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<s>[INST] Summarize the judgementivil Appeal No. 584 of 1982.
From the Judgment and Order dated 21.9.1979 of the Punjab and Haryana High Court in Civil Writ Petition No. 2247 of 1979.
A.B. Rohtagi and M.S. Mann for the Appellant.
Harbans Lal and Ashok K. Mahajan for the Respondents.
The following Judgment of the Court were delivered by K. RAMASWAMY, J. I wholly agree with my learned brother Saikia, J. with regard to the reasoning and the conclusions.
He has succinctly stated the facts of the case and the relevant provisions of law and they need no reiteration.
I would add only few points which I deem relevant to be dealt with.
As regards the applicability of the limitation of six months period prescribed under Rule 18 for the exercise of the revisional power by the State Govt.
under Section 42 of the Act, assailing legality or propriety of the scheme prepared or confirmation thereof or repartition made in pursuance thereof, it could be angulated from yet another perspective.
Indisputably Section 42 was amended by the Amendment Act of 1960 incorporating after the words any order passed "(Scheme prepared or confirmed or repartition made)".
Rule 18 was made in exercise of the rule making power by the subordinate legislation.
After the amendment of Section 42 was made to exercise the revisional power by the State Govt.
against the schemes prepared or confirmed or repartition made, correspondingly, no amendment to Rule 18 was made bringing within its ambit scheme prepared or con firmed or repartition made in pursuance thereof.
It is unnecessary to go into the question whether Rule 18 was declared to be intra vires or not.
We proceed on the footing that Rule 18 is ultra vires and applies to the exercise of the revisional power by the State Govt.
under Section 42.
The omission to amend the Rule is an indication of the legislative animation that the limitation of six months prescribed under the Rule 18 would be confined to be ap plicable only to "any order passed by any officer under the Act.
Thereby, by necessary implication the prescription of the limitation of six months for filing revision petition against the scheme prepared or confirmed or repartition made in pursuance thereof would stand excluded.
It is no 580 doubt true as contended for respondents that the Consolida tion Officer who has prepared the scheme or confirmed it or modified or repartition made when it is objected to by the affected party, has to consider the objections and, as a part thereof by necessary implication, has to assign reasons and the record must contain reasons.
But the legislature made a dichotomy between the orders passed and scheme pre pared or confirmation thereof or repartition affected in pursuance thereof.
He is not free to take arbitrary deci sion.
Assigning reasons are sine quo non for application of the mind though he does not appear to communicate the rea sons therefore.
But to an order passed assigning reasons in its support and communication thereof are necessary concomi tants and this was made manifest when Section 19, 20 and 21 are looked into.
As regards the exercise of the power under Section 19 and 20 the statute does not envisage passing any orders.
But when exercise of the power in Sub sec.
20 of 21, the officer is enjoined to pass orders and appeals are provided within the prescribed limitation against those orders to the appellate forums.
This, also, is an indication of the fact that the limitation of six months is confined to the orders to be revised under section 42.
It is undoubted that the scheme prepared or confirmed or modified or repartition made in pursuance thereof are amena ble to the revisional jurisdiction under section 42.
The State Govt. would consider the legality or propriety of the reasons or the grounds on which the scheme was initially prepared or confirmed or modified or repartition made in pursuance thereof.
But that does not mean that it is an order made and the limitation of six months prescribed under Rule 18 would get attracted to the revision filed against the scheme prepared or modified or repartition made in pursuance thereof.
Thus I have.
little hesitation to hold that the prescription of limitation of six months under Rule 18 would be confined only to order passed by any officer under the Act; it would not apply to the revision filed against the scheme prepared or confirmed or reparti tion made in pursuance thereof.
It is undoubted that when there is no limitation pre scribed for exercise of the revisional power under Section 42 against the schemes prepared or confirmed or repartition made, it would be exercised within a reasonable time.
What is a reasonable time is always a question of fact depending upon the facts and circumstances in each case.
When legisla ture chose not to fix a particular period of limitation by judicial dicta it is not permissible to limit to a particu lar period.
The long lapse of time may be a fact for the revisional authority to take into 581 account in the light of the facts and circumstances obtain able in an appropriate case.
No absolute or precise period of limitation could be predicated or laid.
Take for instance the facts of this case.
the previous Sarpanch is a benefici ary from the impugned order and has chosen not to take steps to have the scheme impugned by filing a revision under Section 42 of the Act.
The Gram Panchayat, being a juristic person, could not by itself except through the executive authority take.
any action against the scheme prepared by the Consolidation Officer to assail its legality or proprie ty by filing the revision.
The revision petition was filed soon after the new Sarpanch came into office.
Take another instance of a case where the officer concerned and the person benefitted, in confabulation, have made a scheme and repartition affected in pursuance thereto and kept it in dark to the knowledge of the person affected by the scheme prepared or the partition made.
Until the person affected had actual knowledge, it is not possible to become award of it.
The limitation begins to run from the date of the knowl edge of the fraud so played.
It is always open to the af fected person to come forward and say that for the first time he became aware of the scheme prepared or partition made in pursuance thereof only when his rights are sought to be interfered with or exercise of the enjoyment of the property is interdicted.
Therefore immediately within a reasonable time thereafter he is to file a revision before the State Govt.
Having had the knowledge of the impugned action if he stood by without taking any further action, it is always open to the other party to bring it to the notice of the State Govt.
of the ground or the circumstances under which the revision petitioner when he became aware of the scheme prepared or the repartition made and he deliberately chose to acquiesce to it and if the State Govt.
is satisfied of the same, unless satisfactory explanation for the delay is given, the State Govt.
may decline to interfere with the impugned action or may decline to entertain the revision petition itself.
Thus it could be seen that each case has to be angulated on its own given facts and circumstances as to the reasonable period of limitation within which the revi sional power is to be filed.
Even though more than 5 years time had elapsed from the date of the preparation of the scheme till date of the filing of the revision under Section 42, there is sufficient ground in this case for the new Sarpanch in not filing a revision within six months from the date of the original scheme and the State Govt.
is well justified in exercising the power under Section 42.
The High Court is unjustified in interfering with the order passed by the Consolidation Officer.
Accordingly, the appeal is al lowed.
No costs.
582 K.N. SAIKIA, J.
This appeal by special leave is from the Judgment of the High Court of Punjab and Haryana at Chandi garh dated 21.9.1979 in Civil Writ Petition No. 2247 of 1979 allowing the petition and setting aside the order of the Director, Consolidation of Holdings dated 8.2.1979.
The appellant Gram Panchayat, hereinafter referred to as the 'Panchayat ', was the owner of 1200 Bighas of land in village Kanonda, Tehsil Bahadurgarh, District Rohtak.
A Scheme of consolidation of holdings, hereinafter referred to as 'the Scheme ', of the village was confirmed on 15.1.1974 under section 20 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 (50 of 1948), hereinafter referred to as 'the Act '.
The Panchayat, there fore, moved an application under section 42 of the Act on 20.9.1977 for setting aside the Scheme, objecting to the utilisation of the land of value of /2/ (two annas) and allotments made to the other rightholders for their benefit.
On 24.1.
1979 a Mushtehri Mundadi was made for information of all the villagers concerned, but the rightholders were absent and ex party proceedings were taken against them.
The Panchayat 's case was that under the said Scheme the Panchay at land was consolidated, repartitioned and allotted to persons who did not have any right to hold the land.
Be sides, the land of Dharat containing two wells and a big house being religious place of worship was also partitioned under the Scheme and consequently the Panchayat has been reduced to a landless person, financially weakened and rendered incapable of rendering service in the village.
After hearing the parties the Director in his order dated 8.2.
1979 observed that it was evident from the perus al of the record that the Scheme of Consolidation of the village was confirmed on 15.1.
1974 whereas the application had been filed on 20.9.
1977 and as such the application had been filed too late.
After the expiry of six months period the application was time barred.
However, he said in his order: "In this case only to benefit some land own ers, the land of the value of two annas has been allotted due to which the deserving persons have been left over and they have not been given even Abadi plots.
Apart from this the Panchayat had no other land to cultivate, due to which the Panchayat is unable to devel op the agricultural schemes and in these circumstances of the matter I condone the delay in filing the present application.
" 583 He accordingly set aside the Scheme and remanded the case to the Consolidation Officer under section 21(2) of the Act with some directions.
Against that order the respondents moved the High Court of Punjab and Haryana in Civil Writ Petition No. 2247 of 1979 urging, inter alia, that the Director of Consolidation of Holdings had condoned the delay without there being any ground for the same and that, in doing so, he had acted illegally and with material irregu larity.
The High Court held that from the observations of the Director it was evident that the delay was condoned on extraneous considerations as no reason whatsoever was given by the applicant in the application filed before him under section 42 of the Act as to why it was filed after the period of limitation.
In that view of the matter, holding that the Director of Consolidation of Holdings had acted illegally and with material irregularity in condoning the delay, the High Court by the impugned order dated 21.9.79 allowed the writ petition and quashed the order of the Director of Consolidation of Holdings dated 8.2.1979.
Mr. A.B. Rohtagi, the learned counsel for the appel lant, submits that the High Court erred in setting aside the Director of Consolidation 's order applying to the confirma tion of the Scheme the period of limitation of six months as prescribed in Rule 18 of the East Punjab Holdings (Consoli dation and Prevention of Fragmentation) Rules 1949, herein after referred to as 'the Rules ', inasmuch as that rule speaks only of orders and not of confirmation of the Scheme; and that a Full Bench of the Punjab and Haryana High Court in Jagtar Singh vs Additional Director, Consolidation of Holdings, Jullundar, , taking the view that the bar of limitation under Rule 18 does not apply to those petitions under section 42 in which the legality or validity of a scheme prepared or confirmed or repartition made is challenged has overruled AIR 1982 Punjab and Har yana 148 and that Full Bench decision has since been followed in Mr. Rohtagi further submits that on merits also there was ample justification for the Director to have taken the view it did inasmuch as Panchayat lands were taken into consolidation and repartitioned and allotted to persons who had no right to obtain the land thereby impoverishing the Panchayat and rendering it incapa ble of giving any help to the villagers.
Mr. Harbans Lal, learned counsel for the respondents submits that the Full Bench decision that the limitation under rule 18 does not cover an order confirming a scheme is not tenable inasmuch as confirmation of a scheme is only by an order as contemplated under rule 18, and an applica tion challenging that order of confirmation has, there 584 fore, to be made within six months thereof; and that even assuming that there was no bar of limitation, an application had to be made within a reasonable time which, according to learned counsel, would be 'about two years '; and that by any standard the appellant 's application under section 42 was belated and could not have been allowed.
Lastly, counsel submits that there were three earlier applications dismissed by the Director under section 42 of the Act, including one by the Panchayat itself, and the Director had no power to review his own order.
The questions to be decided therefore are, whether for the purpose of limitation under rule 18 of the Rules confir mation of a scheme would be an order as envisaged in the rule; if it was not an order, whether the Director was justified in setting aside the scheme and remanding the matter to the Consolidation Officer; and whether the Direc tor 's order was one of review of his earlier order and as such beyond his jurisdiction.
To decide the first question we may conveniently refer to the provisions of the Act and rule 18 of the Rules.
Section 42 of the Act empowers the State Government to call for proceedings under the Act.
It says: "42.
Power of State Government to call for proceedings:The State Government may at any time for the purpose of satisfying itself as to the legality or propriety of any order passed, scheme prepared or confirmed or repar tition made by any officer under this Act, call for and examine the record of any case pending before or disposed of by such officer and may pass such order in reference thereto as it thinks fit: Provided that no order or scheme or repartition shall be varied or reversed with out giving the parties interested notice ' to appear and opportunity to be heard except in cases where the State Government is satisfied that the proceedings have been vitiated by unlawful consideration.
" From a perusal of this section there arises no doubt that under it the State Government may for the stated purpose call for proceedings wherein any order is passed, scheme prepared or confirmed or repartition made by any officer under this Act.
Under the proviso the State 585 Government shall not vary or reverse any order or scheme or repartition without giving the interested parties opportuni ty of being heard except in cases where the State Government is satisfied that the proceedings have been vitiated by unlawful consideration.
There is therefore no doubt that this section envisages proceedings wherein order is passed, scheme prepared or confirmed or repartition made.
These are the distinct proceedings for the purpose of exercising jurisdiction under this section.
Rule 18 deals with limitation for application under section 42, and it reads: "18.
Limitation for application under section 42: An application under section 42 shall be made within six months of the date of the order against which it is filed: Provided that in computing the period of limitation, the time spent in ob taining certified copies of the orders and the grounds of appeal, if any, filed under sub section (3) or sub section(4) of section 21, required to accompany the application shall be excluded: Provided further, that an applica tion may be admitted after the period of limitation prescribed therefore if the appli cant satisfies the authority competent to take action under section 42 that he had sufficient cause for not making the application within such period.
" From a perusal of this rule there arises no doubt that for applying this rule the application has to be one under section 42 of the Act and it has to be against an order and under the first proviso a certified copy of the order is required to accompany the application and in computing the period of limitation of six months, the time spent in ob taining the certified copy is to be excluded.
While the Division Bench comprising P.C. Jain and Tewa tia, JJ of the Punjab and Haryana High Court in the instant case applied the period of limitation to the confirmation of the scheme and in that view of the matter set aside the Director 's order, the Full Bench comprising P.C. Jain, Acting C.J., Tewatia and Tiwana, JJ.
held: "A bare perusal of rule 18 of the Rules would show that .it provides limitation only for petitions filed against orders 586 passed.
There is no reference in the Rules to a scheme prepared or confirmed or repartition made.
The fact that in section 42 of the Act the words 'scheme prepared or confirmed or repartition made ' have been added as a result of amendment, cannot justify the conclusion that in Rule 18 of the Rules these words have also to be read.
" We respectfully agree with this view.
Rule 18 has to be interpreted as we find it and the words of the rule are simple, precise and unambiguous and no more is necessary than to understand these words in their natural and ordinary sense.
Two different meanings cannot be given to the same word 'order ' namely, that in section 42 it does not include scheme prepared or confirmed or repartition made; while in rule 18 it would include them.
The Full Bench therefore rightly held that rule 18 of the Rules does not apply to those proceedings in which the legality or validity of the scheme prepared or confirmed or repartition made is chal lenged.
The Full Bench rightly approved the decision in Haqiqat Singh vs Addl.
Director, Consolidation of Holdings, AIR 1981 Punjab & Haryana 204, wherein it was held that a reading of section 42 as well as the scheme of the Act unmistakably pointed out that the statute made a clear distinction between order passed by an officer under the Act and the performance of duties by the authorities under the Act in the matter of preparation and confirmation of scheme of consolidation and re partition made in pursuance thereof.
So it could not possibly be held that preparation or confir mation of a scheme and the repartition carried would fail within the scope of 'order ' as used in rule 18 of the rules.
The rule did not come into play when a petitioner challenged either the scheme of consolidation including its preparation or confirmation of the repartition made in pursuance there of.
The amendment made this position clear.
In a subsequent decision reported in Joginder Singh and Ors.
vs The Director, Consolidation of Holdings, decided on August 8, 1988, where the direct hold ers had not challenged any order of the consolidation au thorities but had attacked the validity of the scheme and the repartition, it was rightly held that the bar of limita tion of six months in rule 18 of the Rules was not attracted to the facts of that case.
Mr. Harbans Lal submits that the above decisions require reconsideration.
We do not agreed.
We have perused the provisions of the Act and rule 18.
The Act provides for the compulsory consolidation of, and for prevention of fragmen tation of, agricultural holdings in the 587 State of Punjab and for the assignment or reservation of land for common purposes of the village.
It appears that prior to the Act there were two methods of consolidation in vogue in the Province, one through the Revenue Department and the other through the Cooperative Department but the progress of consolidation was very slow and lengthy and the Act sought to remedy those defects.
Section 19 of the Act provides for publication of draft scheme and on such publi cation any person likely to be affected by such scheme, shall, within 30 days of such publication, communicate in writing to the Consolidation Officer any objections relating to the scheme.
The Consolidation Officer, shall, after considering the objections, if any received, submit the scheme with such amendment as he considers necessary togeth er with his remarks on the objections to the Settlement Officer (Consolidation).
Thus, in this section we do not find any provisions for any order being passed.
Section 20 deals with confirmation of the scheme.
Under sub section(2) thereof if any objections are received to the draft scheme published under sub section (1) of section 19 and also if no written or oral objections to the draft scheme are received under subsection (3) of that section by the Settlement Officer (Consolidation) he shall confirm that scheme.
Under sub section (3) if any objections are received to the draft scheme published under sub section (1) of section 19 or if any written or oral objections are received by the Settle ment Officer (Consolidation) before the confirmation of the draft scheme by him the Settlement Officer(Consolidation) may after taking the objections into consideration together with the remarks thereon of the Consolidation Officer and also after considering the written or oral objections either confirm the scheme with or without modifications, or refuse to confirm it.
In case of such refusal the Settlement Offi cer (Consolidation) shall return the draft scheme, with such directions as may be necessary to the Consolidation Officer, for reconsideration and resubmission .
Under sub section (4) upon the consideration of the scheme under sub section (2) or (3) the scheme as confirmed shall be published in the prescribed manner in the estate or estates concerned.
Thus, this section also does not envisage passing of any order with reference to any person affected by the scheme.
It may be true, as Mr. Harbans Lal submits, that the confirmation may be done in the form of an order.
However, the word 'order ' has not been used by the legislature in this sec tion.
Section 21 deals with repartition.
Under sub section (1) of this section, the Consolidation Officer shall, after obtaining the advice of the land owners of the estate or estates concerned, carry out repartition in accordance with the scheme of consolidation of holdings 588 confirmed under section 20 and the boundaries of the hold ings as demarcated shall be shown on the Shajra which shall be published in the prescribed manner in the estate or estates concerned.
There is no provision of passing of any 'order ' under this sub section.
Under subsection (2) any person aggrieved by the repartition may file written objec tion within 15 days of the publication before the Consolida tion Officer who shall after hearing the objectors pass such orders as he considers proper confirming or modifying the repartition.
Thus this sub section envisages passing of orders on the objections after hearing the objectors.
Sub section (3) provides that any person aggrieved by the order of the Consolidation Officer under sub section (2) may within one month of that order file an appeal before the Settlement Officer (Consolidation) who shall after hearing the appellant pass such order as he considers proper.
This sub section also clearly envisages passing of an order on appeal by an aggrieved person as above.
Subsection (4) provides that any person aggrieved by the order of Settle ment Officer (Consolidation) under sub section (3) whether made before or after the commencement of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Second Amendment and Validation Act, 1962 may within 60 days of that order appeal to the Assistant Director of Consolida tion and under sub section (5) any appeal against an order of the Settlement Officer (Consolidation) pending under sub section (4) immediately before the commencement of the East Punjab Holdings (Consolidation and Prevention of Frag mentation) Second Amendment and Validation Act, 1962, either before the State or any officer to whom the powers of the State Government in this behalf have been delegated, shall be decided by the Assistant Director of Consolidation.
Thus, the above sub sections clearly envisage passing of orders by the respective authorities.
We have already extracted section 42 of the Act and Rule 18 of the Rules.
It would be clear that though section 42 envisaged orders, preparation or confirmation of scheme and repartition separately, Rule 18 provides for limitation only in respect of an application under that section in a pro ceeding where an order was passed.
There is the maxim ex pressio unius est exclusio alterius expression of one thing is the exclusion of another.
Mention of one thing implies the exclusion of another.
When certain persons or things are specified in a law an intention to exclude all others from its operation may be inferred.
When mention has been made only of 'Orders ', the inference would be that preparation or confirmation of scheme and repartition are 589 excluded.
Again, Ex praecedentibus et consequentibus optima fit interpretation.
The best interpretation is made from the context.
As we have seen, while section 19 and 20 did not envisage passing of any order section 21 envisaged passing of orders.
Section 42 deals with applications against or ders, preparation or confirmation of scheme and repartition.
Rule 18 mentions only orders and hence by inference excludes 'preparation and confirmation of scheme and repartition '.
We have accordingly no doubt in approving the Full Bench deci sion in Jagtar Singh vs Additional Director, Consolidation of Holdings (supra).
Mr. Harbans Lal 's submission that even if no limitation was prescribed the application of the Panchayat before the Director was inordinately delayed is not tenable.
According to the learned counsel the period of two years would be reasonable period.
We are unable to agree.
In matters like Consolidation of Holdings by a scheme and the preparation and confirmation of the scheme and repartition thereafter the objections may arise at various stages for various reasons and it will not be possible to prescribe any hard and fast rule as to reasonable period after which an appli cation could be made under section 42 of the Act.
The legis lature itself did not do so.
In the instant case the Pan chayat filed the application on 20th September, 1977 before the Director of Consolidation under section 42 of the Act praying for the revocation of the Scheme and for directions for fresh valuation to be ordered and repartition effected through appropriate authorities stating that the Sarpanch was not given any Nishan Dehi or demarcation on the spot nor was issued any passbook, and the petition was not filed earlier because the new Sarpanch came to know all these only a month ago and so the petition was claimed to be in time.
The original Sarpanch was a beneficiary out of the Panchayat land and he took no steps and the present Sarpanch took charge only a few months ago.
There were lot of complaints about valuation and allotments to rightholders.
Under the above circumstances when the Director himself considered it fit for granting the prayer, it cannot be said that the application was unreasonably delayed.
The next submission of Mr. Harbans Lal is equally un tenable.
It is true that in Harbhajan Singh vs Karam Singh and Anr., ; , it has been held that there is no provision in the Act granting express power of Review to the State Government with regard to an order made under section 42 of the Act and in the absence of any such power the Director, Consolidation of Holdings could not have reviewed his previous order dismissing an application of the Panchay at 590 under section 42 of the Act, and if so done, the review order of the Director would be ultra vires and without jurisdiction.
In the instant case it has not been shown to us that the Panchayat earlier moved any application under section 42 on the same subject matter and the instant order of the Director amounted to a review of his own order.
There is no material to hold that the instant order of the Direc tor is an order of review of his earlier order; and Mr. Rohtagi clearly denied that it was so.
In the result we allow this appeal, set aside the im pugned order of the High Court and restore that of the Director, Consolidation.
We, however, leave the parties to bear their own costs.
Y. Lal Appeal allowed.
[/INST]The appellant Panchayat owned 1200 Bighas of land in Village Kanonda Distt.
Rohtak in Haryana.
A Scheme of con solidation of Holdings under Section 20 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act 1948 was confirmed on 15.1.1974, as a result whereof the Panchayat 's land was consolidated, repartitioned and allot ted to persons, allegedly having no right to hold the same with the result, the Panchayat was reduced as a landless person, and financially weak.
The Panchayat, therefore, on 20.9.1977 moved an application under section 42 of the Act objecting to the utilization of the Land of the value of /2/ (Two annas) and the allotments made to other right holders.
After hearing the parties, the Director of Consolidation of Holdings by his order dated 8.2.79 set aside the scheme and remanded the case to the consolidation officer with some directions.
The Director took the view that even though the application had been made much beyond the period of limita tion of six months contemplated under Rule 18, yet in view of the fact that the Panchayat had no other land to culti vate due to which the Panchayat was unable to develop the agricultural Schemes, condoned the delay and allowed the application as aforesaid.
Against the said orders the Re spondents moved the High Court by means of a Writ Petition urging inter alia that the Director had condoned the delay without there being any ground for the same and thus had acted illegally.
The High Court held that the Director condoned the delay on extraneous considerations and accord ingly quashed the impugned 577 order of 8.2.79 passed by the Director.
Hence the Panchayat has filed this appeal after obtaining Special Leave.
Allowing the appeal, this Court, HELD: (Per K.N. Saikia & M. Fathima Beevi, JJ.) Section 42 of the Act envisages proceedings wherein order is passed, scheme prepared or confirmed or repartition made.
These are the distinct proceedings for the purpose of exercising jurisdiction under this section.
[585B] Applying Rule 18, the application has to be one under section 42 of the Act, and it has to be against an order and under the first proviso, a certified copy of the order is required to accompany the application and in computing the period of limitation of six months, the time spent in ob taining the certified copy is to be excluded.
[585F].
Rule 18 has to be interpreted as it is found, and the words of the rule are simple, precise and unambiguous and no more is necessary than to understand these words in their natural and ordinary sense.
Two different meanings cannot be given to the same word "order" namely, that, in section 42 it does not include scheme prepared or confirmed or reparti tion made, while in Rule 18, it would include them.
[586B C] The Rule did not come into play when a petitioner chal lenged either the scheme of consolidation including its preparation or confirmation or the repartition made in pursuance thereof.
The amendment made this position clear.
[586E] Though section 42 envisaged orders, preparation or confirmation of scheme and repartition separately, Rule 18 provides for limitation only in respect of an application under that section in a proceeding where an order was passed.
There is the maxim expressio unius est exclusio alterius expression of one thing implies the exclusion of another.
When mention has been made only of "orders", the inference would be that preparation or confirmation of scheme and repartition are excluded.
[588F G] In matters like consolidation of Holdings by a scheme and the preparation and confirmation of the scheme and repartition thereafter, the objections may arise at various stages for various reasons and it will 578 not be possible to prescribe any hard and fast rule as to the reasonable period after which an application could be made under section 42 of the Act.
The Legislature itself did not do so.
[589C D] In the instant case, it has not been shown that the Panchayat earlier moved an application under section 42 on the same subject matter.
There is no material to hold that the instant order of the Director is an order of review of his earlier order.
[590A] (Per K. Ramaswamy, J.) As regards the exercise of the power under sections 19 & 20, the statute does not envisage passing any orders.
But when exercising the power, the officer is enjoined to pass orders and appeals are provided within the prescribed limi tation against those orders to the appellate forums.
This also, is an indication of the fact that the limitation of six months is confined to the orders to be revised under section 42.
[580C D] The prescription of limitation of six months under Rule 18 would be confined only to order passed by an officer under the Act, it would not apply to the revision filed against the scheme prepared on confirmed or repartition made in pursuance thereof.
[580F] It is undoubted that when there is no limitation pre scribed for exercise of the revisional power under section 42 against the schemes prepared or confirmed or repartition made, it would be exercised within a reasonable time.
[580G] What is reasonable time is always a question of fact depending upon the facts and circumstances of each case.
[580G] When legislature chose not to fix a particular period of limitation, by judicial dicta it is not permissible to limit to a particular period.
:While exercising power under Sec tion 42, the revisional authority may take into account the long lapse of time as a factor in the light of the facts and circumstances obtainable in an appropriate, case.
No abso lute or precise period of limitation could be predicted or laid.
[580H] Jagtar Singh vs Additional Director, Consolidation of Holdings, Jullundar, AIR 1984 Punjab & Haryana 216, ap proved.
Haqiqat Singh vs Addl.
Director, Consolidation of Hold ings, AIR 1981 Punjab & Haryana 204; Joginder Singh & Ors.
vs The Director, 579 Consolidation of Holdings, and Harbha jan Singh vs Karam Singh & Anr., ; , referred to.
</s>
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<s>[INST] Summarize the judgementCivil Appeal No. 3072 of 1980 etc.
From the Judgment and order dated 5.
10.1979 of the Allahabad High Court in Civil Misc.
Writ No. 3587 of 1974.
S.N. Kacker, C.P. Lal, M.N. Krishnamani, Dalip Tandon, E.C. Agganvala, Vijay Pandit, Atul Sharma and Ms. Purnima Bhat for the Appellants.
Govind Das, Anil Dev, K.K. Singhvi, P.P. Rao, Kapil Sibbal, V.A. Bobde, G.L Sanghi, A. Subba Rao, C.V.S. Rao, C. Ramesh, Miss A. Subhashini, Mrs. section Dikshit, A.S. Bhasme, A.M. Khanwilkar, R.K. Mehta, V.J. Francis, N.M. Popli, J.R. Dass, S.P. Kalra, Mrs. Rani Chhabra, V.B. Joshi, L.K. Pandey, D.D. Gupta and K.K. Khurana for the Respondents.
P.N. Mishra for the Intervener.
The Judgment of the Court was delivered by 292 INTRODUCTION RANGANATHAN, J.
1.
The controversies arising in this batch of cases are by way of sequel to three earlier decisions of this court in regard to the constitution of the Indian Forest Service viz. Kraipak vs Union of India, AIR 1970 S.C. 150; Parvez Qadir vs Union of India, ; and Union of India vs Chothia, [1978] 3 S.C.R. 652.
A little historical background is, therefore, necessary to appreciate the problems before us.
THE ALL INDIA SERVICES ACT 2.
A few months before India gained Independence, a decision was taken that one of the primary needs of the federal constitution envisaged for India would be the setting up of All India Services common to the Centre and to the States.
The members were to be recruited from the intelligent youth of the country by competitive examinations of high standard.
They were to be free from political control, contended and having a sense of security.
The idea was to build up a bureaucracy consisting of efficient officers of integrity and impartiality who could man important administrative posts and make possible the continued governance of the country unaffected by periodical changes in the political set ups in the Centre and various States consequent on quinquennial elections to the various legislatures in the country.
The recruitment to these services and their ultimate disciplinary control was to be with the Union Government but the officers would serve, under the immediate control of the State Governments, on various State cadres.
Initially, the All India Services viz. the Indian Administrative Service and the Indian Police Service were created to replace the former Indian Civil Service and Indian Police respectively.
p The statutory basis for the implementation of the above policy was provided by Chapter I of Part XIV of the Constitution (articles 308 to 314) supplemented by the All India Services Act, 1951 (hereinafter referred to as "the Act") passed by Parliament as envisaged in article 312 of the Constitution.
The Act, initially applicable to the two Services above mentioned, was extended by Amendment Act 27 of 1963 to cover the constitution of three new All India Services one of which was the Indian Forest Service (I.F.S. for short).
section 3 of the Act empowers the Government of India to make, after consultation with the State Governments, rules for the regulation of recruitment, and the conditions of service of persons appointed, to an All India Service.
Such rules are to be laid, as soon as possible after they are made and for not less than fourteen days, before Parliament.
293 THE RULES 3.
Pursuant to the amendment of 1963, mutual consultations were held between the Union Government and the various State Governments and the broad pattern I already in existence for the Indian Administrative Service and the Indian Police Service was decided to be adopted for the Indian Forest Service also.
Once this decision was taken, the statutory rules followed.
There were five sets of rules framed between 1966 and 1968: (i) The IFS (Cadre) Rules, 1966 (ii) The IFS (Recruitment) Rules, 1966 (iii) The IFS (Probation) Rules, 1968 (iv) The IFS (Pay) Rules, 1968 (v) The IFS (Regulation of Seniority) Rules, 1968 Some of the rules relevant for our present purposes may now be set out.
4(a) Cadre Rules: The Cadre Rules came into force on 1st July, 1966.
Rule 3 provides that there shall be constituted for each State or group of States an Indian Forest Service Cadre.
The cadre constituted for a State is called a 'State Cadre ' and a cadre constituted for a group of states, a 'Joint Cadre '.
Rule 4 is important and can be extracted: "4.
Strength of Cadres: (1) The strength and composition of each of the cadres constituted under rule 3 shall be as determined by regulations made by the Central Government in consultation with the State Government in this behalf.
(2) The Central Government shall, at the interval of every three years, re examine the strength and composition of each such cadre in consultation with the State Government concerned and may make such alterations therein as it deems fit; Provided that nothing in this sub rule shall be deemed to affect the power of the Central Government to 294 alter the strength and composition of any cadre at any time: Provided further that the State Government concerned may add for a period not exceeding one year, and with the approval of the Central Government for a further period not exceeding two years, to a State or Joint Cadre one of.
more posts carrying duties or responsibilities of a like nature to cadre posts.
" Rule 7 empowers the State Government to make the appointments to the State cadre and one of the 'concerned ' State Governments to a Joint cadre.
Under rule 8, every cadre post has to be filled by a cadre officer.
Rule 9 envisages temporary appointments of non cadre officers to cadre posts.
Under rule 10, cadre posts are not be kept vacant or held in abeyance for a period exceeding six months without approval of the Central Government.
Under rule 11, temporary arrangements or leave arrangements could be made enabling a single cadre officer to look after two cadre posts but such arrangements cannot extend beyond 12 months.
(b) Recruitment Rules: The Recruitment Rules were also framed simultaneously and came into force on 1st of July, 1966.
They contemplate the initial recruitment of the officers of certain Services already in existence (hereinafter referred to as the State Forest Service or S.F.S. in short).
Rule 3 and rule 4 are relevant for our present purposes .
The relevant portions of these rules reads as follows: "3.
Constitution of the Service: The Service shall consist of the following Persons, namely: (a) Members of the State Forest Service recruited to the service at its initial constitution in accordance with the provisions of sub rule (1) of rule 4; and (b) Persons recruited to the service in accordance with the provisions of sub rules (2) to (4) of rule 4.
Method of recruitment to the Service (1) As soon as may be after the commencement of 295 these rules, the Central Government may Recruit to the Service any person from amongst the members of the State Forest Service adjudged suitable in accordance with such regulations as the Central Government may make in consultation with the State Governments and the Union Public Service Commission (U.P.S.C.): (2) After the recruitment under sub rule (1), subsequent recruitment to the Service, shall be by the following methods, namely: (a) by a competitive examination (aa) by selection of persons from amongst the Emergency Commissioned officers and Short Service Commissioned officers of the Armed Forces of the Union who were commissioned after the Ist November, 1961, and who are released in the manner specified in sub rule (I) of rule 7A; (b) by promotion of substantive members of the State Forest Service.
Rule 6 makes it clear that all appointments to the service are to be made by the Central Government.
No appointment can be made except after recruitment by one of the methods specified in rule 4.
The appointments of persons recruited to the service under rule 4(2)(a) (i.e. by competitive examination) can only be made to the junior time scale of pay and the appointments of persons recruited to the service under rule 4(2)(b) (i.e., by promotion of substantive members of the State Forest Service) shall be in the senior time scale of pay. "However, under rule 6A, "an officer in the junior time scale of pay shall be appointed by the State Government concerned to a post in the senior time scale of pay if, having regard to his length of service, experience and performance in the junior time scale of pay, the State Government is satisfied that he is suitable for appointment to a post in the senior time scale of Pay.
" Rule 7 deals with the recruitment by competitive Examination, rule 296 7A deals with recruitment by selection of persons from among officers released from the Armed Forces and rule 8 with recruitments by promotion.
Rule 9 provides that the recruitment of persons under rule 8 is not to exceed 331/3 per cent of the number of senior duty posts borne on the cadre of that State.
(c) Pay Rules: The Pay Rules provide for time scales of pay for the members of the service.
There are two scales prescribed, one a Junior scale, the top of which is reached after 18 years of service and the other a senior scale which runs over a period of about 22 years.
Under rule 4, the initial pay of a member of the service appointed under rule 4(1) of the Recruitment Rules has to be fixed in the junior time scale of the service at he stage he would have got if he had been appointed in that scale on the deemed date of appointment in the year of allotment.
Sub rule (b) of rule 4(1) contemplates appointment of such an officer simultaneously to a post in the senior time scale and prescribes the mode of fixation of his salary in the senior time scale.
(d) Seniority Rules: So far as seniority rules are concerned, two rules are relevant for our present purposes.
One is the definition of 'senior post ' contained in rule 2(g), which reads thus: "2(g) 'Senior post ' means a post included and specified under item (1) of the Cadre of each State in the Schedule to the Indian Forest Service (Fixation of Cadre Strength) Regulations.
and includes: a post included in the number of posts specified in item 2 and 5 of the said cadre, when held on senior scale of pay, by an officer recruited to the Service in accordance with sub rule ( 1) of rule 4 or rule 7 of the Recruitment Rules.
" Rule 3 describes the mode of appointment and the allotment of a year of allotment to every officer appointed to the service.
The seniority of officers is determined primarily by the year of allotment and, inter se officers having the same year of allotment, by the principles set out in rule 4.
THE REGULATIONS 5.
It may be mentioned that the rules contemplate regulations 297 being made by the Central Government in consultation with the State Government on various matters.
Some of these regulations are also relevant: 6(a) Cadre Strength Regulations: The Fixation of Cadre Strength Regulations were framed in exercise of the powers conferred by rule 4(1) of the Cadre Rules.
These regulations were first issued by a notification of the Government of India dated 31.10.1966 and were deemed to have come into force with effect from Ist October, 1966.
There is only one substantive clause in this regulation, which reads thus: "2.
Strength and Composition of Cadres The posts borne on, and the strength and composition of the cadre of, the Indian Forest Service in each of the States, shall be as specified in the Schedule to these regulations.
" The schedule proceeds to set out the strength and composition of the cadres of various States.
In these matters before us we are concerned with the position in regard to three States,: Uttar Pradesh, Maharashtra and Orissa.
The provisions of the Schedule in so far as these States are concerned are as follows: Maharashtra U.P. Orissa 1.
Senior posts under the State Government Chief Conservator of 1 1 1 Forests Deputy Chief Conservator of Forests 2 Addl.
Chief Conservator of Forests 1 Conservator of Forests 7 9 4 Conservator of Forests (Development Circle) 1 Conservator of Forests, Working Plan Circle 1 1 298 Conservator of Forests, Headquarters 1 Special officer, Revenue & Forest Department 1 Deputy Conservators of Forests 35 48 24 Deputy Conservators of Forests, Integrated Unit 3 Deputy Conservator of Forests, Working Plans 8 Deputy Conservators of Forests, Foresters ' Training Division 2 Deputy Conservator of Forests, Forest Resources Survey Division 1 Forest Utilisation officer 1 1 Working Plan officer 7 4 Forest Extension officer 1 Chief Wild Life Warden 1 Timber Supply officer 1 Silviculturist 1 2 1 Working Plan officers Officer on Special Duty for Forest Labourers Cooperative Society 1 Officer on Special Duty for Forest Labourers Cooperative Society 1 Assistant to Chief Conservator of Forests 1 P.A. to the Chief Conservator of Forests 1 __ __ __ Total: 62 76 37 __ __ __ 2.
Senior posts under the Central Government 5 6 3 __ __ __ 67 82 40 __ __ __ 299 3.
Posts to be filled by promotion in accordance with rule 8 of the Indian Forest Service (Recruitment) Rules 1966 22 27 13 4.
Posts to be filled by direct recruitment 45 55 27 __ __ __ 67 82 40 __ __ __ 5.
Deputation Reserve 15% of 4 above 7 8 4 6.
Leave Reserve 11% of 4 above 5 6 3 7.
Junior posts 20% of 4 above 9 11 5 8.
Training Reserve 5% of 4 above 2 3 1 __ ___ __ 90 110 53 __ ___ __ Direct Recruitment posts 68 83 40 Promotion posts 22 27 13 __ ___ __ Total Authorised Strength 90 110 53 __ ___ __ (b) Initial Recruitment Regulations: The second set of regulations is the Initial Recruitment Regulations framed in pursuance of rule 4(1) of the Recruitment Rules.
These regulations are somewhat important for our present purposes and they have to be referred to in some detail.
These also came into force with effect from Ist July, 1966.
Regulation 3 provides for the constitution of a Special Selection Board (S.S.B.) for the purpose of making selections to the service.
The S.S.B. consists of a number of officers, one of whom is the Chief Conservator of Forests (C.C.F.) of the State Government, concerned.
Regulations 4. 5 and 6 have to be set out in full: "4.
Conditions of eligibility (1) Every officer of the State Forest Service who, on the date of constitution of the Service (a) is holding a cadre post substantively or holds a lien on such post, or (b) (i) holds substantively a post in the State Forest Service, 300 (ii) who has completed not less than eight years of continuous service (whether officiating or substantive) in that Service, and (iii)who has completed not less than three years continuous service in an officiating capacity in a cadre post or in any other post declared equivalent thereto by the State Government concerned, shall be eligible for selection to the Service in the senior scale.
(2) Every officer of the State Forest Service who has completed four years of continuous service on the date of constitution of the Service shall be eligible for selection to the Service in the junior scale.
Explanation: In computing the period of continuous service for the purpose of sub regulation (1)(b) or sub regulation (2) there shall be included any period during which an officer has undertaken: (a) training in a diploma course in the Forest Research Institute and Colleges, DehraDun; or (b) such other training as may be approved by the Central Government in consultation with the Commission in any other institution.
Preparation of list of suitable officers: (1) The Board shall prepare, in the order of preference, a list of such officers of State Forest Service who satisfy the conditions specified in regulation 4 and who are adjudged by the Board suitable for appointment to posts in the senior and junior scales of the Service.
(2) The list prepared in accordance with sub regulation (1) shall then be referred to the Commission for advice, by the Central Government along with: 301 (a) the records of all officers of State Forest Service included in the list; (b) the records of all other eligible officers of the State Forest Service who are not adjudged suitable for inclusion in the list, together with the reasons as recorded by the Board for their non inclusion in the list; and (c) the observations, if any, of the Ministry of Home Affairs on the recommendations of the Board.
(3) on receipt of the list, along with the other documents received from the Central Government, the Commission shall forward its recommendations to that Government.
Appointment to the Service The officers recommended by the Commissioner under sub regulation (3) of regulations shall be appointed to the Service by the Central Government, subject to availability of vacancies in the State Cadre concern.
(c) The Appointment by Competitive Examination Regulations: We may next refer to the appointment by Competitive Examination Regulations, 1968.
All that is necessary for our present purposes is that, under these regulations, a candidate, to compete at the examination, must, inter alia have attained the age of 20 and not attained the age of 24 on the Ist day of July of the year in which the examination is held.
There is a provision for relaxation of the upper age limit in respect of persons who are directly recruited to the gazetted cadre of the State Forest Service and put in less than 4 years ' service (including 2 years ' training for Diploma course in the Foreign Research Institute and Colleges, Dehradun on the Ist July, 1966.
But persons who have put in more than 4 years ' service in the State Forest Service would not be eligible to appear in these examinations firstly because they would have crossed the maximum age limit and secondly because the provision for relaxation does not enuse in their favour.
(d) Appointment by Promotion Regulations: Recruitment by promotion under rule 9(1) of the Recruitment Rules is governed by the Appointment by Promotions Regulations, 1966, which came into force with effect from 1.7.1966.
A selection committee is constituted under regulation 3 to select candidates whose conditions of eligibility for 302 promotion are defined in regulation 4.
Briefly speaking, the selection committee is to consider the cases of all substantive members of the State Forest Service, who on the first day of January of that year, have completed not less than eight years of continuous service (whether officiating or substantive) in a post not lower in rank than that of Assistant Conservator of Forests.
This Committee would then prepare a list of eligible members which, after approval by the U.P.S.C., would be forwarded to the State Government for making appointment to the cadre posts.
INITIAL RECRUITMENT 7.
Kraipack case: Sometime after these rules and regulations were framed the initial recruitment to the service was taken on hand.
S.S.Bs., including the C.C.F., made selections of officers to the various cadres.
The process brought to light a serious defect in the constitution of the S.S.Bs.
It has been mentioned earlier that, under the Initial Recruitment Regulations, a S.S.B. had been constituted for selection L) of officers at the time of the initial constitution of the service and that the Chief Conservator of Forests (C.C.F.) was one of the officers on the Selection Board.
A perusal of the Schedule to the Cadre Strength Regulations would show that the C.C.F. was also one of the cadre posts mentioned in the Schedule.
At the time of the initial recruitment, therefore, it was necessary also to recruit an officer who might eventually fill this post.
Thus, the C.C.F. was not only on the S.S.B. but was also a prospective candidate for consideration in the initial recruitment.
This somewhat anamolous position was considered by the Supreme Court in the case of A.K. Kraipak vs Union of India, AIR 1970 S.C. 150 in its judgment dated 29th April, 1969.
The Supreme Court held that the initial recruitment to the State Cadre of Jammu & Kashmir was vitiated by the above circumstance and quashed the same.
Though the question arose only with regard to one of the States, namely, Jammu & Kashmir, the position was identical in respect of several States in the Indian Union.
Hence all the initial recruitments made to the various State cadres had to be quashed either suo moto by the Government or got quashed by proceedings in a court of law.
It may be mentioned here that, in the States with which we are concerned here, the position was as follows.
In Orissa, a select list of 41 officers was issued in January 1967, which had to be set aside as a result of the decision in Kraipak.
In Uttar Pradesh, 85 persons were initially recruited to the service and this initial recruitment was held to be bad, on 11.12.1979, in Jagat Narain vs Union, CMWP 58 of 1968 following the decision in Kraipak.
In Maharashtra, a selection was 303 made on 2.6.1967 of 57 persons but this selection was set aside by the High Court following Kraipak.
LEGISLATIVE INTERVENTION 8.(a) Rule 4(3A) The decision in Kraipak having rendered the initial appointment in all the States invalid, the defect had to be cured and fresh selections had to be made by way of initial recruitment.
Perhaps a second selection could have been made even under general law by way of implementation of the decision but Government wanted to make sure and, therefore, it introduced rule 4(3A) in the Recruitment Rules.
This provision reads as follows: "4(3A) Notwithstanding anything contained in this rule where appointments to the Service in pursuance of the recruitment under sub rule (1) have become invalid by reason of any judgment or order of any court, the Central Government may make fresh recruitment under that subrule and may give effect to the appointments to the service in pursuance of such fresh recruitment from the same date on which the appointments which have become invalid as aforesaid had been given effect to.
" This rule was introduced with effect from 1.3.1971.
section 3(1A) It appears that certain doubts had arisen in the meanwhile regarding the power of the Government to make rules with retrospective effect.
Since such retrospective effect was necessary for various reasons and particularly for implementing the decision of the Third Central Pay Commission, it was considered necessary to make a specific statutory provision clarifying the power of the Central Government to make rules, if necessary, with retrospective effect.
Parliament, therefore, enacted the All India Service (Amendment) Act, 1975.
The statement of objects of the Amendment Act shows that section 3 of the Act was amended "so as to empower the Central Government to make rules with retrospective effect subject to the safeguard that no rules shall be made retrospectively so as to prejudicially affect the interests of any person, who may be governed by such rules.
