of all or any goods under sub section (3) of Section 54, the transportation of all or any goods under Section 56 and the removal of ware housed goods from one warehouse to another under section 67 may be allowed without payment of duty, (c) the conditions subject to which any manufacturing process or other operations may be carried on in a warehouse under Section 65.
" section 156 confers upon the Central Government the power to make rules "consistent with this Act generally, to carry out the purposes of this Act".
SubSection (2) of Section 156 again Specifies certain matters with respect to which rules can be made.
The specification in sub section (2) is without prejudice to the generality of the power conferred by sub section (1).
The Parliament has appointed two authorities i.e. central government and the Board to make rules/regulations to carry out the purposes of the Act generally.
The character of Rules and of the Regulations made under Sections 156 and 157 respectively is the same both constitute delegated legislation.
The Regulations are subject to an additional limitation viz., they should not be contrary to the Rules 664 made under Section 156.
The purpose of sub section (2) in both the sections is inter alia to allocate certain matters to each of them exclusively; subject to these subsections, both the delegates can exercise the power vested in them for carrying out the purposes of the Act.
No established legislative practice of any considerable duration has been brought to our notice to read any further limitation into the regulation making power under Section 157, assuming that a legislative practice can be read as a limitation.
We cannot, therefore, accept the contention that regulation making power under Section 157 should be confined only to peripheral and/or procedural matters.
It is not necessary for the purposes of this case to emphasis the need or the growing relevance of delegated legislation.
Moreover, enactments like customs Act and are not merely taxing statues but are also potent instruments in the hands of the Government for regulating the economy and the industrial development of the country.
The 'economic ' ministries had the establishments allied to them keep a close watch on the economy, closely monitoring its behaviour.
Power of taxation is one of weapons in the Government 's armoury to regulate the economy.
A certain industry may require encouragement while another may not.
Yet another sector may require to be controlled nay, discouraged on some occasions.
In an under developed country like ours, the emphasis is bound to be more on capital goods industry rather than on consumer goods ' industry.
The domestic industry has also to be protected and encouraged in certain situations.
In 1986, the government which expression in this discussion includes the Board evidently thought that import of 'industrial systems ' meant for 'establishments designed to offer services of any description such as hotels, hospitals, photographic studios, photographic film processing laboratories ' etc.
needs no encouragement in the shape of concessional custom tariff and they said so through the said Regulations made in April 1986.
It is not for the court to question the wisdom of the government 's or for that matter, of Board 's policy.
Board is a part of the government.
It is in direct charge of the administration of the Act along with the government.
Probably, it is for this reason that the Parliament has, through Chapter Note (2), vested the power to define the expressions occurring in Chapter 98 in the Board.
In this scheme of things, we cannot accept the argument of Sri Salve with respect to some kind of an inherent limitation upon the regulation making power of the Board.
We cannot say that the said power is confined only to, what the learned counsel calls, peripheral and/or procedural matters.
There is another and perhaps more simpler answer to the attack upon the validity of the said Regulations.
They are relatable not only to Section 157 of the but more 665 particularly to Chapter Note (2) of Chapter 98 of the .
Chapter Note (2) expressly states that the expressions used in Heading 98.01 shall have the meaning assigned to them in the said regulations.
In accordance with the said Chapter Note, Project Imports Regulations have been made excluding "establishments designed to offer services of any description" from the purview of "industrial plant".
If the said regulations are good any valid, there can be no escape from what they say; the photographic equipment does not fall within the ambit of "industrial plant".
In this view of the matter, the relevance of the alleged legislative practice with respect to regulation making power, or of the situation obtaining prior to the framing of the said regulations, is very little.
The express power conferred by Chapter Note (2) of Chapter 98 cannot be curtailed or abridged with reference to alleged legislative practice relating to regulation making power, assuming that such a practice is established and is relevant.
The only question which really arises is whether Chapter Note (2) amounts to excessive delegation of legislative power.
As rightly pointed out by Thommen,J. In Supreme Court Employees Welfare Association vs Union of India ; "where the validity of a subordinate legislation (whether made directly under the constitution or statute) is in question, the court has to consider the nature, objects and scheme of the instrument as a whole, and on the basis of that examination, it has to consider what exactly was the area over which and the purposes for which power has been delegated by the governing law.
" In statutes like and one has also to keep in mind that such legislation can be properly administered only by constantly adjusting it to the needs of the situation.
This calls for a good amount of discretion to be allowed to the delegate.
As is often pointed out "flexibility is essential (in law making) and it is one of the advantages of rules and regulations that they can be altered much more quickly and easily than can acts of Parliament.
" We have pointed out hereinbefore the necessity of constant and continuous monitoring of the nation 's economy by the government (and its various institutions) and the relevance of these enactments as a means of ensuring a proper and healthy growth.
Looked at from this angle, we are unable to see any substance in the argument that Chapter Note (2) amounts to excessive delegation of the Parliament 's essential legislative function.
Chapter 98 provides a concessional tariff inter alia to industrial plant.
The expression "industrial plant" is a term of wide connotation.
All kind of industrial plants may not require to be encouraged.
Some may; others may not.
Decisions of this nature have to be made from time to time.
Parliament cannot obviously do this.
It has, therefore, left the function to the Board which, as emphasised hereinbefore, is in immediate direct charge of the administration of the Act, along with and subject to the guidance of the central 666 government.
In Vasantlal Maganbhai Sanjanwala vs State of Bombay ; , it is observed by this Court that "self effacement of legislative power in favour of another agency either in whole or in part is beyond the permissible limits of delegation".
At the same time, it is held, "it is for a court to hold on a fair, generous and liberal construction of an impugned statute whether the legislature exceeded such limits.
But the said liberal construction should not be carried by the Courts to the extent of always trying to discover a dormant or a latent legislative policy to sustain an arbitrary power conferred an executive authorities.
It is the duty of the Court to strike down without any hesitation any arbitrary power conferred on the executive by the legislature".
These words were quoted with approval in a subsequent decision of the Constitution Bench in Devidas vs State of Punjab ; Krishna lyer, J. emphasised this very aspect in the context of a taxing statute in Avinder Singh vs Punjab ; The learned Judge said: ". . the legislature cannot self efface its personality and make over, in terms plenary, the essential legislative functions.
The legislature is responsible and responsive to the people and its representatives, the delegate may not be and that is why excessive delegation and legislative, hara kiri have been frowned upon by constitutional law.
This is a trite proposition but the complexities of modem administration are so bafflingly intricate and bristle with details, urgencies, difficulties and need for flexibility that our massive legislatures may not get off to a start if they must directly and comprehensively handle legislative business in all their plenitude, proliferation and particularisation.
Delegation of such part of legislative power becomes a compulsive necessity for viability.
If the 500 odd parliamentarians are to focus on every minuscule of legislative detail leaving nothing to subordinate agencies the annual output may be both unsatisfactory and negligible.
The law making is not a turnkey project, readymade in all detail and once this situation is grasped the dynamics of delegation easily follow.
Thus, we reach the second constitutional rule that the essentials of legislative functions shall not be delegated but the inessentials, however, numerous and significant they be, may well be made over to appropriate agencies.
of course, every delegate is subject to the authority and control of the principal and exercise of delegated power can always be directed, corrected or cancelled by the principal.
" 667 Applying the principles aforesaid, we cannot say that the Parliament has, by empowering the Board to define the expression "industrial plant" occurring in Chapter 98, delegated its essential legislative function.
Indeed, we see no self abnegation on the part of the Parliament.
The power conferred by Chapter Note (2) is undoubtedly different from the power of exemption conferred, by Section 25.
It makes little difference in principle that while an exemption notification is required to be laid on the floor of the Parliament, Regulations made under Section 157 are not so required.
Absence of such requirement does not mean absence of control by the Parliament over the acts of the delegate.
Nor are we satisfied that by excluding the industrial systems meant for establishments designed to offer services of any description, the Board has travelled beyond its brief Reference may be had, in this connection to the decision of this court in State of Tamil Nadu vs Hind Stone Section 15 of the empowers the State Government to make rules for regulating the grant of quarry lease, mining lease and other mineral concessions in respect of minor minerals and purposes connected therewith.
In exercise of the said power, the Government of Tamil Nadu framed Tamil Nadu Minor Mineral concession Rules, 1959.
Rule 8 of the Rules prescribed the procedure for lease of quarries to private persons.
Rule 8(C), which was introduced in the year 1977, imposed a prohibition on the grant of lease of quarries in respect of black granite to private persons.
The Rule provided that notwithstanding anything to the contrary contained in the said rules, no lease for quarrying black granite shall be granted to private persons on or after7th December, 1977.
It could be ranted only to the State Government or to a corporation wholly owned by it.
The validity of Rule 8(C) was challenged on the ground that it travels beyond the purview of the Act inasmuch as the power to make rules conferred upon the State Government by Section 15 was meant for regulating the rant of quarry leases in respect of minor minerals but not for prohibiting it for creating a monopoly in itself (State Government).
It was also argued that since the decision contained in Rule 8(C) involved a major change of policy, it could be done only by the legislature and not by a subordinate legislative body.
Both these arguments were rejected.
Following observations are apposite: ".
It was pointed out by the Privy Council in Commonwealth of Australia vs Bank of New South Wales and we agree with what was stated therein that the problem whether an enactment was regulatory or something more or whether a restriction was direct or only remote or only incidental involved, not so much legal as political, social or economic consideration.
Each case, it was said, must be judged on its own facts and in its own setting of time and circumstances and it might be that in regard to some economic 668 activities and at same Stage of social development, prohibition with a view to State monopoly was the only practical and reasonable manner of regulation.
Another of the submission of the learned counsel was that the G.O.Ms.
No. 1312 dated December 2, 1977 involved a major change of policy, which was a legislative function and therefore beyond the competence of a subordinate legislating body.
We do not agree with the submission.
Whenever there is as witch over from 'private sector ' to 'public sector ' it does not necessarily follow that a change of policy requiring express legislative sanction is involved.
It depends on the subject and the statute.
For example, if a decision is taken to impose a general and complete ban on private mining of all minor minerals, such a ban may involve the reversal of a major policy and so it may require Legislative sanction.
But if a decision is taken to ban private mining of a single minor mineral for the purpose of conserving it, such a ban, if it is otherwise within the bounds of the authority Given to the Government by the Statute, cannot be said to involve any change of policy.
" The statement of law is clear and we agree with it respectfully.
We are, therefore, of the considered opinion that Chapter Note (2) cannot be faulted as an instance of excessive delegation of essential legislative function nor can the Project Imports Regulations be faulted on the ground of travelling beyond the purview of the statute.
For the above reasons, the appeals fail and are dismissed.
No costs.
Appeals failed. [/INST] The by its First and Second Schedules provided the rates of and custom duties to be levied under the .
Chapter 98 introduced in Second Schedule prescribed a concessional rate of duty in respect of articles and items specified therein.
As per Chapter 655 Note (1), if a particular article mentioned in Chapter 98 also fell under some other Chapter/heading, still such item would be governed by Chapter 98 and not by that other chapter/heading.
Photographic machinery was covered under Chapter 90 wherein the rate of duty was far higher, but for purposes of duty it was claimed as "industrial plant" under Chapter 98.01.
The expression "industrial plant" was defined neither in nor in .
Chapter Note (2) of Chapter 98 of the laid down that Heading 98.01 would apply to all goods imported in accordance with the regulations made under.
section 157 of the Act and the expressions used in heading 98.01 should have the meaning assigned to them in the said regulations.
Accordingly, the Project Import Regulations, 1986 were framed.
Regulation (3) of said Regulations defined "industrial plant" exduding from its purview industrial systems meant for "establishments designed to offer services of any description" such as.
photographic studios, photographic film processing laboratories etc.
On coming into force of the Project Import Regulations, the Customs authorities refused to treat the photographic equipment imported by the appellants as industrial plant falling under heading 98.01 and sought to levy duty thereon under Chapter 90 of the .
The appellant filed writ petitions before the High Court challenging the validity of the Project Import Regulations, 1986.
The writ petitions were dismissed.
Hence the appeals by special leave.
The appellant contended that regulations made by the Central Board of customs and Excise under section 157 of the , not being subject to Parliament 's scrutiny in the sense that they were not required to be laid on the floor of the Houses of Parliament under section 159 stand on an inferior footing to rules made by the Central Government under section 156, and therefore, the regulation making power was confined only to peripheral and procedural matters and not for making substantive provisions; the Act specified the articles and things subjected to duty as also the rates of duty and such A power was not left to be exercised by a delegate; the Parliament did not contemplate delegating to the Board the power to cut down the field and ambit occupied by the provisions of the or the and such a power, if delegated to the Board, would amount to excessive delegation of legislative power; Regulation (3) of the Project Imports Regu 656 lation defining "Industrial plant" was outside the purview of the regulation making power conferred by section 157 as the same took away under the garb of defining the said expression the beneficial rate of duty provided by the Parliament in the interest of industrial progress of the country.
Dismissing the appeals, this Court, HELD : 1.
The regulation making power conferred on the Central Board of Customs and Excise by section 157 of the customs Act, 1962 is not confined only to peripheral and/or procedural matters.
The Parliament has appointed the Central Government and the Board to make rules/regulations to carry out purposes of the Act.
The character of Rules and of the Regulations made under sections 156 and 157 of the Act respectively Is the same both constitute delegated legislation.
The Regulations are subject to an additional limitation viz., they should not be contrary to the Rules made under section 156.
The purpose of sub section (2) in both the sections is to allocate certain matters to each of them exclusively; subject to these sub sections, both the delegates can exercise the power vested in them for carrying out the purposes of the Act.
(662G H, 663 G H, 664 A) 2.1.
It is not for the Court to question the wisdom of the Government 'sor for that matter, of Board 's policy.
Enactments like and are not merely taxing statutes but are also potent instruments in the hands of the Government for regulating the economy and the industrial development of the country.
Power of taxation is one of the weapons in the Government 's armoury to regulate the economy.
A certain industry may require encouragement while another may not.
Such legislations can be properly administered only by constantly adjusting them to the needs of the situation.
This calls for a good amount of discretion to be allowed to the delegate.
"Flexibility is essential (in law making) and it is one of the advantages of rules and regulations that they can be altered much more quickly and easily than can Acts of Parliament".
Probably, it is for this reason that the Parliament has through Chapter Note (2) vested the power to define the expressions, occurring in Chapter 98, in the Board which is a part of the Government and is in immediate direct charge of the administration of the Act alongwith and subject to the guidance of the Central Government.
Looked at from this angle, it cannot be said that Chapter Note (2) amounts to excessive delegation of the Parliament 's essentialle legislative function.
(665 D , G).
Chapter 98 of the provides a concessional tariff to industrial plant.
The expression "industrial plant" is a term of wide 657 connotation.
All kinds of Industrial plants may not require to be encouraged.
Some may; others may not.
Decisions of this nature have to be made from time to time.
Parliament cannot obviously do this.
It has, therefore, rightly left the function to the Board.
In 1986, the Government which expression includes the Board thought that import of 'industrial systems ' meant for 'establishments designed to offer services of any description such as hotels, hospitals, photographicstudios, photographic film processing laboratories, etc need no encouragement in the shape of concessional custom tariff and they said so through the Project Imports Regulations, 1986 which cannot he said to have travelled beyond the purview of the statute.
Nor can it be said that the Board has travelled beyond its brief by excluding the "Establishments designed to offer services of any description" from the preview of "industrial plant" as defined under Regulation (3) of the Project Imports Regulations.
Accordingly, photographic equipment does not fall within the ambit of "industrial plant".
(665 G H, 666 A, 668 E) 2.3.
It cannot be said that the Parliament has, by empowering the Board to define the expression "industrial plant" occurring in Chapter 98, delegated its essential legislative function.
There is, indeed, no self abnegation on the part of the Parlimaent.
The express power conferred by Chapter Note (2) of Chapter 98 of is undoubtedly different from the power of exemption conferred by Section 25.
It makes little difference in principle that while an exception notification is required to be laid on the floor of the parliament, Regulations made under Section 157 are not so required.
Absence of such requirement does not mean absence of control by the Parliament over the acts of the delegate.
(661 G H) Supreme Court Employee Welfare Association vs Union of lndia ; Avinder Singh vs Punjab ; & State of Tamil Nadu vs Hind Stone ; , relied on.
Vasantial Maganbhai Sanjanwala vs State of Bombay, ; & Devidas vs State of Punjab ; , referred to. </s> |
<s>[INST] Summarize the following judgement: Appeal No. 266 (NT) of 1980.
From the Judgment and Order dt 14.12.1979 of the Allahabad High Court in Sales Tax Rev. No. 214 of 1979.
Harish N. Salve, P.P. Singh and Ms. Meenakshi Grover for the Appellant.
R.C. Verma and Ms section Mukherjee for R.B. Misra for the Respondent.
The Judgment of the Court was delivered by YOGESHWAR DAYAL, J.
This appeal is directed against the judgment of the Single Judge of the Allahabad High Court passed in Sales Tax Revision No. 214 of 1979 dated 14th December, 1979.
By the impugned judgment the High Court set aside the order of the Judge (Revisions), Sales Tax, U.P. Lucknow holding that the Phosphorous Bronze which the assessee/appellant herein have been manufacturing, fell within the ambit of Notification No. ST II 333/X 10121971 dated the 15th November, 1971 issued in exercise of the powers under the second proviso to sub section (2) of section 3 A of the U.P. Sales Tax Act, 1948 (U.P. Act No.
XV of 1948), and took the view that the relevant entry at serial No. 2(a) of the said Notification did not cover the goods prepared by the appellant herein and was thus liable to be taxed as an unclassified commodity at the rate of 3.5%.The relevant entry reads as under: SI.