" The Amendment Act also proposed to validate rules which had been made in the past with retrospective effect.
It may the convenient here to set out the new sub section ( lA) introduced in section 3 of the Act the 1975 Amendment Act.
This sub section reads as follows: 304 " 1A The power to make rules conferred by this section shall include the power to give retrospective effect from a date not earlier than the date of commencement of this Act, to the rules or any of them but no retrospective effect shall be given to any rule so as to prejudicially affect the interests of any person to whom such rule may be applicable.
" It is also necessary to refer to section 3 of the Amendment Act, which was in the following terms. "3.
Validation No rule made, or purporting to have been made, with retrospective effect, under section 3 of the Principal Act before the commencement of this Act shall be deemed to be invalid or ever to have been invalid merely on the ground that such rule was made with retrospective effect and accordingly every such rule and any action taken or thing done thereunder shall be as valid and effective as if the provisions of section 3 of he Principal Act, as amended by this Act, were in force at all material times when such rule was made or action or thing was taken or done.
Purvez Qadir 's Case Exercising the powers conferred by the amendment of the Act and the rules, the Central Government constituted fresh S.S.Bs.
to consider the initial recruitment to the various State cadres in place of the one that was quashed in Kraipak.
This raised the question of the validity of rule 4(3A), introduced with substantial retrospective effect.
The seniority of persons recruited to the service as affected by the provision that recruitments to be made pursuant to the new sub rule would be deemed to have taken effect from Ist October, 1966.
The validity of the rule was, therefore, challenged by various concerned officers but this challenge was repelled by the Supreme Court in the case of Parvez Qadir vs Union of India & Ors., ; 11.
Chothia Case Another challenge was also posed to the initial recruitment made in certain States under rule 4(1).
It appears that the S.S.Bs. had considered not all the officers who were eligible under the initial recruitment rules but only such number of them as was considered necessary to fill up the vacancies that were then available in the State cadre.
Thus, for example, in the State of Maharashtra, although there were 116 officers eligible for consideration, the State is 305 said to have considered only about 95 of them.
The others were not, it is alleged, considered by the S.S.B.
This procedure was challenged by a number of officers.
A contention was raised that rule 4(1) and the regulation thereunder envisaged a consideration by the S .
Of (broadly speaking) all the officers belonging to the State Forest Service who had put in 8 years of service or 4 years of service (as the case may be) for recruitment to the service and that the S.S.B. had to arrange the names of all the officers found to be eligible and adjudged suitable for appointment in the order of preference.
Thereafter, subject to the availability of vacancies, these officers had to be recruited to the service.
It was also urged that in respect of each one of the officers not placed in the select list, the SSB had to record and forward to the U.P.S.C. specific reasons for their non inclusion in the list.
It was not sufficient for the S.S.B. generally to say that it had considered the other officers and found them unsuitable as initial recruits.
This contention was accepted by the Supreme Court in Union of India vs Chothia., [1978] 3 S.C.R. 652. 12.
Present Cases In the present matters, we have to consider certain questions arising out of the second (in the case of U.P., the second and third) set of selections made by the SSBs in place of the first selection set aside by Kraipak.
To avoid confusion, we may clarify here that what we are concerned with in all the cases is the INITIAL RECRUITMENT under section 4(1) of the Recruitment Rules but made for the second or third time, the first selection having been set aside by Kraipak.
The problem arises this way.
It has been mentioned that the first selections by way of initial recruitments to the State cadres were made sometime in 1966 and 1967.
The Kraipak decision came in 1969.
In the meanwhile in many of the States the first selection had been followed up by subsequent recruitments largely made on the basis of competitive examination under rule 4(2)(a) of the Recruitment Rules and a few also by promotion under rule 4(2)(b).
As a result of the second (and third) selections made by the SSBs, a number of officers in the respective S.F.S. have been given appointment in the I.F.S. with effect from 1. 10.1966 under rule 4(3A) and have thus been placed in a position of higher seniority vis a vis the recruits under rule 4(2) (all of whom are, for convenience, hereinafter referred to as 'direct recruits ').
The direct recruits are dissatisfied with this for obvious reasons.
The present batches of cases relate to three State cadres, Maharashtra, Orissa and Uttar Pradesh.
Before dealing with the contentions, it may perhaps be convenient to give a brief resume of the position in each of these States.
306 14.
Uttar Pradesh The nine petitioners in the High Court (of whom 8 are appellants before this court) are direct recruits of 1968 and 1969 confirmed between 1969 and 1972 after probation.
In this State, the initial recruitment was made in 1966 67 of 85 officers, 58 to posts in the senior time scale and 27 to posts in the junior time scale.
Subsequently, six persons were promoted under rule 4(2)(b) and nine persons were recruited under rule 4(2)(a) of the Recruitment Rules.
The initial recruitment having been declared bad, a fresh SSB was appointed and, on its recommendations 104 persons were appointed to the Service, 60 to senior time scale posts and 44 to junior time scale posts.
Again in 1976, six more persons were added and thus 110 persons have been taken in as and by way of initial recruitment as against 85 persons taken in the first selection.
The direct recruits are aggrieved by these selections.
They contend: (a) Under the Maharashtra Schedule to the Cadre Regulations, there can be initial recruitment only to 28 junior posts.
This has been exceeded by the second and third selections; (b) As on 23.12.1974, the total strength of the cadre rose to 104 plus 15, appointed earlier under rule 4(2), thus making a total of 119 as against an authorised strength of 110 only; (c) The second and third selections can only be made to validate the initial recruitment of 85 which had been invalidated and cannot be made use of to increase the number of initial recruits; (d) The third selection of six officers is, in any event, bad as the power under rule 4(3A) could have been exercised only once; and (e) It appears that in the subsequent selections certain officers not adjudged suitable at the first selection have been included.
This could have been done only if their confidential report (CRs) subsequent to, or other than, those considered at the time of the first selection had been considered.
This is not.
justified as a recruitment under rule 4(3A) has to be made as if it was being made at the time of the initial recruitment i.e. 1.
10.1966 and subsequent records cannot be taken into account.
Their contentions having been rejected by the High Court, they are in appeal.
307 15.
Maharashtra Turning to Maharashtra, the position is as follows: The first selection was made on 2.2.1967 of 57 officers, 36 for the senior time scale posts and 21 for the junior time scale posts.
This was set aside.
On 13.7.1971, at the second selection, 116 officers were found to be eligible but only 66 officers were considered suitable for appointment.
39 out of 51 eligible officers were found suitable for senior scale out of whom 35 were appointed immediately and four later.
27 were found suitable for junior scale out of whom 23 were appointed initially and four later.
All these 66 appointments were made w.e.f. 1. 10. 1966.
The writ petitioners before the High Court (in.
CA No. 2443/74) were persons who had joined the SFS in 1962 and had put in 4 years.of service as on 1. 10. 1986 and were thus eligible for consideration to junior scale posts.
Their grievance was that the Government had not considered the case of all the officers who were eligible for consideration for junior posts (viz. those in section Nos. 52 to 116 on the eligibility list) because the Government, which had found 23 officers suitable when they reached section No. 96 stopped there and did not consider the names of the others at all as they should have done under Chothia.
Initially, the writ petition was dismissed on 2.6.1979 for the failure to implead all persons affected as parties but this Court by its order dated 24.10.1980 (in CA 2359/80) restored the matter for fresh disposal after adding the affected persons as parties.
The High Court eventually allowed the writ petition on 7.8.1981 holding that all the 116 officers should be considered and that the omnibus reason given for rejecting some is not sufficient compliance with regulation 5(2)(b) of the Initial Recruitment Regulations.
It directed that now the 116 persons should be considered for the 90 posts available in the State cadre in strict compliance with regulation 5.
Some of the respondents, comprising persons who had been directly recruited under rule 4(2) between 1968 and 1970, have preferred the appeals to this Court.
While they have in principle no objection to a fresh selection, their contention is (a) that the recruitments to the senior time scale posts should not be redone as there is no controversy regarding the selection of 39 out of 5 1 eligible officers; (b) that the number of selections to junior time scale posts from out of the candidates section Nos. 52 to 116 should not exceed 23; and (c) that the selections should be made on the basis of CRs upto 1. 10.
1966 without reference to subsequently changes made therein or the CRs for subsequent periods.
On behalf of the writ petitioners before the High Court (respondents here), a preliminary objection has been taken.
They point out that the appellants had not raised any protest of this type either at the stage of hearing of the original writ petitions or at the stage of their rehearing (when they had been added as parties).
Neither was any counter affidavit filed nor was 308 there any appearance on their beahlf.
In view of this, it is contended that their appeal is not maintainable.
It is also submitted that the selections now being made are for an initial recruitment as on 1.1().1966, a date at which the appellants had not been "born" into the service, and so they do not have any locus standi to complain against any recruitments as on the said date.
Without prejudice to the above preliminary objections, they also support the judgment of the High Court on merits.
Orissa In the case of Orissa, writ petitions have been directly filed in this court.
There are eight petitioners who had joined the Orissa State Forest Service as on 1.4.1962.
After two years ' training, they were appointed as Assistant Conservators of Forests on 1.4.1964.
By 1.4.1966 they had completed 4 years ' continuous service in the State Cadre.
They were, therefore, eligible for selection to junior scale posts in the IFS.
Two selections were made by way of initial recruitment, once in January 1967 when 4 1 officers were selected and, then in 1972 when 42 out of 82 eligible officers were selected.
The petitioners were not adjudged suitable at either of these selections but they were eventually taken into the IFS under Rule 4(2)(b) between 1975 and 1977.
The petitioners ' contention is that their names were not considered at all either at the first selection or at the second selection under an impression that the number of posts in the junior time scale were limited.
It is said that the selections were made by considering eligible officers in the order of seniority only to an extent necessary to recruit 41 or 42 persons and the Government did not consider all the 82 eligible officers and select 42 out of them arranged in the order of preference.
This, it is argued vitiates the selection as held in Chothia.
In the counter affidavit, these allegations are vehemently denied.
It is claimed that the petitioners were all considered at the time of drawing up the earlier select lists.
The respondents, are (a) the persons selected and appointed in 1972 who are still in service and (b) persons who have come in between 1966 and 1975 by way of recruitment under rule 4(2)(a).
They plead that the writ petition should be dismissed on grounds of laches as the petitioners raised no such protest or objection at any earlier stage and have come to court after a lapse of twelve years.
They also deny the allegations in the writ petitions and contend that the petitioners had all been duly considered at the earlier selections but had not been adjudged suitable for recruitment to the service.
These, in brief, are the problems raised in these cases and we may now proceed to deal with them one after the other.
309 CAN NUMBER EXCEED INITIAL SELECTIONS? 18.
The first contention urged on behalf of the direct recruits is that rule 4(3A) authorises the Government to fill in only the number of posts the appointment to which had been declared void by the Court and no more.
Thus, in U.P., the initial recruitment which had to be quashed because of Kraipak was of 85 persons.
Taking advantage of this situation, the Government purported to recruit 104 persons on 23.12.1974 and six more in 1976, thus completing the total strength of 110 as against 85 first filled up.
Likewise, in Maharashtra the first selection was of 57 persons which was expanded to 66 in 1971.
ln Orissa, the first selection was of 41 persons but the second selection resulted in the recruitment of 42 persons.
T his addition to the number of officers first recruited in the subsequent selections is challenged by the direct recruits principally because the subsequent selections, which are deemed to be a remaking of the initial recruitment, have been given retrospective effect from 1. 10.1966 and thus these persons rank higher in seniority to the direct recruits who have come in from 1967 onwards.
We are unable to accept this contention.
The initial recruitment regulations clearly envisage that the S.S.B. should consider the cases of all the officers in the S.F.S. who fulfill the conditions of eligibility and judge their suitability for appointment to posts in the service and prepare a list of such officers in the order of preference.
This selection was initially done by a Board, the constitution of which was found to be vitiated.
The logical consequence of this would be that the process has to be redone by a competent and validly appointed S.S.B. from out of the eligible officers.
It is not anybody 's case that, in the second or third selections, the Board has considered persons other than those in the SFS who were eligible as on 1.10.1966.
In other words, the range of selection was the same as was considered or should have been considered by the initial S.S.B. It is also not anybody 's case that the Board has considered the records of any of these officers subsequent to 1.10.1966.
It, however, appears that there had been some changes, subsequent to 1.
10.1966, in the CRs of some of the officers pertaining to the period upto 1.
10.1966, consequent on representations made for expunction or modification of adverse remarks.
Sri Kackar suggested that such revised CRs should not have been taken with account but we are unable to agree.
We do not think that anyone can validly object to this course since the case of an officer who has succeeded in having an adverse remark against him struck off or modified is exactly on the same footing as if such adverse remarks had 310 not been there at all or had been there in the modified form right from the beginning.
What has happened therefore is only that, from the same set of officers as had been considered by the initial S.S.B., the subsequent Boards have adjudged more officers as suitable for recruitment, partly due to inherent differences of approach between one Board and another in the process of adjudication and partly due to the fact that the records of some of the officers for the relevant period had undergone changes which had to be taken into account.
One further reason for the increase in the number of officers adjudged suitable (which we shall discuss in some detail later) is that the initial S.S.B. considered only some out of all the eligible officers and did not extend their scrutiny to all the eligible officers as they should have done as per the decision in Chotia to sum up, the decision in Kraipak necessitated a complete review of the first selection.
On no logical basis can the subsequent Selection Boards be compelled to restrict their adjudication of suitability to the same list number of persons as the first Board had selected, so long as the same list of eligible officers and their records as on 1.
10.1966 were considered.
We see, therefore, no t) merit in the first contention urged on behalf of the direct recruits.
STRENGTH & COMPOSITION OF THE CADRE 20.
The second contention urged on behalf of the direct recruits is more substantial and is perhaps the vital contention on which their case rests.
It is pointed out that the Cadre Strength Regulations not merely prescribe the strength of the various cadres but also their composition.
One of the principal features of the composition as per the schedules is that the authorised strength prescribed is to consist of a certain number of senior posts and a certain number of junior posts.
According to the direct recruits, the schedules prescribe the minimum number of senior posts and the maximum number of junior posts.
It is pointed out: (a) that all the posts enumerated against items nos.
1 and 2 in each of the schedules are specifically described as senior posts; (b) that items nos.
3 and 4 set out in each of the schedules pertain to recruitments (subsequent to the initial recruitment) under rule 4(2) of the Recruitment Rules and that these items have to be left out of account in considering the initial recruitment under rule 4(1);(c) that all the posts enumerated against item No. 7 are described as junior posts; and (d) that the posts mentioned against items nos.
S, 6, and 8 depend upon item No. 4 and so partake of the same character.
Even assuming that all the posts against item nos.
5 to 8 are only junior posts, the total number of junior posts cannot exceed 13, 28 and 23 respectively in the case of Orissa, Uttar Pradesh and Maharashtra.
On 311 this premise, it is contended that the appointments purportedly made by way of initial recruitment in the subsequent selections have exceeded the quotas prescribed by the schedules in regard to senior and junior posts.
Thus in U.P., while the first recruitment of 58 officers to the senior scale and 27 to the junior scale was in order, the second recruitment of 44 persons to junior scale posts was not warranted.
Likewise, in Maharashtra while the Government restricted itself in the first selection to the appointment of 23 persons to the junior scale, the High Court has now directed the filling up of all the 90 posts in the cadre by considering the 116 eligible officers, overlooking that the maximum number of officers found eligible for consideration to senior scale posts is only 51 and that out of the balance of 65 persons only 23 can be appointed to junior scale posts.
The petitioners submit that, while they do not wish to attack the validity of the appointment of officers in excess of the respective quotas, it is necessary at least to ensure that the officers so appointed do not steal a march over those who have been rightly recruited in terms of rule 4(2) after the first recruitment in terms of rule 4(1) had been completed.
The Government and the initial recruits seek to meet the above contention in two ways.
They contend, firstly, that the assumption of the direct recruits that the prescription of strength of the service in the schedule will apply to the initial recruitment is wrong and that, even if this were correct, the further assumption that the schedule separately prescribes limitations on the number of junior and senior posts is wrong.
Secondly, they submit that, even if both the above assumptions are granted, the argument overlooks that the rules confer power on the Central Government to alter the strength and composition of the cadres at any time and that, therefore, any appointments, even if made in excees, should be treated as an automatic expansion of the cadre strength and would not be irregular or invalid.
We may take up the second argument first.
If it were correct.
it would be a complete answer to the contentions of the direct recruits.
The argument is that it is for the Central Government to fix the strength and composition of the cadres and that this power can be exercised by it at any time.
The first proviso to rule 4(2) of the cadre rules, it is said, places this beyond all doubt.
As against this, it is contended by the direct recruits that the proviso relied upon is only a proviso to rule 4(2) and does not extend to rule 4(1).
it is urged that it has application only to the power of the Central Government to make alterations to the cadre strength in between the three year review contemplated by rule 4(2).
Shri Kackar, in this context, referred us to 312 the following observations in Royappa vs State of Tamil Nadu, [19741 2 SCR 348 at p. 379: "We now turn to the first ground of challenged which alleges contravention of the second proviso to r. 4(2) of the Indian Administrative Service (Cadre) Rules, 1954 and r. 9, sub s.(1) of the Indian Administrative Service (Pay) Rules, 1954.
So far as the second proviso to r. 4(2) of the Indian Administrative Service (Cadre) Rules, 1954 is concerned, we do not think it has any application.
That proviso merely confers limited authority on the State Government to make temporary addition to the cadre for a period not exceeding the limit therein specified.
The strength and composition of the cadre can be determined only by the Central Government under r. 4( l) and the Central Government alone can review it trienially or at any other intermediate time under r. 4(2).
We do not think that such a narrow interpretation of the proviso is warranted.
As we see it, the proviso only outlines the general principle that, whoever has the power to do a particular thing has also the power to exercise it from time to time, if need be: (vide, section 14 of the ).
It had to be specifically put in because of the language of the main part of sub rule (2) providing for a triennial review lest it should be construed as a restriction on the general power otherwise available.
We, therefore, agree with the contention of the initial recruits that the Central Government has the power to alter the strength and composition of the cadres at any time.
We are, however, still of the view that the contention urged on behalf of the initial recruits cannot be accepted for a different reason.
If the terms of the relevant rules are scrutinised, it will be seen that the strength and composition of the cadre has to be determined by regulations and that these regulations have to be made by the Central Government in consultation with the State Government.
It is a well settled principle that, if a statutory power has to be exercised in a particular manner, any exercise of that power has to comply with that procedure.
[t follows, therefore, that if the initial composition can be only drawn up in consultation with the State Government and by regulations, it will not be permissible for the Central Government to modify or alter the same save in the same manner.
In fact also, it has been brought to our notice, there have been subsequent increases in the authorised strength of almost all State Cadres and this has been effected by an appropriate amendment to the Regulations.
It is not the 313 case of the Government that before the second and third selections were made, either the State Government was consulted or the regulations were amended for increasing the strength.
Nor is it even their case that there was any specific order by the Central Government changing the strength and composition of any cadre.
We are, therefore, of opinion that it is not possible to accpet the contention of the initial recruits that the mere appointment of an excess number of officers should be treated as an automatic expansion of the cadre strength and composition in exercise of the power available under rule 4( 1).
On behalf of the Government and the initial recruits, it was contended that the Regulations, in this respect, cannot be considered to be mandatory, particularly as they do not outline the consequences that will follow on a violation of their requirements.
Reference was made, in this context, to the decision of this court in Lila Gupta vs Lakshmi Narain; , at p. 932; Atlas Cycle Industries Ltd. vs State of Haryana, ; at p. 1076 and 1084 5 and G.S. Lamba vs Union of India, at p. 1032.
We do not think the observations cited are in point.
The nature and context of the provisions considered in the cited decisions were totally different.
In Lila Gupta, the court was concerned with the question whether a marriage contracted in violation of the proviso to section 15 of the Hindu Marriage Act should be considered void; and the Atlas case, the question was whether the non lying of a notification before the Legislature rendered it null and ineffective; and in the Lamba case the court, in the context of certain facts, came to the conclusion that the exercise of a power of relaxation should not be treated as vitiated merely because reasons were not recorded.
Here we are concerned with a set of Regulations whose whole purpose is to fix the cadre strength.
It is also a provision in regard to an All India Services in regard to the constitution of which both the Central Government and State Governments have a say.
It is difficult to accept, in this context, the submission that the cadre strength could be varied without amending the Regulations and schedule of without consulting the State Government concerned.
The former course would leave the strength of the cadre easily alterable, fluctuating and indeterminable and thus nullify the entire purpose of the Cadre Strength Regulation.
So far as the latter is concerned, this Court held, in Kapur vs Union of India, that it is not open to a State Government to overutilise the deputation reserve in all All India Service without consulting the Central Government.
Equally, we think, it is not open to the Central Government to alter the strength and composition of the Cadre without con 314 sulting the State Government concerned.
The second argument of the initial recruits is, therefore, rejected.
We may now turn to the first argument which, again consists of two parts.
The first is that the restriction on number of officers in the schedule does not apply to the initial recruitment at all.
It is argued that the idea and intention of the Initial Recruitment regulations is that all officers of the SFS found eligible for appointment either in the senior time scale or in the junior time scale and adjudged suitable for such appointment to the service by the S.S.B. and U.P.S.C. will automatically stand recruited to the service irrespective of the number of such of .
Thus, it is argued that even if, in any particular State, the number of such officers exceeds the total authorised strength of that State Cadre as per the Schedule to the Cadre Regulations, there can be no bar to their initial recruitment to the service.
In support of this contention, it is pointed out that items nos.
3 and 4 mentioned in the schedule, viz., posts to be filled by direct recruitment, are references to recruitments under rule 4(2) of the Recruitment Rules.
It is then said that item No. S and 8 which are expressed as a percentage of item No. 4 can also be considered only as a reference to such subsequent recruitment.
It follows, it is argued, that the total authorised strength which is the aggregate of item nos.
3 to 8 can pertain only to the strength of recruitments under rule 4(2) and not to the initial recruitment.
Plausible as this argument appears, we are unable to accept this contention.
The Cadre Regulations read with the Cadre Rules leave no doubt that the strength and composition referred to, or prescribed, therein is of the entire cadre of the service in the State concerned and is not restricted to the recruitments made after the initial recruitment.
The total authorised strength referred to is the total number of officers who, at any point of time, can man the posts in the cadre.
It could not have been the intention that the cadre should consist of an indefinite number of persons recruited by the SSB from the SFS supplemented by the number of officers referred to as the total authorised strength.
This conclusion is reinforced by three important considerations.
The first, as rightly pointed out by Sri Kackar, is that if the intention were that the Schedule was to operate only in respect of recruitments under rule 4(2), it would have been specifically so mentioned.
Not only has this not been done; the regulations have been made retrospective with effect from the date of commencement of the Service which would be totally without purpose on the argument addressed by the initial recruits.
Such a situation cannot be accepted.
The second is that the number of officers referred to against item nos.
3 and 4 is the same as the numbers indicated against 1 and 2 which represents posts already in 315 the State cadre and in Central Government and which have to be filled in by way of initial recruitment.
Thus, for example, if in Maharashtra, 67 officers in the SFS are found eligible and are recruited to the service against the various cadre posts and if subsequently 67 officers are recruited against item nos.
3 & 4, the total authorised strength will rise to 134.
The fact that the total of items 1 and 2 is the same as the total of items 3 and 4 indicates beyond doubt that, apart from officers recruited against items 5 to 8, the cadre, at any point, can only consist of the number prescribed as the authorised strength and not virtually twice that number.
The more harmonious way of reading the entries in the schedule in that the maximum strength of the cadre at any point can only be the total authorised strength which will comprise of the senior posts mentioned against items nos.
1 and 2 and the adjuncts specified against items nos.
5 to 8.
Items 3 and 4 are indicated in the schedule only to show that after the initial recruitments are over and recruitments are to be made to senior posts in the cadre under rule 4(2), the number of promotes should not exceed 331/3% of the senior posts in the cadre, which is the requirement of rule 9 of the Recruitment Rules.
The break up and composition of the cadre, referred to against items nos.
3 and 4, will only be relevant at the stage when, all the initial recruits having retired or ceased to be in service, the cadre comprises exclusively of persons recruited under rule 4(2).
The third consideration which reinforces our conclusion is the significant mandate that the initial recruitment under rule 4(1) shall be "subject to the availability of vacancies in the State Cadre concerned".
If the number of initial recruits can be indefinite and limitless as urged, this expression would be meaningless.
The apprehension that the interpretation placed by us would create difficulties where the number of eligible officers of the SFS adjudged suitable exceeds the total strength is really without foundation.
In the first place, a good deal of discussion preceded the framing of the rules and regulations and one can reasonably assume that the cadre strength has been fixed for each State with a fair idea about the number of SFS officers who may be eligible and are likely to come into the cadrs at the time of initial recruitment.
The actual experience in the three States before us also shows that the contingency of such officers exceeding the total authorised strength is quite remote.
Secondly, even if in any case there should be an excess of such officers, no insurmountable problems will be created.
The Central Government, in consultation with the State Government (which would only be too anxious to place its eligible officers in the All India Service) can increase the authorised total strength to accommodate them.
Even otherwise, the surplus officers will be kept in the waiting list and will get into the service as and when vacancies available due to retirement 316 or other vacation of office by the initial recruits arise or as and when the cadre strength is augmented.
All that is necessary is that they should all be accommodated before recruitment under rule 4(2) is undertaken.
There is, therefore, no difficulty in holding that the total authorised strength of the cadre is to be counted by including the initial recruits and that all eligible officers adjudged suitable cannot be recruited to the Service in excess of the total authorised strength.
The truly critical, and really difficult, question that needs consideration in these appeals is not that appointments by way of initial recruitment were made in excess of the total authorised strength but that the Government has failed to keep in mind the restrictions placed on the number of senior and junior posts in each cadre while making appointments.
The point made is that, in each State cadre, the posts indicated against items nos.
I and 2 are senior posts.
These, say the petitioners, can be filled up subject to the availability by officers found eligible under regulation 4(1).
Items nos.
3 and 4 do not at all figure at the time of initial recruitment.
So far as items 5 to 8 are concerned, it is submitted, items 7 and 8 are clearly junior posts and, though there is no indication whether items nos.
5 and 6 are to be junior or senior posts, the total number of junior posts in the cadre cannot exceed the total number mentioned against items nos.
5 to 8.
The grievance of the petitioners is that more recruitments have been made against junior posts than is permissible under the respective schedule.
The above contention arises in the following way.
In U.P. as has been pointed out earlier, the first recruitment of 58 and 27 fell within the prescribed strength.
But, in the second selection, 44 junior posts and again six more officers in a third selection were taken in.
This it is said, was not justified as the maximum number of junior posts in the cadre was only 28.
While it is suggested that, strictly speaking, the appointment of surplus officers is invalid, the petitioners say that they do not want those appointments declared invalid but only pray that they should not be treated as initial recruits and hence should be placed in seniority below the direct recruits.
In Maharashtra, the setting aside of the initial recruitment is not, and cannot be, complained against in view of the earlier decision of this Court.
The only grievance here is that the High Court, while ordering a redo of the initial recruitment, by a second selection, has directed that, the 116 eligible persons should be considered for 90 posts, without specifying that officers eligible for senior scale will have to be considered for 67 senior posts and a maximum of only 23 officers could be taken for junior posts.
In 317 Orissa, 41 officers were recruited in 1967 and 42 in 1972 by way of initial recruitment.
It is not known whether the number of officers appointed to junior posts has been restricted to 13 (the total of items nos.
5 to 8 in the Schedule) or not but there is no allegation that this number has been exceeded and so this question does not arise.
The answer of the initial recruits to this contention is that it proceeds on a complete misapprehension of the nature of the all India Service and the composition of the cadre.
They say that the rules contemplate two stages.
The first is a recruitment of an officer to the All India Service, whether under rule 4(1) or 4(2), in accordance with the regulations and subject to the total strength authorised thereunder.
This is done by the Central Government and it is with this that we are concerned here.
The second is the appointment of a person recruited to the Service to a particular post in the cadre.
This has to be done by the State concerned under rule 7 of the Cadre Rules.
At the first stage, the post which the person may eventually accept in the service is totally irrelevant.
Once a person is recruited, whatever may be the post to which he may be assigned, he will be an I.F.S. Officer belonging to the cadre.
To give an easily understood analogy, a person who succeeds in the written and viva voce tests held for recruitment to the Indian Administrative Service becomes a member of the Service once he is recruited having been selected and having come within the scope of the available posts in the service.
Thereafter, whether he is to be appointed as a Collector or as an officer in the Secretariat or is to occupy one of the innumerable cadre posts allotted to the service and whether he should be given a junior post or senior post will be a concern of the State concerned and will have no bearing on the validity of his initial recruitment to the service.
The initial recruits also object to the attempt of the direct recruits to equate senior and junior posts with senior time scale and junior time scale posts mentioned in the Initial Recruitment Regulations.
They say that a senior officer can occupy a junior scale post if exigencies of the service so require.
This will not cause any prejudice to the officer because he will be carrying his own time scale of pay on any post.
So also, a very junior officer can be appointed to a senior post, for the Pay Rules envisage an officer just recruited to the service being appointed simultaneously to a post on the senior time scale.
Attention is also invited to the definition in the Seniority Rules which defines certain posts as senior in the light of the status of the officer occupying the same.
It is urged, therefore, that though the Cadre Regulations describe some posts as senior and some as junior, this is 318 only a description of the nature of the posts on the cadre and has no bearing on the nature of the initial recruitment.
Hence, it is said, a reference to the junior and senior posts should not be confounded with the right of an appointee to be placed on a junior or senior time scale post, as the case may.
We have given careful thought to the various aspects of the issue and it seems to us that the initial recruits are right in contending that the Cadre Regulations do not lay down any water tight classification of junior and senior posts in the manner contended for by the direct recruits.
It is true that the Cadre Regulations make a reference to senior and junior posts but this is not intended to be an essential element in the composition of the cadre.
For one thing, the Cadre Regulations do not indicate, in respect of a number of posts, whether they are to be considered as junior or senior.
This would not have been the position if this classification was intended to be a vital feature of the composition.
Secondly, the Cadre Regulations contain no definition of the words 'senior ' and 'junior ' posts.
There is a definition only in the seniority rules but even that definition declares a post indicated in item No. 2 of the schedule as a senior post to be a senior post only when the current incumbent therein at any point of time is an officer on the senior time scale of pay.
Nor can we conclude that the posts are divided into senior time scale and junior time scale posts, the former of which can be describe as senior, and the latter as junior posts.
This is because the Pay Rules show that if regard be had to pay scales, some of the posts are on scale of pay higher than either of the scales indicated in rule 3 thereof.
Again the rules envisage that (a) officers recruited under rule 4(1) should be placed on either of the scales depending, broadly speaking, on the length of their service; (b) direct recruits through competitive examination should be taken on the junior scale; and (c) that recruits through promotion should be placed on the senior scale.
In other words, it cannot be postulated that entrants to the service will first enter on a junior scale post and work his way upward.
Though rule 6A of the Recruitment Rules permits an appointment of an officer on a junior time scale post to a post on the senior time scale only if "having regard to his length of service, experience and performance in the junior scale of pay, the State Government is satisfied that he is suitable for appointment to a post in the senior time scale of pay", rule 4 of the Pay Rules envisages an officer recruited under rule 4(1) of the Recruitment Rules being simultaneously appointed to a post on the senior time scale.
This rule indeed takes away the basis of the arguments on behalf of the direct recruits for it will be open to the State Government to appoint even officers recruited on junior time 319 scale to posts on the senior time scale.
Equally, there appears to be no specific bar to an officer recruited to the senior time scale being appointed to a post described as a junior post in the Schedule to the Cadre Regulations as such an officer will carry his time scale with him, although, normally, such an appointment is not likely to be made.
All these rules therefore show that an officer being in the junior or senior time scale or a on a junior post or senior post depend upon various eventualities and it is not possible to pin down any posts as senior or junior or any officer as on one of the two time scales.
We are, therefore, inclined to agree with the initial recruits that the reference to junior and senior posts in the cadre should not be considered to be so a rigid or integral part of the cadre composition as to affect the validity of appointments made in excess of a particular number.
However, we would like to say that, in the view we take of the regulations as discussed below, it is unnecessary to express any concluded opinion on the above issue.
One thing that is plain on the terms of the regulations is this: that, once a person is found to be eligible and is adjudged suitable for recruitment under the Initial Recruitment Regulations, he has to be taken into the service as part of the initial recruitment either immediately on 1. 10.
1966 or as and when vacancies arise in the cadre.
When the number of officers found eligible for each category is less than the number of available posts in the corresponding category, there is no difficulty.
But where the number of suitable candidates to either category or in both categories exceeds the number of posts, difficulties arise on the stand taken by the direct recruits.
In this context, we can conceive of four types of situations.
To illustrate with reference to a concrete example, we may consider a State where, on the basis urged by the direct recruits, there are 45 senior and 20 junior posts in the cadre.
Let us suppose that the SSB 's selections reveal one of the following alternative states of affairs: (i) that 25 persons in the SFS are suitable for senior posts and 15 persons for junior posts; (ii) that 25 persons in the SFS are suitable for senior posts and 40 persons for junior posts; G (iii)that 50 persons in the SFS are suitable for senior posts and 15 for junior posts; and (iv) that 75 persons in the SFS are found suitable for senior post and 40 for junior posts.
320 Situation (i) will create no difficulty.
The initial recruitment will be inadequate to fill up the cadre and the remaining posts will have to be filled in by recruits under rule 4(2).
In situation (iii) also, there will be no difficulty if it can be agreed that persons found eligible for senior posts can be given junior posts for the time being.
But if this is not conceded, five of the officers found suitable for senior posts will be left out even though five of the junior posts are vacant and will have to wait until enough senior posts fall vacant and then compete for them alongwith others who may have become eligible therefor by then.
In situation (ii) above, though there are 40 persons found suitable for junior posts, twenty of them will have to be left out even though there are 20 senior posts remaining vacant.
And, in situation (iv) above, 30 .
Officers adjudged suitable for senior posts and 20 for junior posts will he left out.
The situations thus result (a) either in vacancies being unfilled though there are available officers adjudged suitable (b) or in officers adjudged suitable being left out altogether.
The first of these positions is contrary to the spirit of the Recruitment.
Rules that no cadre posts should remain vacant for long spells particularly when cadre officers are available to occupy them.
It is necessary to remember in this context that if the vacancies are in senior posts they can be filed up only by SFS officers with X years ' continuous service and, ex hypothesi, such officers will not be available for at least four more years, and if the vacancies are of junior posts, they can be filled in only after a competitive examination is held and this will take time.
The second of the positions will leave the officers selected for the service and having more than 4 years of experience in the SFS in a very uneviable position.
They cannot be appointed according to the petitioners, because there are no vacancies of posts for which there have been found suitable.
They cannot seek recruitment under rule 4(2)(a), as regulation 4(3) of the Appointment by Competitive Examination Regulations prescribes an upper age limit of 24 years which they would have crossed already and permits relaxation of that age limit only to persons directly recruited to the SFS officers who had put in less than four years ' service including their training period.
They cannot also hope for recruitment under rule 4(2)(b) until they put in eight years ' of service.
The result will be that these persons will be in the dilemma of looking on and seeing younger people and people with shorter service being recruited under rule 4(2).
Surely that could not, have been the intention of these rules and regulations.
Such an interpretation also amounts to an arbitrary and discriminatory treatment of a group of officers incompatible with the spirit of article 14 of the competition.
We cannot, therefore, accept the contention that officers of the SFS who have been adjudged suitable by the SSB should 321 not be taken into the service merely because their number exceeds the number of posts available.
True, they cannot be appointed immediately but the consequence cannot be that they should be ignored and persons recruited under rule 4(2) given preference over them.
The correct solution, in our opinion, on a proper construction of the rules, is this.
Even accepting the position, for the sake of argument, that the number specified for each category of posts in the Cadre Regulations limits, as contended for by the petitioners, the number of persons who could have been taken into the service in those posts in the first instance, the others are also entitled to be absorbed into the service as and when vacancies occur, by reason of Rule 6 of the initial Recruitment Regulations.
The filing up of such vacancies will also be part of the initial recruitment contemplated under rule 4(1) and no recruitment under rule 4(2) can start before the above process is complete.
It is only rational to interpret the rules as laying down that all those officers of the SFS with 8 or 4 years ' experience, as the case may be, who are adjudged suitable for the service should be recruited to the service before any recruitment can at all start under rule 4(2).
Whether all such persons are entitled to the back dating of their appointment to 1.
10. 1966 or not, they are certainly entitled to contend that their appointment should be given precedence over the appointments of recruits under rule 4(2) of the Recruitment Rules.
That being so, if there are vacancies against which recruitments could have been made under rule 4(2) they should have first gone to these left overs among the eligibles.
In this view of the matter the plea of the petitioners that they will get precedence over these surplus officers among the eligible cannot at all be accepted.
CAN THERE BE RECRUITMENT MORE THAN ONCE? 33.
The next contention urged by Shri Kackar was that a fresh selection by way of initial recruitment can take place only once and cannot be repeated twice as has been done in the State of Maharashtra.
He cited, in this connection, a decision of the Punjab & Haryana High Court in Union of India vs Harnek Singh, L.P.A. 406/83 decided on 20.9.83 affirming the decision of the Single Judge in W.P 545 75.
We think that this argument proceeds on a misapprehension.
To recapitulate the facts relating to this cadre, there were 116 officers who were eligible for consideration by the Selection Board.
The first selection was of 57 persons (36 to senior scale posts and 21 for Junior scale posts).
This was set aside because of Kraipak.
This necessitated a reconsideration of the cases of the 116 eligible officers by a different 322 SSB of suffering from the defect that vitiated the earlier one.
This S.S.B. appears to have committed the mistake of considering only 97 persons out of 116.
This was not correct, as it was the duty of the Selection Board, under Chotia, to consider all the 116 officers, arrange those adjudged suitable in their order of preference and give reasons for not including in the list the names of those not adjudged suitable.
This has, therefore, necessitated the second selection which the High Court has directed.
Apart from the fact that such a fresh selection has to follow as a necessary consequence of the setting aside of the earlier selection by the court, it is also specifically warranted by the terms of rule 4(3A) which authorises such fresh recruitment under sub rule ( 1) '.where appointments to the service in pursuance of sub rule (1) have become invalid by reason of any judgment or order of any court.
" It is not limited to a fresh recruitment becoming necessary on account of Kraipak.
The position in this regard in U.P. is slightly different.
Here 5 persons were recruited initially but this became bad due to Kraipak.
Subsequently, 104 persons were recruited.
We have already held that this recruitment cannot be challenged either because it is of a number larger than the initial 85 or because it selects 44 officers eligible only for the junior time scales.
Sri Kackar, however, contends that there was no justification to recruit six more persons in 1976.
Here again, though ostensibly there have been two selections, there has been in substance only one selection in place of the one set aside by reason of Kraipak.
It is not in dispute that the Selection Board has considered only such of the officers as were eligible on 1. 10.
It is also common ground that the selection has been made only on the basis of the C. Rs. pertaining to that period.
We have already pointed out that it is only right that persons should be adjudged on the basis of the correct C.Rs.
pertaining to them.
Any expunction or modification in the CR of a period naturally relate back to that period and no legitimate objection can be taken if the correct CRs are taken into account.
In our view, therefore, there was nothing wrong in the selections made by the Selection Board.
Though made in two stages, the Board was only considering and selecting suitable officers out of those eligible for consideration on 1 10 1966 on the strength of their CRs uptil then and this has to be taken only as the initial recruitment, done in two stages but really one.
RETROSPECTlVE EFFECT OF RULE 4(3A) 35.
Sri Kackar took considerable pains to urge that the persons 323 selected in 1972 and later cannot claim seniority over the petitioners recruited earlier under rule 4(2).
The argument was that, even if this be treated as authorised by rule 4(3A), the retrospective effect to this rule has to be limited by reference to section 3(lA) of the Act.
He contends, relying on the decision in Inderjit Singh vs Union of India, that the Act has been framed in exercise of the powers conferred by Article 312 of the Constitution and that, unlike rules framed under Article 309 of the Constitution, the rules framed under the Act cannot have greater retrospective effect than is authorised by the Act itself.
He therefore urges that rule 4(3A) should not be as interpreted as to "prejudicially affect the interests" of the petitioners who, by reason of their earlier appointments under rule 4(2) have earned a higher seniority than the respondents who are subsequent recruits under rule 4(1).
We do not think it is necessary to go into all these questions.
Granting all the premises of Sri Kackar, we think that rule 4(3A) does not offend any of them.
The rule only places the fresh recruits in the same position as if they had been recruited in the first instance i.e. On 1.10.1966 as indeed they should have been and thus involves no retrospective effect beyond the date of commencement of the Act.
It is also not correct to suggest that it prejudicially affects the direct recruits in any way.
The fresh selectees of 1974 were all in the SFS on 1. 10.1966, at a time when the petitioners were nowhere in the picture.
As we have pointed out earlier the petitioners acquire under the rules no right to be in the service until after the initial recruitment is over.
The mere fact that, due to certain fortuitous circumstances, that initial recruitment has had to be set aside and time has been consumed in the process of remaking that selection validly and properly, cannot, in our view, confer a right on the recruits under section 4(2) so as to justify their complaint that some benefits given to them have been taken away.
Under the rules, they can rank only after the candidates who get in by way of initial recruitment.
In that position there is no change and the petitioners cannot be aggrieved that those in service in the SFS are found suitable for recruitment to the service and taken into the service w.e.f. 1. 10.1966.
As we have observed earlier, those persons, even if not entitled to appointment as on 1.10.1966, are entitled to be appointed as and when vacancies arise and must always be given a position of precedence over the recruits under rule 4(2).
In this view of the matter the direct recruits can hardly claim that they are prejudicially affected by the remaking of the initial recruitment.
We, therefore, do not see any force in Sri Kakker 's contention.
THE POSITION IN ORISSA 36.
So far as orissa is concerned, the position is very simple.
It 324 clearly emerges from our discussion above that all the 82 eligible officers had to be considered for initial recruitment.
Though it has been alleged in the counter affidavit that they had been so considered, the Government note referred to by counsel dated 2.6.1967 (at p. 47 of the paper book) indicates to the contrary.
The S.S.B. merely selected 42 officers and made an omnibus observation that the others were found unsuitable.
This, as explained in Chothia, is not proper compliance with the rules and so the selection has to be aside with a direction that it should be redone properly.
It has been vehmently contended for the respondents that the writ petition should be dismissed on the ground of laches.
It is true that the petitioners have come to court somewhat belatedly.
Counsel urged that they had been under a bona fide impression that they had been considered and found ineligible.
But this does not appear to be correct.
T here is on record (at p. 44 of the paper book) a representation made by one of them on 20.4.67 from which it seems that he was even then aware that his name had not been considered at all because of an interpretation that the junior posts were limited to 19 only.
Nevertheless, they did not take any steps.
The Gujarat, Karnataka and Maharashtra judgments on which the petitioners rely had been rendered in 1978, Jan. 1981 and August 1981 respectively but even after that the petitioners allowed time to lapse.
There has therefore been delay on the part of the petitioners in coming to Court.
Nevertheless, having regard to the complicated nature of the issues involved, we do not think that the petitioners should be put out of court on the ground of laches.
The position as it has now emerged is that all 82 eligible officers as on 1. 10.
1966 should be considered and not merely some of them.
Their suitability should be adjudged.
If they are not found suitable, reasons should be given which the U.P.S.C. should be able to consider.
If they are found suitable a list of such officers should be drawn up with ranking given to them in the order of preference for the consideration of the U.P.S.C.
Since this has not been done the recruitments have to be set aside and the matter remanded with directions that it should be finalised as per the Recruitment Rules and in the light of the above discussion.
OTHER CONDITlONS 38.
Before concluding, we may touch upon certain other contentions which were urged before us: (i) Shri Kackar, for instance, made a reference to rules 3 and 4 325 of the All India Services (Conditions of Service Residuary Matters) Rules, 1960, the Government of India 's decisions thereunder and the decisions of this Court in Shri Amrik Singh and others vs Union of India and others, [1980] 2 S .L .
R. 1 10 and R. R. Verma and Ors.
The Union of India & Ors., interpreting the same.
These rules confer powers on the Central Government to relax or dispense with the requirements of any rule in case they cause undue hardship in any particular case and also to decide questions arising as to the application or interpretation of certain rules applicable to All India Services.
Apart from the fact that no relaxation, dispensation or interpretation has been made by the Government, we see no occasion at all to involve these provisions and we need not go with the question of their interpretation.
(ii) Shri Kackar also made a reference to rule 3(3) of the Pay Rules inserted in 1980 to highlight the fact that since promotions in the service are under this rule, based on "merit with due regard to seniority", the interests of the direct recruits is vitally affected by the fall in their seniority resulting from the induction of initial recruits by a second or third or even further selection.
We have already pointed out that this argument proceeds on a misconception.
The direct recruits cannot have any grievance against the remaking of the initial selection because they cannot deny to the eligible officers on the S.F.S. their legitimate dues.
No doubt, they can complain against the fall in their seniority if these subsequent selections are invalid but, if, as we have explained above, they are the logical consequence of Kraipak and have been validly made, they can have no grievance.
In the latter event, it is actually the persons who ought to have been included in the first selection but were not, due to no fault of theirs, who have room for legitimate complaint that recruits under section 4(2) have been allowed to forestall them.
(iii) Sri Kakkar submitted that the view we have taken that recruitment under rule 4(2) cannot be restored to until initial the recruitment under rule 4(1) is complete runs contrary to the following Observations of this Court in Parvez Qadir; , at p. 443.
"If the interpretation urged by the petitioner 's learned Advocate to be accepted, then the initial recruitment not having taken place till after the Kraipak 's case was decided any subsequent recruitment to the Service under sub rule (2) of rule 4 cannot take place.
Such cannot, in our view, be 326 the purpose of the rules and regulations, nor was it so in tended .
" We do not agree The above observations were made in the context of answering an argument that.
the officers for initial recruitment have to be considered not as on 1.
10.1966 but as on the date of the (second, third or subsequent) selection that may have to be made consequent on Kraipak.
The court pointed out that, to uphold such a contention would virtually render the rules and regulations meaningless as, then, one unsuccessful aspirant after another could hold up the selections by way of initial recruitment indefinitely and thus deprive others of benefits they could have otherwise obtained.
This Court did not, and did not intend to, observe, inspite of the language of rule 4(2), that recruitment under that rule could be made even before recruitment under rule 4(1) are complete.
(iv) Shri Singhvi in supporting his plea that the appeal in the Maharashtra cases is not maintainable relied on the following observations of the Court in HarjeetSingh vs Union, ; "On the other hand we think that the Fixation of Cadre Strength Regulations made under Rule 4 of the Cadre Rules do not over ride the Recruitment Rule, the remaining Cadre Rules and the Seniority Rules so as to render invalid any service rendered by a non cadre officer in a Cadre post on the mere ground of breach of the Fixation of Cadre Strength Regulations, when there has been strict compliance with Rule 9 of the Cadre Rules.
We think that fixation of Cadre Strength is the exclusive concern of the Central and the State Governments and the Regulations are made for their convenience and better relationship.
Excessive utilisation of 'Deputation or Central Reserve ' is a matter for adjustment and controversy between the Central and the State Governments and is of no concern to any member of the Service.
For example no can cadre officer who is asked to fill a deputation post can refuse to join the post on the ground that the 'Deputation Reserve ' has already been exceeded.
The Regulations are not intended to and do not confer any right on any member of the Service, unlike some other Rules which do confer or create rights in the members of the Services.
Among other Rules, for instance Rule 9(2) of the Recruitment Rules stipulates that the total number of persons recruited by promotion shall not at 327 any time exceed 25% of the posts shown against item Nos. 1 and 2 of the cadre in the schedule to the fixation of Cadre Strength Regulations.
Now, if at a point of time this limit is exceeded, direct recruits may have a just cause for complaint and it may perhaps be held that to the extent of the excess the appointments by promotion are invalid and confer no rights of seniority over direct recruits.
But, as we said, the Fixation of Strength Regulations confer no rights on members of the Service and a mere breach of the Regulations furnishes no cause of action to any member of the service on the ground that his seniority is affected in some round about way.
We may add that there is no suggestion that Rule 9(2) of the Recruitment Rules was contravened.
" He urged, on the strength of these observations, that the Cadre Strength Regulations only provide for internal adjustments at the discretion of the Government that no one can claim a right on the strength of those Regulations.
In our opinion the argument places the case of the initial recruits on too high a pedestal to be accepted and we do not think that the cited observations help him sustain such a tall argument.
The exception, given by way of illustration in the above passage, indicates that there can be circumstances in which rights can be created in certain recruits under the Cadre Strength Regulations.
If we had agreed with the direct recruits that there had been some invalidity or infirmity attached to the subsequent selections by way of initial recruitment, we would not have rejected the appeal on the ground that the Regulations cannot give rise to a cause of action.
It is only because we have come to the conclusion, on a proper interpretation of the Cadre Strength Regulations and the Recruitment Rules, that there is no error in the procedure followed by the Government that we are rejecting the appellants ' contention.
We would like to make one more thing clear before we conclude.
It is not our intention, nor can it be the result of our discussion, that the appointment of any of the officers recruited under rule 4(1) or 4(2) should be considered invalid.
All the officers selected will have to be adjusted, if necessary, by amending the Cadre Regulations.
The only result of our findings will be the readjustment of their seniority with necessary and consequential effect on their promotions in the Service.
CONCLUSlON 40.
In the result, we see no merits in the appeals from U.P. and 328 Maharashtra which, consequently, stand dismissed subject to what we have observed above.
So far as the Orissa writs are concerned, they are allowed and the S.S.B. is directed to redo the selections in the light of the principles set out in this judgment.
We make no order as to costs.
[/INST]% The respondent mortgaged his shop and delivered possession thereof to the mortgagees with the right to collect rent from the tenant in payment of the interest on the mortgage amount.
The mortgagees let out the premises to the appellant (tenant), during the subsistence of the mortgage.
The respondent filled a suit against the mortgagees for redemption of the mortgage and recovery of vacant possession of the mortgaged shop.
The appellant tenant was also impleaded as a party defendant in the suit.
The suit was decreed and the mortgage was redeemed, with an order to the mortgagees to give possession of the shop to the respondent.
The appellant tenant filed an application under Section 47, read with Section 151 of the C.P.C. stating that the decree of redemption could not be executed and possession given by the mortgagees to the respondent/decree holder, as the tenancy of the appellant subsisted and the same had not been terminated under the provisions of the Rajasthan Premises (Control of Rent and Eviction) Act, 1950.
This plea of the appellant was rejected by the executing Court which held that the decree was executable and the appellant had no interest and he could not resist the execution of the decree.
Against this Judgment and order of the court, the appellant filed an appeal which was allowed.
Thereupon, the respondent preferred a second appeal which was allowed by the High Court.
The appellant appealed to this Court by special leave against the order of the High Court.
Dismissing the appeal, the Court on a conspectus of the various decisions of the Court on the subject, 100 ^ HELD: The lease given by the mortgagee during the subsistence of the mortgage came to an end on the redemption of the mortgage.
The tenant of the mortgagee in possession is not entitled to the protection of the Rent Act against the mortgagor after redemption of the mortgage, as held by the Rajasthan High Court in 1984 R.L.R. 709, following the decisions of this Court.
The letting out of the premises to the appellant tenant was not a prudent act done in the ordinary course of management, as held by all the Courts below.
The respondent/mortgagor landlord is entitled to get recovery of possession.
[106A D] M/s. Sachalmal Parasram vs Mst.
Ratanbai and Ors., AIR 1972 (SC) 637; The All India Film Corp. Ltd. & Ors.
vs Sri Raja Gyan Nath & Ors. ; Mahabir Cope & Ors.
vs Harbans Narain Singh & Ors., ; Hanhar Prasad Singh & Anr.
vs Must.
Of Munshi Nath Prasad & Ors., [1956] SCR t; Asa Ram & Anr.
vs Mst.
Ram Kali Anr.
AIR 1958 (SC) 183 and Om Prakash Garg vs Ganga Sahai & Ors.
JT , referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 233 of 1991 etc.
From the Judgment and Order dated 21.6.1988 of the Central Administrative Tribunal, Bombay Bench in O.A. No. 58 of 1988.
V.C. Mahajan, S.N. Terdal, A.K. Srivastava, C.V, Subba Rao, S.K. Gambhir, Dr. B. L. Wadhera, Sudarshan Menon, P. Parameshwaran and G.D. Gupta for the appearing parties.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
To cater to the educational needs of children of persons employed in the ordnances factory at Ambazari the Central Government has sanctioned and is running a Primary School from classes I to V.
In the same premises, the employees 687 of the ordance factory, by their own arrangement are also having a Secondary School with classes VI to X.
They have appointed the respondents as teachers in the Secondary School.
They are paid honorarium and not full salary.
Their honorarium is paid out of fees from the children and other donations received by the school.
the respondents, however, approached the Central Administrative Tribunal seeking regularisation of their services and demanding equal pay for equal work.
The Tribunal has allowed their claim with certain directions to the appellants including the Union of India.
The directions issued by the Tribunal are as follows: "(i) The respondents will immediately take up an assessment of the needs of the school to carry on its activities at their present level and the number of additional teachers required for this purpose; (ii) After assessing the number of teachers needed, the respondents will proceed to create a sufficient number of posts to be filled up on a regular basis; (iii) After completing the above exercise respondents will take steps to fill up the newly created posts in accordance with recruitment rules to be framed for the purpose.
the applicants who have worked as teachers in past should be first considered for the posts and only if they are found unsuitable should candidates from sources like the Employment Exchange be considered; (iv) Once the procedure outlined above is completed all persons selected should be appointed on a regular basis and on remuneration admissible to the regular teachers of the primary school; (v) Similar procedure should also be followed in respect of posts of peon giving Shri Tadas an opportunity of competing for regular appontment; (vi) Till the exercise outlined above is completed which we hope will be done before the academic year 1989 90 commences the present procedure may continue and such of the applicants as are selected for appointment will be subject to the same conditions of service as before.
" The Union of India and the officers of the ordnance factory have challenged the validity of these directions in Civil Appeal No. 233/1991.
The respondents who have not been recruited as per the directions of the Tribunal have preferred Civil Appeal No. 480/1989.
We have considered the submissions of counsel on both sides in the light of the material on record.
At the outset we may point out that 688 there is no evidence that the respondents were appointed as teachers on honorarium by or on behalf of the Central Government.
There is also no evidence that the respondents were initially appointed in the Primary School and latter they were shifted to the Secondary School.
The fact, however, remains that when the respondents moved the Tribunal for relies they were only teaching in the Secondary School.
It is undisputed that the Central Government has not sanctioned the Secondary School nor created any posts thereto.
the Central Government has only sanctioned the Primary School and the posts connected therewith.
Those posts are being occupied by regularly recruited teachers.
The Tribunal, however, has directed the Central Government immediately to take up an assessment of the needs of the School to carry on its activities at the present level and to create a sufficient number of posts to be filled up on a regular basis.
The Tribunal has further directed the Central Government to take steps to fill up the newly created posts in accordance with the recruitment rules to be framed for the purpose.
These directions are indeed amazing.
It has compelled the Government to sanction the Secondary School, create adequate number of posts and fill up the posts after framing the recruitment rules for the purpose.
There is no law requiring the Central Government to sanction the Secondary School.
the Central Government has taken a decision that it will not involve itself in sanctioning or running classes beyond the Primary School level.
It is a policy matter involving financial burden.
No Court or the Tribunal could compel the Government to change its policy involving expenditure.
The Tribunal therefore, could not have, could not have, issued the directions as it did to compel the Central Government to assess the needs of the school and create the necessary posts without support of law.
Secondly, the respondents are not paid by the Central Government.
They are not holding any appointment under the Central Government.
There is no relationship of master and servant between the Central Government and the respondents.
The respondents are employed in the Secondary School by local arrangement made by the officers of the ordnance factory.
It is not proved that how the Central Government is accountable to such arrangement made by the local officers.
Thirdly, Section 14 of the confers no jurisdiction, power and authority on the Tribunal to deal with the service matters of the employees like the respondents.
689 In any view of the matter, the respondents cannot claim the pay scale admissible to the Government school teachers much less regularisation of their services by the Central Government.
The directions issued by the Tribunal therefore, cannot be sustained.
They are apparently injustified and without authority of law.
In the result we allow the Civil Appeal No. 233/1991, and set aside the order of the Tribunal.
the Civil Appeal No. 480/1989 is dismissed.
In the circumstances of the case, however, we make no order as to costs.
S.B. CA No. 233/91 allowed and CA No. 480/89 dismissed.
[/INST]The appellant i.e. the Central Government sanctioned primary school from classes I V to cater to the educational needs of children of persons employed in the ordance factory at Ambazari.
The employees on their own in the same premises opened a secondary school with classes VI to X.
The respondents are teachers in the Secondary School and are being paid out of fees and other donations received by the school, They approached the Central Administrative Tribunal seeking regularisation of their service and demanded equal pay for equal work.
The Tribunal allowed their claim with certain directions to the appellants including the Union of India i.e. directing the Central Government immediately to take up an assessment of the needs of the School to carry on its activities at the present level and to create a sufficient number of posts to be filled up on a regular basis.
The Tribunal further directed the Central Government to take steps to fill up the newly created posts in accordance with recruitment rules to be framed for the purpose.
Allowing Civil appeal No. 233 of 1991 of the Union of India, and setting aside the order of the Tribunal dismissing Civil Appeal No. 480 of 1989 of the respondents who have not been recruited as per direction of the Tribunal, the Court.
HELD: 1.
There is no evidence in record that respondents were appointed as teachers on honorarium by or on behalf of the Central Government.
There is no evidence that they were initially appointed in primary School and later shifted to the Secondary School.
It is undisputed 686 that the Central Government has not sanctioned the Secondary School nor created any posts thereto.
It had only sanctioned the Primary School and the posts connected therewith which are being occupied by regularly recruited teachers.
[688A B] 2.
The directions of the Tribunal are indeed amazing compelling the Central Government to sanction the Secondary School.
The Central Government has taken a decision that it will not involve itself in sanctioning or running classes beyond the Primary School level.
It is a policy matter involving financial burden.
No court or the Tribunal could compel the Government to change its policy involving expenditure.
[688D E] 3.
The respondents are not paid by the Central Government.
There is no relationship of master and servant between the Central Government and the respondents.
The respondents are employed by the local officers so how the Central Government is accountable.
[688G] 4.
Even section 14 of the Administrative Tribunal Act, 1985 confers no jurisdiction, power or authority on the Tribunal to deal with the service matters of the employees like the respondents.
the respondents cannot claim the pay scale admissible to the Government school teachers and much less regularisation of their services by the Central Government.
[688H 689A] 5.
The directions of the Tribunal are apparently unjustified and without authority of law so cannot be sustained.
[688F]
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<s>[INST] Summarize the judgementCivil Appeal No. 1185 of 1979, Appeal by Special Leave from the Judgment and order dated 15.12.1978 of the Gujarat High Court in Sales Tax Reference No. 24 of 1978.
AND Civil Appeal No. 1187 of 1979.
Appeal by Special Leave from the Judgment and order dated 27.11.1978 of the Gujarat High Court in Sales Tax Reference No. 11 of 1977.
K H. Kaji, T. Sridharan, R.D. Pathak, Miss C. K. Sucharita and Mrs. section Bhandare for the Appellant in both the Appeals.
S.T. Desai and M.N. Shroff for the Respondent in both the Appeals.
437 The Judgment of the Court was delivered by VENKATARAMIAH, J.
Since a common question of law is involved in these two appeals by special leave, they are disposed of by this common judgment.
The appellant in Civil Appeal No. 1185 of 1979 is M/s. Hindustan Brown Boveri Ltd., a company engaged in the business of manufacturing certain goods which are used in electrical undertakings for the purpose of generating and distributing electrical energy.
It is registered as dealer under the provisions of the Gujarat Sales Tax Act, 1969 (Gujarat Act No. I of 1970) (hereinafter referred to as 'the Act ').
For the purpose of manufacturing the goods, the appellant which was also a recognised dealer under the Act purchased raw materials during the period between May 6, 1970 and March 31, 1971 after furnishing a certificate in Form No. 19 as provided under section 13(1)(B) of the Act read with Rule 24(4) of the Gujarat Sales Tax Rules, 1970 (hereinafter referred to as 'the Rules ') framed under the Act stating that the raw materials purchased by it would be used in manufacturing taxable goods which would be sold by it in the State of Gujarat.
Some part of the goods manufactured by the appellant were sold to a certain electrical undertaking in the State of Gujarat against 'C ' forms in order to claim exemption from payment of tax on the said sales under the Act by virtue of a notification issued under section 49(2) of the Act exempting the goods sold to electrical undertakings for being used in generation and distribution of electrical energy.
On coming to know of the said sales, the Sales Tax officer.
, who was the assessing authority under the Act levied purchase tax under section 16 of the Act on the raw materials purchased be the appellant on the ground that the undertaking given in Form No. 19 had been violated.
The appeals filed by the appellant before the Assistant Commissioner of Sales Tax and the Gujarat Sales Tax Tribunal against the said levy were unsuccessful.
Thereafter at the instance of the appellant the Tribunal referred the following question of law to the High Court of Gujarat under section 69 of the Act: "Whether on the facts and in the circumstances of the case, and on a correct interpretation of sub section (33) of section 2 of the Gujarat Sales Tax Act, 1969 the Tribunal was right in deciding that the applicant was liable to pay purchase tax under section 16 of the Gujarat Sales Tax Act, 1969 on the ground that certain electric goods manufactured 438 out of raw materials etc.
purchased against declaration in Form 19 were sold to Gujarat State Electricity Board against declarations in Form prescribed in Entry 5 of the Government Notification issued under section 49 of the Gujarat Sales Tax Act, 1969 ?" The appellant in Civil Appeal No. 1187 of 1979 is M/s. Hindustan Engineering Co. Ltd. which is engaged in manufacturing heavy machinery and gear conveyers.
It is also a recognised dealer under the Act.
Like the appellant in Civil Appeal 1185 of ]979, this appellant also purchased raw materials by furnishing certificates in Form No. 19 and later on sold a part of the goods manufactured by it to a certain electrical undertaking against Form No. 'C ' and claimed exemption under the notification issued under section 49(2) of the Act.
In this case also the Sales Tax officer levied purchase tax under section 16 of the Act for violation of the undertaking given in Form No. 19.
The appeals to the Assistant Commissioner of Sales Tax and the Gujarat Sales Tax Tribunal failed.
Thereafter at the instance of the appellant, the Gujarat Sales Tax Tribunal referred the following question for the opinion of the High Court of Gujarat: Whether on the facts and in the circumstances of the case, the Tribunal is justified in holding that the sales of machineries and conveyers manufactured by the applicant to an electrical undertaking against Form 'C ' under Entry 5 of the Government Notification issued under section 49 of the Gujarat Sales Tax Act, 1969 resulted in the breach of the declarations in Form 19 as the goods so manufactured and sold did not amount to manufacture of taxable goods ?" It is seen from the two questions referred to above that they are substantially the same.
The High Court answered the said questions in favour of the Revenue and against the assessees by two separate orders following its earlier decision in M/s. Nawroji N. Vakil & Co. vs State of Gujarat.
The appellants have filed these appeals against the decision of the High Court by special leave under Article 136 of the Constitution.
We shall now briefly refer to the relevant provisions of the Act.
Section 2(10) of the Act defines a 'dealer ' as any person who 439 buys or sells goods in connection with his business and when he obtains a certificate of registration he becomes a registered dealer.
Section 32 of the Act provides for the recognition of a registered dealer.
It says that where during the previous or current year, the value of all taxable goods manufactured for sale by a dealer registered under section 29 or by a dealer registered under section 30, whose turnover of sales or purchases has subsequently, exceeded the limits specified in sub section (4) of section 3, exceeds Rs. 3,000/ such dealer on application by him may be granted recognition by the Commissioner and on such recognition being granted, he becomes a recognised dealer.
Section S of the Act says that subject to the conditions or exceptions (if any) set out against each of the goods specified in column 3 of the Schedule I to the Act, no tax shall be payable on the sales or purchases of any goods specified in that Schedule.
Section 6 of the Act provides that subject to the provisions of the Act and to any rules made thereunder there shall be paid by every dealer who is liable to pay tax under the Act, the tax or taxes leviable in accordance with the provisions of Chapter II of the Act.
Tn order to ensure that as far as possible the incidence of tax under the Act is not felt at more than one point in the series of transactions of sales and purchases of goods other than declared good in the State of Gujarat, sections 7, 8 and 10 of the Act are enacted as follows: "7.
Levy of sales tax on goods in Schedule II, Part A.
There shall be levied a sales tax on the turnover of sales of goods specified in Part A of Schedule II at the rate set out against each of them in column 3 thereof, but after deducting from such turnover, (i) resale of goods on the purchase of which the dealer is liable to pay purchase tax under sec.
(ii) resales of goods purchased by him from a Registered dealer (iii) sales of goods, of resales of goods to which clauses (i) and (ii) do not apply, to a Recognised dealer or to a Commission agent holding a permit who purchases on behalf of a principal who is a Recognised dealer, upon such dealer or Commission agent, as the case may be, furnishing in the circumstances and subject to the conditions specified in sub clause (B) and item (ii) of sub clause (C) of 440 sub see.
(1) of sec.
13, a certificate as provided therein, and (iv) sales of goods or resales of goods to which clauses (i) and (ii) do not apply, to a Licensed dealer or to a Commission agent holding a permit who purchases on behalf of a principal who is a Licensed dealer, upon such dealer or Commission agent, as the ease may be; furnishing in the circumstances and subject to the conditions specified in item (i) of sub clause (A) and item (i) (a) of sub clause (C) of sub sec.
(I) of sec.
13, a certificate as provided therein.
Levy of general sales tax on goods in Schedule II Part B There shall be levied a general sales tax on the turnover of sales of goods specified in Part of Schedule II at the rate set out against each of them in column 3 thereof, but after deducting from such turnover, (i) resales of goods on the purchase of which the dealer is liable to pay purchase tax under see.
16; (ii) resales of goods purchased from a Registered dealer by a dealer who is not a Licensed dealer at the time of such purchase, and (iii) sales of goods, or resales of goods to which clauses (i) and (ii) do not apply, to a Licensed dealer, Recognised dealer or to a Commission agent holding a permit, who purchases on behalf of a principal who is a Licensed dealer or a Recognised dealer, upon such dealer or Commission agent as the ease may be furnishing, in the circumstances and subject to the conditions specified in see.
13, a certificate as provided therein.
" " 10.
Levy of sales tax and general sales tax on goods specified in Schedule III. (I) There shall be levied a sales tax on the turnover of sales of goods specified in Schedule III at the rate set out against each of such goods in column 3 thereof, but after deducting from such turnover, (i) resales of goods on the purchase of which the dealer is liable to pay purchase tax under see.
16, 441 (ii) resales of goods purchased by him from a Registered dealer, (iii)sales of goods.
Or resales of goods to which clauses (i) and (ii) do not apply, to a Recognised dealer or to a Commission agent holding a permit who purchases on behalf of a principal who is a Recognised dealer, upon such dealer or Commission agent, as the case may be, furnishing in the circumstances and subject to the conditions specified in sub clause (B) and item (ii) of sub clause (C) of sub sec.
(1) of sec 13, a certificate as provided therein, and C (iv) sales of goods or resales of goods to which clauses (i) and (ii) do not apply, to a Licensed dealer or to a Commission agent holdings permit who purchases on behalf of a principal who is a Licensed dealer, upon such dealer or Commission agent as the case may be, furnishing in the circumstances and subject to the conditions specified in item (i) of sub clause (A) and item (i) (a) of sub clause (C) of sub sec.
(1) of sec.
13, a certificate as provided therein.
(2) There shall be levied a general sales tax on the turnover of sales of goods specified in Schedule III at the rate set out against each of such goods in column 4 thereof, but after deducting from such turnover (i) resales of goods purchased from a Registered dealer, by a dealer who is not a Licensed dealer at the time of such purchase; and (ii) sales of goods, or resales of goods which clause (i) does not apply to a Licensed dealer, or Recognised dealer or a Commission agent holding a Permit who purchases on behalf of a principal who is a Licensed dealer or a Recognised dealer upon such dealer or Commission agent, as the case may be, furnishing in the circumstances and subject to the conditions specified in sec.
13 a certificate as provided therein.
" 442 It may be noted that in the above provisions that from the turnover of sales of goods of a dealer which are otherwise taxable, the turnover of goods sold to a Recognised dealer, upon such Recognised dealer furnishing in the circumstances and subject to the conditions specified in sub clause (B) of sub section (1) of section 13 of the Act a certificate as provided therein becomes deductible and no tax is payable on such sales in favour of the Recognised dealer.
The relevant part of section 13 of the Act reads thus: "13.
No deduction from turnover except on a certificate. (1) There shall not be deducted from the turnover of sales, sales of goods to a Licensed dealer, Recognised dealer or to a Commission agent holding a permit purchasing on behalf of his principal, as provided in sections 7, 8 and 10 unless (A). (B) The Recognised dealer certifies in the prescribed form, that the goods other than prohibited goods sold to him are goods purchased by him for use by him as raw or processing materials or as consumable stores in the manufacture of taxable goods for sale by him; or Rule 24(4) of the Rules prescribes that the certificate issued by a Recognised dealer shall be in Form No. 19.
The relevant part of Form No. 19 reads: ". and that the goods purchased by me/the said . . and specified in bill/cash memo/invoice No . dated. . of M/s. . address. . will be used by me/the said. as raw/or processing materials or consumable stores in the manufacture of taxable goods viz. . for sale by me/the said. . and that such sale shall not take place outside the State of Gujarat.
(Emphasis supplied)" The expression 'taxable goods ' is defined by section 3(33) of the Act thus: "2(33).
"taxable goods" means goods other than those on the sale or purchase of which no tax is payable under sec.
5 or sec.
49 or a notification issued thereunder.
" 443 Sub section (1) of section 49 provides that subject to the conditions or exemptions.
if any, specified in relation to them, the classes of sales or purchases referred in clauses (i) to (vii) of section 49(1) shall be exempt from the payment of the whole of tax payable under the provisions of the Act.
Sub section 2 of section 49 of the Act authorises the State Government to exempt any other specified class of sales by a notification published in the Official Gazette.
Section 49(2) reads: "49.
Exemptions (1) (2) Subject to such conditions as it may impose, the State Government may, if it considers it necessary so to do in the public interest, by notification in the Official Gazette, exempt any specified class of sales or purchases from payment of the whole or any tax payable under the provisions of this Act. ' By a notification dated April 29, 1970 issued under section 49(2) of the Act the State Government exempted the entire tax payable on sales of goods (other than prohibited goods) by a registered dealer to an electrical undertaking, certified for the purpose by the Commissioner, if the electrical undertaking furnished to the selling dealer a certificate in Form appended to the notification stating inter alia that the goods purchased were required for the use of the generation or distribution of electrical energy by the undertaking.
In view of the above notification the sales made to the electrical undertaking become exempt from payment of sales tax under the Act on the undertaking furnishing the required certificate and no tax was paid by the appellants in these two appeals on sales of goods effected by them in favour of the electrical undertaking.
It is now necessary to refer to section 16 of the Act, the relevant part of which reads : "16.
Liability to purchase tax for contravention of terms of certificate etc. (1) Where any dealer or Commission agent has purchased any taxable goods under a certificate given by him under section 12 or 13, and (a) contrary to such certificate, the goods are used for another purpose, or are not resold or despatched in the manner and within the period certified, or 444 (b) on the resales in the course of inter State trade or commerce, of the goods so purchased, no tax under the (LXXIV of 1956), is actually payable by him on account of any deduction admissible under any of the Provisions of the said Act.
then such dealer or Commission agent shall be liable to pay tax on the purchase price of the goods purchased under such certificate; and accordingly, he shall include the purchase price thereof in his turnover of purchases in his declaration or return under section 40 which he is to furnish next thereafter.
(2) . . (3) the purchase tax leviable under this section in respect of any goods specified in Schedule II or III shall be the aggregate of all taxes which would have been leviable thereon but for the certificate given under section 12 or 13.
(4) If any question arises whether the purchase price of goods purchased under a certificate given under section 12 or 13 is not liable to be included in the turnover of purchases of a dealer or Commission agent under this section, the burden of so proving shall be upon such dealer, or as the case may be, the Commission agent.
" Section 16 of the Act provides that where a dealer has purchased any taxable goods under a certificate given by him under section 13 and has used the goods for a different purpose contrary to such certificate, then such dealer shall be liable to pay tax on the purchase price of the goods purchased under such certificate and his liability has to be computed in the manner stated in that section.
It is this liability of the appellants that is in dispute in these appeals.
It is not disputed that the appellants are recognised dealers; that they had purchased raw materials which were taxable goods (other than prohibited goods) from registered dealers against certificates issued by them in Form No. 19; that no sales tax had been paid on sales in their favour; that they had manufactured goods by using the said raw materials that they had sold a part of the goods to an electrical undertaking notified under section 49(2) of the Act and that no tax had been paid on sales effected by them in 445 favour of the electrical undertaking.
It is also not disputed that in Form No. 19 the appellants had stated that the raw materials purchased by them would be used to manufacture taxable goods which would be sold inside the State of Gujarat.
The question for consideration is whether the appellants had used the raw materials for another purpose contrary to the terms of Form No. 19.
The contention of the Department is that the appellants had contravened Form No. 19 by manufacturing goods which were not 'taxable goods ' and hence were liable to pay purchase tax on the purchase of raw materials under section 16 of the Act and the contention of the appellants is that the goods manufactured and sold by them to the electrical undertakings were 'taxable goods ' and merely because they were sold to an electrical undertaking under transactions exempted by section 49(2) of the Act, the goods did not cease to be taxable goods.
The solution to the question, therefore, lies on the true meaning of the expression 'taxable goods '.
Relying upon the decision of this Court in the Stale of Tamil Nadu vs M.K. Kandaswami and Ors.
it is urged on behalf of the appellants that the expressions 'taxable persons ', 'taxable goods ' and 'taxable events ' are entirely different concepts in sales tax law; that the goods in question were taxable goods as any sale of those goods not covered by section 49(1) and (2) would make such sale taxable and that section 49(1) and (2) of the Act referred to only events which resulted in the exemption from payment of sales tax.
It is further argued that all goods the sale or purchase of which is liable to tax under the Act are taxable goods and that goods would not be taxable goods only when their sales are exempted generally from payment of tax as provided in section 5 of the Act.
It is, therefore, contended that the goods manufactured by the appellants not having been goods, the sale or purchase of which had been exempted from tax by inclusion in Schedule I to the Act, the appellants could not be treated as having infringed the terms of Form No. 19, notwithstanding the existence of the circumstance that the particular sales made by them to the electrical undertakings were exempt from payment of tax.
The second ground urged on behalf of the appellants is that the condition under Form No. 19 became satisfied immediately on the goods being manufactured by the appellants as at that stage the goods were really taxable and that a subsequent event of sale to the electrical undertaking cannot be considered as having violated the said condition.
The third ground urged by the appel 446 lants is that a transaction of sale involved two facets a sale and a purchase and if a sale is exempted from tax, it cannot be said the purchase is also exempted.
On the above footing it is contended that since under section 49(2) only the tax on sale is exempted and nothing is said about the liability of the purchaser to tax, it cannot be said that the goods which were otherwise taxable had become non taxable on being sold under a transaction which attracted section 49(2) of the Act.
We find no substance in any of the three grounds urged on behalf of the appellants for the reason that the present case is governed by the definition of the expression 'taxable goods ' in section 2(33) of the Act.
It is interesting to note that the Bombay Sales Tax Act, 1959 (Bombay Act No. 1 of 1959) which was in force in the State of Gujarat before the Act came into force and which was repealed by section 88 of the Act contained the definition of the expression 'taxable goods ' in section 2(33) thereof.
The expression 'taxable goods ' was defined in the Bombay Act as 'goods other than those on the sale or purchase of which no tax is payable under section 5 '.
In the Bombay Act there was also a provision corresponding to section 49 of the Act in section 41 thereof which empowered the State Government subject to such conditions as it may impose to exempt by a notification published in the Official Gazette any specified class of sales or purchases from payment of the whole or any part of any tax payable thereunder if the State Government was satisfied that it was necessary so to do in the public interest.
Still the definition of 'taxable goods ' in that Act did not refer to sales exempted under section 41 thereof.
But in the Act which repealed and replaced the Bombay Act the meaning of the expression 'taxable goods ' has been narrowed down as section 2(33) of the Act reads 'taxable goods ' means goods other than those on the sale or purchase of which no tax is payable under section 5 (which corresponds to section 5 of the Bombay Act) and section 49 of the Act (which corresponds to section 41 of the Bombay Act) or a notification issued thereunder.
By this definition, the dichotomy that is stated to exist between 'taxable goods ' and 'taxable events ' has been given a go by.
It may be that section 5 and Schedule I refer to goods only but section 49 deals with only taxable events which result in the exemption from payment of tax on the conditions mentioned therein or in the notification issued thereunder being satisfied even though the goods in question do not come under Schedule I.
Secondly one has to wait till the disposal of the goods by the dealer to find out whether the goods are taxable goods or not in view of the 447 definition of the said expression which takes away goods sold under circumstances attracting section 49 from the scope of the meaning of that expression.
Nor does the third ground survive for the very same reason.
If the sale is exempt from tax under section 49 of the Act, the goods sold would not be taxable goods.
We need not go into the question whether the purchaser in a sale under section 49 of the Act has to pay tax in these cases.
This reason also disposes of an allied argument of the appellants that the possibility of any liability arising under section 50 of the Act on the breach of any condition imposed by section 49 or the notification issued thereunder would absolve the appellants of their liability to pay the tax under section 16 of the Act.
Any such levy made under section 50 has not been shown to have any effect in law on the liability of the appellants under section 16.
The scheme of the Act appears to be that sales tax should be levied on goods which are not included in Schedule I at least once inside the State in the series of sales and purchases even though they may have been converted into manufactured goods and that is why Form No. 19 requires the purchaser to state that the goods will be used by him as raw or processing materials or as consumable stores in the manufacture of taxable goods for sale by him inside the State and section 16 of the Act provides that where any dealer has purchased any taxable goods under a certificate given by him under section 12 or section 13 of the Act and contrary to such certificate the goods are used for another purpose or are not resold or despatched in the manner and within the period certified or on the resales in the course of inter State trade or commerce, of the goods so purchased no tax under the is actually payable by him on account of any deductions admissible under any of the provisions of that Act, then such dealer shall be liable to pay tax on the purchase price of the goods purchased under such certificate.
The deliberate alteration of the definition of 'taxable goods ' in the Act also is attributable to the said intention of the State legislature.
The appellants also cannot derive any assistance from the decision of this Court in Polestar Electronic (Pvt.) Ltd. vs Additional Commissioner, Sales Tax and Anr.
as these cases are governed by 448 the provisions of the Act and as there appears to be no similarity between the facts of these appeals and the facts involved in that case.
For the foregoing reasons, we do not find any merit in these appeals.
The appeals are dismissed with costs.
Hearing fee one set.
[/INST]The appellants are partners of a firm of Solicitors at Calcutta and they had been engaged by a German Corporation to act on its behalf in three suits pending before the High Court at Calcutta.
A firm of Solicitors in London, namely M/s. Ashurst, Morris, Crisp & Co., which was also acting on behalf of the German Corporation instructed the appellants to retain Mr. Blanco White Q.C., a resident of the United Kingdom, who was a barrister having considerable practice in the branch of patent law, to argue the case in the aforesaid three suits.
The appellants did not deliver any briefs to him and also did not pay or undertake any obligation to pay any fees for his services The briefs had been earlier delivered by the London Solicitors.
Mr. Blanco White left India on February 17, 1970 after arguing the cases for 13 days commencing from January 27, 1970 to February 16, 1970, without making any arrangement regarding the payment of the Income Tax on the fees earned by him.
The Income Tax Officer informed the appellants that he proposed to proceed against them under section 163(1) of the Act treating them as the agents of Mr. Blanco White on the ground that the income arising out of professional charges had arisen on account of the business connection that existed between the appellants and Mr. Blanco White.
Thereafter the appellants challenged the said order of the Income Tax Officer by filing a petition under Article 226 of the Constitution before the High Court of Calcutta.
The learned Single Judge dismissed the petition on the ground that it was a premature one taking the view that the question whether the case came within the purview of section 163(1) of the Act had to be determined after ascertainment of facts by the Income tax officer.
The appeal preferred by the appellants was dismissed by a Division Bench holding (a) there was business connection (directly or indirectly through correspondence) between the appellants ' firm and their non resident British Counsel Mr. Blanco White and that an agency could very well be said to have been established between them; (b) there was business connection between them and (c) income did either accrue or arise to Mr. Blanco White in India.
However, the Division Bench granted certificate to the appellants under Article 133 of the Constitution and hence the appeal.
388 Dismissing the appeal, the Court ^ HELD: 1.
From the facts and other material on record there was connection between the appellants and Mr. Blanco White.
The said connection cannot also be termed as a casual one having regard to the period over which it had existed.
It was real and intimate and Mr. Blanco White earned the fees for arguing the case in India only through the said connection.
From the year 1965 there was correspondence between the appellants and the London Solicitors who in their turn had engaged Mr. Blanco White in connection with the suits in question Mr. Blanco White appeared before the High Court along with Indian counsel engaged by the appellants, though with the leave of the Court granted presumably under section 37 of the Advocates Act, 1951.
Mr. Blanco White could appear only with the consent of the appellants who were the Solicitors on record.
[398 A F] Commissioner of Income tax, Punjab vs R.D. Aggarwal and Co. and Anr., , applied .
2 It is incorrect to suggest that it was the intention of the Parliament to exclude non residents engaged in learned professions from the operation of section 9(1).
The words in section 9(1) and section 163 are comprehensive enough to include all heads of income mentioned in section 14 of the Act.
[393 D].
The expression "business" does not necessarily mean trade or manufacture only it is being used as including within its scope professions, vocations, and callings from a fairly long time.
From section 2(b) of the , it is clear that the "business is one of wide import and it means an activity carried on continuously and systematically by a person by the application of his labour or skill with a view to earning an income.
In the context in which the expression "business connection" is used in section 9(1) of the Income Tax Act, 1961 there is no warrant for giving a restricted meaning to it excluding "professional connection" from its scope.
[400 B D, 401 A B] Commissioner of income Tax, Bombay vs Currimbhoy Ebrahim and Sons Ltd., ; Christopher Barker and Sons vs Commissioner of Inland Revenue, at page 228 and Commissioner of Inland Revenue vs Marine Steam Turbine Company Limited, , quoted with approval .
In the instant case, (a) it cannot be said that since Mr. Blanco White could not appear as counsel as of right either under the Advocates Act or under the Calcutta High Court Original Side Rules, he could not be treated as having any business connection with the appellants; (b) since Mr. Blanco White appeared along with the Indian counsel engaged by the appellants and the appellants continued to represent the German Corporation when Mr. Blanco White argued the case before the High Court, it cannot be said that Mr. White was a stranger to the appellants; (c) the appellants may not have engaged him to argue the case but, they allowed him at the request of the London Solicitors to argue the case and willingly co operated with him in doing so; (d) the appellants may not have undertaken to pay Mr. White 's fees but he could not have argued and earned the fees without associating himself with the appellants.
The fact that Mr. Blanco White being a barrister could not file a 389 suit to recover the fees would not make any difference; and (e) that it is seen from the correspondence that Mr. Blanco White has earned the fees amounting to Pounds 2200 with refreshers at the rate of Pounds 220 per day, for the work done in India.
Therefore.
the appellants are liable to tax agents of Mr. Blanco White under section 153(1) of the Income Tax Act, 1961.
[401 B E]
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<s>[INST] Summarize the judgementCivil Appeal No. 220 (NT) of 1986 370 From the Judgment and order dated 20th November, 1985 of the Karnataka High Court in Writ Petition No. 27805 of 1982.
C.K. Viswanath Iyer, K.M.K. Nair and S.T. Desai for the Appellants B.R.L. Iyengar, M. Veerappa for the Respondents.
The Judgment of the Court was delivered by BHAGWATI, C.J.
The short question that arises for determination in this appeal by certificate is whether shrimps, prawns and lobsters subjected to processing like cutting of heads and tails, peeling, deveining, cleaning and freezing cease to be the same commodity and become a different commodity for the purpose of the .
Can they still go under the description of shrimps, prawns and lobsters or in other words, when we use the words 'shrimps, prawns and lobsters ' do they mean only raw shrimps, prawns and lobsters as caught from the sea or do they also include processed and frozen shrimps, prawns and lobsters.
This question which falls for determination in the present appeal arising out of the following facts.
The appellants are a partnership firm carrying on business as dealers in shrimps, prawns and lobsters and other sea food products.
The appellants are registered as a dealer both under the Karnataka Sales Tax Act, 1957 and the .
The appellants in the course of their business purchase shrimps, prawns and lobsters locally for the purpose of complying with orders for export and they cut the heads and tails of the shrimps, prawns and lobsters purchased by them, peel, devein and clean them and after freezing and packing them in cartons, they export them to foreign buyers outside India under prior contracts of sale.
The appellants filed their statement of monthly turn over for the month of April 1982 before the Assistant Commissioner of Commercial Taxes, Mangalore and in this statement of monthly turn over, they claimed total exemption from tax in respect of the purchase turn over of shrimps, prawns and lobsters on the ground that the same had been purchased in the course of export.
The appellants relied on sub section (3) of section 5 of the which reads as follows: "Notwithstanding anything contained in sub section (1) the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the 371 territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after, and was for the purpose of complying with, the agreement or order for or in relation to such export.
" The appellants contended that since the purchases of shrimps, prawns and lobsters had been made by them for the purpose of complying with the orders for export, such purchases of shrimps, prawns and lobsters must be deemed to be in the course of export and they were accordingly not taxable under the Karnataka Sales Tax Act 1957.
This contention of the appellants was rejected by the Assistant Commissioner of Commercial Taxes and on 30th July 1982 an order was made by the Assistant Commissioner of Commercial Taxes for the month of April 1982 under section 12 B (2) of the Karnataka Sales Tax 1957 assessing the appellants to purchase tax and other incidental taxes in respect of the purchases of shrimps, prawns and lobsters made by them during the said period.
The Assistant Commissioner of Commercial Taxes also passed another order dated 3rd August 1982 assessing the appellants to purchase tax and other incidental taxes in respect of the purchases of shrimps, prawns and lobsters made by them during the month of May, 1982.
These two orders made by the Assistant Commissioner of Commercial Taxes were followed by issue of notices of demand for Rs.52,610.71 and Rs.44,237.88 respectively against the appellants.
The appellants thereupon filed a writ petition in the High Court of Karnataka challenging the assessment orders and the notices of demand issued against them and sought appropriate direction, order or writ restraining the respondents from imposing or collecting purchase tax on purchase turn over of shrimps, prawns and lobsters under the Karnataka Sales Tax Act 1957.
The writ petition was dismissed by the High Court, but having regard to the importance of the question involved, a certificate under Article 133 of the Constitution was granted by the High Court and that is how the present appeal by certificate has come before us.
It is clear on a plain reading of sub section (3) of Section 5 of the that in order to attract the applicability of that provision, it is necessary that the goods which are purchased by an assessee for the purpose of complying with the agreement or order for or in relation to export, must be the same goods which are exported out of the territory of India.
The words "those goods" in this subsection are clearly referable to "any goods" mentioned in the preceding part of the sub section and it is therefore obvious that the goods 372 purchased by the assessee and the goods exported by him must be the same.
If by reason of any processing to which the goods may be subjected after purchase, they change their identity so that commercially they can no longer be regarded as the original goods, but instead become a new and different kind of goods and then they are exported, the purchases of original goods made by the assessee cannot be said to be purchases in the course of export.
The question which therefore arises for consideration is as to what happens when shrimps, prawns and lobsters purchased by the assessee are subjected to the process of cutting of heads and tails, peeling, deveining, cleaning and freezing before export.
Do they cease to be the original commodity and become commercially a new commodity or do they still retain their original identity as shrimps, prawns and lobsters? Before we proceed to consider this question, it is necessary to refer to certain provisions of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as the 'Karnataka Act ') which came into force on 1st October 1957.
Section 5 of the Karnataka Act which enacts the charging section provides for levy of tax on sales and purchases of various commodities described in the Schedules to the Act.
The Third Schedule to the Karnataka Act, as originally enacted, enumerated the commodities on which a single point tax was leviable under subsection 3(b) of section 5 and there were 13 entries in this Schedule.
None of these 13 entries included shrimps, prawns and lobsters with the result that the purchases of shrimps, prawns and lobsters were not exigible to purchase tax.
This position continued right from the time of the original enactment until 31st March 1973 when the Karnataka Sales Tax (Amendment) Act, 1973 introduced a new Entry '13a ' in the Third Schedule with effect from Ist April 1973.
This entry included "shrimps, prawns and lobsters" in the Third Schedule.
There was another amendment made in the Karnataka Act in 1978 by the Karnataka Sales Tax (Amendment) Act, 1978 and section 9 of this Amending Act made certain amendments in Entry 13a with retrospective effect, so that from 1st April 1973 Entry 13a included in the Third Schedule "shrimps, prawns and lobsters other than processed or frozen shrimps, prawns and lobsters" and the Explanation to Entry 13a provided that "processing" shall include "all or any of the following, namely, cutting of head or tail, peeling, deveining, cleaning or freezing".
But, Entry 13a in this form continued only up to 31st August 1978 and with effect from 1st September, 1978, a further amendment was made by the Karnataka Taxation and Certain Other Laws (Amendment) Act, 1982 and after this amendment which was made 373 with retrospective effect from 1st September 1978, Entry 13a read: "Shrimps, prawns and lobsters other than frozen shrimps, prawns and lobsters".
The amendment made by the 1982 Amendment Act excluded from the scope and ambit of Entry 13a, frozen shrimps, prawns and lobsters and brought within the net of taxation only purchases of shrimps, prawns and lobsters other than frozen shrimps, prawns and lobsters, provided they were last purchases within the State.
It is in the context of these provisions of the Karnataka Act that we have to consider whether shrimps, prawns and lobsters, when subjected to the process of cutting of heads and tails, peeling, deveining, cleaning and freezing, retain their original character and identity or become another distinct commodity.
The test which has to be applied for the purpose of determining whether a commodity subjected to processing retains its original character and identity is as to whether the processed commodity is regarded in the trade by those who deal in it as distinct in identity from the original commodity or it is regarded, commercially and in the trade, the same as the original commodity.
It is necessary to point out that it is not every processing that brings about change in the character and identity of a commodity.
The nature and extent of processing may vary from one case to another and indeed there may be several stages of processing and perhaps different kinds of processing at each stage.
With each process suffered, the original commodity experiences change.
But it is only when the change or a series of changes take the commodity to the point where commercially it can no longer be regarded as the original commodity but instead is recognised as a new and distinct commodity that it can be said that a new commodity, distinct from the original, has come into being.