No. Description of goods Rate of tax 1. . . . 2. (a) Copper, tin, nickel or zinc 1 per cent.m or any other alloy containing any of these metals only.
(b). . . .
The contention on behalf of the appellant is that Phosphorous Bronze manufactured and marketed by them is covered under the aforesaid entry.
According to the appellant the said Phosphorous Bronze is made of tin and copper only.
It is further contended on behalf of the appellant that the small quantity of Phosphorous is used to deoxidise the metal and as such the Phosphorous is not an 721 essential substance of Phosphorous Bronze.
It is, however, admitted case of the parties that without the use of Phosphorous the Phosphorous Bronze cannot be produced and certain quantity of Phosphorous still remains in the Phosphorous Bronze.
The contention of the respondent is that Phosphorous Bronze is an alloy containing not only the metals mentioned in the aforesaid entry but Phosphorous also and as such it is not covered under the aforesaid entry.
The words "other alloy containing any of these metals only" mean that the alloy made of these metals i.e. copper, tin, nickel or zinc only and that alone is covered under the said entry.
It was submitted that if any other metal or substance is included in such an alloy, the same would not be covered under the aforesaid entry.
A similar question arose in the case of Commissioner of Sales Tax, U. P. vs Hindustan Metal Works, Hathras reported in (1964) 15 Sales Tax Cases 97 wherein it was held as under: "The Notification exempts tax on sale of alloys prepared from the solution of two or more of the metals enumerated therein.
On account of the word "only" the sale of an alloy prepared from the solution of two or more of those metals and some other substance or substances would not be exempt from tax.
The assesse sold an alloy called phosphorous bronze which was prepared from the solution of copper, tin, phosphorous and lead.
Phosphorous and lead are not mentioned in the notification.
They are deliberately added by the assessee as per agreement between the parties.
The sale is, therefore, prime facie liable to be taxed.
" We were referred to various dictionary meanings of the words Phosphorous Bronze 'which have been noticed by the learned Judge dealing with case in the High Court.
We are really concerned with the interpretation of the entry.
The emphasis in the entry is either it should be pure copper, tin, nickel or zinc and if it is an alloy containing two or more metals, it must be an alloy containing these metals only.
The expression "only" is very material for understanding the meaning of the entry.
Since the alloy in dispute contains Phosphorous, may be in a very small quantity, it cannot fall within entry 2(a) of the aforesaid Notification.
The appeal consequently fails and is dismissed with costs.
U.R. Appeal dismissed. [/INST] By Notification No. ST 11 333/X 1012 1971 dated 15 November 1971, entry 2(a) copper, tin, nickel, zinc or any other alloy containing any of these metals only were made exigible at a reduced rate of sales tax of I The Judge (Revisions) Sales Tax, U.P., Lucknow held that phosphorous bronze falls within this notification.
The Single Judge of the Allahabad High Court took a contrary view and held that it was taxable as an unclassified commodity at 3.5%.
Before this court it was contended that phosphorous bronze is made of tin and copper only; that a small quantity of phosphorous is used to deoxidize the metal and that it is not an essential substance of the phosphorous bronze.
It was, however, admitted that without the use of phosphorous, phosphorous bronze cannot he produced, and a certain quantity remains in the phosphorous bronze.
Dismissing the appeal, this Court, HELD: (1) The emphasis in the entry is that it must contain, even if an alloy, "only" copper, tin, nickel or zinc.
The expression "only" is very material for understanding the meaning of the entry.
Since the alloy in dispute contains phosphorous, may he in a very small quantity, it cannot fall within entry 2(a) of the notification.
(721 G) Commissioner of Sales Tax vs Hindustan Metal Works (1964) 15 STC 97 720 referred to. </s> |
<s>[INST] Summarize the following judgement: Appeal No. 139 of 1959.
Appeal by special leave from the judgment and order dated January 8, 1959, of the Patna High Court in Election Appeal No. I of 1958, arising out of the judgment and order dated November 30, 1957, of the Election Tribunal, Patna, in Election Petition No. 353 of 1957.
B. K. P. Sinha and D. P. Singh, for the appellant.
G. C. Mathur and Dipak D. Choudhri, for respondent No. 1.
R. H. Dhebar, for respondent No. 3. 1959.
April 14.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
This appeal by special leave arises from the ' election petition filed by respondent I (No. 353 of 1957) in which he claimed a declaration that the election of the appellant as a member of the 537 Bihar Legislative Assembly Maner Constituency should be declared to be void.
In the last General Election for the said constituency which was held in February March 1957, there were three candidates, the appellant, respondent I and respondent 2.
The last date for filing nomination papers at the said election was January 29, 1957; the 'said papers were scrutinised on February 1, 1957.
Respondent I had challenged the validity of the appellant 's nomination paper at the said scrutiny but the returning officer had overruled the objection raised by respondent I and had accepted the nomination paper of the appellant along with 'those of the two other candidates.
After the counting of votes was done on March 3, 1957, the appellant was declared duly elected at the election inasmuch as he had got 9,826 votes while res pondents I and 2 had got 7,526 and 49 votes respectively.
Thereupon respondent I filed his election petition under section 81 of the Representation of the People Act, 1951 (hereinafter called the Act).
In his petition respondent 1 challenged the election of the appellant on several grounds all of which were controverted by the appellant.
On the allegations of the parties the tribunal had framed several issues and parties had led evidence on them.
At the stage of arguments, however, only a few issues were pressed by respondent I and all of them were found against him and in favour of the appellant.
In the result the tribunal dismissed the election petition on November 30, 1957.
Against the said decision of the tribunal respondent I preferred an appeal in the High Court of Judicature at Patna; and in his appeal he pressed only issue No. 1.
This issue was whether the nomination of the appellant was hit by the provision of section 7(d) of the Act and as such whether the said nomination had been improperly accepted.
On this issue the tribunal had found in favour of the appellant but the High Court reversed the said finding and accepted the plea of respondent 1.
As a result of this finding the High Court allowed the appeal preferred by respondent I and 68 538 declared on January 8, 1959, that the election of the appellant was void under section 100(1)(a) of the Act.
The validity of the appellant 's nomination has been challenged under section 7(d) of the Act on the ground that at the date of the nomination he had an interest in a contract for the execution of works undertaken by the Bihar Government.
There is no doubt that if a person is interested in a contract for the execution of any work undertaken by the appropriate Government he is disqualified for membership of the State Legislature in question.
The appellant, however, denied that the disqualification imposed by section 7(d) could be invoked against him.
His case was that the contracts in question had not been undertaken by the Bihar Government but they bad been undertaken by the Central Government; and he also urged that he had not taken the said contracts individually in his personal capacity, but as the Mukhiya of the Jeorakhan Tola Gram Panchayat.
On both these issues the Election Tribunal and the High Court have differed; and it is the said two issues that arise for our decision in the present appeal.
It is clear that if the appellant succeeds in showing that he had entered into the impugned contracts not individually but on behalf of the Panchayat of which he was the Mukhiya it would be un necessary to consider whether the works covered by the said contracts had been undertaken by the Government of Bihar.
Let us therefore first consider that point.
The impugned contracts are five in number.
They were for the execution of works under local development works programme envisaged under the Second Five Year Plan formulated by the Government of India.
These contracts are evidenced by five documents, Exs.
16 A, B, C, D & E. The first is for the construction of Beyapore Jeorakhan Tola Road, the second for the construction of the Beyapore M. E. School, the third for the construction of a Dispensary at Jeorakhan Tola, the fourth for the construction of the Gram Panchayat building, and the last for the construction of a well at the said village.
It is admitted by the appellant that these contracts had not been completed at the time of his nomination.
539 In considering the appellant 's plea that he had executed these contracts as a Mukhiya of the Village Panchayat of his village, it would be necessary to bear in mind the background of the scheme in pursuance of which these works were undertaken.
The Second Five Year Plan published by the Planning Commission in 1956 shows that the programme of ' starting these ' works was treated as a part of the co operative movement and the Commission had therefore recommended that the States were to sponsor and assist actively in the Organisation and development of Village Panchayats which was an important constituent of the programme of fostering corporate life in the rural areas as it would promote among the rural community active interest in the development programmes of the villages.
The object of this programme which would operate in areas not yet reached by the National Extension Service was to enable village communities to undertake works of local benefit mainly with their own labour.
The Commission realised that the resources of all the States taken together would fall far short of the requirements of this Plan and so it recommended large transfers of resources from the Centre to the States.
In this connection the conclusion of the Commission was that out of Rs. 200 chores sanctioned for the year 1957 58, 12 cores would be required for the Centre for schemes undertaken or directly sponsored by the Community Project Administration and 180 crores were to form part of the balance for the States.
Thus it is obvious that the basic idea underlying the Plan was to evoke popular response to the community projects undertaken in pursuance of the Plan and to leave the execution of different works adopted under the Plan to be fulfilled by popular local agencies like Village Panchayats.
This policy was emphasised by the Secretary of the Planning Commission in his communication to all State Governments, No. PC/Pub/52/53 dated August 11, 1953 (H. 1).
This communication set out the seven categories of work which were most suitable for assistance and it said that the local contribution in cash or kind or through voluntary labour together 540 with any contribution that the State Government or a local body might make should be a minimum of 50% of the total cost of each work.
The intention was to spread the benefit over as wide an area and to as many people as possible.
The State Governments were accordingly requested to arrange for a detailed scrutiny of the schemes before they were accepted and for making adequate provisions providing for their pro per execution.
They were also required to nominate a liaison officer for each district or other suitable unit for the purpose of checking the execution of the works and for maintenance of such initial accounts as might be necessary.
This communication makes detailed provisions about financing and accounting procedures to be followed and required the State Governments to make progress reports from time to time.
It appears that the Government of India was aware that the District Boards whose primary responsibility it was to sponsor these undertakings would find the project beyond their financial resources and so it accepted the recommendation of the Planning Commission to contribute 50% of the cost of each of the schemes on the condition that the remaining half had to be found by the District Board or by the public to be benefited by it in the form of cash or voluntary labour.
The five impugned contracts related to community projects of the kind envisaged by this programme.
By its letter dated February 27, 1954 (H. 2) the Bihar Government had advised all the District Local Boards to assist the execution of such projects and to afford all facilities to and co operate with the district officers in the execution of the programmes undertaken by these projects without charging any remuneration for the same.
The idea clearly was that if the Village Panchayats sponsored works undertaken under these programmes they should encourage people to contribute labour and even money.
The result would be that the works undertaken would benefit the community at large and if any saving was made in executing the contract it would enure for the benefit of the village Panchayats that were usually expected to be the sponsoring units.
541 It is in the light of this background that we have to consider the question whether the contracts in question had been executed by the appellant in his individual capacity as contended by respondent I or in his capacity as the Mukhiya of the Village Panchayat as urged by the appellant.
The four contracts evidenced by Exs.
16A, C, D and E are all similarly executed whereas contract 16 B which is in respect of the construction of the Beyapore M. E. School is somewhat differently worded.
With regard to this latter contract both the Election Tribunal and the High Court are agreed that it had been executed by the appellant as the Secretary of the Beyapore Madhyamik Vidyalaya and that in this con tract the appellant was not personally interested.
The Election Tribunal took the view that the other contracts are substantially of the same character whereas the High Court has held that they are entirely different and that the appellant has personally executed them.
The question which we have now to decide is whether this view of the High Court is right.
We would take exhibit 16 A as typical of the remaining four contracts.
The material terms of this contract are 8 in number and they are all in the prescribed form.
At the commencement of the contract the appellant has described himself by his name and he has stated that he belongs to the village of Jeorakhan Tola and that his profession is cultivation.
The preamble to the contract shows that the appellant undertook to carry out the construction of the development project under local works programme mentioned in the contract as per estimate attached thereto and he agreed to execute the work according to and subject to the terms and conditions contained therein, and he also undertook to contribute 50% of the cost in cash and labour.
At the end the appellant has signed as Mukhiya and has given his address as Jeorakhan Tola Gram Panchayat.
The High Court took the view that the description of the appellant given by him at the time when he signed the contract was not a term of the contract and could not therefore support his plea that he had executed the contract as Mukhiya of 542 the Panchayat.
It is on this ground that the High Court distinguished this and the other three allied contracts from the school contract, exhibit 16 B.
In this latter contract the appellant has described himself as the Secretary, Madhyamik Vidyalaya, both at the commencement of the document and at the end where the appellant has signed.
In our opinion, the distinction made by the High Court between the two sets of contracts is not valid.
We do not see any reason to take the view that the description given by the appellant about his status while he signed the contract is no part of the contract itself.
Incidentally we may observe that the contract is accepted by the officer who signs as the section D. O., Dinapore.
The designation of the officer given by him while signing the acceptance of the contract indicates the character in which the officer has accepted the contract.
Similarly the description given by the appellant about his status and character when he signed the contract should be taken to denote the character in which he executed the contract.
The High Court also thought that cls.
4 and 7 by which the appellant undertook liability to execute the contract as required and to become liable for payment of any fine imposed by the local government officer in case of his default clearly showed obligations of a personal type which were inconsistent with his plea that he had entered into the contract as the Mukhiya of the Panchayat.
We think that this argument has no force.
If the nature of the liability undertaken by these two clauses necessarily involves the conclusion that the execution of the contract must be by an individual person, then it is significant that the same two clauses occur in the school contract and yet the High Court has held that the said contract has been executed by the appellant not in his individual capacity but as the Secretary of the Madhyamik Vidvalava.
Therefore too much reliance cannot be placed upon these two clauses to support the view that the contract has been executed by the appellant personally.
Besides, the High Court has not properly considered the term of the contract by which the contracting 543 party undertakes to contribute 50% of the cost of the work in cash or labour.
In other words, the contracting party becomes a sponsoring agent of the contract and agrees to undertake 50% of its cost.
It is very difficult to appreciate the suggestion that the appellant personally and in his individual character agreed to contribute 50% of the cost in cash or labour.
In ' ordinary course a person who undertakes to carry out a building contract expects to make profit and would never agree to contribute 50% of the cost of the contemplated work.
This clause clearly indicates that the sponsoring of the contract was really done by the Village Panchayat which agreed through its Mukhiya that it would contribute 50% of the cost either in cash or in labour.
Consistently with the general policy of Plan the Village Panchayat became a sponsoring agent and hoped and expected to obtain popular response from the villagers who would contribute their labour and thus make up the 50% of the cost of the intended work.
Therefore, in our opinion, if the contract in question is considered in the light of the background of the Plan of which it forms one item, and all its conditions are taken into account together, there can be no doubt that the appellant as the Mukhiya of the Village Panchayat acted as its agent when he signed the contract., and not as an individual acting in his personal capacity.
This position is also corroborated by the record kept by the Village Panchayat in respect of these contracts.
This record consists of the several proceedings before the Village Panchayat, the budgets adopted by it and the resolutions passed by it from time to time in respect of these contracts.
It had been alleged by respondent 1 that the whole of this record had been fabricated for the purpose of the present proceedings.
The Election Tribunal has made a definite finding against respondent I on this point.
It has considered the oral evidence given by the appellant and other witnesses in proving the said record.
It has examined the entries themselves on their merits and has taken into account the fact that some of the exhibits showed that they had been signed and 544 approved by the District Panchayat Officer from time to time.
The tribunal, therefore, thought that it was impossible to believe that all persons who purported to sign the record had helped the appellant to manufacture it simply because the appellant was the Mukhiya of the village.
The judgment of the High Court shows that it was not prepared to reverse this finding in terms.
It has, however, made certain observations in respect of this record which would show that it was not prepared to attach any importance to it.
" The papers ", says the judgment, " do not inspire much confidence and cannot be relied upon in proof of, the facts disclosed by them ".
It is unfortunate that when a serious allegation was made against the whole of the record alleged 'to have been kept by the Village Panchayat and it had been categorically rejected by the Election Tribunal, the High Court should not have made its own finding on the point in clear and unambiguous terms.
The oral evidence led by the appellant in support of the record and the other material circumstances considered by the Election Tribunal do not appear to have been properly taken into account by the High Court in dealing with this point.
The High Court was, however, impressed by what it called two defects in respect of this record .
It observed that the accounts had not been audited as required by r. 20 of the Bihar Gram Panchayat Account Rules, 1949, and that the cash balance had not been kept by the Mukhiya in the nearest Post Office Savings Bank or in any recognised Co operative Bank or a Government Treasury in the name of the Panchayat as required by r. 8.
These two defects may undoubtedly suggest that the officers of the Panchayat including the appellant had not acted properly and had not complied with the obligations imposed by the said rules; but it is difficult to understand how the said two defects can have a material and direct bearing on the question as to whether the record had, been fabricated.
If the High Court intended to hold that the record bad in fact been fabricated it should have considered the relevant evidence and the material circumstances 545 more carefully and should have made a definite finding in that behalf.
To say that the record bore only the signatures of the appellant and his clerk and to seek to draw an adverse inference from that fact is, in our opinion, adopting a wrong approach to the question.
If the appellant was the Mukhiya he was bound to sign the record, and so was the clerk bound to write it; that cannot therefore be treated as a suspicious circumstance by itself We have carefully examined this question and we do not see any reason why the well considered finding of the Election Tribunal on this point should not have been accepted.
Therefore, we must assume that the Panchayat record produced by the appellant is not shown to have been fabricated.
Besides, the High Court itself appears to have assumed that this record showed that there was an understanding between the appellant and the Village Panchayat in regard to the financial obligations involved in the execution of the impugned contracts.
" It might well be ", says the judgment, " that the loss or the profit was ultimately to be borne or pocketed by the Gram Panchayat itself " ; but that, according to the High Court, " does not take away the effect of the contract itself which on the face of it was entered into by the appellant himself ".
If the Panchayat agreed to bear the loss or take the profit flowing from the performance of the contract then it clearly supports the appellant 's case that he had executed the contract as the Mukhiya of the Panchayat.
The arrangement to which the High Court refers, if genuine, would be wholly inconsistent with the case set up by respondent I that the contract had been executed by the appellant personally.
The High Court has also held that the appellant had not made out this specific case either before the returning officer when his nomination was challenged or in the present proceedings when he filed his written statement.
The appellant had no doubt stated in reply that he had no interest in any contract undertaken by the State Government.
According to the 69 546 High Court his failure to add the further particular that the contract had been executed,by him on behalf of the Panchayat shows that the said plea is an afterthought.
We are unable to see the force of this criticism.
But apart from it, the question raised by the appellant relates to the construction of the contract and we do not see how the construction of a document can be prejudicially affected by the failure of the party to make a more specific and more precise plea in his written statement.
We have no doubt that, if the contract is considered as a whole, it would show that the appellant had executed it as the Mukhiya of the Village Panchayat and this conclusion cannot be affected by the alleged defect in the plea taken by him in the written statement.
The High Court has also relied on the fact that if the contract was intended to be executed by the appellant on behalf of the Panchayat it should have been executed in the name of the corporate body as required by section 6 of the Bihar Panchayat Raj Act (Bihar Act 7 of 1958).
It may be that the Gram Panchayat is a body corporate by the name specified in the notification under sub section
(1) of section 3 and has a perpetual succession and a common seal, and so has power to contract in the name of the body corporate; but as the judgment of the High Court itself points out the invalidity of the contract would not affect the merits of the issue raised under section 7(d) of the Act.
That is the view taken by this Court in Chatturbhuj Vithaldas Jasani vs Moreshwar Parashram (1), and that in fact is the point made by the High Court in rejecting the appellant 's contention that since the contract was invalid he could not be said to be interested in it under section 7(d) of the Act.
Therefore, the invalidity of the contract cannot help us in deciding the question as to whether, on its true construction, the contract can be said to have been executed by the appellant in his personal capacity or as the Mukhiya of the Village Panchayat.
Our conclusion, therefore, is that the four impugned contracts have been executed by the appellant as the Mukhiya of the Village (1) ; 547 Panchayat just in the same way as he had executed the school contract as the Secretary of the Vidyalaya in question.
That being so, section 7(d) cannot be invoked against him.
In view of this conclusion it is unnecessary to decide whether the works in question had been undertaken by the Government of Bihar or by the Central Government.
The result is that the appeal must be allowed, the order passed by the High Court set aside and that of the tribunal restored ; respondent I shall pay the costs of the appellant throughout; and the Election Commission shall bear their own.
We would like to add that, after this appeal was argued before us on April 2, 1959, we had announced our decision that the appeal would be allowed and that the judgment would be delivered later on in due course.
It is in pursuance of that order that the present judgment has been delivered.
Appeal allowed. [/INST] The election of the appellant as a member of the Bihar State Assembly was challenged under section 7(d) of the Representation of the People Act, 951, by the first respondent who was also a candidate for election for the same constituency, on the ground that at the date of the nomination the appellant had an interest in contracts for execution of works undertaken by the Bihar Government, and that his nomination had been improperly accepted.
The appellant 's plea inter alia was that he had executed the contracts not in his individual capacity but as the Mukhiya of the Village Panchayat and therefore the disqualification imposed by section 7(d) of the Act could not be invoked against him.
The contracts in question related to community projects undertaken in pursuance of the Second Five Year Plan, under which the execution of different works adopted under the plan was to be by popular local agencies like Village Panchayats.
The contracts were all in the prescribed form and the appellant, at the com 536 mencement of the contract, described himself by his name, stating that he belonged to the village.
The preamble to the contract showed that the appellant undertook to carry out the construction of the development project under local works programme mentioned in the contract as per estimate attached thereto, that he agreed to execute the work.
according to and subject to the terms and conditions contained therein and that he undertook to contribute 50% of the cost in cash and labour.
At the end of the contract he signed as Mukhiya, giving his address as the Gram Panchayat.
The Election Tribunal found in favour of the appellant and dismissed the election petition, but, on appeal, the High Court took the view (1) that the description of the appellant given by him at the time when he signed the contracts was not a term of the contract and could not therefore support his plea that he had executed the contract as Mukhiya of the Panchayat, and (2) that the fact that he undertook liability to execute the contracts as required and to become liable for payment of any fine imposed by the local government officer in case of his default showed obligations of a personal character inconsistent with his plea.
Held, that, on a proper construction of the contracts taking into account all the terms and conditions as a whole and considering them in the light of the background of the Second Five Year Plan, when the appellant signed the contracts as the Mukhiya of the Village Panchayat he acted as its agent and not as an individual acting in his personal capacity. </s> |
<s>[INST] Summarize the following judgement: (c) No. 715 of 1990.
Under Article 32 of the Constitution of India.
Gobinda Mukhoty, R.K. Jain, Yusuf H. Machhale, Ms. K. Amreswari, (N.P) R.N. Sachthey, N.N. Goswamy, Ashwani kumar, Mukesh K.Giri, A.K. Sharma, B.K. Prasad, (N.P) Ms. Anil Katiyar, Ms. Niranjana Singh, section Wasim A. Qadri, B.K. Prasad,Nafis Ahmad Siddiqui,Asoar Ali Khan,A.S. Bhasme, E.M.S. Anam, Sakil Ahmed Syed, Anil K. Jha, Raj Kumar Mehta, S.K. Agnihotri, B.R. Jad, Anip Sachthey, Syed Ali Ahmed, Syed Tanweer Ahmad, Mohan Pandey, M. Veerappa, K.H. Nobin Singh section K. Mehta, Dhruv Mehta, Aman Vachher, P. K. Manohar, B. B. Singh, Aruneshwar Gupta and R.Mohan for the appearing parties.
The Judgment of the Court was delivered by R.M. SAHAI, J.
Imams,incharge of religious activities of the mosque '(1) have approached this court by way of this, representative, petition under Article 32 of the Constitution for enforcement of fundamental right against their exploitation by Wakf Boards.
Relief sought is direction to Central and State Wakf Boards to treat the petitioner as employees of the Board and to pay them basic wages to enable them to survive.
Basis of claim is glaring disparity between the nature of work and amount of remuneration.
Higher pay scale is claimed for degree holders.
Imams perform the duty of offering prayer (Namaz) for congregation in mosques. 'Essentially the mosque is a centre of community worship where Muslims perform ritual prayers and where historically they have also gathered for political, social and cultural functions '.
(2) The functions of the mosque is summarised by the 13th Century jurist Ibn Taymiyah 'as a. place of fathering where prayer was celebrated and when public affairs were conducted '.
(3) 'All mosques are where Muslim men on an equalitarian basis rich or poor, noble or humble, stand in rows to perform their prayers behind the imam (4) Imams are expected to look after the cleanliness of mosque, call azans from the balcony of the minarets to the whole religious meetings and propagate the Islamic faith.
They are expected to be 745 well versed in the Shariat, the holy Quran, the Hadiths, ethics, philosophy, social, economic and religious aspects.
"Imam or prayer leader is the most important appointee.
In the early days the ruler himself filled this role; he was leader (imam) of the government of war, and of the common salat ("ritual prayer").
Under the Abbasids, when the caliph no longer conducted prayers on a regular basis, a paid imam was appointed.
While any prominent or learned Muslim can have the honor of leading prayers, each mosque specifically appoints a man well versed in theological matters to act as its imam.
He is in charge of the religious activities of the mosque, and it is his duty to conduct prayers five times a day in front of Mihyab '.
(5) On nature of the duties performed by the imams there is no dispute.
But both the Union of India and various State Wakf Boards of different States which have put in appearance in response to the notice issued by this Court have seriously disputed the manner of their appointment, right to receive any payment and absence of any relationship of master and servant.
It is stated that the imams or muazzins are appointed by the Mutwallis.
According to them the Wakf Boards have nothing to do either with their, appointment or working.
It is claimed that under lslamic religious practice they are not entitled to any emoluments as a matter of right as the Islamic law ordains the imams to offer voluntary service.
They are said to be paid some money out of the donations received in mosques or by the Mutwallis of the Boards.
Their job is stated to be honorary and not paid.
Nature of duty under Islamic Sharjat is stated to lead prayers which is performed voluntarily by any suitable Muslim without any monetary benefit.
Some of the affidavits claim that they are appointed by people of the locality.
The Union Government has specifically stated that the Islam does not recognise the concept of priesthood as in other religions and the selection of imams is the sole prerogative of the members of the local community or the managing committee, if any, of the mosque.
According to Karnataka Wakf Board Imamate in the mosque is not considered to be employment.
The allegation of the petitioners that due to meagre payment they are humiliated or insulted in the society, is denied and it is claimed that they are respectable persons who carry on the duty of Imamate as a part of religious activity and not for earning bread and butter.
The Delhi Wakf Board pointed out that the honorarium is paid to an imam as a consideration for his five time presence in the mosque regularly and punctually.
The Board has denied any right to exercise an authority over the mosque where imams and muazzins are appointed by the mutwallis or by the managing committees.
It is stated that holding of a certificate from a registered institution to enable a person to lead the prayer is not necessary as the only requirement for being an imam under the Sharjat is to (1) to (5) The Encyclopedia of Religion Vol.
10 p 121 122 746 have a thorough knowledge of the holy Quaran and the rites, rules and obligations required for offering prayers according to the principles laid down by the Kuran and Sunnah.
The affidavit filed on behalf of Wakf Board has pointed out that mosque can be categorised in five categories, one, which are under direct control or management of the Government such as Mecca Masjid or the mosque situated in public garden which are not governed or regulated by the Muslim Wakf Board ', second, mosques which are under the direct management of Wakf Board , third, mosques which are under the control of mutwallis under various Wakfs according to the wishes of the Wakf as the creator of the Wakf, fourth, mosques which are not registered with the Wakf Board and are managed by local inhabitants and are under the management of the public who offer prayers regularly in a particular mosque , and fifth, mosques which are not managed by mutwallis or the Muslin is of the locality.
It is claimed that imams of fourth and fifth category are not regular and any Muslim can lead the prayers, whereas under the third category mosques are having regular imams.
Financial difficulty of the Wakf Board to meet the demand has also been pointed out.
The Pondicherry Wakf Board has pointed that there is not even one employee except a peon working therein and, therefore, it is not possible to meet the demand of the imam.
It is also claimed that the Board has no control over the pesh imams as they are considered to be well dignified personality of the society and they are given due respect by the Muslim community as a whole.
In the counter affidavit filed by the Punjab Wakf Board it has been stated that imams of mosques in Punjab were being paid on basis of their qualification.
Imam: Nazara (Muntaii grade) are in the scale of Rs. 380 20 58O25 830 30 980, whereas Imams Hafiz (Wasti grade),are paid Rs. 445 20 645 25895 30 1045, and Imam Alim (Muntaii grade) are paid Rs. 520 20 720 25 97030 1120.
They are also paid Rs.30 per month medical allowance and muazzins are paid Rs. 310 per month.
These scales were revised in 1992.
According to them imams of all the mosques in Punjab, Haryana and Himachal Pradesh which come under the Punjab Wakf Board are being paid regularly and they are treated as regular employees.
The Sunni Central Wakf Board of 'Uttar Pradesh filed only a Written submission stating that all the sunni mosques were managed by mutwallis of the concerned managing committees and not by the Wakf Board.
The mosque differs from a church or a temple in many respects.
Ceremonies and service connected with marriages and birth are never performed in mosques.
Tile rites that are important and integral functions of many churches such as confessions, penitencies and confirmations do not exist in the mosques.
(6) Nor any offerings are made as is common in Hindu temples. 'In Muslims countries mosques are subsidized by the States, hence no collection of money from the community is permitted.
The Ministry of Wakf (Endowments) appoints the 747 servant, preachers and readers of the Koran.
Mosques in non Muslim countries are subsidised by individuals.
They are administered by their founder or by their special fund.
A caretaker is appointed to keep the place clean.
The muazzin cells to prayer five times a day from the minaret.
(7) In our country in 1954 was passed by the Parliament for better administration and supervision of Wakfs.
To achieve the objective of the Act Section 9 provides for establishment of a Wakf Board the functions of which are detailed in Section 15.
Sub section (1) of it reads as under "(1) Subject to any rules that may be made under this Act, the (general superintendence of all wakfs in State in relation to all matters, except those which are expressly required by this Act to be dealt with by the Wakf Commissioner, shall vest) in the Boar d established for the State; and it shall be the duty of the Board so to exercise its powers under this Act as to ensure that the Wakfs under its superintendence are properly maintained controlled and administered and the income thereof is duly applied to the objects and for the purposes for the objects and for the purposes for which such wakfs were created or intended: Provided that in exercising its powers under this Act in respect of any wakf, the Board shall act in conformity with the directions of the Wakf, the purposes of the wakf and any usage or custom of the wakf sanctioned by the Muslim law".
Clause (b) of Sub section (2) obliges the board "to ensure that the income and other property of a wakf are applied to the objects and for the purposes for which that wakf was created or intended".
The board is vested not only with supervisory and administrative powers over the wakfs but even the financial power vests in it.
One of its primary duties is to ensure that the income from the wakf is spent on carrying out the purposes for which wakf was created.
Mosques are wakfs and are required to be registered under the Act over which the board exercises control.
Purpose of their creation is community, worship.
Namaz or Salat is the mandatory practice observed in every mosque. "(Among the Five Pillars (arkan; so., rukn) of Islam, it holds the second most import, position, immediately after the declaration of faith (shahadah) (8).
The ' (6) & (7) Encyclopedia, Britannica Vol.
(8) The Encyclopedia of Religion Vol.
748 principal functionary to undertake it is the Imam.
The objective and purpose of every mosque being community worship and it being the obligation of board under the Act to ensure that the objective of the wakf is carried on the Board cannot escape from its responsibility for proper maintenance of religious service in a mosque.
To say, therefore, that the Board has no control over the mosque or Imam is not correct.
Absence of any provision in the Act or the rules providing for appointment of Imam or laying down condition of their service is probably because they are not considered as employees.
At the same time it cannot be disputed that due to change in social and economic set up they too need sustenance.
Nature of their job is such that,they may be required to be present in the mosque nearly for the whole day.
There may be some who may perform the duty as part of their religious observance.
Still others may be ordained by the community to do so.
But there are large number of such persons who have no other occupation or profession or service for their livelihood except doing duty as Imam.
What should be their fate? Should they be paid any remuneration and if so how much and by whom? According to the Board they are appointed by the mutwallis and, therefore, any payment by the board was out of question.
Prima.facie it is not correct as the letter of appointments issued in some states are from the Board.
But assuming that they are appointed by the Mutwallis the Board cannot escape from its responsibility as the mutwallis too section 36 of the Act are under the supervision and control of the Board.
In series of decisions rendered by this Court it has been held that right to life enshrined in Article 21 means right to live with human dignity.
It is too late in the day, therefore, to claim or urge that since Imams perform religious duties they are not entitled to any emoluments.
Whatever may leave been the ancient concept but it has undergone change and even in Muslim countries mosques are subsidised and the Imams are paid their remuneration.
We are, therefore, not willing to accept the submission that in our set up or in absence of any statutory provision in the the imams who look after the religious activities of mosques are not entitled to any remuneration.
Much was argued on behalf of Union and the Wakf Boards that their financial position was not such that they can meet the obligations of paying the imams as they are being paid in the State of Punjab.
It was also urged that the number of mosques is so large that it would entail heavy expenditure which the boards of different States would not be able to bear.
We do not find any co relation between the two.
Financial difficulties of the institution cannot be above fundamental right of a citizen.
If the boards have been entrusted with the responsibility of supervision and administering the wakf then it is their duty to harness resources to pay those persons who perform the most important duty namely of leading community prayer in a mosque the very purpose or which it is created.
749 In the circumstances we allow this petitions and issue following directions (i) The Union of India and the Central Wakf Board will prepare a scheme within a period of six months in respect of different types of mosques some detail of which has been furnished in the counter affidavit filed by the Delhi Wakf Board.
(ii) Mosques which are under control of the Government shall not be governed by this order.
But if their imams are not paid any remuneration and they have no independent income.
The Government may fix their emoluments on the basis as the Central Wakf Board may do for other mosques in pursuance of our order.
(iii) For other mosques, except those which are nonregistered with the Board of their respective States or which are not manned by members of Islamic faith the scheme shall provide for payment of remuneration to such Imams taking guidance from the scale of pay prevalent in the State of Punjab and Haryana.
(iv) The State Board shall ascertain income of each mosque the number and nature of Imams required by it namely full time or part time.
(v) For the full time Punjab Wakf Board may be treated as a guideline.
That shall also furnish guideline for payment to part time imam, (vi) In all those mosques where full time Imams are working they shall be paid the remuneration determined in pursuance of this order.
(vii) Part time and honorary Imam shall be paid such remuneration and allowance as is determined under the scheme.
(viii) The scheme shall also take into account those mosques which are small or are in the rural area or are such as mentioned in the affidavit of Pondichery Board and have no source of income and find out ways and means to raise its income.
(ix) The exercise should be completed and the scheme be enforced within six months.
(x) Our order for payment to Imams shall come into operation from 1st Dec., 750 1993.
In case the scheme it not prepared within the time allowed then it shall operate retrospectively from 1st December, 1993.
(xi) The scheme framed by the Central Wakf Board shall be implemented by every State Board.
The Writ Petition is decided accordingly.