The test is whether in the eyes of those dealing in the commodity or in commercial parlance the processed commodity is regarded as distinct in character and identity from the original commodity vide Sales Tax Board vs PIO Food Packers ; It is clear on an application of this test that processed or frozen shrimps, prawns and lobsters are commercially regarded the same commodity as raw shrimps, prawns and lobsters.
When raw shrimps, prawns and lobsters are subjected to the process of cutting of heads and tails, peeling, deveining, cleaning and freezing, they do not cease to be shrimps, prawns and lobsters and become another distinct commodity.
They are in common parlance known as shrimps, prawns and lobsters.
There is no essential difference between raw shrimps, prawns and lobsters and processed or frozen shrimps, prawns and lobsters.
374 The dealer and the consumer regard both as shrimps, prawns and lobsters.
The only difference is that processed shrimps, prawns and lobsters are ready for the table while raw shrimps, prawns and lobsters are not, but still both are, in commercial parlance, shrimps, prawns and lobsters.
It is undoubtedly true that processed shrimps, prawns and lobsters are the result of subjecting raw shrimps, prawns and lobsters to a certain degree of processing but even so they continue to possess their original character and identity as shrimps, prawns and lobsters, notwithstanding the removal of heads and tails, peeling, deveining and cleaning which are necessary for making them fit for the table.
Equally it makes no difference in character or identity when shrimps, prawns and lobsters are frozen for the purpose of preservation and transfer to other places including far off countries in the world.
There can therefore be no doubt that processed or frozen shrimps, prawns and lobsters are not a new and distinct commodity but they retain the same character and identity as the original shrimps, prawns and lobsters.
This view finds ample support from the decision of the Supreme Court of the United States in East Texas Motor Freight Lines vs Frozen Food Express, ; , where the question was whether dressed and frozen chicken was a commercially distinct article from the original chicken.
The Supreme Court held that it was not a commercially distinct article but was commercially and in common parlance the same article as chicken.
The Supreme Court pointed out: "Killing, dressing and freezing a chicken is certainly a change in the commodity.
But it is no more drastic a change than the change which takes place in milk from pasturising, homogenizing, adding vitamin concentrates, standardising and bottling".
and proceeded to add in words clear and explicit: " . . there is hardly less difference between cotton in the field and cotton at the gin or in the bale or between cottonseed in the field and cottonseed at the gin, than between a chicken in the pen and one that is dressed.
The ginned and baled cotton and the cottonseed, as well as the dressed chicken, have gone through a processing stage.
But neither has been "manufactured" in the normal sense of the word." 375 If dressed and frozen chicken is not a commercially distinct article from the original chicken, it must follow on a process of analogical reasoning that processed and frozen shrimps, prawns and lobsters cannot be regarded as commercially distinct commodity from raw shrimps, prawns and lobsters.
This conclusion on principle was not disputed by the High Court in its judgment and the High Court conceded that even after processing such as cutting of heads and tails, peeling, deveining, cleaning and freezing, shrimps, prawns and lobsters subjected to such processing continued in common parlance to be called 'shrimps, prawns and lobsters '.
But the High Court took the view that Entry 13a after the amendment effected in it with retrospective effect from 1st September, 1978, made a distinction between raw shrimps, prawns and lobsters and processed or frozen shrimps, prawns and lobsters.
In view of this distinction made in Entry 13a, it was not possible to hold that processed or frozen shrimps, prawns and lobsters were the same commodity as raw shrimps, prawns and lobsters.
The argument was that when the State Legislature itself made a distinction between these categories of commodities by making purchases of one category amenable to sales tax under Entry 13a and leaving out of the scope of taxation under Entry 13a the other category, how could it be said that both these categories represent the same commodity and there is no difference in character and identity between the two.
This argument, we are afraid, is not well founded.
It is based on a total misapprehension in regard to the true object and intendment of Entry 13a and it erroneously seeks to project that Entry in the interpretation and application of Section 5 sub section (3) of the .
In fact Entry 13a as amended, supports the argument that even processed or frozen shrimps, prawns and lobsters are known commercially and in the trade as 'shrimps, prawns and lobsters '.
It is because Entry 13a as it stood prior to its amendment, would have, on the plain natural meaning of the expression 'shrimps, prawns and lobsters ' included processed and frozen shrimps, prawns and lobsters, that it became necessary for the State Legislature to amend Entry 13a with retrospective effect so as to exclude from the scope and ambit of that entry processed or frozen shrimps, prawns and lobsters.
Now when the State Legislature excluded processed or frozen shrimps, prawns and lobsters from the ambit and coverage of Entry 13a, its object obviously was that the last purchases of processed or frozen shrimps, prawns and lobsters in the State should not be exigible to State Sales Tax under Entry 13a.
The State Legislature was not at all concerned with the question as to 376 whether processed or frozen shrimps, prawns and lobsters are commercially the same commodity as raw shrimps, prawns and lobsters or are a different commodity and merely because the State Legislature made a distinction between the two for the purpose of determining exigibility to State Sales Tax, it cannot be said that in commercial parlance or according to popular sense, processed or frozen shrimps, prawns and lobsters are recognised as different commodity distinct from raw shrimps, prawns and lobsters.
The question whether raw shrimps, prawns and lobsters after suffering processing retain their original character or identity or become a new commodity has to be determined not on the basis of a distinction made by the State Legislature for the purpose of exigibility to State Sales Tax because even where the commodity is the same in the eyes of the persons dealing in it the State Legislature may make a classification for determining liability to sales tax.
This question, for the purpose of the , has to be determined on the basis of what is commonly known or recognised in commercial parlance.
If in commercial parlance and according to what is understood in the trade by the dealer and the consumer, processed or frozen shrimps, prawns and lobsters retain their original character and identity as shrimps, prawns and lobsters and do not become a new distinct commodity and are as much 'shrimps, prawns and lobsters ', as raw shrimps, prawns and lobsters, sub section (3) of section 5 of the would be attracted and if with a view to fulfilling the existing contracts for export, the assessee purchases raw shrimps, prawns and lobsters and processes and freezes them, such purchases of raw shrimps, prawns and lobsters would be deemed to be in course of export so as to be exempt from liability to State Sales Tax.
Here in the present case, it was not disputed on behalf of Revenue that the purchases of raw shrimps, prawns and lobsters were made by the appellants for the purpose of fulfilling existing contracts for export and after making such purchases the appellants subjected raw shrimps, prawns and lobsters purchased by them to the process of cutting of heads and tails, peeling, deveining, cleaning and freezing and exported such processed and frozen shrimps, prawns and lobsters in fulfilment of the contracts for export.
The only argument raised on behalf of Revenue was that the goods which were exported were not the same as the goods purchased by the appellants because raw shrimps, prawns and lobsters after processings ceased to be the same commodity and became a new distinct commodity.
But, for reasons which we have already discussed, this argument cannot be sustained.
377 The shrimps, prawns and lobsters purchased by the appellants did not lose their original character and identity when they were subjected to processing for the purpose of export.
So far as commercial parlance or popular usage is concerned, they remained the same goods and hence the purchases of raw shrimps, prawns and lobsters by the appellants must be held to be purchases in the course of export and hence exempt from liability to tax under the Karnataka Sales Tax Act.
We, accordingly, allow the appeal, set aside the judgment of the High Court as also the Orders made by the Assistant Commissioner of Commercial Taxes and direct that the purchases of raw shrimps, prawns and lobsters made by the appellants for the purpose of fulfilling the existing contracts for export shall not be included in the tax able turnover of the appellants.
The respondents will pay the costs of the appeal to the appellants.
S.R. Appeal allowed.
[/INST]Pursuant to section 88 of the , the Punjab General Sales Tax Act, 1948 continued as the law in force on and from Nov. 1, 1966 even in those territories which now comprise the State of Haryana.
The Punjab Act was repealed by the enactment of the Haryana General Sales Tax Act 1973 which came into effect from May 5, 1973.
Some Provisions of the Haryana Act came into force from an earlier date, among being them the definition of 'dealer ' set forth in section 2(c) of that Act which operated retrospectively with effect from Sept. 7, 1955.
The appellant, Government Medical Store Depot, Karnal, set up by the Central Government, used to purchase medical stores and hospital equipment and supplied them only to Government hospitals, Government institutions, health centres, dispensaries and primary health clinics located in northern India on a 'no profit no loss ' basis.
On August 21, 1968, the Excise and Taxation officer Karnal, after giving an opportunity to the appellant, held that the appellant was a dealer under the Punjab Act and proceeded to make assessment orders for the years 1364 65 and 1365 66, and also passed penalty orders for each year.
He also initiated assessment proceedings for the years 1966 67 to 1968 69.
The appellant 's writ petitions in the High Court challenging the aforesaid assessment proceedings were dismissed.
Allowing the appeals by the appellant, ^ HELD: l.(i) The existence or absence of a profit motive is irrelevant when identifying a 'dealer ' under the Haryana Act.
No such 451 statement of immateriality is contained in the definition of the word 'dealer ' under the Punjab Act as applied to the State of Haryana.
The definition of the word 'dealer ' in the Haryana Act has been framed only for the purpose of the provisions of that Act.
The opening words of the definition under section 2 make it clear that the expressions defined by that section are the expressions as used in the Haryana Act.
Wherever the word 'dealer ' is used in the Haryana Act, one must turn to the definition contained in section 2(c) of that Act.
Now, except for a few specified provisions, the Haryana General Sales Tax Act came into force on May 5, 1973.
Section 6, its charging provisions, commenced to operate from that date.
Section 6(1) of the Haryana Act declares that the first year of which the turnover is liable to tax under that Act is the year "Immediately preceding the commencement of this Act.
" It is obvious that section 6 does not govern the assessment years which are the subject of these appeals.
Therefore, it is immaterial as to whether the definition of the word 'dealer ' under the Haryana Act has to be read retrospectively with effect from Sept. 7, 1955.
Section 2(c) relates to the word 'dealer ' contained in the provisions of the Haryana Act, and the charging provision of the Haryana Act did not operate during the assessment years with which these appeals are concerned.
These appeals will be governed by the Punjab General Sales Tax Act, and it is section 2(d) of that Act which must be looked to for ascertaining the definition of the word 'dealer ' in that Act.
[455H; 456A D] 1(ii) The definition of the word 'dealer ' under section 2(d) of the Punjab Act does not treat the existence of the profit motive in the business as an immaterial factor and the burden is on the revenue to show that the transactions carried on by the appellant were carried on with a profit motive.
The assessment proceedings which are the subject of these appeals are therefore quashed.
Having regard to the lapse of time, it is not right to remand the cases for fresh assessment proceedings.
[457D E] 2.
Section 65 of the Haryana General Sales Tax Act repealed the Punjab General Sales Tax Act.
Section 65 contains a proviso that such repeal will not affect the previous operation of the repealed Act or any right, title, obligation or liability already acquired, accrued or incurred thereunder.
The liability incurred by a dealer in respect of the years under consideration in these appeals is a liability incurred under the charging provision, section 4 of the Punjab General Sales Tax.
To ascertain who such dealer is one must read the definition of the word 'dealer ' in the Punjab General Sales Tax Act.
No reference is permissible for that purpose to the definition in the Haryana General Sales Tax Act.
No doubt the further language in the proviso to section 65 of the Haryana 452 General Sales Tax Act provides that anything done or any action taken in respect of the liability incurred under the Punjab General Tax Act will be deemed to have been done or taken in the exercise of the powers conferred by or under the provisions of the Haryana Act as if that Act was in force on the date on which such thing was done or action taken.
This merely refers to the provisions enacted for the purpose of enforcing the liability and realising the tax, and does not affect the position that the charge is under section 4 of the Punjab General Sales Tax Act, and that to appreciate who the 'dealer ' mentioned therein is, one must turn to section 2(d) of the Punjab Act.
[456E H; 457A] Deputy Commercial Tax Officer, Saidapet, Madras vs Enfield India Ltd. Co operative Canteen, [1968] 21 STC 317 and Government Medical Store Depot, Gauhati vs The Supdt. of Taxes.
Gauhati & Ors., ; , referred to.
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<s>[INST] Summarize the judgementCivil Appeal Nos.
1122 and 1123 of 1970 Appeals by special leave from the Judgment and order dated the 13th February 1970 of the Allahabad High Court in S.A. Nos. 267 and 268 of 1962.
520 section C. Manchanda, section K. Bagga, (Mrs.) Sureshta Bagga and (Mrs) Yash Bagga; for the Appellant.
R. N. Sharma and C. P. Lal; for Respondent.
The Judgement of the Court was delivered by CHANDRACHUD, J.
These appeals by special leave arise out of the judgment rendered by the High Court of Allahabad on February 13, 1970 in Second Appeals 267 and 268 of 1962.
Mahant Vishwa Nath Bharthi, the sarbrahkar of the temple of Shankarji Maharaj, Khowja, gave lands belonging to the temple, ad measuring about 44 acres, on Theka to one Sukai.
The Thekanama was executed on June 5, 1942 to be effective from July 1, 1942.
The lease was to enure for a period of 10 years and was due to expire on June 30, 1952.
The Thekanama contained an express term that the Thekadar will not sub let the leasehold property and that on the expiry of the period of lease he shall hand over the possession of the property to the lessor.
In spite of this term against sub letting, on July 27, 1942 the Lessee executed a power of attorney in favour of his nephews Haqiqullah and Ghani, apparently authorising them to cultivate the lands on his be half.
On the expiry of the period of lease the Mahant instituted a suit for ejectment of the lessee which was decreed on November 25, 1 952.
The Mahant then filed an application for executing the decree but an objection was raised thereto by the respondents, Sanaullah and Fakhrul Hasan who are respectively the brother and cousin of Haqiqullah.
They filed two separate applications objecting to the execution of the decree on the ground that they had been cultivating the lands for several years and that they were entitled to continue in possession as Sirdars.
On June 2, 1954 the objection raised by the respondents was allowed by the executing court which passed an order that the possession of the lands which on March 13, 1953 was given to the decree holder in execution of the decree should be re delivered to the respondents.
Accordingly, the respondents were put back in possession in July, 1954.
The lessor then instituted two separate suits under order XXI, Rule 103 of the Civil Procedure Code, the suit filed against Fakhrul Hasan being No. 17 of 1954 and the one against Sanaullah being No. of 1954.
His case was that the lands were given on lease to Sukai on condition that he shall not sublet them, that a decree for possession was accordingly passed against Sukai on the expiry of the lease and that the respondents had got their names entered fraudulently in the revenue record as the cultivators of the lands.
Respondents took up various inconsistent pleas in answer to the suits.
They contended that they were in possession of the lands with the consent of the original lessor.
that they had become hereditary 521 tenants and that they must be deemed to have become Adhivasis of the lands.
The learned Munsiff who tried the suits framed six issues, issue No. 2 being whether the respondents were Sirdars of the lands as alleged in paragraphs 17 and 18 of their written statements.
This issue was referred to the revenue court for decision.
The lessor having died during the pendency of those suits, the appellant was substituted in his placed as the Mahant of the Math.
The revenue court found in favour of the respondents and accepting that finding the trial court dismissed the suits.
In appeal, the District Court took the view that there was no justification for referring the particular issue to the revenue court and that the trial court ought to have decided all the issues for itself.
The District Court accordingly remanded the suit with a direction that the Munsiff should decide the suit afresh uninfluenced by the finding given by the revenue court.
The trial court then assessed the evidence, held the respondents and dismissed both the suits by its judgment dated November 17, 1961 The District Court reversed the findings of the trial court in appeal and held that the appellant, being the Bhumidar of the lands, was entitled to recover possession thereof from the respondents.
The appeals were accordingly allowed by the District Court by its judgment dated April 18, 1962.
The respondents filed Second Appeals Nos. 267 and 268 of 1962 against the decrees passed by the District Court.
The High Court having allowed those appeals the Mahant of the Math has filed these appeals by special leave.
The decision of these appeals involves a very narrow question as regards the power of the High Court in second appeal.
Section 10 of the Code of Civil Procedure provides to the extent that the appeal can lie to the High Court from a decree passed ill appeal by any court subordinate to it if the decision is contrary to law or to some usage having the force of law.
The only question for decision before the High Court was whether the respondents were entitled to the protection of section 20(b)(ii) of the U.P. Zamindari Abolition and Land Reforms Act, 1 of 1951.
That section provides, in so far as material, that every person who was recorded as an occupant of any land in the Khasra or Khatauni of 1356 Fasli but who was not in possession in the year 1359 Fasli shall be called an 'Adhivasi ' of the land and shall be entitled to retain possession thereof.
The names of the respondents were entered as occupants in the revenue record of 1356 Fasli but after considering the entire evidence, the District Court rejected those entries on the ground that they were fraudulent.
Thus, the only question before the High Court was whether the entries on which the respondents relied were genuine or fraudulent.
That is a question of fact and the High Court had no jurisdiction to set aside in second appeal the finding recorded on that question by the district Court.
522 The High Court assumed erroneously that the District Court had not given any finding on the question of fraud and on that assumption, it accepted mechanically the entries in the revenue record showing that the respondents were in possession of the lands as occupants.
The learned District Judge, by his judgment dated April 18, 1962 had gone in great details into the question whether the particular entries showing that the respondents were occupants of the land were genuine or fraudulent.
Those entries are Exs.
A 5 to A 12.
As pointed out by the learned Judge, the original lessee Sukai had migrated to Bombay after handing over the charge of the lands to his nephews who got the names of the respondents entered in the revenue record "surreptitiously".
The learned Judge points out that Fakhrul Hasan, who alone was examined on behalf of the respondents, was just a lad of 10 at the time when he is alleged to have entered into adverse possession of the lands.
Neither Sukai, who was the original lessee, nor Haqiqullah and Ghani who were said to : be cultivating the lands under a power of attorney executed by Sukai, were examined by the respondents.
The other respondent Sanaullah was not living in the village at all and is said to have been doing business in second hand spares in Bombay.
Haqiqullah was summoned by the appellant for producing the power of attorney dated July 27, 1942 and taking advantage of that opportunity the respondents cross examined him.
Haqiqullah, being a close relation of the respondents was only too willing to oblige them by giving pre conceived answers in the so called cross examination.
But the learned trial Judge overlooked that Haqiqullah was only summoned to produce a document and by reason of section 139 of the Evidence Act he could not become a witness in the case and could not therefore have been cross examined on the merits of the case.
But, even her considering the evidence of Haqiqullah the learned District Judge recorded a finding that "The entries were all fictitious".
He then proceeded to examine the documentary evidence in the case and held: "After a careful consideration of the pros and cons of the whole case I am of opinion that the Thekedar Sukai had I cultivated the sir and Khudkashi of the temple land which was given to him on Theka through his brother and his cousin, namely Haqiqullah and Ghani and these two per sons in order to create permanent rights in the Theka property, had fraudulently got the names of their boys entered , in the revenue records right from the inception.
I am also of the opinion that these by of the house hold never cultivated the land and they acquired no right, title or interest in the Theka land".
We find it quite difficult to understand how the High Court could hold that the District Court had not recorded any "clear finding" that the entries in the revenue record for the year 1356 Fasli were fraudulent.
Evidently, the attention of the High Court was not drawn to at least half a dozen reasons given by the District Court for holding that the entries were "fictitious" and were made "surreptitiously" and "fraudulently".
523 We could have even appreciated if, under section 103 of the Code of Civil Procedure, the High Court were to determine the issue whether the entries were fraudulent, if it though, wrongly though, that the District Court had not recorded a clear finding on that issue.
But the High Court did not discuss the evidence at all and chose instead to place a blind and easy reliance on the entries which are utterly uninspiring.
B It is true that the entries in the revenue record ought, generally, to be accepted at their face value and courts should not embark upon an appellate inquiry in to their correctness.
But the presumption of correctness can apply only to genuine, not forged or fraudulent, entries.
The distinction may be fine but it is real.
The distinction is that one cannot challenge the correctness of what the entry is the revenue record states but the entry is open to the attack that it was Made fraudulently or surreptitiously.
Fraud and forgery rob a document of all its legal effect and cannot found a claim to possessory title.
In Amba Prasad vs Abdul Noor Khan and ors.(1), it was held by this Court that section 20 of the U.P. Act 1 of 1.951 does not require proof of actual possession and that its purpose is to eliminate inquiries into disputed possession by acceptance of the entries in the Khasra or Khatauni of 1356 Fasli.
While commenting on this decision, this Court observed in Sonawati and ors.
vs Sri Ram and Anr.(2) that "the Civil Court in adjudging a claim of a person to the rights of an adhivasi is not called upon to make an enquiry whether the claimant was actually in possession of the land or held the right as an occupant: cases of fraud apart, the entry in the record alone is relevant".
We have supplied the emphasis in order to show that the normal presumption of correctness attaching to entries in the revenue record, which by law constitute evidence of a legal title, is displaced by proof of fraud.
For these reasons we allow these appeals, set aside the judgment li.
Of the High Court and restore that of the District Court.
The suits filed by the appellant shall stand decreed.
Respondents shall pay to the appellant the costs of these appeals in one set.
P.H.PAppeals allowed.
(1) ; (2) [1968] 1 S.C.R. 617, 620.
[/INST]The petitioners, two Insurance Companies, carrying on business both in life insurance and general insurance, questioned the validity of notifications issued against them under section 52 A of the Insurance Act for appointment of Administrators to take over management of their affairs on the ground, inter alia, that section 52 A was exclusively restricted to life insurance business and the Government had no power to take oyer management of general insurance busi ness.
Held, that the Insurance Act of 1938 no doubt makes a distinction between life insurance business and general insurance business, but its main concern is to protect life insurance policy holders.
Although section 52 A of the Act has no application to an insurer who carries on business in general insurance alone, it undoubtedly applies to an insurer who combines both and gives the Central Government the power, on the report of the Controller, to appoint an Administrator to take over the management of the entire business of the insurer including general insurance business when such insurer is found to act in a manner prejudicial to the interests of the life policy holders.
That grounds not specifically taken in petitions under article 32 cannot be urged at the time of the hearing.
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<s>[INST] Summarize the judgementvil Appeal Nos. 1274 to 1278 of 1984.
From the Judgment and Order dated 27.5.81 of the Punjab and Haryana High Court in R.F.A. Nos.
688 to 692 of 1979.
Rajinder Sachar and K.C. Dua for the Appellants.
S.P. Goel, Rana Ranjit Singh and Mahabir Singh for the Respondents.
The Judgment of the Court was delivered by RAY, J.
These appeals on special leave are directed against the judgment .and order dated May 27, 1981 passed in R.F.A. Nos.
688 to 592 of 1979 and 1112 of 1979 by the High Court of Punjab and Haryana at Chandigarh.
The short ques tion raised in these appeals is whether the appellants are entitled to any compensation 'for nursery plants existing on the land at the time of acquisition as well as at the time of notification published under Section 4 of the Land Acqui sition Act, 419 1894.
Secondly, whether the valuation made in respect of the mother plants is low and the same needs to be increased in accordance with the report of the Horticulture Expert.
The facts of these appeals in short, are as follows.
A notification under section 4 of the Land Acquisition Act, 1894 was published on March 24, 1971 for acquisition of the lands in question in village Faridabad, Hadbust No. 123, Tehsil Ballabgarh, District Gurgaon for a public purpose viz. for planned development of residential sector No. 19 by the Haryana Government.
Thereafter, a declaration under Section 6 of the said Act was published vide Notification No. LAC 71/NTLA/376 dated January 18, 1972 in Haryana Gov ernment Extraordinary Gazette.
The Government declared that the Government was satisfied that the said land was needed at public expenses for a public purpose namely for the planned development in the area of this village Faridabad.
Thereafter a notice under Section 9 and 10 was issued call ing upon the owners and other interested persons to file their claims in respect of the interest in the land and also other particulars as regards their claims for compensation for such interest.
The owners of the land and other inter ested persons filed their claims demanding compensation for the land @ Rs.35 per sq.
and also claimed compensation for the nursery plants and potted plants in the land ac quired.
The Land Acquisition Collector awarded compensation in respect of the land acquired @ Rs.900 per Biswa.
The Land Acquisition Collector held that the mother plants and trees were irremovable and as such he assessed the value thereof at Rs.2,41,576.
He also awarded the shifting charges for the shifting of potted plants amounting to Rs. 1,773.20 paise together with compulsory charges @ 15% of the amount award ed.
This award was made by the Land Acquisition Collector on February 22, 1975.
The possession of the acquired land was taken by the Government.
The Land Acquisition Collector also granted six months ' time or any such further period as extended by the Government to enable the appellants to remove the nursery plants as well as the potted plants from the acquired land.
The Collector further stated in the award that the nursery plants can be removed from the land and the same be sold by the owners to the customers.
So no compensa tion was awarded in respect of these plants as well as in respect of the potted plants.
The appellants filed five claim petitions being Petition Nos.
191/85 to 195/85 of 1973/78 in the Court of the Addi tional District Judge, Gurgaon.
The 2nd Additional District Judge, Gurgaon after hearing 420 the parties and also considering the evidences enhanced the rate of compensation of the acquired land (C) Rs. 10 per sq.
It has also been held that the appellants will be enti tled to double the compensation for trees and plants as given by the Land Acquisition Collector.
He also ordered that the appellants shall be entitled to solatium at the rate of 15% on the enhanced amount of compensation on these two items.
In all other respects the impugned order made by the Land Acquisition Collector was upheld.
He further or dered that the appellants will be entitled to recover inter est @ 6% from the date of compensation to the date of reali zation of the enhanced amount to be paid to them and the appellants shall also be entitled to recover the proportion ate costs of the petitions from the Government.
The appellants filed R.F.A. Nos.
688 to 692 of 1979 in the High Court of Punjab and Haryana.
The High Court fixed the value of the acquired land considering the potentiality of the land @ Rs. 16 per sq.
The total area of the land acquired in these appeals being 11.38 acres, at the rate of Rs. 16 per sq.
the value of the land acquired comes to Rs.8.8 lakhs.
The Land Acquisition Collector awarded a sum of Rs.2,41,576 for the trees, which value had been doubled by the Court below.
The High Court held that no case was made out for doubling the value of the trees in the evidence recorded before remand.
It has been further observed by the High Court that the appellants ' own case was that most of their income was from potted plants, flowers and nursery plants, the potted plants gave the maximum income, as was shown by the vouchers produced by the appellants on record.
The potted plants had been taken away by the appellants after acquisition.
Similar was the position of nursery plants.
The High Court, therefore, held that the value awarded by the Land Acquisition Collector would be for the trees and since no justification was made, the Court below was in error in doubling the value of the trees.
The High Court, therefore, valued the acquired land at the enhanced rate of Rs. 16 per sq.
, for the trees the compensation awarded by the Land Acquisition Collector was directed to be paid to the appellants and the enhancement awarded in re spect of trees by the Court below was set aside.
It was further ordered that the appellants would be entitled to solatium at the rate of 15 per cent and interest at the rate of 6% per annum from the date of taking of possession till payment thereof.
The appeals were thus disposed of.
Against this judgment and decree passed in R.F.A. Nos.
688 to 692 of 1979, the appellants filed five Special Leave Petitions before this Court.
On February 27, 1984 this Court granted Special Leave 421 confined only to the compensation for mother plants and nursery plants.
Mr. Rajinder Sacbar, learned counsel appearing on behalf of the appellants has made two fold submissions before this Court.
His first submission is that the Land Acquisition Collector as well as the Courts below were wrong in not granting any compensation for the nursery plants.
Nursery plants were grown in the nursery on the acquired land for the purpose of rearing them for a certain period and there after selling those plants to the customers on taking out the same from the nursery.
There has been an inspection and a list was prepared of the various varieties of fruits and flower plants existing on the acquired land at the time of acquisition.
He further submitted that the value of these various plants has been assessed by Shri Som Dutta Diwan, Deputy Director, Horticulture/Vegetable, Haryana, Chandi garh, who was requested to assess the value of all sorts of trees.
Copies of the assessment made by him had been filed before the Land Acquisition Collector and it will be evident from the said assessment lists that each variety of trees has been assessed separately with reference to the total number of those trees.
It has been submitted by Mr. Sachar in this connection that these nursery plants if taken out of the land will die after two three days.
The appellants have got no other land where they could plant these plants and keep them alive.
It has, therefore, been submitted by him that the High Court was wrong in refusing to assess the value of the nursery plants and to award compensation in respect of the same.
Mr. Sachar next submitted that the compensation awarded with regard to the mother trees by the Land Acquisition Collector has been made arbitrarily without reference to the market price of these trees.
It has been further submitted by referring to the judgment and order of the 2nd Additional District Judge, Gurgaon that the 2nd Additional District Judge held that the.
appellants were entitled to double the compensation under the head 'value of trees and plants ' as assessed by the Land Acquisition Col lector.
The High Court arbitrarily and wrongly rejected this on the mere ground that there was no justification for doubling the compensation as awarded by the Land Acquisition Collector in respect of the mother trees and plants.
It has, therefore, been submitted by Mr. Sachar that the amount of compensation awarded by the Land Acquisition Collector in respect of the mother trees should be doubled and the com pensation for the nursery plants should also be assessed on the basis of the value of the plants as assessed by the Deputy Director of Horticulture.
422 Mr. S.P. Goel appearing for the respondent State has submitted that the land acquired was not treated as an agriculture land in assessing the market value of the same.
It has been taken as urban land and considering its potenti alities, the High Court assessed the value of the land @ Rs. 16 per sq.
In such circumstances, the value of the land being assessed on considering its potentiality, the question of valuation of the mother trees as well as of the nursery plants does not at all arise.
The valuation of the mother trees can at best be assessed at the value assessed by the Land Acquisition Collector.
There is, therefore, no ground for interference with the amount of compensation awarded by the Land Acquisition Collector and upheld by the High Court.
It has been next submitted by the learned counsel for the State that the nursery plants are planted and grown for the purpose of selling the same to the customers after taking them out from the land.
These nursery plants are never planted for the purpose of growing them into big trees or mother plants.
The High Court has rightly held that like the potted plants these nursery plants can easily be removed from the nursery as the purpose of growing these plants is to sell the same to the customers.
These plants can be removed and sufficient time had been granted by the State by permitting the appellants to remove these plants from the acquired land.
It has, therefore, been submitted that the High Court has rightly rejected the claim of the appellants for compensation in respect of the nursery plants.
We have considered in depth the arguments advanced by the learned counsel for both the parties and we have also considered very carefully the weighty reasonings given by the High Court as well as by the Land Acquisition Collector.
It is obvious that the land acquired though agriculture land was taken for assessment of its market value not as agricul ture land but as land with high potentialities i.e. as urban land and, therefore, the market value of these lands has been fixed after considering its potential value @ Rs. 16 per sq.
The appellants did not at all dispute this value and on the other hand they withdrew the entire compensation award for the value of these lands.
In these circumstances, we find that there is much substance in the submissions made on behalf of the State that the mother trees should be valued as wood and the value has been rightly assessed as such by the Land Acquisition Collector in his award and the same has been upheld by the High Court.
Moreover, the find ings of the Collector that the nursery plants can be taken out of the land and sold to the customers like potted plants and as such no compensation can be awarded is in our consid ered opinion quite in accordance with law.
In these cir 423 cumstances, we do not find any infirmity or arbitrariness in the findings arrived at by the High Court and as such there is no merit in the contentions made on behalf of the appel lants in these appeals.
We, therefore, uphold the findings of the High Court and dismiss the appeals without any costs.
P.S.S Appeals dis missed.
[/INST]The appellants ' land was acquired under the Land Acqui sition Act on March 24, 1971 for planned development as residential area.
They were then running a plant nursery on the said land.
A large number of potted plants, mother plants and trees also existed there.
They demanded compensa tion for the land at the rate of Rs.35 per sq.
They also claimed compensation for nursery plants, potted plants mother plants and trees.
The Land Acquisition Collector awarded compensation in respect of the land at the rate of Rs.900 per Biswa.
He held that the mother plants and trees were irremovable and as such assessed the value thereof at Rs.2,41,576.
He also awarded charges for the shifting of potted plants.
In re spect of the nursery plants he took the view that the appel lants were not entitled to any compensation as these could be removed from the land and sold.
The District Judge enhanced the rate of compensation for the acquired land at the rate of Rs. 10 per sq.
and also doubled the compensation for trees and mother plants.
The High Court considering the potentiality of the acquired land fixed its value at the rate of Rs. 16 per sq.
It took the view that the court below was in error in doubling the value of the trees as no case was made out in the evidence recorded and therefore set aside the enhance ment.
In these appeals by special leave it was contended for the appellants that the nursery plants if taken out of the land would die after two three days and the appellants had got no other land where they could plant them and keep them alive.
It was further contended that the compensation with regard to mother trees had been awarded with 418 out reference to their market price and that the High Court had arbitrarily rejected the enhancement in the said compen sation granted by the District Court.
Dismissing the appeals, the Court, HELD: 1.
The finding of the Land Acquisition Collector that the nursery plants could be taken out of the land and sold to the customers like potted plants and as such no compensation could be awarded was quite in accordance with law.
Sufficient time had been granted by the State by per mitting the appellants to remove these plants from the acquired land.
Their claim was, therefore, rightly rejected by the High Court.
[422G H, D E] 2.
The land acquired though agricultural land was taken.
for assessment of its market value @ Rs. 16 per sq.
not as agricultural laud but as laud with high potentialities i.e. as urban laud.
The appellants did not at all dispute this value.
On the other hand they withdrew the entire compensation award for the value of these lands.
In these circumstances, it could not be said that the value of mother trees has been wrongly assessed as wood.
The appellants were, therefore, not entitled to enhancement In the value of trees.
[422F G]
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<s>[INST] Summarize the judgementAppeal No. 484 of 1961.
Appeal by special leave from the judgment and decree dated March 28, 1958 of the Rajasthan High Court (Jaipur Bench) at Jaipur in D. B. Civil First Appeal No. 64 of 1951.
Sarjoo Prasad and Harbans Singh, for the appellants.
B. P. Sinha and Naunit Lal, for the respondents.
May 8, 1964.
The Judgment of the Court was delivered by GAJENDRAGADKAR, C.J.
This appeal by special leave arises out of a redemption suit filed by the respondent Dev Karan against the appellant Murarilal.
The mortgage sought to be redeemed was executed on the 19th March, 1919 for a sum of Rs. 6,500.
The mortgaged property consisted of a shop which was delivered over in the possession of the mortgagee after the execution of the mortgage deed.
The mortgage deed had provided that the amount due under the mortgage should be repaid to the mortgagee within 15 years, whereupon the property would be redeemed.
It had also stipulated that if the payment was not made within 15 years, the mortgagee would become the owner of the property.
The mortgagor was Mangal 241 Ram who died and the respondent claims to be the heir and legal representative of the said deceased mortgagor.
In the plaint filed by the respondent, it was averred that the transaction was, in substance, a mortgage and the mortgagor 's right to redeem was alive even though the stipulated period of 15 years for the repayment of the loan had passed.
On these allegations, the respondent claimed a decree for redemption of the suit mortgage on payment of Rs. 6,500.
It appears that the original mortgagee Gangadhar had also died before the institution of the suit, and so, the appellant Murarilal was impleaded as the defendant on the basis that he was the only heir and legal representative of the deceased mortgagee Gangadhar.
The claim for redemption thus made by the respondent was resisted by the appellant on several grounds.
It was alleged that after the expiry of the stipulated period of 15 years, the property had become the absolute property of the mortgagee and it was urged that the original transaction was, in substance, and in reality, not a mortgage but a sale.
Several other pleas were also raised by the appellant in resisting the respondent 's claim, but it is unnecessary to refer to them.
The learned trial Judge framed appropriate issues which arose on the pleading of the parties.
In substance, he field that the claim for redemption made long after the 15 years ' period had expired could not be sustained.
Findings were made on other issues also and they were against the respondent.
In the result, the respondent 's suit was dismissed.
The respondent then took the matter in appeal before the Rajasthan High Court.
He urged that the view taken by the trial Court that the stipulation as to the mortgagor 's liability to re pay the loan within 15 years did not bar his present suit for redemption, because the said stipulation amounted to a clog on the equity of redemption and as such, could not affect the mortgagor 's right to redeem, and he added that the transaction, in substance, was a mortgage and not a sale, and so, his right to redeem was alive and could be effectively enforced by the present suit.
The High Court has upheld his first contention that the relevant 51 S.C. 16.
242 provision as to the period within which the mortgage amount had to be repaid amounted to a clog on the equity of redemption and could not be pleaded as a bar to the present suit.
But on the question about the character of the origi nal transaction itself, the High Court appears to have been inclined to take the view that the relevant clause on which the plea about the bar was raised did not really support the said plea, because it was by no means clear that even after the expiration of 15 years, the mortgagee was intended to be the absolute owner of the property.
On these findings, the decree passed by the trial Court dismissing the respondent 's suit has been reversed and the suit has been remanded to the trial Court to be disposed of in accordance with law.
It is against this order that the appellant has come to this Court by special leave.
Pending the appeal before this Court, both the appellant and the respondent have died, and their respective heirs have been brought on the record.
The first question which calls for our decision is whether the relevant clause on which the appellant relies makes the mortgagee the owner of the property at the end of the sti pulated period of 15 years.
The mortgage provides, inter alia, that after the house which was the mortgage property was delivered over to the mortgagee, it was open to him either to live in it, or to let it out to tenants.
The mortgagee was further given liberty to spend up to Rs. 35 for repairing the house and if more expenses were intended to be incurred, the &aid expenditure would be incurred through the mortgagor.
On the expenditure thus incurred the mortgagor was liable to pay interest at the rate of As. 0 6 0 per cent per month.
Then the document proceeded to add that the mortgagor would get the property redeemed on payment of the mortgage amount as well as the cost of Patta which may have been incurred by the mortgagee and the repairing expenses within a period of 15 years.
Then, occurs the relevant clause: "After the expiry of the stipulated period of 15 years, this shop would be deemed as an absolute transfer "Mala Kalam" for this very amount.
Till the mortgage money is paid, I shall have no concern with the shop.
" The High Court appears to have taken the view that the words "Mala Kalam" which occur at 243 the end of the relevant clause do not necessarily import the notion that the mortgage property would be the absolute property of the mortgagee.
According to the High Court, the said words literally mean "where there is no scope for having any say".
If that is the meaning of the relevant words, it seems difficult to accept the view that the document did not intend to make the mortgagee the owner of the property at the end of 15 years if the debt due was not paid within that period.
When the document says that there would be no scope for the mortgagor to say anything, it necessarily means, in the context, that the mortgagor would, in that case, have lost his title to the property, and that means the mortgagee would become the absolute owner of the property.
Therefore, we feel no difficulty in holding that if the terms of the document were to prevail, the appel lant 's contention that the present suit for redemption is barred, must succeed.
It is common ground that the amount due under the mortgage deed was not paid by the mortgagor or his heir within the stipulated period and that would extinguish the title of the mortgagor and make the mortgagee to be the owner of the property.
But the question is whether such a stipulation can be allowed to be pleaded as a bar to the respondent 's claim for redemption.
Just as it is common ground that if the terms of the document were to prevail, the suit would be barred, it is also common ground that if the doctrine that the clog on the equity of redemption cannot be enforced is to prevail in the present proceedings, the respondent 's action for redemption must succeed.
The fact that a stipulation of the kind with which we are concerned in the present case amounts to a clog on the equity of redemption, is not and cannot be disputed.
Therefore, the main question which arises in the present appeal is: does the equitable doctrine ensuring the mortgagor 's equity of redemption in spite of a clog created on such equity by stipulations in the mortgage deed apply to the present case? This question arises in this form, because the Transfer of Property Act did not apply to Alwar at the time when the mortgage was executed nor at the time when the 15 years ' stipulated period expired.
244 Mr. Sarjoo Prasad for the appellant contends that the High Court was in error in applying the equitable principle, because the said principle cannot be invoked in cases where the Transfer of Property Act does not apply.
In support of this argument, he has very strongly relied on an early decision of the Privy Council pronounced in 1870, in the case of Pattabhiramier vs Vencatarow Naicken and Narasimha Naicken(1).
In that case, the Privy Council was dealing with a Bye bil wuffa, or mortgage and conditional sale usufructuary executed in 1806 under which the mortgagees were put in possession.
The deed contained a condition that if the mortgagor failed to redeem within five years, the conditional sale was to be absolute.
The mortgagor failed to redeem within the stipulated period, and the mortgagee, without foreclosing the mortgage, sold the mortgaged pro perty.
Thereafter, the mortgagor 's representative sued to redeem the mortgage under section 8 of the Madras Regulation XXXIV of 1802.
The Privy Council held that the interest of the mortgagee after the expiry of the stipulated period had become absolute.
In dealing with this question, Lord Chelmsford who delivered the opinion of the Board observed that the form of security with which the Board was concerned had long been common in India, and he added that the sti pulations in such contracts were recognised and enforced according to their letter by the ancient Hindu law as well as under Mohammedan law; and in support of this statement, reference was made to certain passages from Colebrooke 's Digest on Hindu Law and Baillie 's introduction to his book on Mohammedan Law of Sale.
If the ancient law of the country, observed Lord Chelmsford, has been modified by any later rule, having the force of law, that rule must be founded either on positive legislation, or on established practice; and since neither any specific statutory provision had been cited before the Board, nor established practice in that behalf had been proved, the Privy Council upheld the mortgagee 's plea that he became the absolute owner of the property at the expiration of the stipulated period.
While pronouncing this decision, Lord Chelmsford, however, took the precaution of adding that while the Board was allowing (1) [1890] 13 Moore 's I.A. 560 245 the appeal, "it must not be supposed that their Lordships design to disturb any rule of property established by judicial decisions so as to form part of the Law of the Forum wherever such may prevail, or to affect any title founded thereon.
" As we will presently point out, the appeal of Pattabhiramier was pending before the Privy Council for as many as 10 years.
Meanwhile, Indian High Courts were enforcing the equitable principle that stipulations contained in mortgage deeds which amounted to clog on the equity of redemption could not be enforced.
In other words, the jurisdiction which courts of equity exercised in England by refusing to enforce clogs on the equity of redemption, was being exercised by High Courts in India.
However, before we refer to those decisions, it would be convenient to cite another decision of the Privy Council pronounced in Thumbusawmy Moodelly vs Hossain Rowthen & Ors(1).
In that case, the Privy Council held that the con tract of mortgage by conditional sale is a form of security known throughout India, and by the ancient law of India, it must be taken to prevail in every part of India, where it has not been modified by actual legislation or established practice, and so, must be enforced according to its letter.
In this case, Sir James W. Colvile who delivered the opinion of the Board, referred to the earlier decision of the Privy Council in Pattabhiramiers case(1), noticed the trend of judicial pronouncements made by the High Courts in India while Pattabhiramier 's case was pending before the Privy Council, and strongly reiterated the view that the said decisions of the High Courts were radically unsound.
He referred to the fact that unfortunately, Pattabhiramier 's case " slept for nine years, and that in the interval the Sudar Court, and afterwards the High Court which succeeded it, continued the course of decision which the former had given in 1858".
Then he mentioned the relevant decisions of the Madras and the Bombay High Courts and expressed the opinion that in trying to enforce principles of equity in dealing with stipulations contained in mortgage documents, the High Courts were really assuming the functions of Legislature.
So, it is clear that the Privy Council emphatically (1) I.L.R. (2) [1870] 13 M.I.A. 246 declared in 1875 that unless there is a legislative enactment or established practice to the contrary, terms in the contract of mortgage by conditional sale must be taken to prevail in every part of India and must be strictly enforced according to their letter.
Mr. Sarjoo Prasad naturally relies on these decisions and contends that so far as the State of Alwar is concerned, there is no legislative enactment to the contrary, nor is there any established practice on which the equitable doctrine could be pleaded by the respondent in support of his case that though 15 years have elapsed, his right to redeem still survives.
There are two other decisions of the Privy Council to which we may refer at this stage.
In Kader Moideen V. Nepean(1), the Privy Council was dealing with a case from Burma, and it observed that the Burmese Courts are directed, in the absence of any statutory law applicable to accounts against a mortgagee in possession, to follow the guidance of justice, equity, and good conscience.
Acting on this principle, the Privy Council accepted Mr. Haldane 's contention that there was no rule of abstract justice in taking the accounts of a mortgagee in possession, and that the Indian rule, which was embodied in section 76 of the Transfer of Property Act, should, though the Act had not been extended to Burma, be followed there in preference to the English practice.
It would thus be seen that the equitable principle underlying the provisions of section 76 was extended to the case on the specific ground that the Burmese Courts had been directed by the relevant statutory provision to follow the guidance of justice, equity and good conscience in the absence of any statutory law applicable to accounts against a mortgagee in possession.
This decision, therefore, is in line with the two earlier decisions of the Privy Council.
Similarly, in Mehrban Khan vs Makhna(2), where the Privy Council was dealing with the provisions in a mortgage deed conferring on the mortgagee upon redemption an interest in the mortgaged property, it was held that the said provisions amounted to a clog or fetter on the equity of redemption and as such, were void not only against the mortgagor, but also against the purchaser of his interest, (1) 25 I.A. 241 (2) 57 I.A. 168 247 since they were inconsistent with the very nature and essence of a mortgage.
In this case, again, section 28 of Regulation No. VII which was applicable to the North West Frontier Province, had expressly provided that in cases not otherwise specially provided for, the Judges shall decide according, to justice, equity and good conscience; and so, recourse to the equitable doctrine was permissible because there was the statutory mandate requiring the Judges to apply the said doctrine where there was no specific legislative provision in relation to the matter with which they were dealing.
Though the position of the Privy Council decisions is thus clear and consistent, the trend of the decisions of the High Courts in India continued to conform to the same pattern which was set up by the decision of the Madras High Court in the case of Venkata Reddi vs Parvati Ammal(1) and adopted by the Bombay High Court in Ramji bin Tukaram vs Chinto Sakharam (2).