Parties shall bear their own costs.
U.R. Petition allowed. [/INST] A petition was filed in this court by Imams for enforcing their fundamental right against exploitation by Wakf Boards.
Their claim was based on the glaring disparity between the nature of work and the amount of remuneration.
The petitioners sought a direction to the Central and State Wakf Boards to pay them basic wages.
A higher pay scale was claimed for degree holders.
The Union of India and various State Wakf Boards disputed the manner of their appointment, their right to receive any payment, and absence of any relationship of master and servant.
It was variously contended that they were appointed by Mutwallis, or in some cases by the people of the locality where the mosques were situated, and not by the Wakf Boards; that under Islamic religious practice it is voluntary service and there is no entitlement to emoluments; that a certificate from a registered institution is not a necessary requirement for leading in prayer.
It was further contended that the Wakf Boards faced financial difficulties.
The Punjab Wakf Board stated that Imams of mosques in Punjab, Haryana and Himachal Pradesh were paid on the basis of their qualification.
A pay scale was indicated, and the Imams were paid regularly and treated as regular employees.
Allowing the petition, this Court, HELD:(1) By Section 15 of the , the Wakf Board is vested not only with supervisory and administrative powers over the Wakfs but even the financial power vests in it.
One of the primary duties is to ensure that the income from the Wakf is spent on carrying out the purposes for which the 743 Wakf was created.
Mosques are Wakfs and are required to be registered under the Act, over which the Board exercises control.
Purpose of their creation is community worship.
The principal functionary to undertake it is the Imam.
It is the responsibility of the Wakf Board to ensure proper maintenance of religious service in a mosque.
To say, therefore, that the Board has no control over the mosque or Imam is not correct.
(747 G H, 748A) (2) In a series of decisions rendered by this Court it has been held that right to life enshrined in Article 21 means right to live with human dignity.
It is too late in the day to urge that since Imams perform religious duties, they are not entitled to emoluments.
(748 E) (3) Financial difficulties of the institution cannot be above fundamental right of a citizen.
If the Boards have been entrusted with the responsibility of supervising and administering the Wakf then, it is their duty to harness resources to pay those persons who perform the most important duty namely of leading community prayer in a mosque, the very purpose for which it is created.
(748 H) (4) The Union of India and the Central Wakf Board are to prepare a scheme within a period of six months in respect of different types of mosques: (7497 H) The scheme shall take guidance from the scale of pay prevalent in the State Punjab and Haryana.
(749 D) Mosques under control of the government will not he governed by this order except if their Imams are not paid any remuneration and have no independent means of income.
The Government may then fix their emoluments on the basis as the Central Wakf Board may do for other mosques.
(749 C) The State Boards shall ascertain the income of each mosque and the number and nature of Imams required full time or part time and their payment is directed.
(749 E) The scheme shall take account of mosques which are small, or in the rural area, or which have no source of income and find 744 ways to raise income.
(749 G) The order for payment to Imams shall come into operation from 1 December 1993.
Every State Board shall implement the scheme.
(749 H, 750 A) </s> |
<s>[INST] Summarize the following judgement: Jurisprudentee the Assistants having been promoted to the Grade of Superintendents Grade 11 after those already working as Superintendents Grade 11 would naturally rank junior to them.
There is no rule of seniority vis a vis for promotes to Superintendent Grade 11 with effect from 1st August, 1981 for calculating seniority and normal rule of service Jurisprudence of length of service will apply.
(718 D) & CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
4604 to 4609 of 1992.
From the Judgment and Order dated 22.8.
1989 of the Central Administrative Tribunal, Madras in OA.
No. 145 to 150/87.
A.S. Nambiar, P.K. Manohar and Shanti Vasudevan for the Appellant.
R. Venkataramni, V.G. Praoasani and S.M. Garg for the Respondents.
The Judgment of the Court was delivered by 714 YOGESHWAR DAYAL,J.
These six appeals have been filed against the decision of the Central Administrative Tribunal, Madras Bench, dated 22nd August, 1989 while disposing of Original Application Nos.
145 to 150 of 1987.
Those were filed in seriatem by B. Jayaraman; A. Kanakasena Rao; M. Venkatachalam; A. Sherfudeen; K. Viswanathan and P. Madhavan Adiyodi.
The respondents in all these six matters before the Tribunal were the same namely, respondent No. 1 was Union of India whereas respondent Nos. 2 to 13 were the erstwhile Secretarial Assistants promoted as Superintendents Grade 11 and further promoted as Superintendents Grade I in the Secretariat of the Government of Pondicherry and governed by the Government of Pondicherry (Group 'C ' Non Gazetted Ministerial Posts) Recruitment Rules, 1981 (hereinafter referred to as 'the Rules ').
The petitioners before the Tribunal had challenged the promotion of respondents 2 to 13 therein who were promoted from Secretarial Assistants to Superintendents Grade II and further promoted as Superintendents Grade I before them inspite of the fact that the petitioners had already been working as Superintendents Grade II prior to the promotion of the erstwhile Assistants as Superintendents Grade II.
The promotion of respondents before the Tribunal was alleged to be based on tentative seniority list wherein respondent No. 1 had included the feeder service rendered by the Assistants between 1. 1. 1973 and 31.7.1981 for computing the seniority in the grade of Superintendent Grade 11.
The plea of the petitioners before the Tribunal was that from 1.8.1981 respondents 2 to 13 who were Assistants and were in a distinctly lower scale of pay as compared to the applicants, they could not be promoted to the post of Superintendent Grade I before the petitioners.
The Tribunal allowed the applications, O.A. Nos.
145 to 150 of 1987 and held : "It appears to us that there has been some confusion between a liberal provision which has been deliberately made for conferring eligibility for consideration for promotion to the next higher post with reckoning of the period of service rendered in the post of Assistant for the purpose of counting seniority in the post of Superintendent, Grade II.
The tentative seniority lists based on which promotions of respondents 2 to 13 have been made as Superintendents.
Grade I are based on the application of an erroneous principle of determining seniority which is not backed up any statutory provision.
That has led to a situation where persons promoted to a higher grade of Superintendent Grade 11 before the Assistants and in which posts they were also confirmed, being 715 placed below respondents 2 onwards.
" The Tribunal accordingly set aside the promotions of respondents 2 to 13 before it contained in various orders of the Government of Pondichery dated 7.8.1986; 20.8.1986; 1.9. 1986 and 17.11.1986.
Respondent No. 1 was further directed to prepare the seniority list in the grade of Superintendent Grade II on the basis of the length of service rendered in that grade and thereafter, all the eligible persons may be considered for promotion to the post of Superintendent Grade I and that should include persons like respondents 2 to 13 before it who would Get the benefit of service rendered by them as Assistant between 1. ].
1973 to 31.11.1981 for determining the period of eligibility and not for the purpose of seniority in the cadre of Superintendent Grade 11.
Aggrieved by the order of the Tribunal the Union of India had preferred the present appeals.
It appears the petitioners before the Tribunal were aggrieved by the grant of benefit of service rendered during the period 1. 1. 1973 to 31.7.
1981 by those who were working in the grade of Assistants towards their seniority in the grade of Superintendent Grade 11.
For appreciating the submissions of the learned counsel for the respective parties were may give a statement showing the dates of appointments in various grades and ranking assigned in respect of the petitioners and respondents 2 to 13 in O.A. Nos.
145 to 150 of 1987 before the Tribunal Name of Date of Appointment Seniority in the Asstt.
Supdt.(NS) Supdt.
Supdt.
Supdt.
Supdt.
official Gr.
II Gr.
I GR.IIGr.
I (Applicant in O.A. 145/87) A. Kanakasena 10.12.73 1.8.8.1.
17.11.86 113197 Rao (Applicant in O.A. 146/87) M. Venkatachal 2.8.73 1.8.81 13.10.86 103188 716 am (Applicant in O.A. 147/87) A.
Sherfudeen 30.8.78 1.8.81 7.9.87 140Not (Applicant in Assigned O.A. 148/87) K. Vishwanathan 7.4.77 1.8.81 20.3.87126207 (Applicant in O.A. 149/87) P.Madhavan 10.2.76 1.8.81 17.12.86 119 201 Adiyodi(Appli cant in O.A. 150/87) (R.2)appointed K.C. Kumaran 8.112.64 do 14.5.82 7.8.86184176 (R.3) G.Ranganathan 11.3.65 do 13.1.82 7.8.86186177 (R.4) S.Pushparaj 25.5.65 do 13.1.82 7.8.86187178 (R.5) K.meenakshi 9.5.67 do 9.7.83 7.8.86208179 (R.6) G.Radha 19.5.67 do 12.1.827.8.86188180 Krishnan (R.7) S.Sethuraman 23.11.68 do 12.1.82 20.8.86190183 (R.8) section Felixraj 7.4.69 do 12.1.8222.8.86191184 (R.9) S.Kuppusamy 14.4.69 do 12.1.82 1.9.86 193185 (R. 10) R.Chandra 29.1.70 do 22.8.83 1.9.86212186 sekaran(R. 11) J.Pandurangan 9.3.74 Not 21.6.82 17.11.86 195198 (R. 12)appointed S.Sundarasan Nov. 1964 do 30.9.86 17.11.86 183175 The scales of pay for various period for the posts of Assistant, Superintendent Grade 11 and Superintendent Grade I may also be noticed : NAME OF THE POSTS SCALE OF PAY Pre revised Revised Revised On & from 717 (prior to (w.e.f. 1.8.1981 1973) 1.1.73) Assistant 210 425 425 700 425 700 Superintendent 325 475 550 750 Grade II (who have 550 750 (Supdt.
(N.S.) passed Hr.
Accounts Test).
270 435 425 700 (for others) (for others) Superintendent 350 550 550 900 550 900 Grade I It may be noticed that most of the respondents before the Tribunal were working in the grade of 425 700 when they were promoted to the post of Superintendent Grade II in the pay scale of 550 750.
It is thus clear that on general principles of service jurisprudence the Assistants having been promoted to the grade of Superintendent Grade II after those already working Superintendent Grade 11 would naturally rank junior to them.
The confusion in the Government appears to have been created in view of note and the provision occurring in Schedule VII of the Rules relating to the recruitment to the post of Superintendent Grade 1.
In column 11 thereof the recruitment is provided by 'Promotion ' from among the Superintendent Grade 11 who have completed five years of service in the said post.
There is a note and the proviso to the following effect in column 11 "Note For computing the five years service, the service rendered in the post of Superintendent (Non Secretariat) and the service rendered after 1st January 1973 and upto 3 1st July 1981 in the post of Assistant shall be taken into account Provided that the Superintendents (Non Secretariat) in service as on 31st December 1972 Shall enbloc be Seniors to Assistants in service on that date and the Superintendents (Non Secretariat) and Assistants appointed on or after 1st January 1973 and upto 3 1st July 1981 shall rank inter se with reference to their dates of appointment in the respective posts.
" It is clear that the note merely allows the erstwhile Assistants, who were 718 promoted to the post of Superintendent Grade 11, for purposes of counting the period of five years service as Superintendent Grade 11, to include their service rendered as Assistants after 1. 1.
1973 to 3 1.7.198 1.
This note is for no purpose other than for giving them eligibility for consideration for promotion from the cadre of Superintendent Grade II to the cadre of Superintendent Grade I.
The proviso again is very clear when it says that Superintendents (Non Secretariat) in service as on 31st December, 1972 shall enbloc be seniors to Assistants in service on that date and the Superintendents (Non Secretariat) and Assistants appointed on or after 1st January, 1973 and upto 3 1 St July, 1981 shall rank inter se with reference to the dates of appointment in their respective posts.
All the Superintendents in Grade II who were appointed after 3 1st July, 1981 would naturally rank in the seniority on the basis of respective dates of appointment as Superintendent Grade II.
We are thus in complete agreement with the `reasonings and conclusion of the Tribunal and it is declared that the note in column 11 is only for purposes of giving eligibility to the erstwhile Assistants working as Superintendents Grade II for purposes of being considered for promotion to the post of Superintendent Grade I and not for the purpose of seniority at all.
There is no rule of seniority viz a viz for promotes to Superintendent Grade II with effect from 1st August, 1981 for calculating seniority and normal rule of service jurisprudence of length of service will apply.
With these observations the appeals fail and are dismissed with no order as to costs.
G.S. Appeal dismissed. [/INST] The petitioners before the Central Administrative Tribunal had been working as Superintendents Grade 11 in the Secretariat of the Government of Pondicherry prior to the promotion of respondents Nos. 2.
to 13 (before the Tribunal), the erstwhile Secretariat Assistants as Superintendents Grade 11.
Respondent Nos 2 to 13 were further promoted as Superintendents Grade I before the petitioners on the basis of tentative Seniority list wherein the feeder service rendered by the Assistants between 1.1.
1973 and 31.7.1981 had been included for computing the seniority in the Grade of Superintendent Grade II.
The petitioners before the Tribunal aggrieved by the grant of benefit of service rendered during the period 1.1.
1973 to 31.7.1981 by those who were working in the grade of Assistants towards their seniority in the grade of Superintendent Grade 11 challenged the promotion of respondent Nos 2 to 13 there in who were promoted from Secretarial Assistants to Superintendents Grade II and further promoted as Superintendents Grade I before them inspite of the fact that the petitioners had already been working as Superintendents Grade 11 prior to the promotion of the erstwhile Assistant as Superintendents Grade II.
It was contended by the petitioners before the Tribunal that from 1.8.1981 respondents Nos. 2 to 13 who were Assistants and were in a distinctly 713 lower scale of pay as compared to them could not be promoted to the post of Superintendents Grade I before the petitioners.
The Tribunal allowed the applications and set aside the promotions of respondents No. 2 to 13 before it.
Aggrieved by the order of the Tribunal the Union of India had preferred the present appeals.
Agreeing with the reasonings and conclusions of the Tribunal HELD:The note in Column 11 is only for purposes of giving eligibility to the erstwhile Assistants working as Superintendents Grade 11 for purposes of being considered for promotion to the post of Superintendent Grade I and not for the purpose of seniority at all.
The note merely allows the erstwhile Assistants, who were promoted to the post of Superintendent Grade 11 to include their service rendered as Assistants after 1.1.
1973 to 31.7.
1981 for purposes of counting the period of five years service as Superintendent Grade 11.
This note is for no purpose other than for giving them eligibility for consideration for promotion from the cadre of superintendent Grade 11 to the cadre of Superintendent Grade 1.
(718 A) </s> |
<s>[INST] Summarize the following judgement: minal Appeal No. 830 of 1985.
From the Judgment and Order dated 30.7.85 of the Allahabad High Court in Crl.
Revision No. 1937 of 1983.
M.S. Gujral, A.K. Srivastava and Serva Mitter for the Appellant.
R.C. Verma and A.S. Pundit.for the Respondent.
The appellant, was convicted under Sections 120 B, 419, 420, 468, and 471 of the Penal Code.
lie was sentenced to undergo rigorous imprisonments for different periods under the aforesaid Sections.
The appeal filed on behalf of the appellant was dismissed by the learned additional Sessions Judge, Ghaziabad.
The High Court, on revision application being filed on behalf of the appellant set aside his conviction under Section 120 B, but the conviction and sentence under other Sections mentioned above passed by the trial Court were affirmed.
According to the prosecution case, the appellant, established a firm by the name of Seemak Industrial Corporation at Ghaziabad.
The account in the bank was opened in the name of one Vijai Kumar and the aforesaid Industrial Corporation was registered in the Sales Tax Department.
The appellant applied for loan before the U.P. Small Industries Corporation and got a sum of Rs. 39,352.50, in the name of Seemak Industrial Corporation.
Later it was discovered that the aforesaid Seemak Industrial Corporation, was a fake concern and the appellant had cheated, even the U.P. Small Industries Corporation, in respect of the amount advanced by them.
The Trial Court, the Appellate Court as well as the High Court have gone into details of the materials on record for purpose of holding, that the charges framed against the appellant had been established and as such there was no occasion to interfere with the conviction and sentence passed against him.
So far the present appeal is concerned, leave was granted as early as in the year 1985 by this Court, but it has been listed for hearing after about 8 years.
The learned Counsel.
appearing for the appellant, after some arguments on merit confined his submissions to the question of sentence only.
lie pointed out that offences aforesaid had been committed by the appellant, as early as in the year 1973, more than 20 years from now and as such a compassionate view should be taken of the whole matter especially when the amount in respect of which the offences are alleged to have been committed is not excessive.
He pointed out that the appellant has remained in jail for some time, in pursuance of the order of conviction and sentence and as such he need not be sent to jail again.
An affidavit detailing the mitigating circumstances has also been filed by the appellant before us.
Taking all facts and circumstances into consideration, by our order dated 26th April, 1993 we directed the appellant to first deposit an amount of Rs. 40,000 (the loan amount) with the U.P. Small Industries Corporation Ltd. Pursuant to that order Rs. 40.000 has been deposited with the U.P. Small Industries Corporation Ltd., on 4 5 1993 and original receipt granted by the Manager of the said Corporation was produced before us.
The zerox copy, of the said original receipt has been kept on record and the original returned to the learned counsel for the appellant.
An affidavit has also been filed on behalf 'of the appellant stating about 902 the aforesaid deposit.
In the peculiar facts and circumstances of the case while maintaining the conviction of the appellant, we reduce the sentence of imprisonment under different Sections mentioned above to the period already undergone by him.
The appellant, shall however pay a fine of Rs. 2,000 and in default of payment thereof, he shall undergo rigorous imprisonment for a period of one month.
The appeal is allowed in part.
The deposit of Rs. 40,000 made by the appellant with the U.P. Small Industries Corporation Ltd., shall be adjusted towards the amount advanced by the said Corporation to the appellant.
The Corporation shall of course be at liberty to take steps for realisation of any further sum.
which may be due.
against the appellant.
U.R. Appeal partly allowed. [/INST] The appellant was charged with cheating the U.P. Industrial Corporation of Rs. 39,352.50 by registering a take concern, and taking in its name.
Three courts concurrently found the charges against him established.
On the question of sentence, it was contended that more than 20 % cars had elapsed; the amount involved was not excessive and other mitigating circumstances were placed (in the record.
Partly allowing the appeal, this Court HELD:1.
The appellant had deposited Rs. 40,000/ (the loan amount) as directed.
(901 G) 2.
In the peculiar facts and circumstances of the case, conviction maintained but sentence of imprisonment reduced to the period already undergone, and a fine of Rs. 2,000/ , or one month R.I. in lieu thereof.
(902 B) </s> |
<s>[INST] Summarize the following judgement: Appeal No. 2909 of 1993.
From the Judgment and Order dated 5.4.1990 of the Patna High Court in C.W.J.C. No. 1465 of 1989 (R).
S.B. Upadhyay for the Appellant.
Uday Sinha, S.K. Verma and Ranjit Kumar for the Respondents.
The following Order of the Court was delivered: Special leave granted.
The controversy in the present case is whether the appellant was qualified to appear for the M.D. (General Medicine) Examination as a teacher candidates The High Court by the impugned order has taken the view that he was not, on the around that he had not completed 3 years training period including one year of the house job, prior to qualifying himself for appearing for the examination.
912 The respondents, P.G. Medical Students Association had challenged the permission given to the appellant to appear for the said examination on two rounds.
The first ground was that he was not a teacher and the second ground was that he had not undergone the necessary training for 2 years and had also not done housemanship in General Medicine for one year.
The requirement of the relevant regulation is that the candidate must have done one year 's housemanship prior to the admission to the Post graduate degree in the same subject in which he wants to appear for the examination or at least six months housemanship in the same Department and the remaining six months in the allied Department.
The period of training thus, shall be 3 years after full registration including one year of the housejob.
The appellant claimed that he was teacher in the Department of Biochemistry in the Rajendra Medical College (R.M.C.) and filed an application for his registration as a student in M.D.
The University forwarded the application to the then Principal of Rajendra Medical College cum Dean, Faculty of Medicine, Dr. C.J.K. Singh.
He objected to his registration on the ground that the appellant was not posted in any of the teaching posts in medical college.
The then Head of the Department of Medicine, Dr. section Sinha also wrote to Dr. C.J.K. Singh that the appellant though attached to the Department of Medicine, was a Bio chemist attached to the Renal Unit and dealt entirely with the subject of Biochemistry.
The appellant filed a writ petition being C.W.J.C. No. 755 of 1988 praying for appropriate direction to the University to permit him to submit his thesis in M.D. (Medicine) examination.
The University contested his claim that he was a teacher and took the stand that since he was not a teacher, he was not eligible for training in M.D. (General Medicine).
For this purpose, the University relied upon the.
letters of Dr. C.J.K. Singh and Dr. section Sinha.
The Court dismissed the said petition on 23rd May, 1988 without deciding the issue as to whether the appellant held a teaching post but recorded a finding that the appellant was not entitled for admission to the examination in M.D. as he had not submitted his thesis and had also failed to produce a certificate of having undergone satisfactory training.
The High Court also held that the acceptance of the thesis was a pre requisite for appearing at the examination.
However, thereafter the present petition was filed by the respondent Association when the appellant was granted permission to appear for the said examination being satisfied that the post which he was holding was a teaching post as pointed out by the State Government.
In this petition, the University supported the appellant by asserting that the, appellant was appointed against a teaching post 913 in the Department of Medicine.
The High Court has again not decided the point whether the appellant was appointed against a teaching post in the Department of Medicine.
For not deciding the point, the High Court has given an additional reason, viz., that many persons who were in fact appointed as teachers would be prejudicially affected since they would become junior to the appellant and they were not before the Court.
For the purposes of the disposal of the writ petition, the High Court presumed that the appellant was teacher in the Department of Medicine in the Rajendra Medical College.
The Court has, however, made it clear that this presumption would be confined to the present case only and the appellant would not be entitled to claim any benefit on the basis of the said presumption.
The High Court has, however, allowed the respondents ' petition only on the grounds that the appellant had not undergone training for 3 years prior to his application to appear for the said examination.
In order to come to the said conclusion, the High Court relied on the fact that although the petitioner was registered with Dr. S.S. Prasad as a trainee on 6th February, 1986, he had not undergone training with him and it was only from 4th February; 1988 onwards that he had undergone the training with another Supervisor, viz., Dr. P.R. Prasad.
Hence, on the date he made the application for appearing in the examination, he had not completed the required 3 years ' training period.
In support of its finding that the appellant had not completed 2 years ' training with Dr. S.s.
Prasad, the former Supervisor, the High Court has relied upon two facts.
The first is that Dr. S.S. Prasad had written to the University that appellant had undergone no training under him.
The second circumstance relied upon is that the second Supervisor, viz., Dr. P.R. Prasad was not appointed as appellant 's Supervisor as per the suggestion of the Dean of the Faculty of Medicine since respondent No. 7 to the petition who had recommended Dr. P.R. Prasad was not the Dean of the Faculty of Medicine at the time of the recommendation.
Hence, according to the High Court even the training of the appellant under Dr. P.R. Prasad was not a valid training The record shows that admittedly the appellant was registered as a trainee under the former Supervisor, Dr. S.S. Prasad on 6th February, 1986 and he continued to be the trainee under him till 4th February, 1988 on which date he was changed as a Supervisor at the request of the appellant.
In his place Dr. P.R. Prasad was appointed as the appellant 's Supervisor on 17th December, 1988.
The appellant, thereafter continued to be the trainee under Dr. P.R. Prasad from 19th December, 1988 to 3rd August, 1989.
Thus the petitioner was registered for M.D. (General Medicine) examination of the University on 6th February, 1986 and by the 3rd August, 1989 when he was due to appear for the examination he had completed 3 years ' training under the two Supervisors.
914 Coming to the respondent Association 's contention that the earlier Supervisor, Dr. S.S. Prasad had denied that the appellant had received any training under him, the University has stated that for the purpose of training, the Supervisor has nothing more to do than guide the candidate for writing thesis.
But more than that, the letter written by Dr. P.V.P. Sinha, the Principal of RMC and Dean, Faculty of Medicines of the Ranchi University to the Registrar of the Ranchi University on 4th July, 1989 speaks volumes on the attitude adopted by Dr. S.S. Prasad towards the appellant.
This letter is Annexure 11 to the rejoinder of the appellant.
The letter makes a complaint that Dr. S.S. Prasad by bypassing the office of the Principal, RMC had addressed directly to the Registrar of the University two letters on 4th May and 3 1st May, 1989.
The Principal then states that he examined the original letter meaning thereby the letter dated 4th May, 1989 and the connected matter and found that Dr. S.S. Prasad had been telling lie to the University and trying to mislead and that is why he had sent the letter directly to the University.
Dr. Prasad had written another letter to the University on 16th May, 1988 regarding the appellant and in that letter he had written that the appellant had been prevented from doing research work connected with his thesis.
The Principal then proceeds to write that when he asked Dr. Prasad in writing vide his letter dated 21st June, 1989 to give him the letter of the Principal or the Dean or the University which had authorised him to prevent the appellant from doing his research work, Dr. Prasad failed to produce any letter.
Thus according to the Principal it became very clear that Dr. Prasad had written the letter dated 16.5.1988 directly to the University to harm the appellant 's career.
The Principal then proceeds to write to University that he would like to bring to the attention of the University that Dr.
Prasad had signed the thesis and certificate of another doctor, viz., Dr. Ashok Kumar Singh on 16.10.1984 when that doctor was registered as an M.D. student in General Medicine only on 26.7.1984 and when Dr. Prasad was not his guide.
It was Dr. R.C.N. Sahai who named the guide for the said Dr. Ashok Kumar Singh.
The Principal then writes that from the perusal of the records as well as from the reply to the explanation sought by him from Dr. Prasad, it had become clear that Dr. Prasad was not made the guide of Dr. Ashok Kumar Singh either by the University or by the Dean or by the Principal and yet he had signed the thesis of Dr. Ashok Kumar Singh barely after 3 months and 11 days of his registration.
The Principal then points out in that letter that a comparison of the two events made it apparent that Dr. Prasad had favoured Dr. Ashok Kumar Singh by violating all the norms statutes of the University and of the Medical Council of India and that even after the University had appointed Dr. P.R. Prasad as the guide of the appellant, Dr. S.S. Prasad was bent upon harming the career of the appellant.
The Principal then adds that there was no record in his office to show that the appellant was ever suspended by the University for doing his M.D. General Medicine.
He had asked Dr. S.S. Prasad to produce any notification of the University regarding the alleged 915 suspension and Dr. S.S. Prasad had failed to do so.
He then concludes the letter by stating that he would, in the circumstances, recommend the University to consider the desirability of removing Dr. S.S. Prasad from all examination work of the Ranchi University.
It is thus apparent that Dr. S.S. Prasad, the former Supervisor of the appellant had become hostile to him and was apparently not cooperating with him in his thesis.
Yet the appellant had proceeded to write a thesis and when it became unbearable, he requested for the change of his Supervisor on 4th February, 1988 pursuant to which the new Supervisor, Dr. P.R. Prasad was appointed on 17th December, 1988.
However, till the new Supervisor was appointed on 17th December, 1988, he continued to be registered with Dr. S.S. Prasad and there is no dispute that under the new Supervisor, viz., Dr. P.R. Prasad he completed his training from 17th December, 1988 to 4th August, 1989.
There is further no dispute that the appellant submitted his thesis prior to the examination.
As regard the qualification of the 7th respondent to make the appointment of Dr. P.R. Prasad as the guide, although the record before us does not show as to who the 7th respondent was, we take it that it is the then Principal, Dr. P.V.P. Sinha who was probably added later as the 7th respondent to the writ petition to whom the High Court has referred to in its judgment.
It is asserted from the Bar on behalf of the appellant that Dr. P.V.P. Sin ha was both the Principal and the Dean of the Faculty of Medicine of the University from a date much prior to 17th December, 1988.
That statement is not controverted nor does the counter filed by the 1st Respondent make any such point.
If that is so, then on the date that Dr. P.R. Prasad was appointed as a Supervisor he was so appointed by a duly qualified person.
Since the High Court has not one into the question as to whether the appellant was appointed against a teaching post and has proceeded on the footing that he was so appointed.
it is not necessary for us to go into the said question.
The appellant was thus fully qualified for appearing in the said examination and in fact on account of the interim orders passed by the High Court he has appeared for the examination.
The High Court has, however, by the impugned decision restrained the University from declaring his results in the examination.
The facts narrated above would reveal that this was a dispute relating to an individual and turned on the facts.
There was no question of law involved in it.
We have, therefore, not understood how the respondent Association could convert an individual dispute into a public interest litigation.
We are of the view that cases where what is strictly an individual dispute is sought to be converted into a public interest litigation should not be encouraged.
The present proceeding is one of the 916 kind.
The learned counsel appearing, for the respondent State wanted to support the respondent Association.
We did not think it necessary to hear the State since the dispute was essentially with regard to the interpretation of the facts relating to the training of an individual medical officer, viz., the appellant.
The University had on the facts of the case accepted the contention of the appellant that he had completed 3 years ' training.
We have not been able to understand as to what stake the State has in denying the said factual position.
It must be remembered in this connection that the State Government itself by its letter of 17th September, 1984 written to the Principal, RMC and had asserted that the post which the appellant was holding, viz., that of Bio chemist in the Artificial Kidney Unit of RM College and Hospital, was a teaching post and that the appellant was posted to that post since 12th February, 1982.
The letter further proceeded to state that the Principal and the Head of the Department of Medicine of RM College and Hospital has also given written certificate that the appellant was posted on a teaching post and therefore his teaching experience would be counted with the Kidney Unit.
A request was, therefore, made in the letter that the appellant 's application for his registration as M.D. General Medicine candidate [Teacher] be forwarded to the University and further action in that regard be intimated to the Regional Additional Commissioner cum Principal Secretary.
There is no dispute further that according to the rules, 4 years teaching experience in the College and the Hospital [which is always combined with practice in the Hospital] is considered equivalent to one year 's house job experience.
It the face of these facts, it is difficult to understand the stand taken by the State Government in the present proceedings.
There is no doubt in our mind that some forces are at work to obstruct the appellant 's career on one ground or the other.
The State Government should not become a party to this came.
In the circumstances, we allow the appeal, set aside the decision of the High Court and hold that the appellant was qualified to appear for the M.D. (General Medicine) examination as a teacher candidate.
Hence, we direct the University to declare his results in M.D. (General Medicine) examination for which he has appeared, forthwith.
There will be no order as to costs.
VPR Appeal allowed. [/INST] The appellant was a teacher in the Department of Biochemistry of Rajendra Medical College.
He filed an application for his registration as a student in M.D.
The University forwarded the application to the Principal of Rajendra Medical College.
The Principal objected to appellant 's registration as he was not posted in any of the teaching posts in Rajendra Medical College.
Though the appellant was attached to the Department of Medicine, was a Biochemist attached to that Renal Unit dealing with the subject of Biochemistry.
The appellant filed a writ petition in the High Court for a direction tot he University to permit him to submit his thesis in M.D. (Medicine) examination on the ground that he was a teacher.
The University took the stand that the appellant was not a teacher and he was not eligible for training in M.D. (General Medicine).
The High Court dismissed the appellants writ petition and held that he was not entitled for admission to the examination in M.D. as he did not such it 910 his thesis and did not produce a certificate of having undergone satisfactory training.
The High Court did not decide on the question whether he held a teaching post or not.
The appellant was granted permission to appear for M.D. (Medicine) examination after the University was satisfied that the appellant was holding a teaching post The respondent Association filed a writ petition before the High Court challenging the permission given to the appellant to appear for the said examination, contending that he was not a teacher and that he did not undergo the necessary training for 2 years and that he did not do housemanship in General Medicine for one year.
The High Court allowed the writ petition on the ground that the appellant did not undergo training for 3 years prior to his application to appear for M.D. (Medicine) examination.
In this writ petition also the High Court did not decide whether the appellant was holding a teaching post.
The appellant filed this appeal by special leave against the High Court 's judgment.
Allowing the appeal, this Court HELD : 1.1.
On account of the interim order passed by the High Court, the appellant appeared for the examination.
The High Court has, however, by the impugned decision restrained the University from declaring his results in the examination.
(915 G) 1.2.
Since the High Court has not gone into the question as whether the appellant was appointed against a teaching post and has proceeded on the footing that he was appointed, it is not necessary for this Court to go into the said question.
(915 F) 2.1.
The facts of the case would reveal that this was a dispute relating to an individual and turned on the facts.
There was no question of law involved in it.
It is not understood how the respondent Association could convert an individual dispute into a public interest litigation.
(915 H) 2.2 Cases where what is strictly an individual dispute is sought to be 911 converted into a public interest litigation should not be encouraged.
The present proceeding is one of the kind.
(915 H) 3.1.
The requirement of the relevant regulation is that the candidate must have done one year 's housemanship prior to the admission to the Postgraduate degree in the same subject in which he wants to appear for the examination or atleast six months housemanship in the same Department and the remaining six months in the allied Department.
The period of training thus, shall be 3 years after full registration including one year of the.
housejob.(912 B) 3.2.
According to the rules, 4 years, (teaching experience in the College and the Hospital (which is always combined.
with practice in the Hospital) is considered equivalent to one year 's house job experience.
In the face of these facts, it is difficult to understand the stand taken by the State Government in the present proceedings.
(916 D) 3. 3.
The University bad on the facts of the case accepted the contention of the appellant that he had completed 3 years ' training.
It is not understood as to what ' state the State has in denying the said factual position.
(916 B) </s> |
<s>[INST] Summarize the following judgement: minal Appeal No. 443 of 1993.
From the Judgment and Order dated 22.4.92 of the Calcutta High Court in Crl.
Revision No. 800/92.
A.K. Sen, S.C. Ghosh, Rajiv K. Dutta and B.B. Tawakley for the Appellant.
Amlan Ghosh and Ranjan Mukherjee for the Respondents.
The Judgment of the Court was delivered by MOHAN, J.
leave granted.
The appellant herein was, married to second respondent on 16th January, 1990 according to Hindu Rites and Customs.
They lived together for sometime until second respondent left the matrimonial home to reside with her parents in order to prepare for Higher Secondary Examination which commenced on 5.4.90 920 and continued upto 10.5.90.
In the month of April, 1990 she conceived, on coming to know that she was pregnant, the appellant and the family members did not want her to beget a child.
Therefore she was forced to undergo abortion which was refused by the second respondent.
During the stay She was meted out cruetreatment both physically and mentally.
She came back to the matrimonial home during Durga Pooja in the month of October, 1990.
A female child was born on 3.1.91.
She filed a petition under section 125 Cr.
P.C. before the Learned Chief Judicial Magistrate, Alipore in Misc.
Case No. 143 of 1991 both for herself and the child.
By an order dated 14.8.91 which was passed ex parte he awarded a sum of Rs. 300 per mansum to the mother and Rs. 200 to the child.
Against that order, he moved a revision to the High Court.
That revision is pending as 1837 of 199 1.
Thereafter the petitioner filed a Crl.
Case No. 143 of 1991 for blood group test of the second respondent and the child.
In that proceeding the petitioner herein disputed the paternity of the child and prayed for blood group test of the child to prove that he was not the father of the child.