The question was elaborately argued on several occasions before the said High Courts and the two earlier decisions of the Privy Council in the case of Pattabhiramier(3) as well as in the case of Thumbuswamy Moodelly(4) were cited and yet, the High Courts have con sistently adhered to the view that in dealing with mortgage transactions which contain unfair, unjust or oppressive stipulations unreasonably restricting the mortgagor 's right to redeem, the Court would be justified in refusing to enforce such stipulations and recognising the paramount character of the equity of redemption.
In Bapuji Apaji vs Sonavaraji Marvati(5), Westropp, C.J., has elaborately considered the relevant aspects of this question.
He referred to the two Privy Council 's decisions and observed that the doctrine of Ramji vs Chinto(2) had been uniformly followed in the Bombay Presidency in a multitude of cases, and he saw no reason to depart from that decision.
In expressing his firm adherence to the pattern of the law prescribed by the decision of the Bombay High Court in Ramji vs Chinto, the learned Chief Justice elaborately considered all the precedents on the point, trend of authorities bearing on the question, the opinion of scholars, and held that he was inclined (1)1 Mad.
H.C. Rep. 460 (2) 1 Bom.
H.C.Rep.
199 [1864] (3) [1870] 13 M.I.A. 560 (4) I.L.R. (5) I.L.R. 248 to take the law to be that which was settled in Ramji vs Chinto(1) and gave effect to it.
So far as the Bombay High Court is concerned, the practice consistently had been to follow the decision of Westropp, C.J. till the Transfer of Property Act was extended to Bombay.
In Madras, we find that same position.
In Ramasami Sastrigal vs Samivappanayakan(2), the majority view of the Full Bench was that in the Madras Presidency, where con tracts of mortgage by way of conditional sale have been entered into subsequent to the year 1858, redemption after the expiry of the term limited by the contract must be allowed.
The, point with which we are dealing in the present appeal was elaborately argued before the Madras High Court; the opinion expressed emphatically by the Privy Council was cited, but Turner, C.J., with whose opinion Muttusami Ayyar, J., agreed made a very significant observation after elaborately examining the merits of the questions "For these reasons," said the learned C.J., "we conceive that we shall not be wanting in due respect for the distinguished tribunal by whose decisions we are bound, if we follow the course they have pronounced there were strong reasons for adopting and apply the rules introduced, however erroneously, by judicial decisions in these provinces.
" That view has prevailed in the Madras High Court ever since.
These decisions show that the High Courts in India conformed to the view that whether or not there is a statutory provision directing the Judges to give effect to the principles of justice, equity and good conscience, it is their duty to enforce that principle where they are dealing with stipulations introduced in mortgage transactions which ' appear to them to be unreasonable, oppresive or unjust.
It is true that according to the strict letter of the ancient Hindu Law, a stipulation that the mortgagor shall pay the amount advanced to him by the mortgage within a specified period, was intended to be enforced.
The ancient Hindu law texts use the word "Adhi" to denote pledge of a movable or mortgage of immovable property.
IV 124 divides Adhi into two sorts, viz., one that is to be redeemed within (1) 1 Bom.
H.C. Rep. 199 Mad. 179 at P. 190 249 a certain time fixed (by agreement at the time of contracting the debt) or to be retained till the debt is paid off.
In regard to the first category of mortgages, if the money is not paid at the time fixed, the thing pledged or mortgaged would belong to the creditor (vide Yaj.
58 and as explained by Mitakshara) (1).
It also appears that if the mortgage is not redeemed even when the debt has grown to double of the principal by non payment of the interest agreed upon, the mortgagor lost his title over the mortgaged property; so that it must be conceded that under the strict letter of the Hindu law texts, if a mortgage deed contains a stipulation for the repayment of the mortgage amount within a specified period, at the expiration of the said period the mortgagor may lose his title over the mortgaged property.
The principle underlying this provision appears to be that Hindu law as enunciated by the ancient texts, attached considerable importance to a person keeping his promise.
Though that is so, we ought also to add that according to Sir R. B. Ghose, ordinarily, time was not of the essence of the contract of mortgage in Hindu law(1), and in support of this opinion the learned author quotes with approval Colebrooke 's opinion.
Basing himself on this position of the Hindu law, Mr. Sarjoo Prasad contends that we ought to assume that Hindu Law which was applicable to Alwar recognised the importance of compelling the mortgagor to perform his promise that he would repay the debt within a specified time and if he tailed to do so, he would lose his title over the mortgaged property.
He urged that the dispute between the parties in the present appeal should be decided in the light of this position of the Hindu law as well as the principles enunciated by the Privy Council in the cases of Pattabhiramier(3) and Thumbusawmy Moodelly (4).
In dealing with this argument, it would be relevant to observe that traditionally, courts in India have been con sistently enforcing the principles of equity which prevent the enforcement of stipulations in mortgage deeds which un reasonably restrain or restrict the mortgagor 's right to (1) Dr. Kane 's History of Dharmasastra Vol.
,128 (1) Ghose on 'The Law of Mortgage in India ' Tagore Law Lectures 1875 6, 5th Ed.
I. p. 56.
(3) [1870] 13 M.I.A. 560 (4) I.L.R. 250 redeem.
We may, in this connection, refer to some of the statutes which were in force in India.
The old Bengal Regulation III of 1793 by section 21 directed the Judges of the District and City Courts in cases where no specific rule existed to act according to justice, equity and good con science.
Similar provision occurs in section 17 of the Madras Regulation II of 1802.
The Bengal Civil Courts Act, 1887, and the Madras Civil Courts Act, 1873, contain similar pro visions in sections 37 and 16 respectively.
Likewise, in regard to Courts in the Mufassal of Bombay, Bombay Regulation IV of 1827 by section 26 provides that the law to be observed in the trial of suits shall be Acts of Parliament and Regulations of Government applicable to the case; in the absence of such Acts and Regulations, the usage of the country in which the suit arose; if none such appears, the law of the defendant, and in the absence of specific law and usage, equity `and good conscience.
In fact, in Namdeo Lokman Lodhi vs Narmadabai(1), this Court has emphatically observed that it is axiomatic that the courts must apply the principles of justice, equity and good conscience to transactions which come before them for determination even though the statutory provisions of the Transfer of Property Act are not made applicable to these transactions.
These observations, in substance, represent the same traditional judicial approach in dealing with oppressive, unjust and unreasonable restric tions imposed by the mortgagees on needy mortgagors when mortgage documents are executed.
There is one other circumstance to which we ought to refer.
We do not know what the true position of the Hindu law was in the State of Alwar at the relevant time.
In fact, we do not know what the provisions of the Contract Act were in the State of Alwar.
Even so, we think it would be reasonable to assume that civil courts established in the State of Alwar were like civil courts all over the country, required to administer justice and equity where there was no specific statutory provision to deal with the question raised before them.
Whether or not the Hindu law which prevailed in Alwar was similar to that prescribed by ancient Hindu Sanskrit texts, is a point on which no material is produced (1) ; 251 before us.
It may well be that just as in Bombay and Madras, notwithstanding the ancient provisions of Hindu Law which seem to entitle the mortgagee to insist upon the performance of a stipulation as to time within which the mortgage debt has to be paid, the High Courts had con sistently refused to enforce such stipulations, the Courts in the State of Alwar also may have adopted the same approach.
In the absence of any material on the record on the point, we are reluctant to accept Mr. Sarjoo Prasad 's argument that the doctrine of equity and justice should be treated as irrelevant in dealing with the present dispute.
In this connection, it is material to refer to the recent decisions pronounced by the Rajasthan High Court in which this position has been upheld either because it was conceded, or because the High Court took the view that the principles of equity were enforceable in dealing with mortgage transactions in Rajasthan.
In Amba Lal vs Amba Lal(1), the Rajasthan High Court held that section 60 and its proviso contained a general principle of law applicable to mortgages in this country, which should be applicable even in those places where the Transfer of Property Act may not be in force as such, but where its principles may be in force.
The property in question which was the subject matter of the mortgage was situated in the State of Udaipur.
Similarly, in the case of Seleh Raj vs Chandan Mal(2) , the Rajasthan High Court held that the principle underlying section 60 may well be regarded to be a salutary one and in accordance with the principles of equity, justice ,and good conscience.
Accordingly it took the view that though the Transfer of Property Act may not be in force in the territory in question, it would not be unreasonable to decide a case in accordance with the principles underlying the said section.
The property with which the Court was concerned in this case was situated in the State of Jodhpur.
The same principle has been applied in Himachal Pradesh (vide Nainu vs Kishan Singh)(").
(1) I.L.R. r957 Raj.
(2) I.L.R. (3) A.I.R. T957 H.P. 46. 252 Thus, it is clear that the equitable principle of justice, equity and good conscience has been consistently applied by Civil Courts in dealing with mortgages in a substantial part of Rajasthan and that lends support to the contention of the respondent that it was recognised even in Alwar that if a mortgage deed contains a stipulation which unreasonably restrains or restricts the mortgagor 's equity of redemption, courts were empowered to ignore that stipulation and enforce the mortgagor 's right to redeem, subject, of course, to the general law of limitation prescribed in that behalf.
We are, therefore, satisfied that no case has been made out by the appellant to justify our interference with the conclusion of the Rajasthan High Court that the relevant stipulation on which the appellant relies ought to be enforced even though it creates a clog on the equity of redemption.
In the result, the appeal fails and is dismissed with costs.
[/INST]The second appellant, who had executed promissory notes in favour of the respondents was adjudicated an insolvent on a petition by them.
The Official Receiver in exercise of the powers under sections 33 and 80 of the Provincial Insolvency Act (5 of 1920) and under directions of the Insolvency Judge, inquired into the claims of the respondents and rejected them.
On appeal, the Insolvency Judge directed the inclusion of their names in the schedule of creditors.
The appeal to the District Court against the order of the Insolvency Judge was allowed.
In second appeal to the High Court, it was held, that the inference drawn by the District Court from its findings was a matter of law and that therefore the High Court had jurisdiction under section 75(1), to interfere with the order of the District Court.
Relying upon the presumption in favour of creditors in section 118 of the Negotiable Instruments Act (26 of 1881), the High Court set aside the judgment of the District Court.
The Official Receiver and the insolvent appealed to the Supreme Court.
HELD : The appeal should be allowed.
Since all the findings of the District Court were findings of fact and the question whether a statutory presumption was rebutted by the rest of the evidence was also a question of fact, the High Court had no jurisdiction to set aside the judgment of the District Court.
[259A C].
Wali Mohammad V. Mohammad Bakhsh, (1930) L.R. 57 I.A. 86.
approved.
Section 118 of the Negotiable Instruments Act, enacts a special rule of evidence which operates only between parties to the instrument or persons claiming under them in a suit or proceeding relating to the negotiable instrument.
The section does not affect section 114 of the Evidence Act, and in cases not falling within section 118 of the Negotiable Instruments Act the Court may or may not presume that a promissory note was founded on good consideration.
Therefore, in a proceeding relating to proof of debts, the question being not one between the insolvent and the proving creditor alone, and since the rights of other creditors of the insolvent have of necessity to be considered, the Court has jurisdiction to investigate whether there is a real debt.
Even if for some reason the debtor himself is estopped from denying the debt, there could be no estopped against the Insolvency Court.
There is thus no statutory presumption of consideration in favour of the creditors under promissory notes in proceedings under section 33 of the Provincial Insolvency Act for settlement of the schedule of creditors, and the Receiver exercising powers under section 80 of that Act is not bound to admit the debts in the schedule merely because the insolvent or the creditors have failed to displace such a presumption.
[261F 262C; 264E G].
Case law reviewed.
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<s>[INST] Summarize the judgementiminal Appeal No.124 of 1966.
Appeal by special leave from the judgment and order dated February 17, 1966 of the Punjab High Court (Circuit Bench) Delhi in Criminal Appeal No. 63 D of 1964.
184 M. C. Chagla E. C. Agarwala, Santosh Agarwala and P. C. Agarwala, for the appellant.
D. Narsaraju and R. N. Sachthey, for the respondents.
The Judgment of the Court was delivered by Ramaswami, J.
This appeal is brought, by special leave, from the judgment of the Punjab High Court dated February 17, 1966 in Criminal Appeal No. 63 D of 1964 affirming the conviction of the appellant under section 5(2) of the Prevention of Corruption Act (Act 11 of 1947) and section 161 of the Indian Penal Code.
The case of the prosecution is that Miss Eylene (P.W. 2) used to live in 1962 with her father at Fazilka.
She developed illicit connection with someone and became pregnant.
In April 1963.
she went to Ambala to her maternal aunt, who is employed as a sister in the Ambala Air Force Hospital, and give birth to a son there in July 1963.
In August 1963 Miss Eylene along with her newly born son came to the house of her uncle Russel Nathaniel in Andrews Ganj, Delhi.
Since Miss Eylene was unmarried and could not keep the son with her, she asked Russel Nathaniel and his wife to make arrangement for the bringing up of the child.
Russel Nathaniel knew Roshan Lal who had no child of his own and wanted to adopt a child.
Accordingly, on August 25, 1963 the child was handed over to Roshan Lal.
After the child was handed over to Roshan Lal, Miss Eylene went to the house of her sister 's husband, N. K. Lal, P.W. 11 and stayed there with her sister.
It is alleged that on August 29, 1963 at about 9.30 or 10 P.m.
the appellant went to the house of Russel Nathaniel in police uniform and accused Russel Nathaniel and his wife of disposing of the illegitimate child.
The appellant further warned Mr. & Mrs. Nathaniel that if they wanted to save themselves they should make some settlement with him and demanded a bribe of Rs. 1,000/ .
But Mr. Nathaniel paid him Rs. 90/ and agreed to pay later on a sum of Rs. 700/ .
The appellant thereafter compelled Russel Nathaniel and his wife to execute a document in writing that they would pay him Rs. 700/ or agree to go to prison.
It is said that the appellant asked Russel Nathaniel to bring to him Roshan Lal and when Roshan Lal was called, 'the appellant asked him to pay something to him.
Roshan Lal ex.
pressed his inability to pay anything whereupon the appellant removed a golden ring from his finger.
On the same night the appellant contacted the girl, Miss Eylene and wished to record her statement.
Russel Nathaniel and his wife expressed their reluctance to send Miss Eylene with the appellant to the police station and therefore the appellant interrogated the girl at the resi dence of N. K. Lal, her brother in law.
The appellant made her sign a paper and took the same with him.
On September 4, 185 1963 Russel Nathaniel and N. K. Lal decided to refer the matter to the anti corruption department.
Accordingly, Russel Nathaniel went to D.S.P. Mukatdhari Singh who recorded his statement and called two witnesses to witness the proceedings.
Russel Nathaniel produced seven currency notes of the denomination of Rs. 100/ each.
The numbers of those currency notes were noted and Russel Nathaniel was then instructed to pass on the money to the appellant.
Russel Nathaniel contacted the appellant and asked him to come to the house of N. K. Lal.
They arrived at the house of N. K. Lal at about 7.30 or 7.45 P.m.
The appellant sent for the girl because he wanted to reprimand her and there after he asked for the payment of the agreed amount.
Russel Nathaniel handed over the currency notes to the appellant who put them in the left side pocket of his trousers.
Russel Nathaniel then gave a signai and immediately D.S.P. Mukatdhari Singh turned up and recovered the currency notes from the pocket of the appellant.
On being questioned the appellant told the D.S.P. that he never asked for bribe and that the money was paid to him in repayment of the loan by him to Russel Nathaniel.
The appellant produced in the witness box Dharam Vir, F. C. Ram Saran, H. C. Jai Parkash and A. section Kapur.
After conclusion of the trial the Special Judge, Delhi accepted the prosecution case as correct and convicted the appellant of the charged framed against him and sentenced him to undergo rigorous imprisonment for two years and to pay a fine of Rs. 5001 or in default to undergo rigorous imprisonment for a further period of six months under section 5(2) of the Prevention of Corruption Act, and to two years rigorous imprisonment under section 161, Indian Penal Code and ordered the substantive sentences to run concurrently.
The appellant took the matter in appeal to the Punjab High Court.
The High Court maintained the conviction of the appellant under section 5(2) of the Prevention of Corruption Act and section 161, Indian Penal.
Code and also the sentence to undergo rigorous imprisonment for a period of two years awarded to the appellant on each count.
The High Court.
however, set aside the order with regard to the payment of fine or imprisonment in default.
In support of this appeal Mr. Chagla submitted in the first place that the order of sanction was bad in law as all the relevant papers and materials were not placed before the D.I.G. Police, Mr. M. P. Singh who, was the sanctioning authority.
Reference was made in this connection to the decision of the Judicial Committee in Gokulchand vs The King(1) in which it was held that a sanction which simply names the person to be prosecuted and specifies the provision of the Order which he is alleged to have contravened is not a sufficient compliance with cl. 23.
Mr. Chagla (1) A.I.R. 1948 P.C. 82.
10 Sup.
C.I 68 13 186 also referred to the evidence of P.W. 9, Sub Inspector, Ascharaj Lal who said that "all the papers relating to the case were sent to the D.I.G." When cross examined, he could not say which were the documents which were sent to the D.I.G. because they were in a sealed cover.
In our opinion, there is no substance in the argument put forward by Mr. Chagla on behalf of the appellant.
The Order of sanction dated December 10, 1963 shows on the face of it what were the facts constituting the offence charged and that a prima facie case was made out against the appellant.
The Order also further recites that Mr. M. P. Singh, D.I.G., "after fully and carefully" examining the material before him in regard to the "aforesaid allegations" in the case, considers that a prima facie case is made against the appellant.
It is manifest that the decision of the Judicial Committee has no application to the present case, for the order of sanction in that case was much more cryptic and materially different.
We are satisfied that the order of sanction in the present case fulfils the requirements of section 6 of the Prevention of Corruption Act.
We accordingly reject the argument of Mr. Chagla on this aspect of the case.
It was then contended that the concealment of the birth of an illegitimate child was not an offence under the Indian Penal Code or any other criminal statute and if the appellant had obtained money from Russel Nathaniel, it cannot be said that the appellant had obtained a gratification for doing or forbearing to do any official act, or for showing or forbearing to show, in the exercise of his official functions, favour or disfavour to any per son.
In other words, the argument was that the appellant could not prosecute either Miss Eylene or Russel Nathaniel or anybody else for any offence and obtaining of money by the appellant for refraining from any such imaginary prosecution cannot be said to be an offence under section 161, Indian Penal Code or section 5(1)(d) of the Prevention of Corruption Act.
We are unable to accept this argument as correct.
When a public servant is charged under section 161, Indian Penal Code and it is alleged that the illegal grati fication was taken by him for doing or procuring an official act, it is not necessary for the Court to consider whether or not the accused public servant was capable of doing or intended to do such an act: see the decision of this Court in Mahesh Prasad vs The State of Uttar Pradesh(1).
In the second place, the charge against the appellant is also under section 5(1)(d) of the Prevention of Corruption Act which states "5.(1) A public servant is said to commit the offence of criminal misconduct (1) [1955] 1 S.C.R.965.
187 (d) if he, by corrupt or illegal means or by otherwise abusing his position as public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage or," Section 5(2) states : "(2) Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to seven years and shall also be liable to, fine X X : Provided that the court may, for any special reasons recorded in writing, impose a sentence of imprisonment of less than one year.
" Upon the facts which have been found by the High Court to be proved there can be no doubt that the appellant was guilty of grossly abusing his position as public servant within the meaning of section 5(1)(d) of the Prevention of Corruption Act and thereby obtained for himself a valuable thing or pecuniary advantage, and the charge under that section is established.
We are therefore of the opinion that Mr. Chagla is unable to make good his argument on this aspect of the case also.
Lastly, Mr. Chagla submitted that the sentence of imprison ment was excessive.
We are unable to accept this contention.
Upon the finding of the High Court in this case it is manifest that the appellant grossly abused his position as a police officer and extorted money from Russel Nathaniel and his wife and also a gold ring from Roshan Lal.
The appellant in his official capacity as a police officer was expected to maintain a high standard of integrity and to uphold the maintenance of law.
Instead them proved facts disclose that there was a gross abuse of his official position on the part or the appellant and in the circumstances of the case we are satisfied that the sentence imposed is not excessive.
For the reasons expressed we affirm the judgment of the High Court of Punjab dated February 17, 1966 in Criminal Appeal No. 63 D of 1964 and dismiss this appeal.
[/INST]An unmarried woman gave birth to a child and on her request, her uncle and aunt made arrangements for the child being brought up by some one who wanted to adopt a child.
The appellant, who was a police officer, accused the uncle and aunt of having disposed of an illegitimate child and demanded a bribe.
The anti corruption department was thereupon informed, a trap laid and currency notes which were given as bribe were recovered from the appellant.
He was prosecuted and convicted for offences under section 5(2) of the Prevention of Corruption Act and section 161, I.P.C. The High Court confirmed the conviction and sentenced him to 2 years R.I.
In appeal to this Court, HELD : (1) The order of sanction showed on the face of it what were the facts constituting the offence, that 'a prima facie case was made out, and that the sanctioning authority had fully and carefully examined the material Therefore,, the order of sanction fulfilled the requirements of section 6 of the Prevention of Corruption Act.
[186 B, D] Gokukhand vs The King, A.I.R. 1948 P.C. 82, distinguished.
(2) (a) When a public servant is charged under section 161 I.P.C. and it is alleged that illegal gratification was taken by him for doing or procuring an official act, it is not necessary for the court to consider whether or not the accused public servant was capable of doing or intended to do such an act.
[186 F G] Mahesh Prasad vs The State of U.P. ; , followed.
Therefore, though the concealment of the birth of an illegitimate child is not an offence and the appellant could not have prosecuted any one, it could not be said that the obtaining of money by the appellant for refraining from an imaginary prosecution was not an offence under 161 I.P.C. [186 E F] (b) In any event, the appellant was guilty of an offence under section 5(1)(d) of the Prevention of Corruption Act, in that he grossly abused his position within the meaning of the section and thereby obtained for himself pecuniary advantage and so, the sentence imposed on him was not excessive [187 D, E]
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<s>[INST] Summarize the judgementcellaneous Petition No, 641 of 1954, 72 562 Application for review of the Judgment of this Court in Civil Appeal No. 152 of 1954.
N. C. Chatterjee (G. C. Mathur, with him) for the petitioner.
Veda Vyas (section K. Kapoor and Naunit Lal, with him) for the respondent.
October 18.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
This is an application for review of the judgment of this Court in Civil Appeal No. 52 of 1954.
That was an appeal against an order of the Election Tribunal, Himachal Pradesh (Simla), dismissing a petition to set aside the election of the respondent to the Legislative Assembly, Himachal Pradesh, from the Rohru Constituency.
Two points were raised at the hearing of the appeal before us: One was that the respondent was disqualified for election to the Assembly under section 17 of Act No. XLIX of 1951, read with section 7(d) of Act No. XLIII of 195 1, by reason of the fact that he was interested in contracts for the supply of Ayurvedic Medicines to the Himachal Pradesh Government, and the other, that he had appointed Government servants as polling agents, and had thereby contravened section 123(8) of Act No. XLIII of 1951.
On the first question, we held that, on a true construction of section 17, what would be a disqualification for election to either House of Parliament under article 102 would, under that section, be disqualification for election to the Legislatures of States, and that the disqualification under section 7 (d) of Act No. XLIII of 1951 would accordingly be a disqualification under section 17 of Act No. XLIX of 195 1.
A further contention was then raised on behalf of the respondent that even if section 7(d) were to be imported into section 17, that would not disqualify him, because under that section, the disqualification must be to being elected to either House of Parliament, and that under sections 7 and 9 of Act No. XLIII of 1951, a contract to operate as a disqualification to the election to either House of Parliament must be, with the Central Government, whereas 563 the contracts of the respondent were with the Government of Himachal Pradesh.
The answer of the petitioner to this contention was that under article 239 the administration of States was vested in the President acting through the Chief Commissioner or the Lieutenant Governor, and that the contracts of the respondent with the Chief Commissioner, Himachal Pradesh, must be held to be contracts with the Central Government.
We, however, disagreed with this con tention, and held that article 239 had not the effect of merging States with the Central Government, and converting contracts with the States into those with the Central Government.
In this application, Mr. Chatterjee appearing for the petitioner invites our attention to the definition of " Central Government " in section 3(8)(b)(ii) of the .
It is as follows: "Central Governmnet" shall in relation to anything done or to be done after the commencement of the Constitution, mean the President; and shall include in relation to the administration of a Part C State, the Chief Commissioner or Lieutenant Governor or Government of a neighbouring State or other authority acting within the scope of the authority given to him or it under article 239 or article 243 of the Constitution, as the case may be." He argues that by force of this definition, contracts with the Chief Commissioner of Himachal Pradesh must be treated as contracts with the Central Government, and that in consequence, the respondent was disqualified for election under section 17 of Act No. XLIX of 1951, read along with section 7(d) of Act No. XLIII of 1951.
As against this, Mr. Veda Vyas for the respondent relies on the definition of " State " in section 3(60)(b) of the , which runs as follows: " State Government " as respects anything done or to be done after the commencement of the Constitution, shall mean, in a Part A State, the Governor, in a Part B State the Rajpramukh, and in a Part C State the Central Government.
" 564 His contention is that there being in the Constitution a fundamental distinction between the Government of the Union and Government of the States, section 3(8) of the should be so construed as not to destroy that distinction, and that having regard to the definition of " State " in section 3(60), it must be held that to the extent the Central Government administers States under article 239, its character is that of the State Governments.
We are unable to agree that section 3(8) has the effect of putting an end to the status of States as independent units, distinct from the Union Government under the Constitution.
It merely recognies that those States are centrally administered through the President under article 239, and enacts that the expression " Central Government " should include the Chief Commissioner administering a Part C State under the authority given to him under article 239.
Section 3(8) does not affect the status of Part C States as distinct entities having their own Legislature and judiciary, as provided in articles 239 and 240.
Its true scope will be clear if, adapting it, we substitute for the words " Central Government" in section 9 of Act No. XLIII of 195 1, the words " the Chief commissioner acting within the scope of the authority given to him under article 239.
" A contract with the Chief Commissioner would, therefore, under section 9 read with section 3(8) of the , be a contract with the Central Government, and would operate as a disqualification for election to either House of Parliament under sections 7(d) and 9 of Act No. XLIII of 1951, 'and it would be a disqualification under section 17 of Act No. XLIX of 1951, for election to the Legislative Assembly of the State.
It is argued for the respondent that this construction would lead to this anomaly that whereas in the States in Part A or Part B a contract with the State would operate as disqualification only for election to the State Legislatures, such a contract would in States operate as a disqualification to be chosen, both to the State Legislature and to either House of Parliament.
That anomaly is undoubtedly 565 there.
But the contrary conclusion also involves the anomaly already pointed out, that in States a contract with the State Government is not a disqualification for election even to the State Legislature, as it is in Parts A and B States.
Whatever the anomaly, in our view, the proper course is to give effect to the plain language of the statute.
We must accordingly hold that in view of section 3(8) of the , a contract with the Chief Commissioner in a State is a contract with the Central Government, and that would be a disqualification for election to the Legislative Assembly under section 17 of Act No. XLIX of 1951 read with section 7(8) of Act No. XLIII of 1951.
This conclusion, however, can result in no advantage to the petitioner, as the further finding of the Election Tribunal is that no contracts of the respondent with the Himachal Pradesh Government were proved to have been subsisting at the material period.
That finding is, for the reasons already given, not open to attack in this appeal, and is sufficient answer to the objection that the respondent was disqualified under section 17.
The second point that was argued before us in appeal was that the respondent had appointed certain Government servants to act as polling agents, and had thereby committed a major corrupt practice under section 123(8) of Act No. XLIII of 1951.
In rejecting this contention we observed that, "as an abstract proposition of law, the mere appointment of a Government servant as a polling agent in itself and without more" is not an infringement of section 123(8).
The correctness of this conclusion is now challenged by Mr. Chatterjee.
His contention is that having regard to the nature of the duties of a polling agent as laid down by the Rules and furtfier elucidated by the instructions contained in the Election Manual issued by the Government, the polling agent must be held to be interested in the candidate for whom he acts as polling agent, and that his employment would therefore be hit by section 123(8).
Examining closely the duties of a polling agent under the Rules and under the Election Manual, they 566 can be grouped under three categories.
The first category relates to the period of time antecedent to the recording of votes.
The duties of the polling agent at this stage are to see that the ballot boxes are, to start with, empty, that the names of the candidates and their symbols are correctly set out thereon, that the slits in the boxes are in an open position, that the knobs of the slits are properly secured, and that the boxes are properly bolted and sealed.
These are duties which are cast on the presiding officer and the polling officers as well, and as these are matters to be attended to before any recording or votes begins, it is difficult to see how they can be said to assist in the furtherance of the election prospects of any one candidate more than of any other.
The second stage is when the polling is actually in progress.
The duty of the polling agent at this stage is to identify the voters.
Rule 27 provides that when there is a doubt as to the identity of a voter, the presiding officer may interrogate the voter and that be should do so, if so required by a polling agent.
Under rule 30, it is open to the polling agent to challenge any voter on the ground that he is not the person whose name is entered in the voters ' list, and when such objection is taken, it is the duty of the presiding officer to hold an enquiry and pass an order.
The object of these Rules is to prevent personation, and that is a matter in which the duty is cast equally on the presiding officer.
Rule 24 provides that, "The presiding officer may employ at the polling station such persons as he thinks fit to assist him or any polling officer in identifying the electors.
The work of the polling agent under rules 27 and 30 is of the same character, and it cannot in itself be said to further the election prospects of any particular candidate.
The third stage is reached after the polling is over '.
Then the boxes are to be examined with.
a view to find out whether the slits are open and the seals intact, the object of these provisions being to ensure that the ballot boxes had not been tampered with during the time of actual polling.
Then the unused ballot papers, the tendered ballot papers and other material documents are required to be put in separate 567 packages, and the polling agents have the right to seal all of them.
It cannot be said that in carrying out these duties the polling agent advances the election prospects of the candidate, as they admittedly relate to a stage after the completion of the polling.
Indeed, the work of the polling agent both in the first stage and in the last stage is similar in character, and neither can be said to contravene section 123(8).
As regards the second stage, as already stated in our judgment, the duty of polling agent is merely to identify a voter, and that could not by itself and without more be said to further the election prospects of the candidate.
Reliance was placed by Mr. Chatterjee on the following passage in Parker 's Election Agent and Returning Officer, Fifth Edition, at page 20: "The polling agents appointed for the same candidate to attend the several polling stations at any election, are engaged on the same duty and in the same interest, and it is generally very desirable that they should meet, under the presidency of the candidate or his election agent, before the opening of the poll for the purpose of mutual discussion and co operation.
" What that passage means is that as the duty to be performed by the polling agents at the several booths is of the same character, it would be desirable that they should all be assembled and their duties explained to them.
This has no bearing on the question whether those duties are such as must inherently promote the election prospects of the candidate.
A passage which is more in point is the one at page 18, mentioning who could be appointed as polling agents.
It is as follows: "Any competent person, whether an elector or not, may be appointed as polling agent, provided he be not the returning officer, the acting or deputy acting returning officer, or an officer or clerk appointed under P.E.R., r. 27, or a partner or clerk of any of them.
" In this connection, it must be noted that while section 41 of Act No. XLIII of 1951 contains a prohibition against the appointment of certain persons as election agents, there is none such with, reference to the appointment of polling agents under section 46 of the 568 Act.
To hold that Government servants are, as such and as a class, disqualified to act as polling agents would be to engraft an exception to the statute, which is not there.
Accordingly, we reaffirm the view taken by us that the appointment of a Government servant as polling agent does not, without more, contravene section 123(8).
It is scarcely necessary to repeat our observation in the original judgment that "if it is made out that the candidate or his agent had abused the right to appoint a Government servant as polling agent by exploiting the situation for furthering his election prospects, then the matter can be dealt with as an infringement of section 123(8).
" In the result, this petition is dismissed; but under the circumstances, without costs.
Petition dismissed.
[/INST]A contract was entered into between the appellant and the respondent in 1964 for sale of 200 bags of Cone yarn.
The contract inter alia conrained the condition that in case of any dispute arising out of the contract "the matter in dispute shall be referred to the arbitration of the Indian Chamber of Commerce whose decision shall be binding on both the parties".
The appellant was not a member of the said Chamber of Commerce; the respondent was On dispute arising between the parties and being referred to the Chamber for arbitration the appellant wrote to the Registrar of the Tribunal of Arbitration of the Chamber to intimate to it the names of the persons constituting the court to enable the appellant to ascertain whether they were independent and disinterested persons.
The Registrar refused to disclose the names on the ground that under the rules of the Chamber they could not be disclosed to a non member.
On persistent refusal to disclose the names the appellant filed an application under section 33 of the Indian before the Calcutta High Court the application was dismissed, whereupon appeal by special leave was filed in this Court.
It was urged that the non disclosure of the names of the arbitrators by the Registrar was violatire not only of the rules of natural justice but also infringed the provisions of the .
It was contended that there was a conflict between r. III(3) of the Rules of Arbitration of the Chamber of Commerce and sections 5 and 11 or section 30 ' of the Act.
HELD: The appeal must be dismissed.
( i) The power given to the Registrar not to disclose names of the members of the arbitration court to non members is discretionary 'and he is not bound in every case to refuse to disclose the names.
At any rate as soon as the proceedings commence the parties will know the names of the.
arbitrators and objection can be taken at that stage.
Under section 5 of the it is not essential that the authority of an appointed arbitrator should be got revoked before the commencement of the arbitration proceedings.
Section 11 contemplates a stage subsequent to the arbitrator entering on the reference.
There is thus no conflict between r. 111(3) of the Rules of Arbitration of the Chamber and sections 5 and 11 and 30 of the Act.
These Rules do not interfere with or take away the powers and jurisdiction of the court under the aforesaid provisions.
The appellant itself had agreed to submit to the arbitration of the Chamber which meant that it was bound by all the Rules of Arbitration of the said body.
No illegality or invalidity could be projected into the agreement by the presence of r. III(3).
[434 C F].
430 (ii) The statement in Russel on Arbitration (17th Edn.
p. 207) that the appointment of an arbitrator by a party is not complete without communication hereof to the other party could be of no avail to the appellant since in the present case the appointment of the arbitrator, namely, the Chamber of Commerce, was in every sense complete.
[434 G H] (iii) The rule objected to by the appellant is part of the long standing practice of Chambers of Commerce in this country its justification being the elimination of all possibility or chance of a party trying to influence the members of the Arbitration court before they enter upon or proceed with the reference.
[435 C D] Unreported judgment of Calcutta High Court in Suraj Ratan Birany vs Hindustan Motors Ltd. decided onApril 10, 1964, disapproved.
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<s>[INST] Summarize the judgementN: Criminal Appeal No. 701 of 1980.
Appeal by special leave from the Judgment and order dated the 5th March, 1980 of the Delhi High Court in Criminal Revision No. 335 of 1974.
B.P. Maheshwari for the Appellants.
M.C. Bhandari, Mrs. Madhhu Mull Chandani and R.B. Datar for the Respondents.
F.S. Nariman, Parveen Kumar Jain, Kapil Sibbal and Anil Kumar Sharma for Respondents.
This appeal by special leave is directed against a judgment dated March 5, 1980 of the Delhi High Court quashing the proceedings taken against respondents Nos. 1 to S and arises in the following circumstances.
On March 25, 1974, one Shri M.M. Gupta, Food Inspector, Municipal Corporation of Delhi visited premises No. 5171, Basant Road, Delhi where Shri Madan Lal had kept for sale 'Morton Toffees '.
The said Inspector after purchasing the sample of the article sent it to the Public Analyst who opined that the said sample did not conform to the standards prescribed for toffees.
The toffees were manufactured by M/s. Upper Ganges Sugar Mills.
Respondent No. 1 (Rain Kishan Rohtagi) was the Manager of the company and Respondent Nos.
2 to 5 were the Directors of the Company, including the company also.
A complaint was filed before the Metropolitan Magistrate who summoned all the respondents for being tried for violating the provisions of the Prevention of Food Adulteration Act (hereinafter referred to as the 'Acts).
The said complaint was filed by the Assistant Municipal Prosecutor in the court of Metropolitan Magistrate, Delhi against the accused for having committed offences under sections 7/16 of the Act.
The only point canvassed before us was that on the allegations made in the complaint, a clear case was made out against all the 887 respondents and the High Court ought not to have quashed the proceedings on the ground that the complaint did not disclose any offence.
Before going through the relevant part of the complaint, it mag be necessary to say a few words about the law on the subject.
After the coming into force of the Code of Criminal Procedure, B 1973 (hereinafter referred to as the 'present Code '), there was a serious divergence of judicial opinion on the question as to whether where a power is exercised under section 397 of the present Code, the High Court could exercise those very powers under section 482 of the present Code.
It is true that section 397 (2) clearly bars the jurisdiction of the Court in respect of interlocutory orders passed in appeal, enquiry or other proceedings.
The matter is, however, no longer res integra as the entire controversy has been set at rest by a decision of this Court in Madhu Limaye vs State of Maharashtra(1) where this Court pointed out that section 482 of the present Code had a different parameter and was a provision independent of section 397(2).
This Court further held that while section 397(2) applied to the exercise y of revisional powers of the High Court, section 482 regulated the .
inherent powers of the court to pass orders necessary in order to prevent the abuse of the process of the court.
In this connection, Untwalia, J. speaking for the Court observed as follows: "On a plain reading of section 482, however, it would follow that nothing in the Code, which would include sub section (2) of section 397 also, "shall be deemed to limit or affect the inherent powers of the High Court".
But, if we were to say that the said bar is not to operate in the exercise of the inherent power at all, it will be setting at naught one of the limitations imposed upon the exercise of the revisional powers .
But in case the impugned order clearly brings about a situation which is an abuse of the process of the court or for the purpose of securing the ends of justice interference by the High Court is absolutely necessary, then nothing contained in section 397(2) can limit or affect the exercise of the inherent power by the High Court.
But such cases would be few and far between.
The High Court must exercise the inherent power very sparingly.
" 888 It may be noticed that section 482 of the present Code is the ad verbatim copy of section 561A of the old Code.
This provision confers a separate and independent power on the High Court alone to pass orders ex debito justitiae in cases where grave and substantial injustice has been done or where the process of the Court has been seriously abused.
It is not merely a revisional power meant to be exercised against the orders passed by subordinate courts.
It was under this section that in the old Code, the High Courts used to quash the proceedings or expunge uncalled for remarks against witnesses or other persons or subordinate courts.
Thus, the scope, ambit and range of section 561A (which is now section 482) is quite different from the powers conferred by the present Code under the provisions of section 397.
It may be that in some cases there may be overlapping but such cases would be few and far between.
It is well settled that the inherent powers under section 482 of the present Code can be exercised only when no other remedy is available to the litigant and not where a specific remedy is provided by the statute.
Further, the power being an extraordinary one, it has to be exercised sparingly.
If these considerations are kept in mind, there will be no inconsistency between sections 482 and 397(2) of the present Code.
The limits of the power under section 482 were clearly defined by this Court in Raj Kapoor and Ors.
vs State and Ors.(l) where Krishna Iyer J. Observed as follows: "Even so, a general principle pervades this branch of law when a specific provision is made: easy resort to inherent power is not right except under compelling circumstances.
Not that there is absence of jurisdiction but that inherent power should not invade areas set apart for specific power under the same Code." Another important consideration which is to be kept in mind is as to when the High Court acting under the provisions of section 482 should exercise the inherent power in so far as quashing of criminal q proceedings are concerned.
This matter was gone into in greater detail in Smt.
Nagawwa vs Veeranna Shivalingappa Konjalji and Ors.(2) where the scope of sections 202 and 204 of the present Code was consider ed and while laying down the guidelines and the grounds on which proceedings could be quashed this Court observed as follows: 889 "Thus, it may be safely held that in the following cases an order of the Magistrate issuing process against the accused can be quashed or set aside: (1) Where the allegations made in the complaint or the statements of the witnesses recorded in support of the same taken at their face value make out absolutely no case against the accused or the complaint does not disclose the essential ingredients of an offence which is alleged against the accused; (2) Where the allegations made in the complaint are patently absurd and inherently improbable so that no prudent person can ever reach a conclusion that there is sufficient ground for proceeding against the accused; (3) Where the discretion exercised by the Magistrate in issuing process is capricious and arbitrary having been based either on no evidence or on materials which are wholly irrelevant or inadmissible; and (4) Where the complaint suffers from fundamental legal defects, such as, want of sanction, or absence of a complaint by legally competent authority and the like.
The cases mentioned by us are purely illustrative and provide sufficient guidelines to indicate contingencies where the High Court can quash Proceedings.
" Same view was taken in a later decision of this Court in Sharda Prasad Sinha vs State of Bihar(l) where Bhagwati, J. speaking for the Court observed as follows: "It is, now settled law that where the allegations set out in the complaint or the charge sheet do not constitute any offence, it is competent to the High Court exercising its inherent jurisdiction under section 482 of the Code of Criminal Procedure to quash the order passed by the Magistrate taking cognizance of the offence." 890 It is, therefore, manifestly clear that proceedings against an accused in the initial stages can be quashed only if on the face of the complaint or the papers accompanying the same, no offence is constituted.
In other words, the test is that taking the allegations and the complaint as they are, without adding or subtracting any thing, if no offence is made out then the High Court will be justified in quashing the proceedings in exercise of its powers under section 482 of the present Code.
In the instant cases the argument of the appellant before us is that taking the complaint as a whole, it cannot be said that no offence is made out or that the facts mentioned in the complaint do not constitute any offence against the respondents or some of them.
On the other hand, the counsel for the respondents submitted that even taking the allegations of the complaint ex facie no case for trial has been made out at all.
Before going to the complaint, we might state that it is common ground that the complaint clearly contains the allegations regarding the visit of the Inspector to the shop of respondent No. 6 (Madan Lal) and that the sample taken by him, which was sent to the Public Analyst, was manufactured by Upper Ganges Sugar Mills, Daryagang, Delhi having its registered office at Calcutta and that the Public Analyst found the samples to be adulterated.
There is no dispute regarding these facts.
The only point on which the contro versy centres is as to whether or not on the allegations, the Manager as also the other respondents I to 5 committed any offence.
The main clause of the complaint which is the subject matter of the dispute is clause No. S which may be extracted thus: "5.
That the accused No. 3 is the Manager, of accused No. 2 and accused No. 4 to 7 are the Directors of accused No. 2 and as such they were incharge of and responsible for the conduct of business of accused No. 2 at the time of a sampling.
" According to this clause, accused No. 3 (Ram Kishan) who is respondent No. I in this appeal and accused Nos. 4 7 who are respondent Nos. 2 to 4, were the Directors of the company, respondent No. 5.
So far as the Manager, respondent No. 1, is concerned it was not and could not be reasonably argued that no case is made out against him because from the very nature of his 891 duties, it is manifest that he must be in the knowledge about the affairs of the sale and manufacture of the disputed sample.
It was, however, contended that there is no allegation whatsoever against the Directors, respondent Nos. 2 to 4.
Reliance has been placed on the words 'as such ' in order to argue that because the complaint does not attribute any criminal responsibility to accused Nos. 4 to 7 except that they were incharge of and responsible for the conduct of the business of the company.
It is true that there is no clear averment of the fact that the Directors were really incharge of the manufacture and responsible for the conduct of business but the words 'as such ' indicate that the complainant has merely presumed that the Directors of the company must be guilty because they are holding a particular office.
This argument found favour with the High Court which quashed the proceedings against the Directors as also against the Manager, respondent No. 1.
So far as the Manager is concerned, we are satisfied that from the very nature of his duties it can be safely inferred that he would undoubtedly be vicariously liable for the offence; vicarious liability being an incident of an offence under the Act.
So far as the Directors are concerned, there is not even a whisper nor a shred of evidence nor anything to show, apart from the presumption drawn by the complainant, that there is any act committed by the Directors from which a reasonable inference can be drawn that they could also be vicariously liable.
In these circumstances, therefore, we find ourselves in complete agreement with the argument of the High Court that no case against the Directors (accused Nos 4 to 7) has been made out ex facie on the allegations made in the complaint and the proceedings against them were rightly quashed.
We, however, do not agree that even accused No. 3, respondent No. 1, who is Manager of the Company and therefore directly incharge of its affairs, could fall in the same category as the Directors.
Hence, we would set aside that part of the judgment of the High Court which quashes the proceedings against the Manager, respondent No. I (Ram Kishan Rohtagi).
Although we uphold the order of the High Court we would like to state that there are ample provisions in the Code of Criminal 892 Procedure, 1973 in which the Court can take cognizance against persons who have not been made accused and try them in the same manner along with the other accused.
In the old Code, section 351 contained a lacuna in the mode of taking cognizance if a new person was to be added as an accused.
1 he Law Commission in its 41st Report (para 24.81) adverted to this aspect of the law and section 319 of the present Code gave full effect to the recommendation of the Law Commission by removing the lacuna which was found to exist in section 351 of the old Code.
Section 319 as incorporated in the present Code may be extracted thus: "319.
Power to proceed against other persons appearing to be guilty of offence.
(1) Where, in the course of any inquiry into, or trial of, an offence, it appears from the evidence that any person not being the accused has committed any offence for which such person could be tried together with the accused, the Court may proceed against such person for the offence which he appears to have committed.
(2) Where such person is not attending the Court, he may be arrested or summoned, as the circumstances of the case may require, for the purpose aforesaid.
(3) Any person attending the Court, although not under arrest or upon a summons, may be detained by such Court for the purpose of the enquiry into, or trial of, the offence which he appears to have committed.
(4) Where the Court proceeds against any person under sub section (1) then (a) the proceedings in respect of such person shall be commenced afresh, and the witnesses re heard; (b) subject to the provisions of clause (a), the case may proceed as if such person had been an accused person when the Court took cognizance 893 of the offence upon which the inquiry or trial was commenced.
" This provision gives ample powers to any court to take cognizance and add any person not being an accused before it and try him alongwith the other accused.
This provision was also the subject matter of a decision by this Court in Joginder Singh and Anr.
vs State of Punjab and Anr.(1) where Tulzapurkar, J., speaking for the Court observed thus: "A plain reading of section 319 (1), which occurs in chapter XXIV dealing with general provisions as to inquiries and trials, clearly shows that it applies to all the Courts including a Sessions Court and as such a Sessions Court will have the power to add any person, not being the accused before it, but against whom there appears during trial sufficient evidence indicating his involvement in the offence, as an accused and direct him to be tried along with the other accused.
" In these circumstances, therefore, if the prosecution can at any stage produce evidence which satisfies the court that the other accused or those who have not been arrayed as accused against whom proceedings have been quashed have also committed the offence the Court can take cognizance against them and try them along with the other accused.
But, we would hasten to add that this is really an extraordinary power which is conferred on the Court and should be used very sparingly and only if compelling reasons exist for taking cognizance against the other person against whom action has not been taken.
More than this we would not like to say anything further at this stage.
We leave the entire matter to the discretion of the court concerned so that it may act according to law.
We would, however, make it plain that the mere fact that the proceedings have been quashed against respondent Nos. 2 to S will not prevent the court from exercising its discretion if it is fully satisfied that a case for taking cognizance against them has been made out on the additional evidence led before it.
894 For these reasons, therefore, we allow this appeal only to the extent that the order of the High Court quashing the proceedings against the Manager (Rohtagi), respondent No. 1, is hereby set aside and that of the Metropolitan Magistrate is restored.
As regards the other respondents (Directors) the order of the High Court stands and the appeal in respect of these respondents only will stand dismissed.
An attested copy of this judgment be placed on the file of criminal appeal No. 749 of 1980.
H.L.C. Appeal partly allowed.
[/INST]The respondent State in the public Works Department has engaged a large number of workers for the construction of Madanganj Harmara Road, close to Tilonia village with a view to providing relief to persons affected by drought and scarcity conditions.
The workers employed in this construction work are divided into gangs of 20 persons or multiple thereof and for each gang one muster roll is maintained.
The work done by each gang is measured every fortnight and payment is made by the Public Works Department to the Mate who is the leader of the gang according to the work turned out by such gang during each fortnight.
The Public Works Department has fixed a certain norm of work to be turned out by each gang before the workmen belonging to such gang can claim the minimum wage of Rs. 7 per day with the result that if any particular gang turns out work according to the norm fixed by the Public Works Department, the Mate would be paid such amount as would be on distribution give a wage of Rs. 7 per day to the workmen constituting such gang, but if less work is turned out by such gang, payment to be made to the mate of such gang would be proportionately reduced and in that event, the wage earned by each member of such gang would fall short of the minimum wage of Rs. 7 per day.
Further, this system of proportionate distribution of the wages adopted without any visible principle or norm enabled a workman who has put in less work to get more payment than the person who has really put in more work.
Hence the public interest writ petition filed by the Director of the Social Work and Research Centre, complaining violation of the provisions of the , Articles 14 and 23 of the Constitution, and the vires of section 3 of the Rajasthan Famine Relief Works Employees (Exemption from Labour Laws) Act, 1964.
Allowing the Petition, the Court ^ HELD: 1.
Where a person provides labour or service to another for remuneration which is less than the minimum wage, the labour or service provided by him clearly falls within the meaning of the words 'forced labour ' and attracts the condemnation of Article 23.
Every person who provides labour or service to another is entitled at the least to the minimum wage and if anything less than the minimum wage is paid to him, he can complain of violation of his 272 fundamental right under Article 23 and ask the court to direct payment of the minimum wage to him so that the breach of Article 23 may be abated.
[280 D F] 2: 1.
The constitutional validity of the Exemption Act in so far as it excludes the applicability of the providing that minimum wage may not be paid to a workman employed in any famine relief work, cannot be sustained in the face of Article 23.
Article 23 mandates that no person shall be required or permitted to provide labour or service to another on payment of anything less than the minimum wage.
Whenever any labour or service is taken by the State from any person, whether he be affected by drought and scarcity conditions or not, the State must pay, at the least, minimum wage to such person on pain of violation of Article 23.
[280 F G, 282 B C] 2: 2.
When the State undertakes famine relief work, it is no doubt true, that it does so in order to provide relief to persons affected by drought and scarcity conditions but, none the less it is work which enures for the benefit of the State representing the society and if labour or service is provided by the affected persons for carrying out such work, the State cannot pay anything less than the minimum wages to the affected persons.
It is not as if dole or bounty is given by the State to the affected persons in order to provide relief to them against drought and scarcity conditions nor is the work to be carried out by the affected persons worthless or useless to the society so that under the guise of providing work what the State in effect and substance seeks to do is to give dole or bounty to the affected persons.
The State cannot be permitted to take advantage of the helpless condition of the affected persons and extract labour or service from them on payment of less than the minimum wage.
No work of utility and value can be allowed to be constructed on the blood and sweat of persons who are reduced to a state of helplessness on account of drought and scarcity conditions.
[281 B E, H, 282 A] 2: 3.
In the instant case, the Notification issued under the makes it clear that the minimum wage of Rs. 7 is fixed per day and not with reference to any particular quantity of work turned out by the workmen during the day.
The Notification does not empower the employer to fix any particular norm of work to be carried out by the workman with reference to which the minimum wage shall be paid by the employer.
The minimum wage is not fixed on piece rate basis, so that a particular minimum wage would be payable only if a certain amount of work is turned out by the workman and if he turns out less work, then the minimum wage payable would be proportionately reduced.
Here the minimum wage is fixed at Rs. 7 per day and that is the minimum wage which must be paid by the employer to the workman so long as the workman works throughout the working hours of the day for which he can lawfully be required to work.
The employer may fix any norm he thinks fit specifying the quantity of work which must be turned out by the workman during the day, but if the workman does not turn out work in conformity with such norm, the employer cannot pay him anything less than the minimum wage.
If the norm fixed by the employer is reasonable and the workman does not turn out work according to such norm, disciplinary action may be taken against the workman and in a given case he must even be liable to be thrown out of employment, but he cannot be paid less than the minimum 273 wage, unless, of course, the minimum wage fixed by the Notification under the is correlated with the quantity of work to be turned out by the workman.
Otherwise, it would be the easiest thing for the employer to fix an unreasonably high norm which a workman working diligently and efficiently during the day cannot possibly reach and thereby deprive the workman of the minimum wage payable to him.
[283 B G] Peoples Union for Democratic Rights & Other vs Union of India &.
Others [1983]1 S.C.R. 456 followed.
PER PATHAK, J. 1.
The workers employed in the construction of the Madanganj Harmara Road as a measure of relief is a famine stricken area are entitled to a minimum wage of Rs. 7 per day, and that wage cannot be reduced by reference to the Rajasthan Famine Relief Works Employees (Exemption and Labour Laws) Act 1964, because in so far as the provisions of section 3 of that Act countenance a lesser wage they operate against Article 14 of the Constitution and are, therefore, void.[286 D E] 2:1.
By prescribing the criterion which it has, the Public Works Department has effected an invidious discrimination bearing no reasonable nexus to the object behind the employment.
[286 C D] 2:2 The circumstance that employment has been given to persons affected by drought and scarcity conditions provides only the reason for extending such employment.
In other words, the granting of relief to persons in distress by giving them employment constitutes merely the motive for giving them work.
It cannot affect their right to what is due to every worker in the course of such employment.
The rights of all the workers will be the same, whether they are drawn from area affected by drought and scarcity conditions or come from elsehwere.
The mere circumstance that a worker belongs to an area affected by drought and scarcity conditions can in no way influence the scope and sum of those rights.
In comparison with a worker belonging to some other more fortunate area and doing the same kind of work, he is not less entitled than the other to the totality of those rights nor liable to be distinguished from the other by the badge of his misfortune.
[285 E G] 2: 3.
When the State employs workers for doing work needed on its development projects, it must find funds for such projects.
And the fund must be sufficient to ensure the prescribed minimum wage to each worker and this is particularly so having regard to the concept of a "minimum wage".
Therefore, the argument that the wages are drawn from a fund too limited to provide for payment of a minimum wage to all is not justified.
[286 B C]
</s>
|
<s>[INST] Summarize the judgementCivil Appeal Nos.
1629, 1857 & 2087 of 1979.
From the Judgment and Order dated 1 5 1979 of the Delhi High Court in Civil Writ No. 408 of 1978.
F. section Nariman, section D. Parekh, A. D. Mehta, Lalit Bhasin, Vinay Bhasin and Vineet Kumar for the Appellants in C.A. No. 1629 and for R. 1 in C.A. No. 2087/79.
V. N. Tarkunde, section Ganesh, K. Vasudev and T.V.S.N. Chari for the Appellants in CA 1857/79.
Soli J. Sorabjee, Solicitor General and Girish Chandra for Appellants in CA 2087 and for Respondent (UOI) in CA 1629/79.
Soli J. Sorabjee, Solicitor General, section Ganesh Vasdev and T.V.S.N. Chari for Respondent No. 2 in CA 1629.
T. V. section N. Chari for Respondent No. 4 in CA 2087 Suresh Parik and section Swarup for Respondent No. 3 in CA 2087.
F. section Nariman, B. P. Maheshwari and Suresh Sethi for Respondent Swadeshi Cotton Mills Co. Ltd. in CA No. 1857 and 2087/79.
C. M. Chopra for Intervenor.
The Judgment of R. section Sarkaria and D. A. Desai, JJ. was delivered by Sarkaria, J. O. Chinnappa Reddy, J. gave a dissenting Opinion.
542 SARKARIA,J.
These appeals arise out of a judgment, dated May 1, 1979, of the High Court of Delhi, in the following circumstances: Appellant No. 1 in Civil Appeal 1629 of 1979 is Swadeshi Cotton Mills Co. Ltd. (hereinafter referred to as the Company).
It was incorporated as a private company with an authorised capital of Rs. 30 lakhs in 1921 by the Horseman family by converting their partnership business into a Private Joint Stock Company.
Its capital was raised in 1923 to Rs. 32 lakhs and thereafter in 1945 to Rs. 52.50 lakhs by issue of bonus shares.
In 1946, the Jaipuria family acquired substantial holding in the Company.
Jaipuria family is the present management.
By issue of further bonus shares in 1946, the capital of the Company was increased to Rs. 122.50 lakhs.
In 1948, the paid up capital of the Company was raised to Rs. 210 lakhs by the issue of further bonus shares.
The subscribed and issued capital consisting mainly of the bonus shares has since remained constant at Rs. 210 lakhs.
In the year 1946, the Company had only one undertaking, a Textile Unit at Kanpur, known as "The Swadeshi Cotton Mills, Kanpur".
Between 1956 and 1973, the Company set up and/or acquired five further Textile Units in Pondicherry, Naini, Udaipur, Maunath Bhanjan and Rae Bareilly.
Each of these six Units or undertakings of the Company was separately registered in accordance with the provisions of Section 10 of the Industries (Development and Regulation) Act, 1951 (hereinafter called the IDR Act).
In addition to these six industrial undertakings, the Company (it is claimed) had other distinct businesses and assets.
It holds inter alia 97 per cent shares in the subsidiary, Swadeshi Mining and Manufacturing Company Ltd., which owns two sugar Mills.
The Company claims, it has substantial income from other businesses and activities including investments in its subsidiary and in other shares and securities which include substantial holding of 10,00,000 Equity Shares of Rs. 10/ each in Swadeshi Polytex Ltd., representing 30 per cent of the total equity capital value of Swadeshi Polytex Ltd., the intrinsic value whereof exceeds Rs. 5 crores.
The Company made considerable progress during the years 1957 to 1973.
The reserves and surplus of the Company increased from Rs. 2.3 crores in 1957 to Rs. 4.3 crores in 1973 74, but declined to Rs. 2.8 crores in 1976 77.
The fixed assets of the Company increased from 5.8 crores in 1957 to 19 crores in 1973 74, but declined to Rs. 18 crores, registering a marginal decrease of Rs. 1 crore in 1976 77.
543 The Company maintained separate books of accounts for each of its six industrial undertakings.
From and after April 1973, the Company maintained separate sets of books of accounts of the businesses and assets other than of the said six industrial undertakings.
Annual accounts of the six industrial undertakings were first prepared separately in seven sets which were separately audited.
The consolidated annual accounts of the Company were then prepared from such annual accounts at the registered office of the Company at Kanpur, and after audit, were placed before the shareholders of the Company.
The Company made over all profits up to the year 1969 and even thereafter up to 1975.
The Balance Sheet showed that the Company suffered a loss of Rs. 86.23 lakhs after providing depreciation of Rs. 93.93 lakhs and gratuity of Rs. 48.79 lakhs, though the trading results showed a gross profit of Rs. 56.49 lakhs.
During the year ending March 31, 1976, the Company again suffered a loss of Rs. 294.82 lakhs after providing for depreciation.
The last Balance Sheet and Profit & Loss Account adopted by the shareholders and published by the Company relates to the year ending March 31, 1977.
It shows that the Company suffered a loss of Rs. 200.34 Lakhs after taking into account depreciation of Rs. 73.27 lakhs which was not provided in accounts.
Between 1975 and 1978, the Company created the under noted encumbrances on the fixed assets: Unit As on As on As on As on Remarks 31 3 75 31 3 76 31 3 77 31 3 78 (in lakhs) (in lakhs) 1 2 3 4 5 6 (i) Pondi 2.40 Nil Nil Nil On fixed chery assets of of Pondi cherry Unit.
(ii) Maun 11.40 5.71 Nil Nil On fixed ath assets of Bhanjan Unit.
(iii)Udaipur 2.76 Nil Nil Nil On fixed assets of Udaipur Unit.
(iv) Kanpur 13.44 9.75 5.95 2.00 On fixed (ICICI) asset of Kanpur Unit.
(v) Kanpur Nil 150.00 150.00 150.00 On fixed assets of Kanpur, Maunath Bhanjan & Pondi cherry Units for wages and Bank Dues 544 1 2 3 4 5 6 vi)Company 67.53 68.45 59.44 59.44 On diesel generating sets of Kanpur, Naini, Pondi cherry, Maunath Bhanjan and Rae Bareilly Units.
(vii)Udaipur Nil 25.00 25.00 25.00 On fixed assets of Udaipur Unit for gratuity fund.
(viii)Naini Nil Nil 70.00 70.00 On fixed assets of Naini for gratuity.
(ix) Kanpur, 106.20 75.31 50.67 15.97 On new Rae machinery Bareilly of Kanpur, & Naini Rae Bareilly & Naini Units under de ferred payment credit.
203.73 334.22 361.06 322.41 The borrowings of the Kanpur, Pondicherry, Naini, Udaipur, Maunath Bhanjan and Rae Bareilly Units of the Company as on March 31, 1978 against current assets were Rs. 256.78, 183.92, 271.05, 70.72, 47.98 and 55.82 lakhs respectively.
All the encumbrances on fixed assets (except the encumbrances of Rs. 70 lakhs on the fixed assets of Naini Unit for gratuity funding to get the benefit of Section 44A of the Income tax Act) were created prior to March 31, 1976.
In the accounting year 1976 77, only one new encumbrance was created by the Company on its fixed assets.
The following are statistics of production in each of the six units of the Company during the years 1975 76, 1976 77 and 1977 78: Name of the Unit 1975 76 1976 77 1977 78 (figures in lakhs) Naini 66.13 kgs.
65.76 kgs.
72.35 kgs.
Udaipur 18.51 kgs.
18.50 kgs.
18.60 kgs.
Maunath Bhanjan 15.59 kgs.
16.63 kgs.
18.49 kgs.
Rae Bareilly 12.09 kgs.
13.58 kgs.
14.00 kgs.
Pondicherry 170.52 Mtrs 178.77 Mtrs 176.54 Mtrs Kanpur 318.75 Mtrs 472.12 Mtrs 238.22 Mtrs 545 On April 13, 1978, the Government of India in exercise of its power under clause (a) of sub section (1) of Section 18AA of the IDR Act, passed an order (hereinafter referred to as the impugned order) which reads as follows: "SO 265(E)/18AA/IDRA/78 Whereas the Central Government is satisfied from the documentary and other evidence in its possession, that the persons in charge of the industrial undertakings namely, (i) M/s. Swadeshi Cotton Mills, Kanpur, (ii) M/s. Swadeshi Cotton Mills, Pondicherry, (iii)M/s.
Swadeshi Cotton Mills, Naini, (iv) M/s. Swadeshi Cotton Mills, Maunath Bhanjan, (v) M/s. Udaipur Cotton Mills, Udaipur, and (vi) Rae Bareilly Textile Mills, Rae Bareilly of M/s. Swadeshi Cotton Mills Company Ltd., Kanpur (hereinafter referred to as the said industrial under takings), have, by creation of encumbrances on the assets of the said industrial undertakings, brought about a situation which has affected and is likely to further affect the production of articles manufactured or produced in the said industrial undertakings and that immediate action is necessary to prevent such a situation; Now, therefore, in exercise of power conferred by clause (a) of sub section (1) of Section 18AA of the Industries (Development and Regulation) Act, 1951 (65 of 1951), the Central Government hereby authorises the National Textile Corporation Limited (hereinafter referred to as the Authorised person) to take over the management of the whole of the said industrial undertakings, subject to the following terms and conditions, namely: (i) The authorised person shall comply with all the directions issued from time to time by the Central Government; (ii) the authorised person shall hold office for a period of five years from the date of publication of this order in the Official Gazette; (iii)the Central Government may terminate the appointment of the authorised person earlier if it considers necessary to do so.
546 This order shall have effect for a period of five years commencing from the date of its publication in the Official Gazette.
Sd/ R. Ramakrishna Joint Secretary to the Govt.
of India (Seal).
" On April 19, 1978, three petitioners, namely, the Company through its Joint Secretary, Shri Bhim Singh Gupta, its Managing Director, Dr. Rajaram Jaipuria, and its subsidiary company, named Swadeshi Mining and Manufacturing Company, through its Directors and Shareholders filed a writ petition under Article 226 of the Constitution in the Delhi High Court against the Union of India and the National Textile Corporation to challenge the validity of the aforesaid Government Order dated April 13, 1978.
The writ petition was further supplemented by subsequent affidavits and rejoinders.
The Union of India and the National Textile Corporation Ltd., who has been authorised to assume management of the undertakings concerned were impleaded, as respondents.
The writ petition first came up for hearing before a Division Bench who by its order dated August 11, 1978, requested the Chief Justice to refer it to a larger Bench.
The case was then heard by a three Judge Bench who by their order dated October 12, 1978, requested the Hon 'ble the Chief Justice to constitute a still larger Bench to consider the question whether a prior hearing is necessary to be given to the persons affected before the order under Section 18AA is passed.
Ultimately, the reference came up for consideration before a Full Bench of five Judges to consider the question, which was reframed by the Bench as under: "Whether in construing Section 18AA of the Industries (Development and Regulation) Act, 1951, as a pure question of law compliance with the principle of audi alteram partem is to be implied.
If so, (a) whether such hearing is to be given to the parties who would be affected by the order to be passed under the said Section prior to the passing of the order; or (b) whether such hearing is to be given after the passing of the order; and (c) if prior hearing is to be normally given and the order passed under the said Section is vitiated by not giving of such 547 hearing whether such vice can be cured by the grant of a subsequent hearing.
" The Bench by a majority (consisting of Deshpande, C.J.,R. Sacher and M. L. Jain, JJ.) answered this three fold question as follows: "(1) Section 18AA(1) (a) (b) excludes the giving of prior hearing to the party who would be affected by order thereunder.
(2) Section 18F expressly provides for a post decisional hearing to the owner of the industrial undertaking, the management of which is taken over under Section 18AA to have the order made under Section 18AA cancelled on any relevant ground.
(3) As the taking over of management under Section 18AA is not vitiated by the failure to grant prior hearing, the question of any such vice being cured by a grant of a subsequent hearing does not arise." H. L. Anand and N. N. Goswamy, JJ, however dissented.
In the opinion of the minority, in compliance with the principles of natural justice, a prior hearing to the owner of the undertaking was required to be given before passing an order under Section 18AA, that the second question did not arise as the denial of a prior hearing would not cure the vice by the grant of subsequent hearing, but it would be open to the Court to moderate the relief in such a way that the order is kept alive to the extent necessary until the making of the fresh order to subserve public interest, and to make appropriate directions to ensure that the subsequent hearing would be a full and complete review of the circumstances of the take over and for the preservation and maintenance of the property during the interregnum.
After the decision of the reference, the case was reheard on merits by a Bench of three learned Judges (consisting of Deshpande, C.J., Anand and M. L. Jain, JJ.) who by their judgment, dated May 1, 1979, disposed of the writ petition.
The operative part of the judgment reads as under: "In the result, the writ petition succeeds in part, the challenge to the validity of the impugned order fails and to that extent the petition is dismissed.
The petition succeeds in so far as it seeks to protect from the impugned order the corporate entity of the company, the corporate entity of the subsidiary and its assets, the holding of the company in Polytex and the assets and property of the company which are not referable to any of the industrial undertakings.
The respondents are hereby restrained from in any manner interfering 548 with the corporate entity, the assets and property which are outside the impugned order.
The respondents would release from its control and custody and/or deliver possession of any assets or property of the company, which are not referable to the industrial undertakings in terms of the observations made in paras 46 and 47 of the judgment, within a period of three months from today (May 1, 1979).
In the peculiar circumstances the parties would bear their respective costs.
" On the application of the Company, the Delhi High Court certified under Article 133 of the Constitution that the case was fit for appeal to this Court.
Subsequently, on July 12,1979, a similar certificate was granted by the High Court to the Union of India and the National Textile Corporation Ltd. Consequently, the Company, the Union of India and the National Textile Corporation have filed Civil Appeals 1629, 2087 and 1857 of 1979, respectively, in this Court.
All the three appeals will be disposed of by this judgment.
The primary, two fold proposition posed and propounded by Shri F. section Nariman, learned counsel for the appellant Company in Civil Appeal 1629 of 1979, is as follows: (a) Whether it is necessary to observe the rules of natural justice before issuing, a notified order under Section 18AA, or enforcing a decision under Section 18AA, or (b) Whether the provisions of Section 18AA and/or Section 18F impliedly exclude rules of natural justice relating to prior hearing.
There were other contentions also which were canvassed by the learned counsel for the parties at considerable length.
But for reasons mentioned in the final part of this judgment, we do not think it necessary, for the disposal of these appeals to deal with the same.
Thus, the first point for consideration is whether, as a matter of law, it is necessary, in accordance with the rules of natural justice, to give a hearing to the owner of an undertaking before issuing a notified order, or enforcing a decision of its take over under Section 18AA.
Shri Nariman contends that there is nothing in the language, scheme or object of the provisions in Section 18AA and/or Section 18F which expressly or by inevitable implication, excludes the application of the principles of natural justice or the giving a pre decisional hearing, adapted to the situation, to the owner of the undertaking.
It is submitted that mere use of the word "immediate" in sub clause (a) of Section 18AA (1) does not show a legislative intent to exclude the 549 application of audi alterm partem rule, altogether.
It is maintained that according to the decision of this Court in Keshav Mills Company Ltd. vs Union of India, even after a full investigation has been made under Section of the I.D.R. Act, the Government has to observe the rules of natural justice and fairplay, which in the facts of a particular case, may include the giving of an opportunity to the affected owner to explain the adverse findings against him in the investigation report.
In support of his contention, that the use of the word "immediate" in Section 18AA(1)(a) does not exclude natural justice, learned counsel has advanced these reasons: (i) The word "immediate" in clause (a) has been used in contra distinction to 'investigation '.
It only means that under Section 18AA action can be taken without prior investigation under Section 15, if there is evidence in the possession of the Government, that the assets of the Company owning the undertaking are being frittered away by doing any of the three things mentioned in clause (a); or, the undertaking has remained closed for a period of not less than three months and the condition of plant and machinery is such that it is possible to restart the undertaking.
This construction, that the use of the word "immediate" in Section 18AA(1)(a) only dispenses with investigation under Section 15 and not with the principle of audi alterm partem altogether, is indicated by the marginal heading of Section 18AA and para 3 of the Statement of Objects and Reasons of the Amendment Bill which inserted Section 18AA, in 1971.
(ii) The word 'immediate ' occurs only in clause (a) and not in clause (b) of Section 18AA(1).
It would be odd if intention to exclude this principle of natural justice is spelt out in one clause of the sub section, when its other clause does not exclude it.
(iii) Section 18F does not exclude a pre decisional hearing.
This section was there, when in Keshav Mills ' case, (ibid), it was held by this Court, that even at the post investigation stage, before passing an order under Section 18A, the Government must proceed fairly in accordance with the rules of natural justice.
The so called post decisional hearing contemplated by Section 18F cannot be and is not intended to be a substitute for a pre decisional hearing.
Section 18F, in terms, deals with the power of Central Government to cancel an order of take over under two conditions, namely: First when "the purpose of an order under Section 18A has been fulfilled, or, second when "for any other reason it is not necessary that the order should remain in force". "Any other reason" has reference to post "take 550 over" circumstances only, and does not cover a reason relatable to pre takeover circumstances.
An order of cancellation under Section 18F is intended to be prospective.
This is clear from the plain meaning of the expressions "remain in force", "necessary" etc.
used in the Section.
Section 18 incorporates only a facet, albeit qualified, of Section 21 of the General Clauses Act, (Kamla Prasad Khetan vs Union of India, referred to.) Therefore, the illusory right given by Section 18F to the aggrieved owner of the undertaking, to make an application for cancellation of the order, is not a full right of appeal on merits.
The language of the Section impliedly prohibits an enquiry into circumstances that led to the passing of the order of "take over", and under it, the aggrieved person is not entitled to show that on merits, the order was void ab initio.
As held by a Bench (consisting of Bhagwati and Vakil JJ.) of the Gujarat High Court, in Dosabhai Ratanshah Keravale vs State of Gujarat, a power to rescind or cancel an order, analogous to that under Section 21, General Clauses Act, has to be construed as a power of prospective cancellation, and not of retroactive obliteration.
It is only the existence of a full right of appeal on the merits or the existence of a provision which unequivocally confers a power to reconsider, cancel and obliterate completely the original order, just as in appeal, which may be construed to exclude natural justice or a pre decisional hearing in an emergent situation.
(Reference on this point has been made to Wade 's Administrative Law, 4th Edition, PP.464 to 468.) (iv) 'Immediacy ' does not exclude a duty to act fairly, because, even an emergent situation can co exist with the canons of natural justice.
The only effect of urgency on the application of the principle of fair hearing would be that the width, form and duration of the hearing would be tailored to the situation and reduced to the reasonable minimum so that it does not delay and defeat the purpose of the contemplated action.
(v) Where the civil consequences of the administrative action as in the instant case are grave and its effect is highly prejudicial to the rights and interests of the person affected and there is nothing in the language and scheme of the statute which unequivocally excludes a fair pre decisional hearing, and the post decisional hearing provided therein is not a real remedial hearing equitable to a full 551 right of appeal, the Court should be loath to infer a legislative intent to exclude even a minimal fair hearing at the pre decisional stage merely on ground of urgency.
(Reference in this connection has been made to Wade 's Administrative Law, ibid, page 468 bottom.) Applying the proposition propounded by him to the facts of the instant case, Shri Nariman submits that there was ample time at the disposal of the Government to give a reasonably short notice to the Company to present its case.
In this connection, it is pointed out that according to para 3 of the further affidavit filed by Shri Daulat Ram on behalf of the Union of India and other respondents, the Central Government had in its possession two documents, namely: (a) copy of the Survey Report on M/s. Swadeshi Cotton Mills Company Ltd., covering the period from May to September, 1977 prepared by the office of the Textile Commissioner, and (b) Annual Report (dated September 30, 1977) of the Company for the year ending March 31, 1971.
In addition, the third circumstance mentioned in the affidavit of Shri Daulat Ram is, that by an order dated January 28, 1978, the Central Government appointed four Government Officials, including one from the office of the Textile Commissioner, to study the affairs of the Company and to make recommendation.
This Official Group submitted its report on February 16, 1978.
It is submitted that this evidence on the basis of which the impugned order was passed, was not disclosed to the appellant Company till May 1978, only after it had filed the writ petition in the High Court to challenge the impugned order.
It is emphasised that if the Survey Report was assumed to contain something adverse to the appellants, there was time enough about six weeks between the submission of the Survey Report and the passing of the impugned order for giving a short, reasonable opportunity to the appellants to explain the adverse findings against them.
It is urged that even if there was immediacy, situational modifications could be made to meet the requirement of fairness, by reducing the period of notice; that even the manner and form of such notice could be simplified to eliminate delay, that telephonic notice or short opportunity for furnishing their explanation to the Company might have satisfied the requirements of natural justice.
Such an opportunity of hearing could have been given after the passing of a conditional tentative order and before its enforcement under Section 18AA.
For the interregnum suitable interim action such as freezing the assets of the Company or restraining the Company from creating further encumbrances, etc. could be taken under Section 16.
552 Reference in this connection has been made to Keshav Mills case (ibid); Mohinder Singh Gill vs Election Commissioner of India; Maneka Gandhi vs Union of India Sukhdev Singh & Ors.
vs Bhagatram Sardar Singh; A. K. Kraipak vs Union of India; Ridge vs Baldwin; Heatley vs Tasmanian Racing & Gaming Commission; Commissioner of Police vs Tanos; Secretary of State for Education & Science vs Metropolitan Borough of Tameside; Wiseman vs Borneman; Nawabkhan Abbaskhan vs State of Gujarat and State of Orissa vs Dr. Bina Pani Dei.
As against this, Shri Soli Sorabji, learned Solicitor General appearing on behalf of respondent 1, contends that the presumption in favour of audi alteram partem rule stands impliedly displaced by the language, scheme, setting, and the purpose of the provision in Section 18AA.
It is maintained that Section 18AA, on its plain terms, deals with situations where immediate preventive action is required.
The paramount concern is to avoid serious problems which may be caused by fall in production.
The purpose of an order under Section 18AA is not to condemn the owner but to protect the scheduled industry.
The issue under Section 18AA is not solely between the Government and the management of the industrial under taking.
The object of taking action under this Section is to protect other outside interests of the community at large and the workers.
On these premises, it is urged, the context, the subject matter and the legislative history of Section 18AA negative the necessity of giving a prior hearing; that Section 18AA does not contemplate any interval between the making of an order thereunder and its enforcement, because it is designed to meet an emergent situation by immediate preventive action.
Shri Sorabji submits that this rule of natural justice in a modified form has been incorporated in Section 18F which gives an opportunity of a post decisional hearing to the owner of the undertaking who, if he feels aggrieved, can, on his application, be heard to show that even the original order under Section 18AA was passed on invalid grounds and should be cancelled or rescinded.
Thus, 553 Shri Sorabji does not go to the length of contending that the principles of natural justice have been fully displaced or completely excluded by Section 18AA.
On the contrary, his stand is that on a true construction of Section 18AA read with Section 18F, the requirements of natural justice and fair play can be read into the statute only "in so far as conformance to such canons can reasonably and realistically be required of it", by the provision for a remedial hearing at a subsequent stage.
Shri Sorabji further submits that since Section 18F does not specify any period of time within which the aggrieved party can seek the relief thereunder, the opportunity of full, effective and post decisional hearing has to be given within a reasonable time.
It is stressed that under Section 18F, the Central Government exercises curial functions, and that Section confers on the aggrieved owner a right to apply to the Government to cancel the order of take over.
On a true construction this Section casts an obligation on the Central Government to deal with and dispose of an application filed thereunder with reasonable expedition.
Shri Sorabji further concedes that on the well settled principle of implied and ancillary powers, the right of hearing afforded by Section 18F carries with it the right to have inspection and copies of all the relevant books, documents, papers etc.
and the Section obligates the Central Government to take all steps which are necessary for the effective hearing and disposal of an application under Section 18F.
Shri Sorabji has in connection with his arguments cited these authorities: Mohinder Singh Gill vs Chief Election Commissioner (ibid); In re. K. (An Infant), Official Solicitor vs K. & Anr.; Collymore vs Attorney General; Union of India vs Col. J. N. Sinha; Judicial Review, 3rd Edn.
by De Smith; Queen vs Davey; Gaiman vs National Association for Internal Revenue; John H. N. Fahey vs Paul Millionee; Schwartz 's Administrative Law '; Madhav Hayawadanrao Hoskot vs Maharashtra; Vijay Kumar Mundhra vs Union of India; Joseph Kuruvilla Vellukumel vs 554 Reserve Bank of India; Corporation of Calcutta vs Calcutta Tramways and Furnell vs Whapgarei High School.
Before dealing with the contentions advanced on both sides, it will be useful to have a general idea of the concept of "natural justice" and the broad principles governing its application or exclusion in the construction or administration of statutes and the exercise of judicial or administrative powers by an authority or tribunal or constituted thereunder.
Well then what is "natural justice" ? The phrase is not capable of a static and precise definition.
It cannot be imprisoned in the straight jacket of a cast iron formula.
Historically, "natural justice" has been used in a way "which implies the existence of moral principles of self evident and unarguable truth.
In course of time, judges nurtured in the traditions of British jurisprudence, often invoked it in conjunction with a reference to "equity and good conscience".
Legal experts of earlier generations did not draw any distinction between "natural justice" and "natural law".
"Natural justice" was considered as "that part of natural law which relates to the administration of justice".
Rules of natural justice are not embodied rules.
Being means to an end and not an end in themselves, it is not possible to make an exhaustive catalogue of such rules.
But two fundamental maxims of natural justice have now become deeply and indelibly ingrained in the common consciousness of man kind, as pre eminently necessary to ensure that the law is applied impartially, objectively and fairly.
Described in the form of Latin tags these twin principles are :(i) audi alteram partem and (ii) nemo judex in re sua.
For the purpose of the question posed above, we are primarily concerned with the first.
This principle was well recognised even in the ancient world.
Seneca, the philosopher, is said to have referred in Medea that it is unjust to reach a decision without a full hearing.
In Maneka Gandhi 's case, Bhagwati, J. emphasised that audi alteram partem is a highly effective rule devised by the Courts to ensure that a statutory authority arrives at a just decision and it is calculated to act as a healthy check on the abuse or misuse of power.
Hence its reach should not be narrowed and its applicability circumscribed.
During the last two decades, the concept of natural justice has made great strides in the realm of administrative law.
Before the epoch making decision of the House of Lords in Ridge vs Baldwin, it was 555 generally thought that the rules of natural justice apply only to judicial or quasi judicial proceedings; and for that purpose, whenever a breach of the rule of natural justice was alleged, Courts in England used to ascertain whether the impugned action was taken by the statutory authority or tribunal in the exercise of its administrative or quasi judicial power.
In India also, this was the position before the decision, dated February 7, 1967, of this Court in Dr. Bina Pani Dei 's case (ibid); wherein it was held that even an administrative order or decision in matters involving civil consequences, has to be made consistently with the rules of natural justice.
This supposed distinction between quasi judicial and administrative decisions, which was perceptibly mitigated in Bina Pani Dei 's case, was further rubbed out to a vanishing point in A. K. Kraipak vs Union of India (ibid), thus: "If the purpose of these rules of natural justice is to prevent miscarriage of justice one fails to see why those rules should be made inapplicable to administrative enquiries.
Often times it is not easy to draw the line that demarcates administrative enquiries from quasi judicial enquiries. . . .
Arriving at a just decision is the aim of both quasi judicial enquiries as well as administrative enquiries.
An unjust decision in an administrative enquiry may have more far reaching effect than a decision in a quasi judicial enquiry.
" In A. K. Kraipak 's case, the Court also quoted with approval the observations of Lord Parker from the Queens Bench decision in In re H. K. (An Infant) (ibid), which were to the effect, that good administration and an honest or bona fide decision require not merely impartiality or merely bringing one 's mind to bear on the problem, but acting fairly.
Thus irrespective of whether the power conferred on a statutory body or tribunal is administrative or quasi judicial, a duty to act fairly, that is, in consonance with the fundamental principles of substantive justice is generally implied, because the presumption is that in a democratic polity wedded to the rule of law, the state or the Legislature does not intend that in the exercise of their statutory powers its functionaries should act unfairly or unjustly.
In the language of V.R. Krishna Iyer, J. (vide Mohinder Singh Gill 's case, ibid.): "Subject to certain necessary limitations natural justice is now a brooding omnipresence although varying in its play.
Its essence is good conscience in a given situation; nothing more but nothing less.
" 556 The rules of natural justice can operate only in areas not covered by any law validly made.
They can supplement the law but cannot supplant it (Per Hegde, J. in A. K. Kraipak, ibid).
If a statutory provision either specifically or by inevitable implication excludes the application of the rules of natural justice, then the Court cannot ignore the mandate of the Legislature.
Whether or not the application of the principles of natural justice in a given case has been excluded, wholly or in part, in the exercise of statutory power, depends upon the language and basic scheme of the provision conferring the power, the nature of the power, the purpose for which it is conferred and the effect of the exercise of that power.
(See Union of India vs Col. J. N. Sinha, ibid.) The maxim audi alteram partem has many facets.
Two of them are: (a) notice of the case to be met; and (b) opportunity to explain.
This rule is universally respected and duty to afford a fair hearing in Lord Loreburn 's oft quoted language, is "a duty lying upon every one who decides something", in the exercise of legal power.
The rule cannot be sacrificed at the altar of administrative convenience or celerity; for, "convenience and justice" as Lord Atkin felicitously put it "are often not on speaking terms".
The next general aspect to be considered is: Are there any exceptions to the application of the principles of natural justice, particularly the audi alteram partem rule ? We have already noticed that the statute conferring the power, can by express language exclude its application.
Such cases do not present any difficulty.
However, difficulties arise when the statute conferring the power does not expressly exclude this rule but its exclusion is sought by implication due to the presence of certain factors: such as, urgency, where the obligation to give notice and opportunity to be heard would obstruct the taking of prompt action of a preventive or remedial nature.
It is proposed to dilate a little on this aspect, because in the instant case before us, exclusion of this rule of fair hearing is sought by implication from the use of the word 'immediate ' in Section 18AA(1).
Audi alteram partem rule may be disregarded in an emergent situation where immediate action brooks no delay to prevent some imminent danger or injury or hazard to paramount public interests.
Thus, Section 133 of the Code of Criminal Procedure, empowers the magistrates specified therein to make an exparte conditional order in emergent cases, for removal of dangerous public nuisances.
Action under Section 17, Land Acquisition Act, furnishes another such instance.
Similarly, action on grounds of public safety public health may justify disregard of the rule of prior hearing.
557 Be that as it may, the fact remains that there is no consensus of judicial opinion on whether more urgency of a decision is a practical consideration which would uniformly justify non observance of even an abridged form of this principle of natural justice.
In Durayappah vs Fernando.
Lord Upjohn observed that "while urgency may rightly limit such opportunity timeously perhaps severely, there can never be a denial of that opportunity if the principles of natural justice are applicable.
These observations of Lord Upjohn in Durayappah 's case were quoted with approval by this Court in Mohinder Singh Gill 's case.
It is therefore, proposed to notice the same here.
In Mohinder Singh Gill 's case, the appellant and the third respondent were candidates for election in a Parliamentary Constituency.
The appellant alleged that when at the last hour of counting it appeared that he had all but won the election, at the instance of respondent, violence broke out and the Returning Officer was forced to postpone declaration of result.
The Returning Officer reported the happening to the Chief Election Commissioner.
An officer of the Election Commission who was an observer at the counting, reported about the incidents to the Commission.
The appellant met the Chief Election Commissioner and requested him to declare the result.
Eventually, the Chief Election Commissioner issued a notification which stated that taking all circumstances into consideration the Commission was satisfied that the poll had been vitiated, and therefore in exercise of the powers under Article 324 of the Constitution, the poll already held was cancelled and a repoll was being ordered in the constituency.
The appellant contended that before making the impugned order, the Election Commission had not given him a full and fair hearing and all that he had was a vacuous meeting where nothing was disclosed.
The Election Commission contended that a prior hearing has, in fact, been given to the appellant.
In addition, on the question of application of the principles of natural justice, it was urged by the respondents that the tardy process of notice and hearing would thwart the conducting of elections with speed, that unless civil consequences ensued, hearing was not necessary and that the right accrues to a candidate only when he is declared elected.
This contention, which had found favour with the High Court, was negatived by this Court.
Delivering the judgment of the Court, V. R. Krishna Iyer, J., lucidly explained the meaning and scope of the concept of natural justice and its role in a case where there is a competition between the necessity of taking speedy 558 action and the duty to act fairly.
It will be useful to extract those illuminating observations, in extenso: "Once we understand the soul of the rule as fairplay in action and it is so we must hold that it extends to both the fields.
After all, administrative power in democratic set up is not allergic to fairness in action and discretionary, executive justice cannot degenerate into unilateral injustice.
Nor is there ground to be frightened of delay, in convenience and expense, if 'natural justice gains access.
For fairness itself is a flexible, pragmatic and relative concept, not a rigid, ritualistic or sophisticated abstraction.
It is not a bull in a china shop, nor a bee in one 's bonnet.
Its essence is good conscience in a given situation; nothing more but nothing less.
The 'exceptions ' to the rules of natural justice are a misnomer or rather are but a shorthand form of expressing the idea that in those exclusionary cases nothing unfair can be inferred by not affording an opportunity to present or meet a case.
" After referring to several decisions, including the observations of Lord Upjohn in Durayappah vs Fernando, the Court explained that mere invocation or existence of urgency does not exclude the duty of giving a fair hearing to the person affected: "It is untenable heresy, in our view, to lock law the victim or act behind his back by tempting invocation of urgency, unless the clearest case of public injury flowing from the least delay is self evident.
Even in such cases a remedial hearing as soon as urgent action has been taken is the next best.
Our objection is not to circumscription dictated by circumstances, but to annihilation as an easy escape from benignant, albeit inconvenient obligation.
The procedural pre condition or fair hearing, however minimal, even post decisional, has relevance to administrative and judicial gentlemanliness." "We may not be taken to. say that situational modifications to notice and hearing are altogether impermissible. . the glory of the law is not that sweeping rules are laid down but that it tailors principles to practical needs.
doctors remedies to suit the patient promotes not freezes Life 's processes, if we may mix metaphors.
". . . 559 The Court further emphasised the necessity of striking pragmatic balance between competing requirements of acting urgently and fairly, thus: "Should the cardinal principle of "hearing ' as condition for decision making be martyred for the cause of administrative, immediacy? We think not.
The full panoply may not be there but a manageable minimum may make do." "In Wiseman vs Borneman there was a hint of the competitive claims of hurry and hearing.
Lord Reid said: 'Even where the decision has to be reached by a body acting judicially, there must be a balance between the need for expedition and the need to give full opportunity to the defendant to see material against him (emphasis added).
We agree that the elaborate and sophisticated methodology of a formalised hearing may be injurious to promptitude so essential in an election under way.
Even so, natural justice is pragmatically flexible and is amenable to capsulation under the compulsive pressure of circumstances.
To burke it altogether may not be a stroke of fairness except in very exceptional circumstances.
" The Court further pointed out that the competing claims of hurry and hearing can be reconciled by making situational modifications in the audi alteram partem rule: "Lord Denning M.R., in Manward vs Boreman, summarised the observations of the Law Lords in this form.
No doctrinaire approach is desirable but the Court must be anxious to salvage the cardinal rule to the extent permissible in a given case.
After all, it is not obligatory that counsel should be allowed to appear 'nor is it compulsory that oral evidence should be adduced.
Indeed, it is not even imperative that written statements should be called for disclosure of the prominent circumstances and asking for an immediate explanation orally or otherwise may, in many cases be sufficient compliance.
It is even conceivable that an urgent meeting with the concerned parties summoned at an hour 's notice, or in a crisis, even a telephone call, may suffice.
If all that is not possible as in the case of a fleeing person whose passport has to be impounded lest he should evade the course of justice or a dangerous nuisance needs immediate abate 560 ment, the action may be taken followed immediately by a hearing for the purpose of sustaining or setting aside the action to the extent feasible.
It is quite on the cards that the Election Commission, if pressed by circumstances may give a short hearing.
In any view, it is not easy to appreciate whether before further steps got under way he could have afforded an opportunity of hearing the parties, and revoke the earlier directions.
All that we need emphasize is that the content of natural justice is a dependent variable, not an easy casualty." "Civil consequence ' undoubtedly cover infraction of not merely property or personal rights but of civil liberties, material deprivations and non pecuniary damages.
In its comprehensive connotation, everything that affects a citizen in his civil life inflicts a civil consequence." (emphasis added) In Maneka Gandhi, it was laid down that where in an emergent situation, requiring immediate action, it is not practicable to give prior notice or opportunity to be heard, the preliminary action should be soon followed by a full remedial hearing.
The High Court of Australia in Commissioner of Police vs Tanos, ibid, held that some urgency, or necessity of prompt action does not necessarily exclude natural justice because a true emergency situation can be properly dealt with by short measures.
In Heatley vs Tasmanian Racing & Gaming Commission, ibid, the same High Court held that without the use of unmistakable language in a statute, one would not attribute to Parliament an intention to authorise the Commission to order a person not to deal in shares or attend a stock exchange without observing natural justice.
In circumstances of likely immediate detriment to the public, it may be appropriate for the Commission to issue a warning off notice without notice or stated grounds but limited to a particular meeting, coupled with a notice that the Commission proposed to make a long term order on stated grounds and to give an earliest practicable opportunity to the person affected to appear before the Commission and show why the proposed long term order be not made.
As pointed out in Mohinder Singh Gill vs Chief Election Commissioner and in Maneka Gandhi vs Union of India ibid, such cases where owing to the compulsion of the fact situation or the necessity of taking speedy action, no pre decisional hearing is given but the action is followed soon by a full post decisional hearing to the 561 person affected, do not, in reality, constitute an 'exception ' to the audi alteram partem rule.