According to him if that could be established he would not be liable to pay maintenance.
That application was dismissed on two grounds: (i) there were other methods in the Evidence Act to disprove the paternity (ii) moreover it is settled law that medical test cannot be conclusive of paternity.
Aggrieved by this order, a revision was preferred before the High Court.
Dismissing the revision it was held that section 112 of the Evidence Act says where during the continuance of valid marriage if a child is born that is a conclusive proof about the legitimacy.
This section would constitute a stumbling block in the way of the petitioner getting his paternity disproved by blood group test.
The English law permitting blood test for determining the paternity of legitimacy could not be applied in view of section 112 of the Evidence Act.
Therefore it must be concluded that section 112 read with section 4 of the said Act debars evidence except in cases of non access for disproving the presumption of legitimacy and paternity.
It is the contention of Mr. Ashok Sen, learned counsel for the appellant that the only way for the father to disprove the paternity is by blood group test.
Having regard to the development of medical jurisprudence to deny that request to the appellant will be unreasonable.
As a matter of fact, in England, this is commonly resorted to as it will leave no room for doubt.
In 1968 (1) All England Reports p. 20 Re. 1 it was held that even without the consent of the guardian ad litem, the court had power to order an infant be subjected to a blood group test.
921 There is no justification for the court below to refuse the same on the ground that section 112 of the Evidence Act would be an obstacle in seeking relief of blood group test.
Before we deal with the arguments, we will examine the law as available in England.
At the beginning of the century scientists established that human blood had certain characteristics which could be genetically transmitted.
The first recognised system was ABO blood group.
The blood group of a child is determined by the parents ' genetic make up but the number of possibilities is such, that it is not possible to prove that certain individuals are the father on the basis of comparing blood groups, only, that they are not the father.
By 1930s other immunological test became available.
As a result the possibility of establishing paternity increased.
An attempt by way of statutory provision to make blood test compulsory in En land failed in 1938.
However, in 1957 the Affiliation Proceedings Act was passed.
Under that Act, it was assumed that a man was the father once a sexual relationship with the mother at the time of conception was proven unless he could show another man had intercourse with her at that time.
Failing the father 's attempt, the mother 's evidence had to be corroborated by facts such as blood test etc.
Under the Act either party could ask for a blood test and either was entitled to refuse to take part, although only the mother can apply for maintenance.
The Family Reforms Act, 1969 conferred powers on the court to direct taking blood test in civil proceedings in paternity cases.
Courts were able to give directions for the use of the blood test and taking blood samples from the child, the mother and any person alleged to be the father.
Since the passing of 1969 Act the general practice has been to use blood tests when paternity is in issue.
However, it is to be stated the court cannot order a person to submit to tests but can draw adverse inferences from a refusal to do so.
Now under the Fan lily Reforms Act, 1987 in keeping with modern thinking on the continuing and shared responsibility of parenthood, 'parentage ' rather than paternity has to be determined before the court.
Fathers as well as mothers can apply for maintenance.
Therefore contests can include mothers denial of paternity.
This Act finally removed the legal aid for corroboration of mother 's statement of paternity.
Two cases may be usefully referred to: Re L Lord Denning M.R. [1968] All England Reports p. 20 stated thus 922 "but they can say positively that a given man cannot be the father, because the blood groups of his and the child are so different." (emphasis supplied).
In B.R.B. vs J.B. [1968] 2 All England Reports 1023 applied this dictum and held as under: "The Country court judge will refer it to a High Court Judge as a matter suitable for ancillary relief, and the High Court Judge can order the blood test.
Likewise, of course, a magistrate 's court has no power to order a blood test against the will of the parties.
The magistrate can only do it by consent of those concerned, namely, the grown ups and the mother on behalf of the child; but, nevertheless, if any of them does not consent, the magistrate can take that refusal into account1 adhere to the view which expressed in Re L. that (6) "If an adult unreasonably refuses to have a blood test, or to allow a child to have one, I think that it is open to the court in any civil proceedings (no matter whether it be a paternity issue or an affiliation summons,or a custody proceedings) to take his refusalas evidence against him, and may draw an inference there from adverse to him.
This is simple common sense." "The conclusion of the whole matter is that a judge of the High Court has power to order a blood test whenever it is in the best interests of the child.
The judges can be trusted to exercise this discretion wisely.
I would set no limit, condition or bounds to the way in which judges exercise their discretion.
To object of the court always is to find out the truth.
When scientific advances give us fresh means of ascertaining it, we should not hesitate to use those means whenever the occasion requires." "Having heard full argument on the case, lam satisfied beyond any reasonable doubt (to use the expression used in rebutting the presumption as to legitimacy) that LORD DENNING, M.R., was right in saying that such an order may be made in any case where the child is made a party to the proceedings and in the opinion of the judge of the High Court it is in the child 's best interests that it should be made.
" 923 As regard United States the law as stated in Forensic Sciences edited by Cyril H. Wecht is as under: Parentage testing is the major (but not the exclusive) involvement of forensic serology in civil cases.
The majority of disputed parentage cases involve disputed paternity, although an occasional disputed maternity, or baby mix up case does arise, and can be solved using the tools of forensic serology described in this chapter.
Blood typing has been used to help resolve paternity cases since the mid 1920 'section According to Latters, there were 3,000 cases tested in Berlin in 1924, and Schiff and Boyd said that the first case went to court in Berlin in 1924.
Ottenberg, in this country published paternity exclusion tables in 192 1, as did Dyke in England in 1922.
It took somewhat longer to satisfy the courts, both in Europe and in country, that parentage exclusions based upon blood grouping were completely valid.
Wiener said that he had obtained an exclusion in a paternity case in this country which reached the courts early in 1933.
In January of 1934, Justice Steinbrink of the New York Supreme Court in Brooklyn ordered that blood tests be performed in a disputed paternity action, using a s precedent a decision by the Italian Supreme Court of Cassation, but his order was reversed upon appeal.
Soon afterward, however, laws were passed in a number of states providing the courts with statutory authority to order blood testing in disputed paternity cases.
Paternity testing has developed somewhat more slowly in the Unitted States than in certain of the European countries, but today the differences in the number of systems employed, and judicial acceptance of the results, are no longer that great.
A number of authorities have recently reviewed the subject of paternity testing in some detail, and in some cases have summarized the results of large number of cases that they have investigated.
Walker points out that failure to exclude a man, even at the 95 percent level of paternity exclusion does not mean that the alleged father is proven to be biologic father, because absolute proof of paternity cannot be established by any known blood test available.
Although this fact is well known and appreciated by workers it), the field of blood grouping and by attorneys active in this area, it is not generally understood by the lay public.
However, blood group 924 serology, using proven genetic marker systems, represents the most accurate scientific information concerning paternity and is so recognised in the United States, as well as in a number of countries abroad.
" In India there is no special statute governing this.
Neither the Criminal Procedure Code nor the Evidence Act empowers the court to direct such a test to be made.
In 1951 (1) Madras Law Journal p.58O Polavarapu Venkteswarlu, minor by guardian and mother Hanwnamma vs Polavarapu Subbayya in that case the application was preferred under section 151 of the Code of Civil Procedure invoking the inherent powers of the Court to direct a blood test.
The learned judge was of the following view: Section 15 1, Civil Procedure Code, has been introduced in to the Statute book to give effect to the inherent powers.
of Courts as expounded by Woodroffe, J., in Hukum Chand Boid vs Kamalan and Singh.
Such powers can only be exercised ex debito justice and not on the mere invocation of parties or on the mere volition of courts.
There is no procedure either in the Civil Procedure Code or in the Indian Evidence Act which provides for a test of the kind sought to be taken by the defendant in the present case.
It is said by Mr. Ramakrishna for the respondent before m e that in England this sort of test is resorted to by Courts where the question of non access in connection with an issue of legitimacy arises for consideration.
My attention has been drawn by learned counsel to page 69 of Taylor 's Principles and Practice of Medical Jurisprudence, Volume 2, where it is stated thus : "In Wilson vs Wilson, Lancet [1942] 1. 570, evidence was given that the husband 's group was OM, that the wife 's was BM and that the child 's was ABN.
The Court held that the husband was not the father of child, and granted a decree for nullity." "It is also pointed out by learned counsel that in the text books on Medical Jurisprudence and Toxicology by Rai Bahadur Jaising P. Moi, (8th Edition), at page 94, reference is made to a case decided by a Criminal Court at Mercare in June, 194 1, in which the paternity and maternity of the child being under dispute, the Court resorted to the results of the blood grouping test." 925 That may be.
But I am not in any event satisfied that if the parties are unwilling to offer their blood for a test of this kind this Court can force them to do so.
" The same view was taken by the Kerala High Court in Vasu vs Santha 1975 Kerala Law Times p. 533 as "A special protection is given by the law to the status of legitimacy in India.
The law is very strict regarding the type of the evidence which can be let in to rebut the presumption of legitimacy of a child.
Even proof that the mother committed adultery with any number of men will not of itself suffice for proving the illegitimacy of the child.
If she had access to her husband during the time the child could have been begotten the law will not countenance any attempt on the part of the husband to prove that the child is not actually his.
The presumption of law of legitimacy of a child will not be lightly repelled.
It will not be allowed to be broken or shaken by a mere balance of probability.
The evidence of non access for the purpose of repelling it must be strong, distinct, satisfactory and conclusive see Morris vs Davies; , The standard of proof in this regard is similar to the standard of proof of guilt in a criminal case.
These rigours are justified by considerations of public policy for there are a variety of reasons why a child 's status is not to be triffled with.
The stigma of illegitimacy is very severe and we have not any of the protective legislations as in England t o protect illegitimate children.
No doubt, this may in some cases require a husband to maintain children of whom he is probably not their father.
But, the legislature alone can change the rigour of the law and not the court.
The court cannot base a conclusion on evidence different from that required by the law or decide on a balance of probability which will be the result if blood test evidence is accepted.
There is an aspect of the matter also.
Before a blood test of a person is ordered his consert is required.
The reason is that this test is a constraint on his personal liberty and cannot be carried out without his consent.
Whether even a legislature can compel a blood test is doubtful.
Here no consent is given by any of the respondents.
It is also doubtful whether a guardian ad litem can give this consent.
Therefore, in these circumstances, the learned Munsiff was right in 926 refusing the prayer for a blood test of the appellant and respondents 2 and 3.
The learned Judge is also correct in holding that there was no illegality in refusing a blood test.
The maximum that can be done where a party refuses to have a blood test is to draw an adverse inference (see in this connection Subayya Gounder vs Bhoopala, AIR 1959 Madras 396, and the earlier decision of the same court in Venkateswarlu vs Subbayya AIR 1951 Madras 910.
Such an adverse inference which has only a very little relevance here will not advance the appellants case to any extent.
He has to prove that he had no opportunity to have any sexual intercourse with the 1st respondent at a time when these children could have been begotten.
That is the only proof that is permitted under section II 2 to dislodge the conclusive presumption enjoined by the Section.
" In Hargavind Soni vs Ramdulari AIR 1986 MP at 57 held as: "The blood grouping test is a perfect test to determine questions of disputed paternity of a child and can be relied upon by Courts as a circumstantial evidence.
But no person can be compelled to give a sample of blood for blood grouping test against his will and no adverse inference can be drawn against him for this refusal.
" Blood grouping test is a useful test to determine the question of disputed paternity.
It can be relied upon by courts as a circumstantial evidence which ultimately excludes a certain invididual as a father of the child.
However, it requires to be carefully noted no person can be compelled to give sample of blood for analysis against her will and no adverse inference can be drawn against her for this refusal.
In Raghunath vs Shardabai , it was observed blood grouping test have their limitation, they cannot possibly establish paternity, they can only indicate its possibilities.
In Bhartiraj vs Sumesh Sachdeo & Ors., held as: "Discussing the evidentiary value of blood tests for determining paternity, Rayden on Divorce, (1983) Vol. 1) p. 1054 has this to say "Medical Science is able to analyse the blood of individuals 927 into definite groups: and by examining the blood of a given man and a child to determine whether the man could or could not be the father.
Blood tests cannot show positively that any man is father, but they can show positively that a given man could or could not be the father.
It is obviously the latter aspect the proves most valuable in determining paternity, that is, the exclusion aspect for once it is determined that a man could not be the father, he is thereby automatically excluded from considerations of paternity.
When a man is not the father of a child, it has been said that there is at least a 70 per cent chance that if blood tests are taken they will show.
positively he is not the father, and in some cases the chance is even higher: between two giver men who have had sexual intercourse with.
the mother at the time of conception, both of whom undergo blood tests, it has likewise been said that there is a 80 per cent chance that the tests will show that one of them is not the father with the irresistible inference that the other is the father.
The position which emerges on reference to these authoritative texts is that depending on the type of litigation, samples of blood, when subjected to skilled scientific examination, can sometimes supply helpful evidence on various issues, to exclude a particular parentage set up in the case.
But the consideration remains that the party asserting the claim to have a child and the rival set of parents put to blood test must establish his right so to do.
The court exercises protective jurisdiction on behalf of an infant.
In my considered opinion it would be unjust and not fair either to direct a test for a collateral reason to assist a litigant in his or her claim.
The child cannot be allowed to suffer because of his incapacity; the aim is to ensure that he gets his rights.
If in a case the court has reason to believe that the application for blood test is of a fishing nature or designed for some ulterior motive, it would be justified in not acceding to such a prayer." "The above is the dicta laid down by the various High Courts.
In matters of this kind the court must have regard to section 112 of the Evidence Act.
This section is based on the well known maxim pater est quem nuptioe demonstrant (he is the father whom the marriage indicates).
The presumption of legitimacy is this, that a child born of a married woman is deemed to be legitimate, it throws on the person who is interested in making out the illegitimacy, the whole burden of proving it.
The law presumes both that a marriage ceremony is valid, any that every 928 person is legitimate.
Marriage or filiation (parentage) may be presumed, the law in general presuming against vice and immoratility.
" It is a rebuttable presumption of law that a child born.
during the lawful wedlock is legitimate, and that access occurred between the parents.
This presumption can only be displaced by a strong preponderannce of evidence, and not by a mere balance of probabilities.
In Smt.
Dukhtar Jahan vs Mohammed Faroog ; this court held.
"Section II 2 lays down that if a person was born during the continuance of a valid marriage between his mother and any man or within two hundren and eighty days after its dissolution and the mother remains unmarried, it shall be taken as conclusive proof that he is the legitimate son of that man, unless it can be shown that the parties to the marriage had no access to each other at anytime when he could have been begotten.
This rule of law based on the dictates of justice has always made the courts incline towards upholding the legitimacy of a child unless the facts are so compulsive and clinching as to necessarily warrant a finding that the child could not at all have been begotten to the father and as such a legitimation of the child would result in rank injustice to the father.
Courts have always desisted from lightly or hastily rendering a verdict and that too, on the basts of slender materials, which will have the effect of branding a child as a bastard and its mother an unchaste woman.
" This section requires the party disputing the paternity to prove non access in order to dispel the presumption. "Access" and "non access" mean the existence or non existence of opportunities for sexual intercourse; it does not mean actual cohabitation.
The effect of this section is this: there is a presumption and a very strong one though a reubttable one.
Conclusive proof means as laid down under section 4 of the Evidence Act.
From the above discussion it emerges: (1) that courts in India cannot order blood test as matter of course; 929 (2) wherever applications are made for such prayers in order to have roving inquiry, the prayer for blood test cannot be entertained.
(3) There must be a strong primafacie case in that the husband must establish non access in order to dispel the presumption arising under section 112 of the Evidence Act.
(4) The court must carefully examine as to what would be the consequence of ordering the blood test; whether it will have the effect of branding a child as a bastard and the mother as an unchaste woman.
(5) No one can be compelled to give sample of blood for analysis.
Examined in the light of the above, we find no difficulty in upholding the impugned order of the High Court, confirming the order of the Addl.
Chief Judicial Magistrate, Alipore in rejecting the application for blood test.
We find the purpose of the application is nothing more than to avoid payment of maintenance, without making any ground whatever to have recourse to the test.
Accordingly Criminal Appeal will stand dismissed.
Cr, M.P.No.
2224/93 in S.L.P.(cr No. 2648/92 filed by Respondent No. 2 will stand allowed.
She is permitted to withdraw the amount without furnishing any Security.
R.P. S.L.P. dismissed. [/INST] Respondent No. 2 was married to the appellant.
She went to reside with her parents in order to prepare for Higher Secondary Examination.
In the meantime she conceived.
The appellant and his family members asked her to undergo abortion but she refused, and a child was born to her.
In a petition under section 125, Cr.
P.C. riled by respondent No. 2, against her husband, the wife and the child were granted maintenance.
The appellant, disputing the paternity of the child, riled a criminal miscellaneous application for blood group test (if respondent No. 2 and the child.
It was claimed that if it was established that he was not father of the child he would not be liable to pay the maintenance.
The application was dismissed.
Appellant 's revision application was also rejected by the High Court.
The appellant filed the appeal by special leave.
Dismissing the appeal, this Court 918 HELD: 1.1 Courts is India cannot order blood group test as a matter of course.
Unlike the English law* in India there is no special statute governing this.
Neither the Criminal Procedure Code nor the Evidence Act empowers the court ; to direct such a test, *Affiliation Proceedings Act.
, 1957; Family Reforms Act.
, 1969; Family Reforms Act, 1987.
1.2 Wherever applications are made for blood group test in order to have roving inquiry, the prayer cannot be entertained.
Bhartiraj vs Sumesh Sachdeo & Ors: , approved.
2.1 Section 112 read with s.4 of the Evidence Act debars evidence except in cases of non access for disproving the presumption of legitimacy and paternity.