To call such cases an 'exception ' is a misnomer because they do not exclude 'fair play in action ', but adapt it to the urgency of the situation by balancing the competing claims of hurry and hearing.
"The necessity for speed", writes Paul Jackson, "may justify immediate action, it will, however, normally allow for a hearing at a later stage.
The possibility of such a hearing and the adequacy of any later remedy should the initial action prove to have been unjustified are considerations to be borne in mind when deciding whether the need for urgent action excludes a right to rely on natural justice.
Moreover, however the need to act swiftly may modify or limit what natural justice requires.
it must not be thought 'that because rough, swift or imperfect justice only is available that there ought to be no justice ' Pratt vs Wanganui Education Board.
" Prof. de Smith the renowned author of 'Judicial Review ' (3nd Edn.) has at page 170, expressed his views on this aspect of the subject, thus: "Can the absence of a hearing before a decision is made be adequately compensated for by a hearing ex post facto ? A prior hearing may be better than a subsequent hearing, but a subsequent hearing is better than no hearing at all; and in some cases the courts have held that statutory provision for an administrative appeal or even full judicial review on the merits are sufficient to negative the existence of any implied duty to hear before the original decision is made.
The approach may be acceptable where the original decision does not cause serious detriment to the person affected, or where there is also a paramount need for prompt action, or where it is impracticable to afford antecedent hearings.
" In short, the general principle as distinguished from an absolute rule of uniform application seems to be that where a statute does not in terms, exclude this rule of prior hearing but contemplates a post decisional hearing amounting to a full review of the original order on merits, then such a statute would be construed as excluding the audi alteram partem rule at the pre decisional stage.
Conversely, if the statute conferring the power is silent with regard to the giving of a pre decisional hearing to the person affected and the administrative decision taken by the authority involves civil consequences of a grave nature, and no full review or appeal on merits against that decision is provided, courts will be extremely reluctant to con 562 strue such a statute as excluding the duty of affording even a minimal hearing, shown of all its formal trappings and dilatory features at the pre decisional stage, unless, viewed pragmatically, it would paralyse the administrative process or frustrate the need or utmost promptitude.
In short, this rule of fairplay "must not be jettisoned save in very exceptional circumstances where compulsive necessity so demands".
The court must make every effort to salvage this cardinal rule to the maximum extent possible, with situational modifications.
But, to recall the words of Bhagvati, J., the core of it must, however, remain, namely, that the person affected must have reasonable opportunity of being heard and the hearing must be a genuine hearing and not an empty public relations exercise.
Keeping the general principles stated above, let us now examine the scheme content, object and legislative history of the relevant provisions of the I.D.R. Act.
The I.D.R. Act (Act 65 of 1951) came into force on May 8,1952 The Statement of Objects and Reasons published in the Gazette of India, dated March 26, 1949, says that its object is to provide the Central Government with the means of implementing their industrial policy which was announced in their Resolution, dated April 6, 1948, and approved by the Central Legislature.
The Act brings under Central Control the development and regulation of a number of important industries specified in its First Schedule, the activities of which affect the country as a whole and the development of which must be governed by economic factors of all India import.
The requirement with regard to registration, issue or revocation of licences of these specific industrial undertakings has been provided in Chapter II of the Act.
Section 3(d) defines an 'industrial undertaking ' to mean "any undertaking pertaining to a scheduled industry carried on in one or more factories by any person or authority including Government": Clause (f) of the same section defines "owner" in relation to an undertaking.
Section 15 gives power to the Central Government to cause investigation to be made into a scheduled industry or industrial undertaking.
The Section reads as follows: "where the Central Government is of the opinion that (a) in respect of any scheduled industry or industrial undertaking or undertakings (i) there has been, or is likely to be a substantial fall in the volume of production in respect of any article or class 563 of articles relatable to that industry or manufactured or produced in the industrial undertaking or undertakings, as the case may be; for which having regard to the economic conditions prevailing, there is no justification, or (ii) there has been, or is likely to be, a marked deterioration in the quality of any article or class of articles relatable to that industry or manufactured or produced in the industrial undertaking or undertakings, as the case may be, which could have been or can be avoided; or (iii) there has been or is likely to be a rise in the price of any article or class of articles relatable to that industry or manufactured or produced in the industrial undertaking or undertakings, as the case may be, for which there is no justification; or (iv) it is necessary to take any such action as is provided in this Chapter for the purpose of conserving any resources of national importance which are utilised in the industry or the industrial undertaking or undertakings, as the case may be; or (b) any industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest.
the Central Government may make or cause to be made a full and complete investigation into the circumstances of the case by such person or body of persons as it may appoint for the purpose.
" Section 16 empowers the Central Government to issue appropriate directions to the industrial undertaking concerned on completion of investigation under Section 15.
Such directions may be for all or any of the following purposes: "(a) regulating the production of any article or class of articles by the industrial undertaking or undertakings and fixing the standards of production; (b) requiring the industrial undertaking or undertakings to take such steps as the Central Government may consider necessary, to stimulate the development of the industry to which the undertaking or undertakings relates or relate; 564 (c) prohibiting the industrial undertaking or undertakings from resorting to any act or practice which might reduce its or their production, capacity or economic value; (d) controlling the prices, or regulating the distribution of any article or class of articles which have been the subject matter of investigation.
" Sub section (2) enables the Central Government to issue such directions to the industrial undertakings pending investigation.
In the course, of the working of I.D.R. Act, certain practical difficulties came to light.
One of them was that "Government cannot take over the management of any industrial undertaking, even in a situation calling for emergent action without first issuing directions to it and waiting to see whether or not they are obeyed." In order to remove such difficulties, the Amending Act 26 of 1953 inserted Chapter IIIA containing Sections 18A to 18F in the I.D.R. Act.
Section 18A confers power on the Central Government to assume management or control of an industrial undertaking in certain cases.
The material part of the Section reads as under: "(1) If the Central Government is of opinion that (a) an industrial undertaking to which directions have been issued in pursuance of Section 16 has failed to comply with such directions, or (b) an industrial undertaking in respect of which an investigation has been made under Section 15 (whether or not any directions have been issued to the undertaking in pursuance of Section 16), is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest; the Central Government may, by notified order, authorise any person or body of persons to take over the management of the whole or any part of the undertaking or to exercise in respect of the whole or any part of the undertaking such functions of control as may be specified in the order.
(2) Any notified order issued under sub section (1) shall have effect for such period not exceeding five years as may be specified in the order.
" Section 18B specifies the effect of notified order under Section 18A Sub section (1) of the section reads thus: 565 "On the issue of a notified order under Section 18A authorising the taking over of the management of an industrial undertaking (a) all persons in charge of the management including, persons holding office as managers or directors of the industrial undertaking immediately before the issue of the notified order, shall be deemed to have vacated their offices as such; (b) any contract of management between the industrial undertaking and any managing agent, or any director thereof holding office as such immediately before the issue of the notified order shall be deemed to have been terminated; (c) the managing agent, if any, appointed under Section 18A shall be deemed to have been duly appointed as the managing agent in pursuance of the Indian Companies Act, 1913 (7 of 1913), and the memorandum and articles of association of the industrial undertaking, and the provisions of the said Act and of the memorandum and articles shall, subject to the other provisions contained in this Act, apply accordingly, but no such managing agent shall be removed from office except with the previous consent of the Central Government; (d) the person or body of persons authorised under Section 18A to take over the management shall take all such steps as may be necessary to take into his or their custody or control all the property, effects and actionable claims to which the industrial undertaking is or appears to be entitled, and all the property and effects of the industrial undertaking, shall be deemed to be in the custody of the person or, as the case may be, the body of persons as from the date of the notified order; and (e) the persons, if any, authorised under Section 18A to take over the management of an industrial undertaking which is a company shall be for all purposes the directors of industrial undertaking duly constituted under the Indian Companies Act, 1913 (7 of 1913), and shall alone be entitled to exercise all the powers of the directors of the industrial undertaking, whether such powers are derived from the said Act or from the memorandum or articles of association of the industrial undertaking or from any other source." 566 Section 18D provides that a person whose office is lost under clause (a) or whose contract of management is terminated under clause (b) of Section 18B shall have no right to compensation for such loss or termination.
Section 18F is material.
It reads thus: "If at any time it appears to the Central Government on the application of the owner of the industrial undertaking or otherwise that the purpose of the order made under Section 18A has been fulfilled or that for any other reason it is not necessary that the order should remain in force, the Central Government may, by notified order, cancel such order and on the cancellation of any such order the management or the control, as the case may be of the industrial undertaking shall vest in the owner of the undertaking.
" By the Constitution Fourth Amendment Act 1955, Chapter IIIA of the I.D.R. Act was included as Item 19 in the Ninth Schedule of the Constitution.
Before we may come to Section 18AA, we may notice here the legislative policy with regard to Cotton Textile Industry, as adumbrated in the Cotton Textile Companies Management of Undertakings and Liquidation or Reconstruction Act, 1967 (Act XXIX of 1967).
The Statement of Objects and Reasons for enacting this statute, inter alia, says: "The cotton textile industry provides one of the basic necessities of life and affords gainful employment to millions of people.
Over the last few years, this vital industry has been passing through difficult times.
Some mills have already to close down and the continuing economic operation of many others is beset with many difficulties.
These difficulties have been aggravated in many cases by the heavy burden of past debts.
The taking over the management of the mills for a limited time and then restoring them to original owners has not remedied the situation.
Steps are therefore, necessary to bring about a degree of rationalisation of the financial and managerial structure of such units with a view to their rehabilitation, so that production and employment may not suffer.
" Textile Industry is also among the industries, included in the First Schedule to the I.D.R. Act.
567 The Amendment Act 72 of 1971 inserted Section 18AA in the original I.D.R. Act.
The material part of the Statement of Objects and Reasons for introducing this Bill of 1971 published in the Gazette of India Extraordinary, is as follows: "The industries included in the First Schedule . not only substantially contribute to the Gross National produce of the country, but also afford gainful employment to millions of people.
For diverse reasons a number of industrial undertakings engaged in these industries have had to close down and the continuing economic operation of many others is beset with serious difficulties affecting industrial production and employment.
During the period of take over Government has to invest public funds in such undertakings and it must be able to do so with a measure of confidence about the continued efficient management of the undertaking at the end of the period of take over.
In order to ensure that at the end of the period of take over by Government, the industrial undertaking is not returned to the same hands which were responsible for its earlier misfortune, it has been provided in the Bill that in relation to an undertaking taken over by them, Government will have the power to move for (i) the sale of the undertaking at a reserve price or higher (Government purchasing it at the reserve price if no offer at or above the reserve price is received), action being taken simultaneously for the winding up of the company owning the industrial undertaking; or (ii) the reconstruction of the company owning the industrial undertaking with a view to giving the Government a controlling interest in it.
With a view to ensuring speedy action by Government, it has been provided in the Bill that if the Government has evidence to the effect that the assets of the company owning the industrial undertaking are being frittered away or the undertaking has been closed for a period not less than three months and such closure is prejudicial to the concerned scheduled industry and that the financial condition of the company owning the industrial undertaking and the condition of the plant and machinery installed in the undertaking is such that it is possible to restart the undertaking and such restarting is in the public interest, Government may take over the management without an investigation." (emphasis added).
568 With the aforesaid Objects in view, Section 18AA was inserted by the Amendment Act No. 72 of 1971.
The marginal heading of the Section is to the effect: "Power to take over industrial undertakings without investigation under certain circumstances".
This marginal heading, it will be seen, accords with the Objects and Reasons extracted above.
Section 18AA runs as under: "Without prejudice to any other provision of this Act, if, from the documentary or other evidence in its possession, the Central Government is satisfied, in relation to an industrial undertaking that (a) the persons incharge of such industrial undertaking have, by reckless investments or creation of encumbrances on the assets of the industrial undertaking, or by diversion of funds, brought about a situation which is likely to affect the production of articles manufactured or produced in the industrial undertaking, and that immediate action is necessary to prevent such a situation; or (b) it has been closed for a period of not less than three months (whether by reason of the voluntary winding up of the company owning the industrial undertaking or for any other reason) and such closure is prejudicial to the concerned scheduled industry and that the financial condition of the company owning the industrial undertaking and the condition of the plant and machinery of such undertaking are such that it is possible to re start the undertaking and such re starting is necessary in the interests of the general public, it may, by a notified order, authorise any person (hereinafter referred to as the 'authorised person ') to take over the management of the whole or any part of the industrial undertaking or to exercise in respect of the whole or any part of the undertaking such functions of control as may be specified in the order.
(2) The provisions of sub section (2) of Section 18A shall, as far as may be, apply to a notified order made under sub section (1) as they apply to a notified order made under sub section (1) of Section 18A. (3) Nothing contained in sub section (1) and sub section (2) shall apply to an industrial undertaking owned by a company which is being wound up by or under the supervision of the Court.
569 (4) Where any notified order has been made under sub section (1), the person or body of persons having, for the time being, charge of the management or control of the industrial undertaking, whether by or under the orders of any court or any contract, instrument or otherwise, shall notwithstanding anything contained in such order, contract, instrument or other arrangement, forthwith make over the charge of management or control, as the case may be, of the industrial undertaking to the authorised person.
(5) The provisions of Section 18 B to 18 E (bot inclusive) shall, as far as may be, apply to, or in relation to the industrial undertaking in respect of which a notified order has been made under sub section (1), as they apply to an industrial undertaking in relation to which a notified order has been issued under Section 18 A." A comparison of the provisions of Section 18A(1)(b) and Section 18AA(1)(a) would bring out two main points of distinction: First, action under Section 18A (1)(b) can be taken only after an investigation had been made under Section 15: while under Section 18AA(1)(a) or (b) action can be taken without such investigation.
The language, scheme and setting of Section 18AA read in the light of the objects and Reasons for enacting this provision make this position clear beyond doubt.
Second, before taking action under Section 18A(1) (b), the Central Government has to form an opinion on the basis of the investigation conducted under Section 15, in regard to the existence of the objective fact, namely: that the industrial undertaking is being managed in a manner highly detrimental to the Scheduled industry concerned or to public interest; while under Section 18AA(1) (a) the Government has to satisfy itself that the persons incharge of the undertaking have brought about a situation likely to cause fall in production, by committing any of the three kinds of acts specified in that provision.
This shows that the preliminary objective fact attributable to the persons in charge of the management or affairs of the undertaking, on the basis of which action may be taken under Section 18A(1) (b), is of far wider amplitude than the circumstances, the existence of which is a sine qua non for taking action under Section 18AA(1).
The phrase "highly detrimental to the scheduled industry or public interest" in Section 18A is capable of being construed to over a large variety of acts or things which may be considered wrong with the manner of running the industry by the management.
In contrast with it, action under Section 18AA(1) (a) can be taken only if the Central Gov 570 ernment is satisfied with regard to the existence of the twin conditions specifically mentioned therein, on the basis of evidence in its possession.
From an analysis of Section 18AA(1) (a), it will be clear that as a necessary preliminary to the exercise of the power thereunder, the Central Government must be satisfied "from documentary or other evidence in its possession" in regard to the co existence of two circumstances: (i) that the persons in charge of the industrial undertaking have by committing any of these acts, namely, reckless investments, or creation of incumbrances on the assets of industrial undertaking, or by diversion of funds, brought about a situation, which is likely to affect the production of the article manufactured or produced in the industrial undertaking, and (ii) that immediate action is necessary to prevent such a situation.
Speaking for the High Court (majority), the learned Chief Justice (Deshpande, C.J.) has observed that only with regard to the fulfilment of condition (i) the satisfaction of the Government is required to be objectively reached on the basis of relevant evidence in its possession; while with regard to condition (ii), that is, the need for immediate action, it is purely subjective, and therefore, the satisfaction of the Government with regard to the immediacy of the situation is outside the scope of judicial review.
Shri Sorabji has in his arguments, forcefully supported this opinion of the High Court.
He maintains that the satisfaction of the Government with regard to the existence of the immediacy is not justiciable.
Reliance has been placed on the following passage in the judgment of Channell, J. in Queen vs Davey & Ors.: "The general principle of law is that an order affecting his liberty or property cannot be made against any one without giving him an opportunity of being heard; the result is that, if general words used in a statute empowering the making of such an order as this, it must be made on notice to the party affected.
There are, however, exceptions to this rule, which arise where it can be seen on the words of the statute that it was intended that the order should be made on an ex parte application, and the case in which it is easiest to see the propriety of the exception is where, looking 571 at the scope and object of the legislation, it was clearly intended that the parties putting the law in force should act promptly.
Such a case is an order for the destruction of unsound meat, which clearly may be made ex parte, because it is desirable in the interest of the public health that it should be acted upon at once.
The case of removing an infectious person, likely to spread abroad the infection, to an infectious hospital is obviously of the same character.
" According to the learned Solicitor General, the power conferred on the Central Government is in the nature of an emergency power, that the necessity for taking immediate action is writ large in Section 18AA(1) (a) the provision being a legislative response to deal with an economically emergent situation fraught with national repercussions.
The object of the exercise of this power is not to punish anyone but to take immediate preventive action in the public interest.
On the other hand, Shri Nariman submits that the High Court was clearly in error in holding that the satisfaction of the Central Government with regard to the necessity of taking immediate action was not open to judicial review at all.
It is emphasised that the very language of the provision shows that the necessity for taking immediate action is a question of fact, which should be apparent from the relevant evidence in the possession of the Government.
We find merit in this contention.
It cannot be laid down as a general proposition that whenever a statute confers a power on an administrative authority and makes the exercise of that power conditional on the formation of an opinion by that authority in regard to the existence of an immediacy, its opinion in regard to that preliminary fact is not open to judicial scrutiny at all.
While it may be conceded that an element of subjectivity is always involved in the formation of such an opinion, but as was pointed out by this Court in Bariam Chemicals (ibid), the existence of circumstances from which the inferences constituting the opinion, as the sine qua non for action are to be drawn, must be demonstrable, and the existence of such "circumstances", if questioned, must be proved at least prima facie.
Section 18AA(1)(a), in terms, requires that the satisfaction of the Government in regard to the existence of the circumstances or conditions precedent set out above, including the necessity of taking immediate action, must be based on evidence in the possession of the Government.
If the satisfaction of the Government in regard to the existence of any of the conditions, (i) and (ii), is based on no evidence, or on irrelevant evidence or on an extraneous consideration, 572 it will vitiate the order of 'take over ', and the Court will be justified in quashing such an illegal order on judicial review in appropriate proceedings.
Even where the statute conferring the discretionary power does not, in terms, regulate or hedge around the formation of the opinion by the statutory authority in regard to the existence of preliminary jurisdictional facts with express checks, the authority has to form that opinion reasonably like a reasonable person.
While spelling out by a construction of Section 18AA(1)(a) the proposition that the opinion or satisfaction of the Government in regard to the necessity of taking immediate action could not be the subject of judicial review, the High Court (majority) relied on the analogy of Section 17 of the Land Acquisition Act, under which, according to them, the Government 's opinion in regard to the existence of the urgency is not justiciable.
This analogy holds good only upto a point.
Just as under Section 18AA of the I.D.R. Act, in case of a genuine 'immediacy ' or imperative necessity of taking immediate action to prevent fall in production and consequent risk of imminent injury paramount public interest, an order of 'take over ' can be passed without prior, time consuming investigation under Section 15 of the Act, under Section 17(1) and (4) of the Land Acquisition Act, also, the preliminary inquiry under Section 5A can be dispensed with in case of an urgency.
It is true that the grounds on which the Government 's opinion as to the existence of the urgency can be challenged are not unlimited, and the power conferred on the Government under Section 17(4) of that Act has been formulated in subjective term; nevertheless, in cases, where an issue is raised, that the Government 's opinion as to urgency has been formed in a manifestly arbitrary or perverse fashion without regard to patent, actual and undeniable facts, or that such opinion has been arrived at on the basis of irrelevant considerations or no material at all, or on materials so tenuous, flimsy, slender or dubious that no reasonable man could reasonably reach that conclusion, the Court is entitled to examine the validity of the formation of that opinion by the Government in the context and to the extent of that issue.
In Narayan Govind Gavate vs State of Maharashtra & Ors.
this Court held that while exercising the power under Section 17(4) of the Land Acquisition Act, the mind of the officer or authority concerned has to be applied to the question whether there is an urgency of such a nature that even the summary proceedings under Section 5A of the Act should be eliminated.
It is not just the existence of an 573 urgency but the need to dispense with an inquiry under Section 5A of the Act which has to be considered.
If the circumstances on the basis of which the Government formed its opinion with regard to the existence of the urgency and the other conditions precedent, recited in the notification, are deficient or defective, the Court may look beyond it.
At that stage, Section 106, Evidence Act can be invoked by the party assailing the notification and if the Government or the authority concerned does not disclose such facts or circumstances especially within its knowledge, without even disclosing a sufficient reason for their abstention from disclosure, they have to take the consequences which flow from the non production of the best evidence which could be produced on behalf of the State if its stand was correct.
Again, in Dora Phalauli vs State of Punjab & Ors., this Court held that where the purported order does not recite the satisfaction of the Government with regard to the existence of urgency, nor the fact of the land being waste or arable land, the order was liable to be struck down and the mere direction, therein, to the Collector to take action on ground of urgency was not a legal and complete fulfilment of the requirement of the law.
Recently, in State of Punjab vs Gurdial Singh, V. R. Krishna Iyer, J., speaking for the Court, made these apposite observations: "It is fundamental that compulsory taking of a man 's property is a serious matter and the smaller the man the more serious the matter.
Hearing him before depriving him is both reasonable and preemptive of arbitrariness, and denial of this administrative fairness is constitutional anathema except for good reasons.
Save in real urgency where public interest does not brook even the minimum time needed to give a hearing, land acquisition authorities should not, having regard to Articles 14 (and 19), burke an enquiry under Section 17 of the Act.
" From these decisions, it is abundantly clear that even under Section 17 of the Land Acquisition Act, the satisfaction or opinion of Government/authority in regard to the urgency of taking action thereunder, is not altogether immune from judicial scrutiny.
For the reasons already stated, it is not possible to subscribe to the proposition propounded by the High Court that the satisfaction of the Central Government in regard to condition (ii), i.e. the exis 574 tence of 'immediacy ', though subjective, is not open to judicial review at all.
From a plain reading of Section 18AA, it is clear that it does not expressly in unmistakable and unequivocal terms exclude the application of the audi alteram partem rule at the pre decisional stage.
The question, therefore, is narrowed down to the issue, whether the phrase "that immediate action is necessary" excludes absolutely, by inevitable implication, the application of this cardinal canon of fairplay in all cases where Section 18AA(1)(a) may be invoked.
In our opinion, for reasons that follow, the, answer to this question must be in the negative.
Firstly, as rightly pointed out by Shri Nariman, the expression "immediate action" in the said phrase, is to be construed in the light of the marginal heading of the Section, its context and the Objects and Reason for enacting this provision.
Thus construed, the expression only means "without prior investigation" under Section 15.
Dispensing with the requirement of such prior investigation does not necessarily indicate an intention to exclude the application of the fundamental principles of natural justice or the duty to act fairly by affording to the owner of the undertaking likely to be affected, at the pre decisional stage, wherever practicable, a short measure fair hearing adjusted, attuned and tailored to the exigency of the situation.
At this stage, it is necessary to examine two decisions of this Court, viz., Ambalal M. Shah vs Hathi Singh Manufacturing Co Ltd.; and Keshav Mills Co. Ltd. vs Union of India (ibid), because according to the High Court (as per Deshpande, C.J., who wrote the leading opinion) these two decisions which are binding on the High Court conclusively show that: "The only prior hearing consisted of the investigation under Section 15 read with Rule 5 before action under Section 18A is taken.
The very object of Section 18AA is to enable action to be taken thereunder without being preceded by the investigation under Section 15.
On the authority of the two Supreme Court decisions in Ambalal M. Shah and Keshav Mills that the only hearing prior to action under Section 18A was the investigation under Section 15, it would follow that action under Section 18AA is to be taken without the investigation under Section 15 and, therefore, without a prior hearing.
" 575 Shri Nariman maintains that the High Court has not correctly construed these decisions.
According to the learned counsel, the corollary deduced by the High Court, viz., that exclusion of the investigation under Section 15 includes exclusion of the audi alteram partem rule at the pre takeover stage, is just the contrary of what was laid down by this Court in Keshav Mills in which Ambalal 's case was also noticed.
Indeed, Shri Nariman strongly relies on this decision in support of his argument that if the application of this rule of natural justice at the pre decisional stage is not excluded even where a full investigation has been made, there is stronger reason to hold that it is to be observed in a case where there has been no investigation at all.
We will first notice the case of Keshav Mills because that is a later decision in which Ambalal 's case was referred to.
In that case, the validity of an order passed by the Central Government under Section 18A was challenged.
By that impugned order the Gujarat State Textile Corporation Ltd. (hereinafter referred to as the Corporation) was appointed as authorised controller of the Company for a period of five years.
The Company was the owner of a cotton textile mill.
Till 1965, the Company made flourishing business.
After the year 1964 65, the Company fell on evil days and the textile mill of the Company was one of the 12 sick textile mills in Gujarat, which had to be closed down during 1966 and 1968.
On May 31, 1969, the Central Government passed an order appointing a Committee for investigation into the affairs of the Company under Section 15 of the I.D.R. Act.
After completing the inquiry, the Investigating Committee submitted its report to the Government who thereafter on November 24, 1970, passed the impugned order under Section 18A authorising the Corporation to take over the management of the Company for a period of five years.
The Company challenged the order of 'take over ' by a writ petition in the High Court of Delhi.
The High Court dismissed the petition.
The main contention of the Company before the High Court was that the Government was not competent to proceed under Section 18A against the Company without supplying before hand, a copy of the report of the Investigating Committee to the Company.
It was further contended that the Government should also have given a hearing to the Company before finally deciding upon take over under Section 18A.
This contention was pressed on behalf of the Company in spite of the fact that an opportunity had been given by the Investigating Committee to the management and the employees of the Company for adducing evidence and for making representation before the completion of the investigation.
On the contentions raised by the Company and 576 resisted by the respondent, in that case, the Court formulated the following questions: (1) Is it necessary to observe the rules of natural justice before enforcing a decision under Section 18A of the Act? (2) What are the rules of natural justice in such a case? (3)(a) In the present case, have the rules to be observed once during the investigation under Section 15 and then again, after the investigation is completed and action on the report of the Investigating Committee taken under Section 18A? (b) Was it necessary to furnish a copy of the Investigating Committee 's Report before passing an order of take over? Mukherjea, J. speaking for the Court, answered these questions, thus: (1) "The first of these questions does not present any difficulty.
It is true that the order of the Government of India that has been challenged by the appellants was a purely executive order embodying on administration decision.
Even so, the question of natural justice does arise in this case.
It is too late now to contend that the principles of natural justice need not apply to administrative order or proceedings; in the language of Lord Denning M.R. in Regina vs Gaming Board, exparte Beniam "that heresy was scotched in Ridge vs Baldwin" (2) "The second question, however, as to what are the principles of natural justice that should regulate an administrative act or order is a much more difficult one to answer We do not think it either feasible or even desirable to lay down any fixed or rigorous yard stick in this manner.
The concept of natural justice cannot be put into a straight jacket.
It is futile, therefore, to look for definitions or standards of natural justice from various decisions and then try to apply them to the facts of any given case.
The only essential point that has to be kept in mind in all cases is that the person concerned should have a reasonable opportunity of presenting his case and that the administrative authority concerned should act fairly, impartially and reasonably.
Where administrative officers are concerned, the duty is not so much to act judicially as to act fairly.
See, for instance, the observations of Lord Parker in In re 577 H.K. (an infant).
It only means that such measure of natural justice should be applied as was described by Lord Reid in Ridge vs Baldwin as insusceptible of exact definition but what a reasonable man would regard as a fair procedure in particular circumstances.
However, even the application of the concept of fairplay requires real flexibility.
Everything will depend on the actual facts and circumstances of a case." (3) (a) "For answering that question we shall keep in mind . and examine the nature and scope of the inquiry that had been carried out by the Investigating Committee set up by the Government, the scope and purpose of the Act and rules under which the Investigating Committee was supposed to act, the matter that was being investigated by the Committee and finally the opportunity that was afforded to the appellants for presenting their case before the Investigating Committee." (After noticing the object, purpose and content of the relevant provisions, the judgment proceeded): "In fact, it appears from a letter addressed by appellant No. 2 Navinchandra Chandulal Parikh on behalf of the Company to Shri H. K. Bansal, Deputy Secretary, Ministry of Foreign Trade and Supply on 12th September, 1970 that the appellants had come to know that the Government of India was in fact considering the question of appointing an authorised controller under Section 18A of the Act in respect of the appellants undertaking.
In that letter a detailed account of the facts and circumstances under which the mill had to be closed down was given.
There is also an account of the efforts made by the Company 's Directors to restore the mill.
There is no attempt to minimise the financial difficulties of the Company in that letter .
The letter specifically mentions the company 's application to the Gujarat State Textile Corporation Ltd., for financial help. the Corporation ultimately failed to come to the succour of the Company.
Parikh requested Government not to appoint an authorised controller and further prayed that the Government of India should ask the State Government and the Gujarat State Textile Corporation Ltd., to give a financial guarantee to the Company. " "Only a few days before this letter had been addressed, Parikh, it appears, had an interview with the Minister of 578 Foreign Trade on 26th August, 1970, when the Minister gave him, as a special case, four weeks ' time with effect from 26th August, 1970 to obtain the necessary financial guarantee from the State or the Gujarat State Textile Corporation without which the Company had expressed its inability to reopen and run the mill.
In a letter of 22 September, 1970, Bansal informed Parikh in clear language that if the Company failed to obtain the necessary guarantee by 26 September 1970, Government was proceeding to take action under the Act.
It is obvious, therefore, that the appellants were aware all long that as a result of the report of the Investigating Committee the Company 's undertaking was going to be taken up by Government, Parikh had not only made written representations but had also seen the Minister of Foreign Trade and Supply.
He had requested the Minister not to take over the undertaking and, on the contrary, to lend his good offices so that the Company could get financial support from the Gujarat State Textile Corporation or from the Gujarat State Government." (emphasis added) "All these circumstances leave in no manner of doubt that the Company had full opportunities to make all possible representations before the Government against the proposed take over of its mill under Section 18A.
In this connection, it is significant that even after the writ petition had been filed before the Delhi High Court the Government of India had given the appellants at their own request one month 's time to obtain the necessary funds to commence the working of the mill.
Even then, they failed to do so . ." "There are at least five features of the case which make it impossible for us to give any weight to the appellants complaint that the rules of natural justice have not been observed.
First on their own showing they were perfectly aware of the grounds on which Government had passed the order under Section 18A of the Act.
Secondly, they are not in a position to deny (a) that the Company has sustained such heavy losses that its mill had to be closed down indefinitely, and (b) that there was not only loss of production of textiles but at least 1200 persons had been thrown out of employment.
Thirdly, it is transparently clear from the affidavits that the Company was not in a position 579 to raise the resources to recommence the working of the mill.
Fourthly, the appellants were given a full hearing at the time of the investigation held by the Investigating Committee and were also given opportunities to adduce evidence.
Finally, even after the Investigating Committee had submitted its report, the appellants were in constant communion with the Government and were in fact negotiating with Government for such help as might enable them to reopen the mill and to avoid a take over of their undertaking by the Government.
Having regard to these features it is impossible for us to accept the contention that the appellants did not get any reasonable opportunity to make out a case against the take over of their undertaking or that the Government has not treated the appellants fairly.
There is not the slightest justification in this case for the complaint that there has been any denial of natural justice." "In our opinion, since the appellants have received a fair treatment and also all reasonable opportunities to make out their own case before Government they cannot be allowed to make any grievance of the fact that they were not given a formal notice calling upon them to show cause why their undertaking should not be taken over or that they had not been furnished with a copy of the report.
They had made all the representations that they could possibly have made against the proposed take over.
By no stretch of imagination, can it be said that the order for take over took them by surprise.
In fact, Government gave them ample opportunity to reopen and run the mill on their own if they wanted to avoid the take over.
The blunt fact is that the appellants just did not have the necessary resources to do so.
Insistence on formal hearing in such circumstances is nothing but insistence on empty formality." (emphasis added) (3) (b) "In our opinion it is not possible to lay down any general principle on the question as to whether the report of an investigating body or an inspector appointed by an administrative authority should be made available to the persons concerned in any given case before the authority takes a decision upon that report.
The answer to this question also must always depend on the facts and circumstances of the case.
It is not at all unlikely that there may be certain cases where unless the report is 580 given the party concerned cannot make any effective representation about the action that Government takes or proposes to take on the basis of that report.
Whether the report should be furnished or not must therefore, depend in every individual case on the merits of that case.
We have no doubt that in the instant case, non disclosure of the report of the Investigating Committee has not caused any prejudice whatsoever to the appellants.
(emphasis added) It will be seen from what has been extracted above that in Keshav Mills case, this Court did not lay it down as an invariable rule that where a full investigation after 'notice to the owner of the industrial undertaking has been held under Section 15, the owner is never entitled on grounds of natural justice, to a copy of the investigation report and to an opportunity of making a representation about the action that the Government proposes to take on the basis of that report.
On the contrary, it was clearly said that this rule of natural justice will apply at that stage in cases "where unless the report is given the party concerned cannot make any effective representation about the action that Government takes or proposes to take on the basis of that report.
" It was held that the application or non application of this rule depends on the facts and circumstances of the particular case.
In the facts of that case, it was found that the non disclosure of the investigation report had not caused any prejudice whatever because the Company were "aware all along that as a result of the report of the Investigating Committee the Company 's undertaking was going to be taken (over) by Government", and had full opportunities, to make all possible representations before the Government against the proposed take over of the Mill.
Shri Sorabji submitted that the observations made by this Court in Keshav Mills case, to the effect, that in certain cases even at the post investigation stage before making an order of take over under Section 18A, it may be necessary to give another opportunity to the affected owner of the undertaking to make a representation, appear to be erroneous.
The argument is that the Legislature has provided in Sections 15 and 18A of the Act and Rule 5 framed thereunder, its measure of this principle of natural justice and the stage at which it has to be observed.
The High Court, therefore, was not right in engrafting any further application of the rule of natural justice at the post investigation stage.
According to the learned Solicitor General for the decision of the case, it was not necessary to go beyond the 581 ratio of Shri Ambalal M. Shah & Anr.
vs Hathi Singh Manufacturing Co. Ltd which was followed in Keshav Mills case.
In our opinion, the observations of this Court in Keshav Mills in regard to the application of this rule of natural justice at the post investigation stage cannot be called obiter dicta.
There is nothing in those observations, which can be said to be inconsistent with the ratio decidendi of Ambalal 's case.
The main ground on which the order of take over under Section 18A was challenged in Ambalal 's case was that on a proper construction of Section 18A, the Central Government had the right to make the order under that Section on the ground that the Company was being managed in a manner highly detrimental to public interest, only where the investigation made under Section 15 was initiated on the basis of the opinion as mentioned in Section 15(b), whereas in the present case (i.e. Ambalal 's case), the investigation ordered by the Central Government was initiated on the formation of an opinion as mentioned in clause (a) (i) of Section 15.
It was urged that in fact, the Committee appointed to investigate had not directed its investigation into the question whether the industrial undertaking was being managed in the manner mentioned above.
The High Court came to the conclusion that on a correct construction of Section 18 A(1) (b) it was necessary before any order could be made thereunder that the investigation should have been initiated on the basis of the opinion mentioned in Section 15(b) of the Act.
It also accepted the petitioner 's contention that no investigation had, in fact, been held into the question whether the undertaking was being managed in a manner highly detrimental to public interest.
On appeal by special leave, this Court reversed the decision of the High Court, and held that the words used by the Legislature in Section 18A (1) (b) "in respect of which an investigation has been made under Section 15" could not be cut down by the restricting phrase "based on an opinion that the industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest"; that Section 18A (1) (b) empowers the Central Government to authorise a person to take over the management of an industrial undertaking if the one condition of an investigation made under Section 15 had been fulfilled irrespective of on what opinion that investigation was initiated and the further condition is fulfilled that the Central Government was of opinion that such undertaking was being managed in a manner highly detrimental to the scheduled industry concerned or to public interest.
In this Court, it 582 was urged on behalf of the Company that absurd results would follow if the words "investigation has been made under Section 15" are held to include investigation based on any of the opinions mentioned in Section 15(a).
Asked to mention what the absurd results would be, the counsel could only say that an order under Section 18A (1) (b) would be unfair and contrary to natural justice in such cases, as the owner of an industrial undertaking would have no notice that the quality of management was being investigated.
The Court found no basis for this assumption because in its opinion, the management could not but be aware that investigation would be directed in regard to the quality of management, also.
It is to be noted that the question of natural justice was casually and halfheartedly raised in a different context as a last resort.
It was negatived because in the facts and circumstances of that case, the Company was fully aware that the quality of the management was also being inquired into and it had full opportunity to meet the allegations against it during investigation.
The second reason which is more or less a facet of the first for holding that the mere use of the word "immediate" in the phrase "immediate action is necessary", does not necessarily and absolutely exclude the prior application of the audi alteram partem rule, is that immediacy or urgency requiring swift action is a situational fact having a direct nexus with the likelihood of adverse effect on fall in production.
And, such likelihood and the urgency of action to prevent it, may vary greatly in degree.
The words "likely to affect production" used in Section 18AA (1) (a) are flexible enough to comprehend a wide spectrum of situations ranging from the one where the likelihood of the happening of the apprehended event is imminent to that where it may be reasonably anticipated to happen sometime in the near future.
Cases of extreme urgency where action under Section 18AA(1) (a) to prevent fall in production and consequent injury to public interest, brooks absolutely no delay, would be rare.
In most cases, where the urgency is not so extreme, it is practicable to adjust and strike a balance between the competing claims of hurry and hearing.
The audi alteram partem rule, as already pointed out, is a very flexible, malleable and adaptable concept of natural justice.
To adjust and harmonise the need for speed and obligation to act fairly, it can be modified and the measure of its application cut short in reasonable proportion to the exigencies of the situation.
Thus, in the ultimate analysis, the question, (as to what extent and in what measure) this rule of fair hearing will apply at the pre decisional stage will depend upon the degree of urgency, if any, evident from the facts and circumstances of the particular case.
583 In the instant case, so far as Kanpur Unit is concerned, it was lying closed for more than three months before the passing of the impugned order.
There was no `immediacy ' in relation to that unit, which could absolve the Government from the obligation of complying fully with the audi alteram partem rule at the pre decisional or pre takeover stage.
As regards the other five units of the Company, the question whether on the basis of the evidential matter before the Government at the time of making the impugned order, any reasonable person could reasonably form an opinion about a likelihood of fall in production and the urgency of taking immediate action, will be discussed later.
For the purpose of the question under consideration we shall assume that there was a likelihood of fall in production.
Even so, the undisputed facts and figures of production of 2 or 3 years preceding the take over, relating to these units, show that on the average, production in these units has remained fairly constant.
Rather, in some of these units, an upward trend in production was discernible.
Be that as it may, the likelihood of fall in production or adverse effect on production in these five units, could not, by any stretch of prognostication or feat of imagination, be said to be imminent, or so urgent that it could not permit the giving of even a minimal but real hearing to the Company before taking over these units.
There was an interval of about six weeks between the Official Group 's Report, dated February 16, 1978 and the passing of the impugned order dated April 13, 1978.
There was thus sufficient time available to the Government to serve a copy of that report on the appellant Company and to give them a short measure opportunity to submit their reply and representation regarding the findings and recommendations of the Group Officers and the proposed action under Section 18AA(1).
The third reason for our forbearance to imply the exclusion of the audi alteram partem rule from the language of Section 18AA(1) (a) is, that although the power thereunder is of a drastic nature and the consequences of a take over are far reaching and its effect on the rights and interests of the owner of the undertaking is grave and deprivatory, yet the Act does not make any provision giving a full right of a remedial hearing equitable to a full right of appeal, at the post decisional stage.
The High Court seems to be of the view that Section 18F gives a right of full post decisional remedial hearing to the aggrieved party.
Shri Soli Sorabji also elaborately supported that view of the High Court.
In the alternative, the learned counsel has committed himself on behalf of his client, to the position, that the Central Government will if required, give the Company a full and fair hearing on merits, 584 including an opportunity to show that the impugned order was not made on adequate or valid grounds.
Shri Nariman on the other hand contends and we think rightly that the so called right of a post decisional hearing available to the aggrieved owner of the undertaking under Section 18F is illusory as in its operation and effect the power of review, if any, conferred thereunder, is prospective, and not retro active, being strictly restricted to and dependent upon the post takeover circumstances.
By virtue of sub section (2) of Section 18AA, the reference to Section 18A in Section 18F will be construed as a reference to Section 18AA, also.
The power of cancellation under Section 18F can be exercised only on any of these grounds : (i) "that the purpose of the order made under Section 18A has been fulfilled", or (ii) "that for any other reason it is not necessary that the order should remain in force".
These `grounds ' and the language in which they are couched is clear enough to show that the cancellation contemplated thereunder cannot have the effect of annulling, rescinding or obliterating the order of take over with retro active force; it can have only a prospective effect.
Section 18F embodies a principle analogous to that in Section 21 of the General Clauses Act.
The first `ground ' in Section 18F for the exercise of the power, obviously does not cover a review of the merits or circumstances preceding and existing at the date of passing the order of `take over ' under Section 18AA(1).
The words "for any other reason" if read in isolation, no doubt, appear to be of wide amplitude.
But their ambit has been greatly cut down and circumscribed by the contextual phrase "no longer necessary that it should remain in force".
Construed in this context, the expression "for any other reason" cannot include a ground that the very order of take over was invalid or void ab initio.
Thus, the post decisional hearing available to the aggrieved owner of the undertaking is not an appropriate substitute for a fair hearing at the pre decisional stage.
The Act does not provide any adequate remedial hearing or right of redress to the aggrieved party even where his under taking has been arbitrarily taken over on insufficient grounds.
Rather, the plight of the aggrieved owner is accentuated by the provision in 18D which disentitles him and other persons whose officers are lost or whose contract of management is terminated as a result of the `take over ', from claiming any compensation whatever for such loss or termination.
Before we conclude the discussion on this point, we may notice one more argument that has been advanced on behalf of the respondents.
It is argued that this was a case where a prior hearing to the Company could only be a useless formality because the impugned action has been 585 taken on the basis of evidence, consisting of the Balance sheet, account books and other records of the Company itself, the correctness of which could not have been disputed by the Company.
On these premises, it is submitted that non observance of the rule of audi altrem partem would not prejudice the Company, and thus make no difference.
The contention does not appear to be well founded.
Firstly, this documentary evidence, at best, shows that the Company was in debt and the assets of some of its `units ' had been hypothecated or mortgaged as security for those debts.
Given an opportunity the Company might have explained that as a result of this indebtedness there was no likelihood of fall in production, which is one of the essential conditions in regard to which the Government must be satisfied before taking action under Section 18(1)(a).
Secondly, what the rule of natural justice required in the circumstances of this case, was not only that the Company should have been given an opportunity to explain the evidence against it, but also an opportunity to be informed of the proposed action of take over and to represent why it be not taken.
In the renowned case, Ridge vs Baldwin & Ors.
(ibid), it was contended before the House of Lords that since the appellant police officer had convicted himself out of his own mouth, a prior hearing to him by the Watch Committee could not have made any difference; that on the undeniable facts of that case, no reasonable body of men could have reinstated the appellant.
This contention was rejected by the House of Lords for the reason that if the Watch Committee had given the police officer a prior hearing they would not have acted wrongly or unreasonably if they had in the exercise of their discretion decided to take a more lenient course than the one they had adopted.
A similar argument was advanced in section L. Kapoor vs Jagmohan & Ors to which decision two of us (Sarkaria and Chinnappa Reddy, JJ.) were parties.
In negativing this argument, this Court, inter alia, quoted with approval the classic passage, reproduced below, from the judgment of Megarry, J. in John vs Rees & Ors. "As everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were not; of unanswerable charges which, in the event, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determinations that, by discussion, suffered a change.
Nor are those with any knowledge of human 586 nature who pause to think for a moment likely to under estimate the feelings of resentment of those who find that a decision against them has been made without their being afforded any opportunity to influence the course of events.
" In General Medical Council vs Spackman, Lord Wright condemned the oft adopted attitude by tribunals to refuse relief on the ground that a fair hearing could have made no difference to the result.
Wade in his Administrative Law, 4th Edn., page 454, has pointed out that "in principle it is vital that the procedure and the merits should be kept strictly apart, since otherwise the merits may be prejudged unfairly".
In Maxwell vs Department of Trade & Industry, Lawton L.J. expressed in the same strain that "doing what is right may still result in unfairness if it is done in the wrong way.
" This view is founded on the cordinal canon that justice must not only be done but also manifestly be seen to be done.
Observance of this fundamental principle is necessary if the courts and the tribunals and the administrative bodies are to command public confidence in the settlement of disputes or in taking quasi judicial or administrative decisions affecting civil rights or legitimate interests of the citizens.
The same proposition was propounded in R. V. Thames Magistrates ' Court ex p. Polemis, by Lord Widgery C.J. at page 1375; and by the American Supreme Court in Margarita Fuentes et al., vs Tobert L. Shevin.
In concluding the discussion in regard to this aspect of the matter, we can do no better than reiterate what was said by one of us (Chinnappa Reddy, J.) in section L. Kapoor vs Jagmohan (ibid) : "In our view the principles of natural justice know of no exclusionary rule dependent on whether it would have made any difference if natural justice had been observed.
The non observance of natural justice is itself prejudice to any man and proof of prejudice independently of proof of denial of natural justice is unnecessary.
It ill comes from a person who has denied justice that the person who has been denied justice is not prejudiced.
" 587 We, therefore, over rule this last contention.