It is a rebuttable presumption of lam, that a child born during the lawful wedlock is legitimate, and that access occurred between the parties.
This presumption can only be displaced by a strong preponderance of evidence and not by a mere balance of probabilities.
2.2 There must be a strong prima facie case in that the husband must establish non access in order to dispel the presumption arising under section 112 of the Evidence Act.
Vasu vs Santha: [1975] Kerala Law Times 533 and Raghunath vs Shardabai, , referred to.
Morris vs Davies ; cited.
3 The Court must carefully examine as to what would be the consequence of ordering the blood test; whether it will have the effect of branding a child as a bastard and the mother as an unchaste woman.
Dikhtar Jahan vs Mohammed Faroog.
; , referred to.
4.1 Blood group test is a useful test to determine the question of disputed paternity.
It can be relied upon by courts as a circumstantial evidence which ultimately excludes a certain individual as a father of the child.
4.2 No person can be compelled to give sample of blood for analysis and no adverse inference can he drawn against a person on account of such refusal.
919 Hargovind Soni vs Ramdulari, AIR [1986] M.P. 57, approved.
Vasu vs Santha, [1975] Kerala Law Times 533, Polavarapu Venkeeswarlu vs Polavarapu Subbayya, , referred to.
Subayya Gounder vs Bhoopala, AIR [1959] Madras 396; Venkateswarlu vs Subbayya, AIR [1951] Madras 910; Hukum Chand Boid vs Kamalan and Singh, Cal. 927, cited.
Wilson vs Wilson, Lancet [1942] 1.570; Re L 1968 [1] All England Reports 20; B. R. B. vs J. B., [1968] 2 All Eng.
Reports 1023, referred to Tauylor 's 'Principles and Practice of Medical Jurisprudence (Vol. 2); 'Medical Jurisprudence and Toxicology (8th Edition) by Rai Bahadur Jaising P. Mod, cited.
`Forensic Sciences ' edited by Cyril H. Wecht, referred to.
In the instant case the purpose of the application for blood group test was nothing more than to avoid payment of maintenance, without making any ground whatever to have recourse to the test.
The High Court was right in confirming the order of the court below rejecting the application. </s> |
<s>[INST] Summarize the following judgement: Appeal Nos.
2863 65 of 1993.
From the Judgment and Order dated 21.2.91 of the Kerala High Court in C.M.P. No. 2170/90, 596/91, 597/91 in M.F.A. No. 518 of 1981.
WITH Civil Appeal No. 2960 of 1993.
K.K. Venugopal, G. Ramaswamy, M.N. Krishnamani, K.P. Dandapani E.M.S. Anam, P.N. Puri, A.T.M. Sampath, Pravir Choudhary for the Petitioner/ Appellant.
Shanti Bhushan.
Joshph Vellapall vs R.K.Jain, A Mariarputham, for M/s A. Mariarputham and Mrs. Aruna Mathur for Mrs. Aruna Mathur & Co. for the respondents.
The Judgment of the Court was delivered by R.M. SAHAI, J.
How far could we protect the interests of subscribers who had subscribed to a chit run by a subsidiary company of the appellant ordered to be wound up when allegedly subscriptions were made good by them not merely out of their hard savings but also of sums got by even, pledging and selling the jewelleries and ornaments of their wives, in the fond hope of getting a lumpsum amount on a future date, to meet the expenses of marriages in the family or health hazards of family members and the like, is the issue that really bothered us at the hearing of the appeals.
About 15 years ago the subsidiary company under winding up, diverted the amount of rupees ten crores received by it by way of chit subscriptions to its holding, company (the appellant) resulting in its inability to pay the subscribers, when they became entitled to (yet the prize amounts.
When some of the subscribers approached the High Court and succeeded in getting the subsidiary company wound up, the appellant holding company appeared in Court and prayed for an opportunity to be given to it to revive its subsidiary company.
That prayer was accepted by a Division Bench of The Kerala High Court in the case of Suarshan Chits (India) Ltd., vs G.S. Pilai ILR 1983 vol.
1 Kerala p. 700.
The Division 906 Bench approved the scheme of compromise and arrangement under Sec. 391 of the .
Consequently, it ordered the winding up order to be held in abeyance on condition that the holding company shall execute a security bond to cover subsidiary company 's liability to the extent of a sum of Rs. 10.40 crores owed to its subscribers.
It also directed the holding company to pay off that amount within a period of five years.
Restriction was also placed on alienation of any property by tile holding, company without obtaining prior permission of the Court.
Arrangement was made for managing, affairs of the appellant company as well.
Apart from the Board of Directors an Additional Director was nominated to supervise and keep a watch on the affairs of the company.
Since than the appellant company is run as directed by the High Court but neither the subscribers are paid, as a body of creditors, not the entire amount of rupees ten crores and odd is paid by the appellant to the subsidiary company.
True, that out of nearly one lakh subscribers.
twenty nine thousand and odd subscribers only remain unpaid.
But, that is hardly satisfactory.
Regret is that more than one third of the subscribers remain unpaid even after ten years from the date the High Court ordered the winding up to be in abeyance.
Payment of rupees two crores and odd by the holding company which had the benefit of ten crores and odd rupees for the last 15 years, which amount by any standard is equivalent to fifty crores of rupees of today, we must state, is a poor consolation, for the holding company to claim that all steps to discharge its obligations is taken.
Having noticed in brief, how matters have proceeded, we shall advert to the dispute which has arisen in respect of an offer now made by the holding company to sell 20.79 acres of land for paying the creditors.
Whatever that be, one situation which has been brought about is, its successful attempt in involving, many subscribers who had formed themselves into a creditors association and an owner of a factory adjoining the disputed land, in litigation which has reached this Court more than once.
It is unfortunate that a company which had volunteered to pay ten crores of rupees with in a period of five years has successfully evaded the payment by offering a pittance.
From the date of offer in 1987 six ears have elapsed but no amount worth consideration, appears to have been paid to the subscribers.
We consider it unnecessary to recount in detail the offer made by Ramaswamy Udayar, the appellant in the other appeal, counter offer made by the creditors association, delay in payment by the association, extension of time by this Court for payment by the association, withdrawal of offer by the holding company in the meantime as the High Court had after detailed examination accepted the offer of creditors association for purchase of disputed land and rejection of the claim of Udayar.
Nor do we consider it necessary to deal with rival submission made by learned senior counsel appearing for respective parties, although we heard them at length, as in our opinion that rupees fifty two lakhs and odd the total amount for which the land 907 has to be sold could hardly be sufficient to relieve the agony of the body of subscribers for whose benefit the entire exercise was undertaken by the High Court.
As we have understood the matter, there may be a grain of truth in the allegation that it is Estate Dealers with vested interests who are interfering and in fact the amount paid by the creditors association is of estate dealers.
It may also.
be true that the total membership of the association is not even 5% of the unpaid subscribers.
In the said circumstances and taking into consideration the board consensus reached among learned counsel as to what needs to be done, we decide the two appeals, one filed by the holding company for release of the land and other by Udayar for accepting his bid on the following terms and conditions: (1)The holding company shall deposit with the official Receiver or Assignee concerned a sum equivalent to the deposited sum on which the High Court was pleased to direct sale deed to be executed in favour of the creditors association together with 25% interest minus the interest, if any earned by the deposit made, calculated on the deposited amount, from the date of deposit till 31st July, 1993, within a period of three months from today.
(2) Out of the amount of sale price of the land already deposited by the creditors Association and the interest if any earned thereon plus the sums of money to be deposited by the holding company under the above term and condition (1), a sum equivalent to the amount deposited by creditors Association, together with interest at 25% thereon from the date of deposit upto 31s t July, 1993 shall be refunded to the creditors association in lieu of their claim for disputed land being, given up.
The balance amount shall remain the benefit of general body of creditors of the subsidiary compa (3) The holding company shall pay the entire outstanding de (amounts) payable to the subscribers who were members of creditors association on the date when their claim applications w decided by the Kerala High Court, together with interest there of 12 percent from the date of decision till 31st July, 1993, within same period, namely, three months.
This amount too shall deposited with the receiver for immediate payment to those cre 908 tors subscribers for giving discharge of their claims against the subsidiary company.
(4) In case the above terms and conditions as to deposits to be made by the holding company are complied with.
within the period allowed, for which no extension of time shall be granted, then the disputed land offered for sale by the holding company and purchased by creditor 's associations shall stand released in its holding company 's) favour.
If such deposits are not made, the sale in favour of creditors company shall stand confirmed.
(5) An offer was made by the appellant in Appeal No. 6614 of 1991 that the land being adjacent to its factory he was willing to pay even rupees five lakhs per acre.
Therefore, on release if the land is sold, it shall be sold, as and when such occasion arises, for a price not less than five lakhs per acre.
The amount so realised shall also be deposited by the holding company with the receiver for distribution among general body of creditors of the subsidiary company in discharge of its obligations to pay of the creditors of the subsidiary company.
(6) (a) The receiver shall further take steps to see that the holding company fulfils its obligations and pays the entire balance within a period of one year from 31st August, 1993.
(b) In case of failure to clear the dues of all the subscribers it shall be open to any unpaid subscriber to approach the High Court for recalling the order passed by the High Court in 1983 directing the winding up to be put in abeyance.
(c) It shall also be open to the unpaid subscribers to approach the High Court for th e aforesaid reasons mentioned in clause (b) to take steps to get the amount realised from assets of the holding company.
If such an application is made it shall be disposed of by the High Court expeditiously in accordance with law after hearing, parties concerned.
Both the appeals are decided accordingly.
The parties shall bear their own costs.
R.P Appeals disposed of. [/INST] A subsidiary company of the appellant holding company (C.A. No. 2866 of 1993) diverted to the appellant rupees ten crores received by it by way of chit subscriptions.
It failed to pay the subscribers the prize money.
When some of the subscribers initiated winding up proceedings against the subsidiary company the appellant appeared before the High Court and undertook the liability of the subsidiary company to an extent of a sum of Rs 10.40 Crores to the subscribers.
The High Court approved the scheme of compromise and arrangement under section 391 of the and directed the winding up order to be held in abeyance on the condition that the appellant holding company would pay off the amount or Rs. 10.40 Crores to the subscribers, within five years.
It also restricted alienation (of any property by the holding company.
Without obtaining prior permission (of the Court.
Even ten %,Cars after the order of the High Court, more than one third of the subscribers remained unpaid.
Meanwhile the appellant company took steps to sell 20.79 acres of land to pay the Creditors.
The appellant in C.A.No. 2863 65 (if 1973 made an offer where as the respondent creditors ' association made a counter offer.
The High Court accepted the (offer of Creditors ' association.
Hence the appeals by special leave.
Disposing of the appeals, this Court gave the following 904 Directions : 1.
The holding company shall deposit with the official Receiver fir Assignee concerned a sum equivalent to the deposited sum on which the High Court had directed sale deed to be executed in favour of the creditors association together with 25% interest minus the interest, if any earned by the deposit, made, calculated (in the deposited amount, from the date of deposit till 31st.
July, 1993, within a period of three months.
Out of the amount mentioned in condition (1) above, a sum equivalent to the amount deposited by creditors Association, together with interest at 25% thereon from the date of deposit upto 31st July, 1993 shall be refunded to the creditors association in lieu of their claim for the disputed land being given up.
The balance amount shall remain for the benefit of general body of creditors of the subsidiary company.
Tile holding company shall pay through the receiver the entire outstanding debts payable to the subscribers who were members of the creditors association on the date when their claim applications were decided by the High Court, together with interest thereon at 12 per cent from the date of decision till 31st July, 1993.
In case the above terms and conditions are complied with, within the period allowed then the disputed land offered for sale by the holding company and purchased by creditors ' associations shall stand released in holding company 's favour.
If such deposits are not made, the sale in favour of creditors company shall stand confirmed 5.
In view of the offer made by the appellant in Appeals No. 2863 65 of 1993, the land on its release shall be sold, for a price not less titan five lakhs per acre.
The amount so realised shall also be deposited of the holding company with the receiver for distribution among general body of creditors of the subsidiary, company.
The receiver shall further take steps to see that the holding company fulfils its obligations and pays the entire balance within a period of one year from 31st August, 1993.
In case of failure to clear the dues of all tile subscribers it shall he open to an%.
unpaid subscriber to approach the High Court for recalling the order passed by the High Court for in 1983 direction the winding up to be plot in abeyance, as well as to the steps to get the amount realised front assets of 905 the holding company.
If such an application is made it shall be disposed of by the High Court expeditiously in accordance with law after hearing parties concerned. </s> |
<s>[INST] Summarize the following judgement: minal Appeal No. 738 of 1992.
From the Judgment and Order dated 16.11.1992 of the Bombay High Court in Crl.
A. No. 148 of 1989.
A.N. Mulla, Ms. Shefali Khanna and J.M. Khanna for the Appellant.
S.B. Bhasme, S.M. Jadhav and A.S. Bhasme for the Respondents.
The Judgment of the Court was delivered by YOGESHWAR DAYAL, J.
This is an appeal by the four accused persons against the judgment of the Bombay High Court dated 16th November.
Appellant No. 1 who was accused No. 1 was tried for the offence of having 880 committed the murder of his daughter in law Sangita, wife of appellant No. 2 who was accused No.2, during the night between 14th September, 1984 and 15th September, 1984 at the residential house of the appellants at Murtizapur with common intention and also for having treated her with cruelty on account of dowry amount.
In the alternative the appellants were also charged for the offence of having abetted the deceased Sangita in commission of suicide by subjecting her to cruelty.
Appellant no.3, who was accused No.3, is the wife of accused No.1 and appellant No.4, who was accused No. 4.
is their daughter.
Appellants 1 to 4 are hereinafter called accused Nos. 1 to 4.
The story of the prosecution was as follows: The accused run a printing press at their residence.
Marriage of accused No. 2 was settled with the 5th daughter of Madan lal (PW. 8).
Few days prior to the settlement of the marriage.
marriage of her elder sister was also settled.
As such marriages of both the daughters i.e. Sangita and Hemlata were celebrated at Paratwada on 28th April, 1994.
Talk over the marriage had taken place about a month prior to the marriage and the same was finalised after about 2 or 3 days of such talks.
At the time of finalisation, accused No. 1 demanded Rs. 20,000 by way of hard cash as dowry, besides other articles, add he himself had given such demands in writing vide Ext.
Though agreed, Madan Lal, father of the deceased could not give Rs. 20,000 at the time of marriage.
He also could not give the gold agreed, though he assured to comply with the demands later on getting the crops.
After the marriage, on account of the month of Shrawan, and as per custom, Sangita resided with her parents.
It was during her stay after the marriage that she was found disturbed and sullen.
Though she herself did not give out the reason therefore, but on insistence by the father to know the reason she told him that accused No. 1 had an evil eve on her and that other members of the family used to beat and ill treat her because of the failure on the part of Madan Lai to pay the dowry amount.
Though Madan lal assured that he would come down to Murtizapur and pursued the accused, but he could not visit Murtizapur.
After the month of Shrawan, Sangita returned to Murtizapur but not communication was made about her safe return by the accused persons to her father.
The accused persons had a telephone connection and Madan Lal (PW.8), two three days prior to the date of the incident contacted accused No. 1 on telephone.
Accused No. 1 talked angrily with Madan Lal.
Madan Lal then requested accused No. 1 to call Sangita on telephone.
Sangita came on phone and in answer to his query she broke down and Stated weeping and told Madan lal as to why he did not send Ganesh Chaturthi Neg ', 'Neg ' means a customary offer that the father of the bride has to pay on an auspicious day.
It varies according to financial capacity of the father.
He told 881 Sangita that he had committed it mistake and assured that he would be sending it immediately.
On the next day lie had got drawn a draft of Rs. 101/ on State Bank of India.
74 A is the said draft.
It was thereafter when Madan Lai was on a visit to Amravati that Madan Lal received a message about Sangita having got burnt on 15th September, 1984.
During the night between 14th and 15th September.
1984 at about midnight the accused found Sangita not in her bed and smell of burning.
They found that in the rear side open space Sangita was burning and lying down.
According to the defence the doors were closed from inside and there was no access to the said open space.
Accused No. 1 informed the police about the occurrence that he had seen through the window opening on the )pen space.
Accused No. 1 at about 3.45 a.m. on 15th September, 1994 submitted it report (Ext.82) to the police wherein he had stated that about 2. 10 a.m. in the night Sangita was found to be burnt and died in the bath room.
Mundheh.
the investigating Officer gave instructions to the accused persons not to disturb the situation.
Initially on the report of the accused, accidental death was registered.
PW9 when reached the spot on 15th September.
1984 at about 10.00 a.m. he made spot Panchnama vide ext.63.
He also found a postcard.
half burnt, (Ext. 62) by the side of the dead body.
He thereafter drew inquest panchnama (Ext.64).
PW. 1 Bhanudas acted as a panch.
PW.9 having convinced that it was a case of murder, lodged it report on behalf of the State registering the offence punishable under Section 302 read with Section 34 of the Indian Penal Code.
Dr. Lande, PW.3, on 15th September, 1994 at about 5.00 p.m. conducted the post mortem.
The Additional Sessions Judge on the basis of the material filed with the challan.
on 30th September, 1994 trained a charge under Sections 302.499 A and 201 read with Section 34 of the Indian Penal code and thereafter recorded the evidence of PWs.
1 to 9.
Thereafter by an order dated 22nd August, 1988 the trial court framed an additional charge for the offence punishable under Section 306 read with Section 34 of the Indian Penal Code.
The accused persons challenged the framing of the additional charge before the High Court but the challenge was defeated.
The accused persons were accordantly tried.
Their defence through out was a total denial.
It appears that during arguments the Prosecutor did not think it proper to press for the diffence punishable under Section 302 read with Section 34 of the Indian penal Code.
According to the Prosecutor the only case made out was for the offences punishable under Sections 306, 498 A read with Section 34 of the Indian Penal Code.
The trial court endorsed the view of the Public Prosecutor and did not 882 discuss the relevant evidence it all on the charge of Section 302 and recorded a finding of acquittal in that behalf.
He also held that the charge of Section 201 also did not survive.
The learned trial Judge also held that the prosecution hits not been able it) prove that the accused persons with their common intention treated Sangita with cruelty or thereby abetted her to commit suicide.
He accordingly acquired all the accused persons for the offence punishable under Section 306 read with Section 34 of the Indian Penal Code.
The State filed all appeal against their order of acquittal and the High Court on appeal castigated the trial judge for having gone merely oil the statement of the public Prosecutor without applying his own mind on the evidence.
The High Court examined the evidence afresh.
The High Court posed a question is to whether the nature of death of Sangita was suicidal or homicidal and ultimately gave a finding that it was a case of homicidal death and found all the accused guilty under Section 302 read With Section 34 and Section 201 read with Section 34.
The accused were also find guilty under Sections 498 A read with Section 34.
For the offence under Section 302 read with Section 34 all of them were sentenced to rigorous imprisonment `for life and different fines.
For the offence under Section 201 read with Section 34 all the accused persons were sentenced to rigorous imprisonment for three years and each of them was fined Rs.1,000/ .
For the offence under Section 498 A read with Section 34 all of them were sentenced to one year rigorous imprisonment and a fine of Rs.2,000.
Learned counsel for the defence, however, submitted before the High Court that the charge under Section 302 read with Section 34 did not survive tit view of the concession made by the Prosecutor and also in view of the framing of the additional charge under Section 306 read with Section 34.
It was also submitted that the framing of the additional charge negated the theory of murder in pith and substance.
The High Court, however negatived this submission and on consideration of the evidence convicted all the accused persons as stated above.
Body of Sangita suffered 100% burn injuries and smell of kerosene was even noticed in the spot panchanama.
The description 1005 burn does not really fully 883 convey the condition of the body.
Asper the inquest report the dead body was lying on its back in the open court yard at the back side of the house of the accused.
Both the legs were partly stiffen.
Both the hands were partly bent and lying at side.
Hairs on the head burnt and even fleshy portion is also burnt at some places.
There was slight hair at some portion of head.
Complete body was burnt and skin on it also peeled up.
Face had became red and black.
Eyes were closed and burnt.
Nose was burnt and blood was cozing from the nose and mouth.
Tongue was slightly protruding out.
Brassier of the left side was totally burnt and right side was partly burnt.
Ash of burnt cloth was visible on stomach.
A partly burnt small piece of the border of saree was lying there.
Some pieces of saree, burnt and sticking each other, were lying on the stomach.
Skin on palm of both hands was peeled up and was appearing reddish.
Skin on the complete body was burnt and peeled up.
On observing the body by turning its upside down, the complete body was burnt from back side.
On observing the private parts of the deceased through Pancha No.3 it was stated that private parts were burnt and there was no injury and to ascertain the actual cause of death, the dead body was sent to the Civil Surgeon, Murtizapur for post mortem.
According to Dr. Lande, who conducted the postmortem, on opening of trachea black particles were found.
He recorded that probable cause of death was 100% burn with bum shock with asphysix.
On the basis of medical evidence the High Court again felt the necessity to ascertain whether the act of pouring kerosene oil was voluntarily by the victim or the act of a third person.
The High Court felt that the trial court has not even discussed the medical evidence or the inquest report and hastily reached the conclusion that it was a case of suicidal death.
According to the High Court the entire approach of the trial court was thoroughly unsatisfactory and grossly erroneous.
After going through the evidence the High Court gave the following findings: That the deceased could not control her emotional out burst even during the presence of her father in law while talking on telephone.
The deceased was a young girl of 20 years.
A determination to suffer extreme pain in silence could not be a matter of speculation.
"In third degree injuries, as per Dr. Lande, the victim suffers extreme pain.
Such injuries will make the person to give out cries and shouts for help." The shouting and crying of the deceased was not only obvious but inevitable.
Undisputedly, none had heard the cries or shouts of the deceased while she was in flames.
This circumstance alone does not support the probability of suicidal death.
884 The trial court has wrongly read the contents of letter Ext.
62 and its interpretation is highly illegal.
Undisputedly Sangita returned from Paratwada after "Shrawani Mass" just a week before the incident, probably by 7th September, 1984.
She was subjected ' to insinuation and accused used to refer her as "awara", "loafer".
"badmash", She wanted to convey this to her father through post card (Ext.62) which seemingly not delivered.
By this letter she requested her father not to visit Murtizapur.
This letter never reached post off ice and the message could not be passed to Madan Lai, PW. 8.
Before accomplishing her design to convey this message, she could not bring an end to her life.
Sangita could not simply think of committing suicide while in possession of Ext.62.
Sangita at the time of incident, as per the post mortem report.
was having, a pregnancy of 3 4 months and this is also not in tune with the act of commission of suicide.
The Sessions Judge omitted to discuss the complete evidence of Dr. Lande and the post mortem report Ext.50.
As per post mortem report the eye ball and tongue of the deceased were protruding.
Dozing of the blood was found from the nose and mouth.
In case of death due to burning such injuries cannot be sustained.
Sangita was assaulted before she was set on fire.
There might be a definite attempt to cause death by strangulation before pouring kerosene oil on her person.
Relying of the evidence of PW.1, Shivraj, a neighbour who heard a shriek of ' woman as a result of strangulation coming from the house of the accused.
Taking into account tile medical evidence read with the testimony of PW.1, Shivraj, Sangita met with tile homicidal death.
A ball of cloth half burnt was also found by the side of the body.
The ball was used for gagging her mouth as a precautionary measure to handicap her from raising cries or shouts.
PW.5, Bhanudas, had also noticed dragging marks in the court yard and the deceased after assault was dragged and kept at the spot.
While in flames Sangita did not make any movement.
She was completely motionless.
The latching of doors of the compound was not accepted as an act of the deceased.
Latching of doors and pouring of kerosene after assault was a farcical venture skilfully and conveniently made to bring colour of suicide to the incident.
885 The High Court then posed the question as to who is responsible for homicidal death of Sangita.
It was held that it could not be an act of an individual It was joint venture.
There is no direct evidence.
Undisputedly the payment of Rs.20,000/ was not made nor the tither items mentioned in Ext.
73 were given till the date of incident.
On her second visit, the deceased had disclosed to her father, Madan Lal.
that the members of in laws ' family had beaten and ill treated her for the reason of non fulfillment of dowry and other articles.
A reading of the letter indicates that the accused persons had very serious grievance against Sangita and her parents for non fulfillment of dowry demands.
Recovery of handkerchief at the instance of accused No. 1 in pursuance of a disclosure statement and the seizure thereof vide Ext.69 from a drawer of the table of the office.
The handkerchief was smelling, kerosene oil.
It was concealed at a place which was not normally or ordinarily used for keeping the handkerchief.
This handkerchief was used at the time of the incident.
None of the accused persons made any attempt to reach the spot even though they noticed the death of Sangita.
They merely allowed the body to be burnt.
Accused persons had quoted exact time of death in Ext.82 which means that they were mentally alert and conscious of the happening in the house.
The refusal to disclose the death of Sangita to the chowkidar of the locality, PW.2, Rahadursingh.
The meeting with chowkidar Bahadursingh was falsely denied in the statement under Section 313 of the Code of Criminal Procedure.
Homicidal death occurred by Sangita while she was in their custody.
The incident with its gravity and extent cannot in any manner go unnoticed.
As such the accused persons were duty bound to offer plausible explanation.
Their action was concerted.
well thought out.
well planned.
With the aforesaid findings all the accused persons were found guilty by the High Court and the appellants have come up in appeal before this Court.
This court on application of appellant Nos. 3 and 4 i.e. another in law and sister in law of the deceased, admitted them to be on hail.
Apart from the inferences noticed by the High Court there are certain other features in the post mortem report Ext.
15 which may also be noticed at this state.
It is stated in paragraph 13 of the post mortem report that the whole (if skin of face 886 was burnt and Covered at places with black soot.
Eye ball slightly protruding Tongue was protruding from mouth.
Blood stained discharge from nose and mouth.
In paragraph 17 it is noticed heirs of the scalp, eye lashes, both ears, eyes, whole neck.
whole chest.
whole abdomen suffer from burns.
Buttock and pubic hairs also burnt.
Black soot was present over burnt area of face, chest, abdomen.
In paragraph 19 it is stated Brain & Meninges congested.
In paragraph 20 it is stated Larynx.
Trachea and Bronchi congested, on opening, troches.
black particles seen inside human.
Right lung left lung congested.
Right ventricle of the heart was full whereas left was empty.
In paragraph 21 it is stated liver and gall bladder congested.
pancreas and suprarenals congested.
spleen congested, kidneys congested and bladder empty, i.e. parenchymatous organs show intense venous congestion.
Dr. K.S. Narayan Reddy, M.D. D.C.P., M.I.A.F.M., F.I.M.S.A.,F.A.F.Sc., Professor of Forensic Medicine, Osmania Medical College Hyderabad in his well known treatise THE ESSENTIALS OL FFORENSIC MEDICINE AND TOXICOLOGY.
Sixth Education at page 255 gives descriptions of internal as well as external symptoms of manual strangulation.
At page 255 while dealing with signs of asphyxia.
the learned author observes : "The face may be livid, blotchy and swollen, the eyes wide open, bulging and suffused, the pupils dialated, the tongue swollen, dark cloured and protruded.
Petechial hemorrhages are common into the skin of the eyelids, face, forehead, behind the cars and scalp.
Bloody froth may escape front the mouth and nostrils and there may he bleeding from the nose and cars.
The hands are usually clenched.
The genital organs may be congested and there may be discharge of urine, faeces and seminal fluid.
" While internal injuries described little later included as under "The larynx.
trachea and bronchi are congested and contain frothy.
often blood stained mucus.
The lungs are markedly congested and show ecchymoses and larger subaerial hemorrhages.
Dark fluid blood exudes on section.
Silvery looking spots under the pleural surface due to rupture of the air cells which disappear on pricking.
are seen in more than 505 cases.
The parenchymatous organs show intense venous congestion and in young persons ecchymoses are usually seen on the heart and kidneys.
The brain is contested and shows petechial hemorrhages.
The right side of the heart is full of dark fluid blood and the left empty.
Both the cavities are full if the heart stopped during diastole.
" Whereas in burn injuries the learned author at pages 237 238 observes.
"the 887 brain is usually shrunken, firm and yellow to light brown due to cooking.
The dura matter is leathery." (dura matter is meninges of the brain).
If the death has occoured from suffocation.
aspirated blackish coal particles are seen in the nose, mouth and whole of the respiratory track.
Their presence is proof that the victim was alive %,.hen tile fire occurred.
The pleurae are contested or inflamed.
The lungs are usually congested.
may be strunken and rarely anemic.
Visceral congestion is marked in many cases.
The heart is usually filled with clotted blood. 'The adarme;s (glands above kidneys) may he enlarged and congested.
Some of these symptoms or internal and external injuries are common in case of strangulation and burn like face is swollen and distorted, the tongue protruded.
the lungs are usually congested visceral congestions is marked in many cases.
What is to he noticed in the present case is that there are hardly "any cries" as per the defence also by the deceased.
This is not possible even in case of suicide.
Even if the burns ,ire inflicted with suicidal intent tile victim is bound to cry out of pain.
Admittedly there was no cries and, therefore, it was not a Case of suicidal burn but the deceased was put in a condition where she could not cry and yet get burnt by third party.
As is clear from the aforesaid commentary of Dr. K.S. Narayan Reddy that if it was a case of merely burns the blood of the heart would have got clotted.
Even the postmortem report does not say that asphvsix was due to burn.
Coupled with all the internal injuries which occur in the case of strangulation.
are present in this case.
As pointed out by the High Court there is no direct evidence to connect the appellants with the offence of murder and the prosecution entirely rests its case only on circumstantial evidence.
There is a series of decisions of this Court propounding the cardinal principles to be followed in cases in which the evidence is of circumstantial nature.
It is not necessary to repapitulate all those decisions except stating the essential ingredients as noticed by Pandian, J. in the case reported as The State of Uttar Pradesh vs Dr. Ravindra Prakesh J. in the case 2 SC 114 at 121, to prove quilt of an accused person by circumstantial evidence.
They are: (1) The circumstance from which tile conclusion is drawn should be fully proved; (2) the circumstances should he conclusive in nature; 888 (3)all the facts so established should he consistent only with the hypothesis of guilt and inconsistent with innocence: (4)the circumstances should.
to a moral certainty, exclude the possibility of guilt of any person other than the accused.
" Now let us examine the impelling circunistances attending the case and examine whether tile cumulative effect of those circumstances negatives tile innocence of tile appellants and serves a definite pointer towards their guilt and unerringly leads to the conclusion that with all human probability the offence was committed by the appellants and none else.
There is no doubt that when the incident occurred there was no outsider its the house.
The circumstances which ire establislied its having closely linked up with one another may be noticed 1) The motive for the occurrence.
2) The place where the tragic incident occurred was in possession and occupation of the appellants.
3) The occurrence had happened in the wee hours when body else would have had ingress at the place where the incident allegedly occurred.
4) The appellants admit their presence.
The positive features, which occurred, had it been it pure case of burning, there would he evidence of vomiting.
6) The positive opinion of the doctor that the death was due to asphysix as well apart from 100% burns.
7) The deceased was carrying fetus of 3 4 months 8) The extensive use of kerosene as seen from the burn shows that the deceased was practically 889 drenched as sort of a bath with kerosene. 9) Total absence of any shout or cries except one which was heard by way o f strangulation by PW.
1. 10) Blood in heart was not found clotted.
Right ventricle heart was full of blood but left ventricle wits empty.
11) Besides total burning of neck was to destroy evidence of attempted strangulation.
12) In burn brain is usually shrunken and firm whereas in strangulation it is congested.
As noticed by Pandian, J. in the aforesaid decision, opinion of Taylor in Medical Jurisprudence is quoted below.
It reads thus: "Not uncommonly the victim who inhales smoke also vomits and inhales some vomit, presumably due to bouts of coughing, and plugs of regur gitated stomach contents mixed with soot may be found in the smaller bronchi, in the depths of the lungs.
" By the time a person could take a bath of kerosene she is likely to get fainted and would not be in a position thereafter to burn herself.
A total burning, of the face and the neck shows that even at portions where she was not wearing any clothes were not burnt.
It could only be possible if she had poured kerosene on her head and face also.
It is not understood as to how the unposted post card found near the dead body was not burnt when the whole body had got burnt.
It in fact indicates that the planting of the post card was to show that it was a case of suicidal death.
In passes all human probabilities that the appellants have satisfied themselves by watching through the window the burning of daughter in law without any due and cry or without and serious attempt to save her.
We are thus satisfied that it was a case of murder and not suicidal death.
So far as the accomplicity of appellants 1 and 2 are concerned, there is no doubt.
But 890 it is not necessary if appellant Nos. 3 4 i.e. mother in law and sister in law of the deceased have also participated in the murder of the deceased.
For the aforesaid reasons we dismiss the appeal on behalf of appellant.
Nos. 1 and 2 but give benefit of doubt to appellant Nos. 3 and 4 and accept the appeal on their behalf.
They are accordingly acquitted.
The convictions and sentences of appellant Nos. 1 and 2 are upheld.
U. R. Appeal dismissed. [/INST] Sangita was married to accused 2 on 28th April, 1984.
In the intervening night of 14115 September 1984, the accused found Sangita burning.
Sangita 's body suffered 100% burns and the smell of kerosene was noticed even in the spot panchnama.
There had been problems relating to dowry, and she had complained of ill treatment and of being beaten because of failure to pay the dowry amount.
The trial judge acquitted accused 1 4 her father in law, husband, mother in law and sister in law respectively.
The High Court examined the evidence a fresh, while castigating the trial judge for having gone merely on the statement of the Public Prosecutor that only a case under Ss. 306, 498 A and 34 was made out.
The High Court Convicted the accused under S.302 r/w 34, S.201 r/w 34 and 498 A r/w 34.
Partly dismissing the appeal, this Court.
HELD: 1.
It was a case of murder and not suicidal death.
It is not possible that there were no 'cries ' from the deceased while she was burning.
This is not possible even in a case of suicide.
Some of the symptoms of internal and external injuries are common in 879 case (if strangulation and burns.
But some symptoms that occur in the case of strangulation, and not in case of burns, are present in this case.
Dr. K.S. Narayan Reddy, The Essentials of Forensic Medicine and Toxicology 6th edn.
p. 55, relied on.
The prosecution rests its case only on circumstantial evidence.
Therefore, it is necessary to examine the impelling circumstances attending the case and examine whether the cumulative effect of those circumstances negatives the innocence of the appellant ,; and serves a definite pointer towards their guilt and unerringly leads to the conclusion that with all human probability the offence was committed by the appellants and none else.
State of U.P. vs Dr. Ravindra prakash Mittal, JT(1992) 2 SC 114 at 121.
applied.
Taylor, Medical jurisprudence, relied on.
On an appreciation of the circumstances which arc established as being closely linked to one another, the complicity of appellants 1 and 2 is not in doubt.
But it is not necessary that appellants 3 and 4 also participated in the murder of the deceased.
They are given the benefit of doubt and accordingly acquitted. </s> |
Subsets and Splits