In sum, for all the reasons aforesaid, we are of the view that it is not reasonably possible to construe Section 18AA(1) as universally excluding, either expressly or by inevitable intendment, the application of the audi alteram partem rule of natural justice at the pre takeover stage, regardless of the facts and circumstances of the particular case.
In the circumstances of the instant case, in order to ensure fairplay in action it was imperative for the Government to comply substantially with this fundamental rule of prior hearing before passing the impugned order.
We therefore, accept the two fold proposition posed and propounded by Shri Nariman.
The further question to be considered is : What is the effect of the non observance of this fundamental principle of fairplay? Does the non observance of the audi alteram partem rule, which in the quest of justice under the rule of law, has been considered universally and most spontaneously acceptable principle, render an administrative decision having civil consequences, void or voidable ? In England, the outfall from the watershed decision, Ridge vs Baldwin brought with it a rash of conflicting opinion on this point.
The majority of the House of Lords in Ridge vs Baldwin held that the non observance of this principle, had rendered the dismissal of the Chief Constable void.
The rationale of the majority view is that where there is a duty to act fairly, just like the duty to act reasonably, it has to be enforced as an implied statutory requirement, so that failure to observe it means that the administrative act or decision was outside the statutory power, unjustified by law, and therefore ultra vires and void.
(See Wade 's Administrative Law, ibid, page 448).
In India, this Court has consistently taken the view that a quasi judicial or administrative decision rendered in violation of the audi alteram partem rule, wherever it can be read as an implied requirement of the law, is null and void.
(e.g. Maneka Gandhi 's case, ibid, and section L. Kapoor vs Jagmohan, ibid).
In the facts and circumstances of the instant case, there has been a non compliance with such implied requirement of the audi alteram partem rule of natural justice at the pre decisional stage.
The impugned order therefore, could be struck down as invalid on that score alone.
But we refrain from doing so, because the learned Solicitor General in all fairness, has both orally and in his written submissions dated August 28, 1979, committed himself to the position that under Section 18F, the Central Government in exercise of its curial functions, is bound to give the affected owner of the undertaking taken over, a "full and effective hearing on all aspects touching the validity and/or correctness of the order and/or action of take 588 over", within a reasonable time after the take over.
The learned Solicitor has assured the Court that such a hearing will be afforded to the appellant Company if it approaches the Central Government for cancellation of the impugned order.
It is pointed out that this was the conceded position in the High Court that the aggrieved owner of the undertaking had a right to such a hearing.
In view of this commitment/or concession fairly made by the learned Solicitor General, we refrain from quashing the impugned order, and allowing Civil Appeal 1629 of 1979 send the case back to the Central Government with the direction that it shall, within a reasonable time, preferably within three months from today, give a full, fair and effective hearing to the aggrieved owner of the undertaking, i.e., the Company, on all aspects of the matter, including those touching the validity and/or correctness of the impugned order and/or action of take over and then after a review of all the relevant materials and circumstances including those obtaining on the date of the impugned order, shall take such fresh decision, and/or such remedial action as may be necessary, just, proper and in accordance with law.
In view of the above decision, no separate order is necessary in Civil Appeals 1857 and 2087 of 1979.
All the three appeals are disposed of accordingly with no order as to costs.
Since the appeals have been disposed of on the first and foremost point canvassed before us, in the manner indicated above, it is not necessary to burden this judgment with a discussion of the other points argued by the counsel for the parties.
CHINNAPPA REDDY, J. I have the misfortune to be unable to agree with the erudite opinion of my learned brother Sarkaria on the question of the applicability of the principles of natural justice.
I do so with diffidence and regret.
The first of the submissions of Shri F. section Nariman, learned counsel for the appellant company was that there was a violation of the principles of natural justice.
He submitted that the provisions of the Industries (Development and Regulation) Act did not rule out natural justice and that there were several occasions in the march of events that led to the passing of the order under Sec.
18AA when an opportunity could have been given to the Company and the principles of natural justice observed but the Government of India refrained from doing so.
He urged that the immediate action contemplated by Sec.
18AA(1) (a) was not to be construed as negat 589 ing natural justice but as intended merely to distinguish it from action under Sec.
18A which was to be taken only after investigation under Sec. 15.
He drew inspiration for this argument from the marginal note to Section 18AA which is "power to take over industrial undertakings without investigation under certain circumstances".
He also urged that Sec.
18F contemplated a post decisional situation necessitating cancellation of the order of take over but did not contemplate cancellation of the order of take over on the ground that such order ought never to have been made.
He urged that the scope of Sec.
18F was very narrow and did not entitle the party affected to a fair hearing.
In any case he argued that the remedy such as it was provided by Sec.
18F was not an answer to the claim to pre decisional natural justice.
His submission was that natural justice was not to be excluded except by the clear and unmistakable language of the statute, though the "quantum" of natural justice to be afforded in an individual case might vary from case to case.
Shri Soli Sorabji, learned Solicitor General, while conceding that statutory silence on the question of natural justice should ordinarily lead to an implication by presumption that natural justice was to be observed, urged that the presumption might be displaced by necessary implication, as for instance where compliance with natural justice might be inconsistent with the demands of promptitude, and delayed action might lead to disaster.
The presumption of implication of natural justice was very weak where action was of a remedial or preventive nature or where such action concerned property rights only.
In appropriate situations post decisional hearing might displace pre decisional natural justice.
The statute itself might well provide for a post decisional hearing as a substitute for pre decisional natural justice in situations requiring immediate action.
18 F of the Industries Development and Regulation Act expressly provided for such a post decisional hearing and the urgency of the situation contemplated by Sec.
18AA necessarily excluded pre decisional natural justice.
There was no reason to belittle the scope of Sec.
18F, so, to exclude a fair post decisional hearing at the instance of the party affected and consequently, to imply pre decisional natural justice.
Both the learned counsel invited our attention to considerable case law.
I do not propose to discuss the case law as my brother Sarkaria has referred to all the cases in great detail.
Before I consider the submissions of the learned counsel as to the applicability of the principles of natural justice, a few prefatory remarks, however, require to be made.
590 Natural justice, like Ultra Vires and Public Policy, is a branch of the Public Law and is a formidable weapon which can be wielded to secure justice to the citizen.
It is productive of great good as well as much mischief.
While it may be used to protect certain fundamental liberties, civil and political rights, it may be used, as indeed it is used more often than not, to protect vested interests and to obstruct the path of progressive change.
In the context of modern welfare legislation, the time has perhaps come to make an appropriate distinction between natural justice in its application to fundamental liberties, civil and political rights and natural justice in its application to vested interests.
Our Constitution, as befits the Constitution of a Socialist Secular Democratic Republic, recognises the paramountcy of the public weal over the private interest.
Natural justice, Ultra Vires, Public Policy, or any other rule of interpretation must therefore, conform, grow and be tailored to serve the public interest and respond to the demands of an evolving society.
In Ridge vs Baldwin, it was thought by Lord Reid that natural justice had no easy application where questions of public interest and policy were more important than the rights of individual citizens.
He observed : "If a Minister is considering whether to make a scheme for, say, an important new road, his primary concern will not be with the damage which its construction will do to the rights of individual owners of land.
He will have to consider all manner of questions of public interest and, it may be, a number of alternate schemes.
He cannot be prevented from attaching more importance to the fulfilment of his policy than to the fate of individual objectors, and it would be quite wrong for the Courts to say that the Minister should or could act in the same kind of way as a board of works deciding whether a house should be pulled down." And, as pointed out by a contributor in 1972 Cambridge Law Journal at page 14 : ". the safeguarding of existing rights can after all in some circumstances amount to little more than the fighting of a rear guard action by the reactionary element in society seeking only to preserve its own vested position.
" The United States Supreme Court has recognised the distinction between cases where only property rights are involved and cases where other civil and political rights are involved.
In cases where only 591 property rights are involved postponement of enquiry has been held not to be a denial of due process, vide : Annie G. Phillips vs Commissioner of Internal Revenue, John H. Fahey vs Paul Mallonee, Margarita Fuentes vs Robert L. Shevin, Attorney General of Florida, and Lawrence Mitchell vs W. F. Grant Co. In the first case ; , Brandeis J observed: "Where only property rights are involved, mere postponement of the judicial inquiry is not a denial of due process, if the opportunity given for the ultimate judicial determination of the liability is adequate.
Delay in the judicial determination of property rights is not uncommon where it is essential that Governmental needs be immediately satisfied.
For the protection of public health, a state may order the summary destruction of property by administrative authorities without antecedent notice or hearing.
Because of the public necessity the property of citizens may be summarily seized in war time.
And at any time, the United States may acquire property by eminent domain, without paying, or determining the amount of the compensation before the taking.
" The principles of natural justice have taken deep root in the judicial conscience of our people, nurtured by Binapani, Kraipak, Mohinder Singh Gill, Maneka Gandhi etc.
They are now considered so fundamental as to be "implicit in the concept of ordered liberty" and, therefore, implicit in every decision making function, call it judicial, quasi judicial or administrative.
Where authority functions under a statute and the statute provides for the observance of the principles of natural justice in a particular manner, natural justice will have to be observed in that manner and in no other.
No wider right than that provided by statute can be claimed nor can the right be narrowed.
Where the statute is silent about the observance of the principles of natural justice, such statutory silence is taken to imply compliance with the principles of natural justice.
The implication of natural justice being presumptive it may be excluded by express words of statute or by necessary intendment.
Where the conflict is between the public interest and the private interest, the presumption must necessarily be weak and may, therefore, be readily displaced.
The presumption is also weak where what are involved are mere property rights.
In cases of urgency, particularly where the public interest is involved, pre emptive 592 action may be a strategic necessity.
There may then be no question of observing natural justice.
Even in cases of preemptive action.
if the statute so provides or if the Courts so deem fit in appropriate cases, a postponed hearing may be substituted for natural justice.
Where natural justice is implied, the extent of the implication and the nature of the hearing must vary with the statute, the subject and the situation.
Seeming judicial ambivalence on the question of the applicability of the principles of natural justice is generally traceable to the readiness of judges to apply the principles of natural justice where no question of the public interest is involved, particularly where rights and interests other than property rights and vested interests are involved and the reluctance of judges to apply the principles of natural justice, where there is suspicion of public mischief and only property rights and vested interests are involved.
In the light of these prefatory remarks, I will proceed to consider the relevant statutory provisions.
The Industries (Development and Regulation) Act, 1951, was enacted pursuant to the power given to Parliament by Entry 52 of List I of the Seventh Schedule to the Constitution.
As required by that Entry Section 2 of the Act declares that it is expedient in the public interest that the Union should take under its control the industries specified in the First Schedule to the Act.
Item 23 of the First Schedule to the Act relates to Textiles of various categories, Sec.
3(d) defines "Industrial undertaking" to mean "any undertaking pertaining to a scheduled industry carried on in one or more factories by any person or authority including Government".
The expression undertaking is not, however, defined Sec. 3(f) defines "Owner", "in relation to an industrial undertaking" as "the person who, or the authority which, has the ultimate control over the affairs of the undertaking, and, where the said affairs are entrusted to a manager, managing director or managing agents, such manager, managing director or managing agent shall be deemed to be the owner of the undertaking".
Sec. 3(j) provides that words and expressions not defined in the Act but defined in the Companies Act shall have the meaning assigned to them in that Act.
10 obliges the owner of an industrial undertaking to register the undertaking in the prescribed manner.
10A authorises the revocation of registration after giving an opportunity to the owner of the undertaking in certain circumstances.
11 provides for the licensing of the new industrial undertaking and Sec.
11A provides for the licensing of the production and manufacture of the new articles.
Sec. 13 provides, among other things, that, except under, and in accordance with, a licence issued in that behalf by the Central Government, no owner of an industrial undertaking shall effect any substantial expansion or 593 change the location of the whole or any part of an industrial undertaking.
14 provides for a full and complete investigation in respect of applications for the grant of licence or permission under Sections 11, 11A, 13 or 29B. Sec.
15 authorises the Central Government to make or cause to be made a full and complete investigation into the circumstances of the case if the Central Government is of the opinion that : (a) in respect of any scheduled industry or industrial undertaking or undertakings (i) there has been, or is likely to be, a substantial fall in the volume of production. for which, having regard to the economic conditions prevailing, there is no justification; or (ii) there has been, or is likely to be, a marked deterioration in the quality of any article. . . which could have been or can be avoided; or (iii) there has been or is likely to be a rise in the price of any article. . for which there is no justification; or (iv) it is necessary to take any such action for the purpose of conserving any resources of national importance; or (b) any industrial undertaking is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest.
After the investigation is made under Sec.
provides, if the Central Government is satisfied that such action is desirable, it may issue appropriate directions for (a) regulating the production of any article . and fixing the standards of production; (b) requiring the industrial undertaking to take such steps as the Central Government may consider necessary, to stimulate the development of the industry; (c) prohibiting resort to any act or practice which might reduce the undertaking 's production, capacity or economic value; (d) controlling the prices, or regulating the distribution of any article.
16(2) also provides for the issue of interim directions by the Central Government pending investigation under Sec. 15.
Such directions are to have effect until validly revoked by the Central Government.
594 Chapter III A consisting of Sections 18A, 18 AA.
18 B, 18 C, 18 D, 18 E and 18 F deals with "direct management or control of Industrial Undertakings by Central Government in certain cases".
18 A which is entitled "Power of Central Government to assume management or control of an industrial undertaking in certain cases" provides that the Central Government may, by notified order, authorise any person or body of persons to take over the management of the whole or any part of an industrial undertaking or to exercise in respect of the whole or any part of the undertaking such functions of control as may be specified in the order, if the Central Government is of opinion that : (a) an industrial undertaking to which directions have been issued in pursuance of Sec.
16 has failed to comply with such directions, or (b) an industrial undertaking in respect of which an investigation has been made under section 15 is being managed in a manner highly detrimental to the scheduled industry concerned or to public interest.
18 AA refers to "Power to take over industrial undertakings without investigation under certain circumstances".
It enables the Central Government by a notified order to authorise any person or body of persons to take over the management of the whole or any part of an industrial undertaking or to exercise in respect of whole or any part of the undertaking such functions of control as may be specified in the order, if, without prejudice to any other provisions of the Act, from the documentary or other evidence in its possession, the Central Government is satisfied in relation to the industrial undertaking, that "(a) the persons incharge of such industrial undertakings have, by reckless investments or creation of encumbrances on the assets of the industrial undertaking, or by diversion of funds, brought about a situation which is likely to affect the production of articles manufactured or produced in the industrial under taking, and that immediate action is necessary to prevent such a situation; or (b) it has been closed for a period of not less than three months (whether by reason of the voluntary winding up of the company owning the industrial undertaking or for any other reason) and such closure is prejudicial to the concerned scheduled industry and 595 that the financial condition of the company owning the industrial undertaking and the condition of the plant and machinery of such undertaking are such that it is possible to re start the undertaking and such re starting is necessary in the interests of the general public".
18 AA(5) stipulates that the provisions of Sections 18 B to 18 E shall be applicable to the industrial undertaking in respect of which an order has been made under section 18 AA even as they apply to an industrial undertaking taken over under Sec.
18 A. Sec.
18 B specifies the effect of a notified order under Sec.
18 A. Sec.
18C empowers the Court to cancel or vary contracts made in bad faith etc.
by the management of an undertaking before such management was taken by the Central Government.
18 D provides that there shall be no right to compensation for termination of office or contract as a result of the `take over '.
18 E deprives the shareholders and the Company of certain rights under the Indian Companies Act.
if the industrial undertaking whose management is taken over is a Company.
18 F empowers the Central Government on the application of the owner of the industrial undertaking or otherwise to cancel the order made under Sec.
18 A if it appears to the Central Government that the purpose of the order has been fulfilled or that for any other reason it is not necessary that the order should remain in force.
18FD(3) enables the Central Government to exercise the powers under Sec.
18 F in relation to an undertaking taken over under Sec.
18 AA.
The question for consideration is whether Sec.
18 AA excludes natural justice by necessary implication.
The development and regulation of certain key industries was apparently considered so basic and vital to the economy of our country that Parliament, in its wisdom, thought fit to enact the Industries Development & Regulation Act, after making the declaration required by Entry 52 of List I of the Seventh Schedule to the Constitution that it was expedient, in the public interest, that the Union should take under its control the industries specified in the schedule to the Act, as earlier mentioned by us.
Apart from making provision for the establishment of a Central Advisory Council and other Development Councils, and the licensing of scheduled industries, the Act empowers the Central Government to cause a full and complete investigation to be made where there is a substantial fall in the volume of production for which there is no justification having regard to the prevailing economic conditions or there is marked deterioration in the quality of the 596 goods produced or the price of the goods produced is rising unjustifiably or where conservation of resources of national importance is necessary or the industrial undertaking is being managed in a manner highly detrimental to the scheduled industry or to public interest (Sec. 15) and thereafter to issue necessary and appropriate directions to the industrial undertaking to mend matters suitably (Sec. 16).
Where the instructions issued under Sec.
16 are not complied with or where the investigation reveals that the industrial undertaking is being managed in a manner highly detrimental to the scheduled industry or to the public interest the Central Government may take over the industry under Sec.
Whether there is an investigation or not, the Central Government may also `take over ' the management of the industry under Sec.
18 AA, if consequent on certain wilfull acts of commission on the part of the management the production is likely to be effected but immediate action may prevent such a situation, or the industrial undertaking has been closed for a period of not less than three months and the closure is prejudicial to the scheduled industry.
Action under Sec.
18 AA is thus preventive and remedial.
Where there is an apprehension that production is likely to be affected as a result of the wilfull acts of the management or where the production has already come to a stand still because of the closure of the undertaking for a period of not less than three months the Central Government is authorised to intervene to restore production.
The object clearly is to take immediate action to prevent a situation likely to affect production or to restore production.
There was some argument at the Bar that the expression `immediate action ' was not to be found in Sec.
18 AA(1) (b).
I do not think that the absence of the expression "immediate action in Sec.
18 AA(1)(b) makes any difference.
18 AA(1)(a) refers to a situation where immediate preventive action may avert a disaster, whereas Sec.
18 AA contemplates a situation where the disaster has occurred and action is necessary to restore normalcy.
Restoration of production where production has stopped in a key industry or industrial undertaking is as important and urgent, in the public interest, as prevention of a situation where production may be affected.
Immediate action is, therefore, as necessary in the situation contemplated by Sec.
18 AA(1)(b) as in the situation contemplated by Sec. 18 AA(1)(a).
It is true that the marginal note refers to the power to take over without investigation but there is no sufficient reason to suppose that the word `immediate ' is used only to contra distinguish it from the investigation contemplated by Sec. 15 of the Act, though, of course a consequence of immediate action under Sec.
18 AA may be to dis 597 pense with the enquiry under Sec. 15.
In fact, facts which come to light during the course of an investigation under Sec. 15 may form the basis of action under Sec. 18 AA(1)(a).
Where in the course of an investigation under Sec.
15 it is discovered that the management have, by reckless investments or creation of encumbrances on the assets of the industrial undertaking or by diversion of funds brought about a situation which is likely to affect the production of the articles manufactured or produced in the industrial undertaking, if the Government is satisfied that immediate action is necessary to prevent such a situation, there is no reason why the Central Government may not straight away take action under Sec. 18 AA(1)(a) without waiting for completion of investigation under Sec. 15.
Parliament apparently contemplated a situation where immediate action was necessary, and having contemplated such a situation, there is no reason to assume that Parliament did not contemplate situations which brooked not a moments delay.
If Parliament also contemplated situations which did not brook a moment 's delay, it would be difficult to read natural justice into Sec.
18 AA.
The submission of Shri Nariman was that the immediacy of the situation would be relevant and relatable to the quantum of natural justice and not to a total denial of natural justice.
According to him the scope and extent of the opportunity to be given to the party against whom action is taken may depend upon the situation but nothing would justify a negation of a natural justice.
He pointed out that in a situation of great urgency which brooked no delay, an order under Sec.
18 AA might be made, the situation could be so frozen that the persons incharge of the industrial undertaking might do no more mischief and the Government could then, without giving further effect to the order under Sec.
18 AA, give a notice to the person incharge to show cause why the order under Sec.
18 AA should not be given effect.
In another given case, according to Shri Nariman, notice of, say two weeks, might be given before making an order, if the making of an order was not so very urgent.
He suggested that the opportunity to be given might vary from situation to situation but opportunity there must be, either before the decision was arrived at or so shortly after the decision was arrived at and before any great mischief might result from the order.
The argument of Shri Nariman would vest in the Government a power to decide from case to case the extent of opportunity to be given in each individual case and, as a corollary, a corresponding right in the aggrieved party to claim that the opportunity provided was not enough.
Such a procedure may be possible, practicable and desirable in situations where there is no statutory provision enabling the decision making authority to review, or reconsider its decision.
Where there is a 598 provision in the statute itself for revocation of the order by the very authority making the decision, it appears to us to be unnecessary to insist upon a pre decisional observance of natural justice.
The question must be considered by regard to the terms of the statute and by an examination, on the terms of the statute, whether it is possible, practicable and desirable to observe pre decisional natural justice and whether a post decisional review or reconsideration provided by the statute itself is not a sufficient substitute.
The likelihood of production being jeopardized or the stoppage of production in a key industrial undertaking is a matter of grave concern affecting the public interest.
Parliament has taken so serious a view of the matter that it has authorised the Central Government to take over the management of the industrial undertaking if immediate action may prevent jeopardy to production or restore production where it has already stopped.
The necessity for immediate action by the Central Government, contemplated by Parliament, is definitely indicative of the exclusion of natural justice.
It is not as if the owner of the industrial undertaking is left with no remedy.
He may move the Central Government under Sec.
18 F to cancel the order made under Sec.
18 AA.
True some mischief affecting the management and top executives may have already been done.
On the other hand, greater mischief affecting the public economy and the lives of many a thousand worker may have been averted.
While on the one hand mere property rights are involved, on the other vital public interest is affected.
This . again, in the light of the need for immediate action contemplated by Parliament, is a clear pointer to the exclusion of natural justice.
It was submitted by the learned counsel that Sec.
18 F did not provide any remedy but merely provided for cancellation of an order of take over on the fulfilment of the purpose of the order of take over or for any other reason which rendered further continuance in force of the order unnecessary because of the happening of subsequent events.
According to the learned counsel the basic assumption of Sec.
18 F was the validity of the order under Sec.
18 A or Sec.
18 AA.
All that Sec.
18 F did was to prescribe conditions for the exercise of the general power which every authority had under Sec.
21 of the General Clauses Act to cancel its own earlier order.
It was said that if Sec.
18 F could be said to impliedly exclude natural justice there is then no reason not to hold that Sec.
21 of the General Clauses Act similarly excluded natural justice in every case.
I am unable to agree with these submissions of the learned counsel.
Neither Sec.
18 F of the Industries (Development and Regulation) Act nor Sec.
21 of the General Clauses Act, by itself, excludes natural justice.
The exclusion of natural justice, where such exclusion is not express, has to be implied by reference 599 to the subject, the statute and the statutory situation.
Where an express provision in the statute itself provides for a post decisional hearing the other provisions of the statute will have to be read in the light of such provision and the provision for post decisional hearing may then clinch the issue where pre decisional natural justice appears to be excluded on the other terms of the statute.
That a post decisional hearing may also be had by the terms of Sec.
21 of the General Clauses Act may not necessarily help in the interpretation of the provisions of the statute concerned.
On the other hand even the general provision contained in Sec.
21 of the General Clauses Act may be sufficient to so interpret the terms of a given statute as to exclude natural justice.
As I said it depends on the subject, statute and the statutory situation.
I am, therefore, satisfied that the principles of natural justice are not attracted to the situations contemplated by Sec.
18 AA of the Industries (Development and Regulation) Act.
In view of the order proposed by my learned brothers Sarkaria and Desai JJ.
I do not propose to consider the other questions.
ORDER As per majority decision, the appeals are allowed.
N. K. A. Appeals allowed.
[/INST]A notice was issued to the Sajjadanashin of the appellant institution stating that consequent on the coming into force of the Bombay Personal Inams Abolition Act 1952 exemption from payment of land revenue was extinguished in respect of the inam village and that he should hand over the village records to mamlatdar.
The appellent in a suit filed in the Civil Court claimed that the inam was held by a religious institution and that, therefore, the provisions of the 1952 Act had no application to it.
In replication the State claimed that under the provisions of the 1952 Act the State Government alone was competent to decide the question whether the grant was a personal or a religious inam and that the Civil Court had no jurisdiction to decide it.
Holding that it was a personal inam the Trial Court dismissed the appellant 's suit.
When the appellant 's appeal was pending before the High Court the Gujarat Devasthan Inams Abolition Act, 1969 was passed abolishing the inams held by religious charitable institutions as well.
On the question of jurisdiction to decide whether an inam was personal or religious the High Court held that it was the State Government and not the Civil Court which had exclusive jurisdiction in this respect.
In appeal to this Court it was contended on behalf of the appellant that unless the jurisdiction of the Civil Court is barred specifically or by necessary implication the Civil Court would have jurisdiction and that the finality contemplated by Explanation I to section 2 (1) (e) (which provides that if any question arises whether any grant is a personal inam such question shall be referred to the State Government and that the decision of the State Government shall be final) is only for the purposes of the 1952 Act and could not stand in the way of the Civil Court entertaining the suit.
883 Allowing the appeal, ^ HELD: 1.
The finality of the decision of the Government as contemplated by Explanation I to section 2(1) (e) of the Act cannot exclude the jurisdiction of the Civil Court.
Except for the Explanation, there is no other provision in the Act touching upon the jurisdiction of the Civil Court.
[890 C D] 2.
In Dulabhai vs State of Madhya Pradesh, ; this Court held that where a statute gave finality to the orders of the special tribunal the .
Civil Court 's jurisdiction must be held to be excluded if there is adequate remedy to do what the Civil Courts would normally do in a suit.
Under the provisions of the 1952 Act it cannot be said that an adequate remedy is available to the plaintiffs on reference made to the Government.
[888 G.H] 3.
The second principle laid down in the above case is that where there is an express bar to the jurisdiction of the Court, an examination of the scheme of the Act to find out the adequacy or the sufficiency of the remedies provided there in may be relevant.
In the absence of any details in the enactment about the reference to be made to the Government, the procedure to be followed by the Government, and the opportunity to be afforded to the aggrieved party, it cannot be held that the expression "finality of the decision of the Government" used in the Explanation was meant to bar the jurisdiction of the Civil Court.
[890 F G] 4.
The High Court, however, erred in travelling beyond the provisions of the 1952 Act by referring to the provisions of the 1969 Act and coming to the conclusion that Explanation I to section 2(1) (e) of the 1952 Act and section 20 of the 1969 Act put beyond the pale of any doubt that the jurisdiction of the Civil Court had been taken away by the legislature to determine the question whether a particular Inam was a personal or devasthan inam.
The High Court was not justified in invoking the provisions of the 1969 Act while deciding a case under the 1952 Act.
[891 E G] 5.
An entry in the alienation register as to whether an inam is personal or religious cannot be said to be so sacrosanct that it cannot be changed.
Explanation 1 to section 2 (1) (e) of the 1952 Act indicates that the entry in the register is not an essential part of the definition of personal inam but is only descriptive.
If the Government decides a case contrary to the entry in the register of alienation the register shall be deemed to have been amended.
If an entry in the register would be deemed to have been automatically amended by the decision of the Government, there is no sanctity to such entry.
The explanation itself contemplates a change in view of the decision of the Government on the question.
An entry in the register is mainly intended to serve the purpose of realisation of land revenue.
[892 C D] 6.
Section 203 of the Bombay Land Revenue Code provides for an appeal to a superior officer from an order passed by the revenue officer.
This section cannot be said to completely bar the jurisdiction of the Civil Court because section 212 of the Code contemplates that whenever it is declared that a decision or order shall be final such expression shall be deemed to mean that no appeal lies from such decision or order.
If this is what finality meant under section 212 it cannot be said that the jurisdiction of the Civil Court is barred.
[893 A C] 884
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<s>[INST] Summarize the judgementCriminal Appeal No. 559 of 1983.
From the Judgment and Order dated 7.1.1982 of the Punjab and Haryana High Court in Crl.
Appeal No. 537 (SB) of 1980.
Harbans Lal, I.S. Goel and K. Chaudhri for the Appellant.
Govind Mukhoty (Amicus Curiae) for the Respondent.
The Judgment of the Court was delivered by BALAKRISHNA ERADI, J.
Uttam alias Cheaku, the respond ent herein along with three others was tried by the learned Additional Sessions Judge, Gurgaon for alleged commission of offences under Sections 395,397 and 4 12 of the Indian Penal Code.
By judgment dated July 21.
1980, the learned Addition al Sessions Judge held that the charge against Uttam under Section 395 I.P.C. was proved beyond all reasonable doubt and he was accordingly convicted and sentenced to undergo rigorous imprisonment for four years.
The other three ac cused were acquitted on the ground that their participation in the crime was not sufficiently proved and hence they were entitled to the benefit of doubt.
The respondent carried the matter in appeal to the High Court of Punjab and Haryana.
The High Court by its impugned judgment dated January 7, 1982 allowed the said appeal, extending the benefit of doubt to the respondent, and set aside his conviction and sen tence.
The State of Haryana has come up to this Court with this appeal against the said order of acquittal after ob taining Special leave from this Court.
Briefly stated, the prosecution case i.s that on October 24, 1978, Om Parkash (P.W. 5) accompanied by his wife Jai Rani (P.W. 6) and their daughter Neelam left Delhi in the early hours of the morning for Jaipur by car.
Om Parkash and his wife Jai Rani were in the front seat of the vehicle while their daughter was occupying the rear seat.
When their car had reached about 10 12 Kms.
beyond Gurgaon on the Delhi Jaipur Road, another car bearing registration No. DEA 2914 came 1067 from behind and attempted to overtake their vehicle.
Even though Om Parkash had made way for the other car to pass, that car deliberately swerved to the left side and struck against the front wheel of his car, whereupon Om Parkash stopped his car on the left side of the road in the kacha portion.
In the meantime, the other car also stopped at a distance of about ten paces ahead and five persons came out of that vehicle.
It is stated that two or three out of them were armed with revolvers and others with daggers.
Om Par kash got out of the vehicle and asked the assailants as to why they had caused the accident.
In the meantime, Jai Rani also came out of the car.
One of the assailants then gave a couple of knife blows in the chest of Om Parkash, whereupon he tried to raise an alarm.
Hearing the said cry ' for help, some trucks which were passing along that road tried to stop but one of the assailants who was armed with a pistol, fired shots in the air and scared away those truck drivers.
There after one of the assailants removed the ear rings, necklace and wrist watch from the person of Jai Rani and in that process one of her ear lobes was cut as under.
The wrist watch and purse of Om Parkash were also removed by one of the culprits.
Apart from that, three attache cases which were on the luggage carrier of the car were also forcibly removed and taken away by the miscreants.
Before the cul prits left the spot in their car with all the booty, a shot was fired by one of them which hit Om Parkash on his fore head.
After inflicting the said injury, the miscreants made good their escape.
Om Parkash somehow managed to drive back his car to Gurgaon and there he contacted his partner Joginder Singh (P.W. 7) to whom he narrated the whole incident.
Om Parkash was immediately taken to Civil Hospital, Gurgaon where he was medically examined and various injuries were found on his person.
Jai Rani also medically examined and the injury on her right ear lobe was declared to be grievous.
The other injuries were found to be simple for which she was given first aid.
The first information report was thereafter lodged with the police by Om Parkash and Sub Inspector Tilak Raj (P.W. 21) carried out the investigation.
He recovered empty cartridge cases (Exhibits P. 15 and P. 16), one wad (Exhibit P. 17) and one Ball Point Pen (Exhibit P. 18) from the place of occurrence.
During the investigation it was found that the car used by the culprits had been stolen on October 23, 1973 from the house of its owner, one S.K. Mahajan.
Subsequently, on October 27, 1978, the car was found lying abandoned in the Ghaziabad factory area and it was taken into police custody.
The accused were arrested after a fairly long delay since it so happened that subsequent to the occurrence in question the accused 1068 persons had been allegedly involved in the commission of other crimes in the State of Uttar Pradesh and they were lodged in the Meerut jail.
After the accused were brought from Meerut, two test identification parades were held, one separately for Uttam at his request and the other for the remaining suspects.
In the first parade, Uttam was correctly identified by both Om Parkash and Jai Rani.
In the second identification parade, Om Parkash failed to identify any of the other accused whereas Jai Rani identified Trilok Singh, who was accused No. 2.
On the basis of the information furnished by the accused the Investigating Officer and the police party led by him recovered some of the articles which formed the contents of the suit cases removed from the car of the victims.
They consisted of new suit length cloths, sarees, trousers, blouses, petti coats etc.
The Prosecution examined in all 22 witnesses in its endeavour to establish the guilt of the accused in relation to the the charges framed against them.
The learned Addi tional Sessions Judge after an elaborate and analytical discussion of the whole evidence recorded the conclusion that the participation of the respondent Uttam in the com mission of the crime was established beyond all doubt inas much as he had been identified by both Om Parkash (P.W. 5) and Jai Rani (P.W. 6), and the testimony given by these two witnesses narrating the details of the incident of robbery and assault was not in any manner shaken in cross examina tion and deserved to be accepted as wholly truthful.
The remaining three accused were given the benefit of doubt mainly on the ground that excepting the second accused who had been identified only by Jai Rani at the identification parade, the others were not identified either by Jai Rani or by Om Parkash and hence there was no satisfactory proof of their participation in the crime.
In the light of the afore said conclusion reached by him, the learned Additional Sessions Judge convicted the respondent Uttam under Section 395 I.P.C. and sentenced him to undergo rigorous imprison ment of four years.
The High Court by a judgment which we are constrained to characterise as most perfunctory has set aside the judgment of the learned Additional Sessions Judge in so far as he was convicted the respondent herein and acquitted him.
We regret to have to remark that the High Court has dealt with the case in a very superficial and casual manner and has not even taken to,trouble to discuss the evidence adduced in the case before it proceeded to interfere with the well consid ered judgment of the trial court.
Both Om Parkash (P.W. 5) and Jai Rani (P.W. 6) had clearly identified the respondent at the test identification parade as well as in the Court and they had 1069 clearly and unequivocally deposed that he was one of the assailants who took part in the robbery and assault.
Their testimony has been discussed at length by the learned Addi tional Sessions Judge and he has given sound and convincing reasons for accepting and acting upon the same.
The whole discussion of the case by the High Court is contained in one short paragraph of its judgment namely, paragraph 6.
It is not disclosed anywhere therein as to why the High Court considered that the testimony of these two witnesses who were the victims of the crime could not be accepted and why it could not form the foundation for the conviction of the respondent.
A case of highway robbery, such as this, should have been dealt with much more seriousness and care than has been bestowed on it by the High Court.
The approach of the High Court to the case and the conclusion recorded by it cannot but be characterised as manifestly illegal and per verse.
In the absence of any discussion of the evidence by the High Court, we have ourselves gone through the entire evi dence adduced in the case with the assistance of the Counsel appearing in both sides.
We are in complete agreement with the conclusion recorded by the learned Additional Sessions Judge that from the evidence of Om Parkash (P.W. 5) and Jai Rani (P.W. 6), the participation of the accused in the commission of the offence has been proved beyond all reason able doubt.
The respondent was, therefore, rightly convicted by the learned Additional Sessions Judge and the only mis take committed by the learned Additional Sessions Judge was in not in awarding a more severe sentence commensurate with the gravity of the offence.
In the result, we allow the appeal, set aside the judg ment Of the High Court and restore that of the learned Additional Sessions Judge convicting the respondent under Section 395 I.P.C. and sentencing him to undergo rigorous imprisonment of four years.
The Bail Bond of the respondent will stand cancelled.
He shall be taken into custody forth with to serve out the remaining portion of the sentence.
N.P.V. Appeal allowed.
[/INST]The respondent, a member of the Indian Police Service was the Inspector General of Police, Haryana from June 30, 1979 to July 25, 1980.
The Home Secretary to the Government of Haryana made certain adverse remarks against the respondent which after acceptance were communicated to the respondent on May 4, 1982, about two years and three months after the close of the relevant period on March 31, 1980.
The respondent filed a writ petition challenging the authority of the Home Secre tary to write a confidential report assessing the per 1031 formance, character, conduct and qualities of the respondent as Inspector General of Police and for the quashing of such report or adverse remarks, which was dismissed by a Single Judge of the High Court.
The respondent filed an appeal and the Division Bench set aside the judgment of the Single Judge and allowed the writ petition holding that the Home Secretary had no authority to submit any report against the performance of the respondent for the aforesaid period during which he was the Inspector General of Police, Haryana.
In the appeal by special leave by the State of Haryana it was submitted that as the Police Department has been placed under the Home Department and the Home Secretary being the head of the Department, the Home Secretary must necessarily be the Head of the Police Department under the Business of the Haryana Government (Allocation) Rules, 1974.
It was also stated that the provisions of Rules 5, 6, 6A and 7 of the All India Services (Confiden tial Rolls) Rules 1970 are directory and not mandatory.
It was urged by the respondent that the Business Rules framed under Article 166 cannot be relied upon for the purpose of interpreting the provisions of clause (e) of Rule 2 of the Rules, and in view of the delay in communica tion, the adverse remarks lost all importance and should be struck down on that ground.
Dismissing the appeal, HELD: 1.
A reporting authority must be a person to whom the member of the Service is answerable for his performances.
Such an authority must be one superior in rank to the member of the Service concerned.
The State Government can specifically empower only such authority as the reporting authority as is superior in rank to the Inspector General of Police.
[1036H; 1037A B] 2.1 The Business Rules have been framed under clauses (2) and (3) of Article 166 of the Constitution for the more convenient transaction of the business of the Government of Haryana and for the allocation of business among the Ministers.
[1038E F] 2.2 Under Rule 4 of the Business Rules, the Secretary of each Department of the Secre tariat is the head of the Department.
Thus, the Secretary of the Home Department is the head of the Home Department being a Department of the Secretariat, but merely because he has to conduct the business.
on behalf of the Government, of the Police 1032 Department, he does not thereby become the Head of the Police Department.
[1038F G] 2.3 The Rules of Business that have been framed under Article 166 cannot override the provisions of the Act, or any statutory rules.
In view of Section 3 and 4 of the read with Rule 1.2 to the Punjab Police Rules, the Inspector General of Police, Haryana is the Head of the Police Department.
The immediate authority superior to Inspector General of Police is the Minister in Charge of the Police Department.
The only authority who could be specifically empowered as the report ing authority in regard to the Inspector General of Police under clause (e) of Rule 2 of the All India Services (Confidential Rolls) Rules is the Minister in Charge and the Chief Minister being superior to the Minister in Charge may be the reviewing authority under clause (f) of Rule 2.
[1039D E] 4.1 Rules 5, 6, 6A and 7 of the All India Services (Confidential Rolls) Rules require that the whole process from the writing of the confidential reports assessing the perform ance, character conduct and qualities of every member of the service, to the communication of the adverse remarks should be completed within a period of seven months.
In the instant case, the adverse remarks were communicated after 27 months.
[1040F G] 4.2 The whole subject of the making and communication of adverse remarks is to give to the officer concerned an opportunity to im prove his performance, conduct or character, as the case may be, and this object would be lost if they are communicated to the officer concerned after an inordinate delay.
Adverse remarks should not be understood in terms of punishment, but really should be taken as an advice to the officer concerned, so that he can act in accordance with the advice and improve his service career.
[1041A B] 4.3 Rules 5, 6, 6A and 7 are directory and not mandatory, but that does not mean that the directory provisions need not be complied with even substantially.
But, where compliance after an inordinate delay would be against the spirit and object of the directory provision, such compliance would not be substantial compliance.
[1041C D] 4.4 While the provisions of Rules 5, 6, 6A and 7 require that everything including the communication of the adverse remarks should be completed within a period of seven months, this period cannot be 1033 stretched to twenty seven months, simply because these rules are directory, without serving any purpose consistent with the spirit and objective of these Rules.
[1041D E]
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<s>[INST] Summarize the judgementON: Criminal Appeals Nos.165 168 of 1962.
Appeals by special leave from the judgment and order dated August 25, 1962 of the Patna High Court in Criminal Revisions Nos.527 to 530 of 1962.
Nuruddin Ahmad and U. P. Singh, for the appellants.
section P. Varma and R. N. Sachthey, for the respondents.
The Judgment of the Court was delivered by Mudholkar, J.
This judgment will also govern Crl.No. 166 of 1962, 167 of 1962 and 168 of 1962.
A common question arises in these appeals from a judgment of the Patna High Court dismissing four revision applications preferred before it by four sets of appellants in the appeals before us.
Counsel on both the sides agree that since the relevant facts of all the proceedings are similar and the question of law arising from them is the same it will be sufficient to refer to the facts of Case No. TR 320/60.
Four informations were lodged at the police station, Ghora Saha on April 14, 1960 by different persons against the different appellants in these cases and a similar information was lodged against some of the appellants by one Mali Ram.
In all these cases the allegations made by the informants were that each set of the accused persons armed with deadly weapons went to the shops of the various informants, demanded from them large sums of money and threatened them with death if they failed to pay the amounts demanded by them.
The informations also stated that 742 some of these persons paid part of the money and were given time to pay the balance while some agreed to pay the amounts demanded.
Upon informations given by these persons offences under section 392, Indian Penal Code, were registered by the station officer and after investigation five challans were lodged by him, in the court of Magistrate.
First Class at Motihari.
One of the cases ended in an acquittal but we have not been informed of the date of the judgment in that case.
In the other four cases trial had come to a close in that all the prosecution witnesses and the defence witnesses had been examined and the cases had been closed for judgment.
In the case against the appellants in Crl. A. 165 of 1962 the challan was presented on October 27, 1960.
The order sheet of that date reads as follows: Date of order Order with the Office action section No. or proceeding signature of taken with the Court date 1.27 10 1960 All the 4 accused are present Heard both sides.
It is argued on behalf of the prosecution that it is a fit case for adopting procedure under Chapter XVIII Cr. P. C. and also that the entire occurrence relates to offences committed on 4 dates so that all of them cannot be dealt with in a single case.
Discussed law point "Charge u/s 302, I.P.C. framed against accused Thakur Ram and Jagarnath Pd. and explained to them.
They plead not guilty.
This case will constitute an independent case.
As for the other parts of the alleged occurrence accused Jagarnath, Kamal Ram and Bansi Rain are charged separately u/s 384, I.P.C. and further accused Thakur Ram u/s 384/109, I.P.C. and explained to the respective accused.
They plead not guilty.
These charges relating to three incidents on 3 dates will constitute a separate single case.
Start separate order sheet for both Summons P.W. for 26 10 60 and 27 11 60.Accused as before.
Sd/ O. Nath".
The trial dragged on for nearly 15 months and then the prosecution made an application to the court for framing a charge 743 under section 386 or section 387, Indian Penal Code and for committing the case to a court of Sessions.
This was disposed of by the learned Magistrate on January 25, 1962.
The relevant portion of his order sheet of that date reads thus "Accused absent.
A petition for their representation u/s 540 A, Cr P.C. is filed.
Allowed.
No reference book is produced.
Persued the record.
The prosecution has pressed to refer the case to the Court of Sessions u/s 386 or 387 I.P.C.
On close scrutiny I find that the robbery defined inside 390 I.P.C. fully cover the ingredients pointed out and asked by the prosecution side.
The case has entered in the defence stage.
This point was not introduced ever before.
The charge was framed u/s 392, I.P.C. after hearing the parties.
Although it may be referred to the superior court at any stage, I find no reason to do so.
Put up on 28 2 62.
All accused to appear with D.Ws without fail.
Accused as before.
" On February 28, 1962 the prosecution moved a petition for stay of proceedings on the ground that it wanted to prefer an application for revision of the order of January 25, 1962.
Stay was refused and the case was proceeded with.
On March 17, 1962 the defence case was closed and the case was fixed for March 29, 1962 for arguments.
On that date a second application was made for committing the case to a court of Sessions.
It would appear from the order sheet of March 29, 1962 that the Magistrate heard the parties and ordered the case to be put up on the next day, that is March 30, 1962.
On this day the Magistrate passed an order to the following effect "30 3 62 All the 2 accused persons are present.
Having carefully gone through the law points and section 236 Cr.P.C. I do not find that it is a case exclusively coming u/s 386 or 387 I.P.C. Hence the prosecution prayer is rejected."
Immediately thereafter a revision application was preferred, not by the prosecution, but by Sagarmal, an informant in one of the other three cases.
The Sessions Judge, Champaran, after briefly reciting the facts and reasons on which the order of the trying Magistrate was founded, disposed of the revision application in the following words: .lm15 "The cases are of very serious nature and the framing of charges under sections 386 or 387, I.P.C. can 744 not be ruled out altogether.
Consequently, I direct that each of these cases should be tried by a Court of Session.
The learned Magistrate will commit the accused persons for trial accordingly.
The applications are thus allowed.
" An application for revision was preferred by the appellants before the High Court and the main ground urged on their behalf was that the Sessions Judge had no jurisdiction to pass an order for commitment as there was no order of discharge by the Magistrate.
There is conflict of authority on the question whether under section 437, Cr.P.C. a Sessions Judge can, in the absence of an express order of discharge, direct commitment of a case to it while the trial is proceeding before a Magistrate in respect of offences not exclusively triable by a Court of Sessions.
After referring to some decisions and relying upon two decisions of the Allahabad High Court the learned Judge who disposed of the revision application observed as follows "As I have already indicated, in the instant cases, the trial Magistrate, after hearing the parties, refused to frame a charge for the major offence under section 386 or section 387 of the Indian Penal Code.
The refusal by the Magistrate to frame a charge under section 386 or 387 of the Indian Penal Code was a final order and it amounted to an order of discharge of the accused of the offence under those sections.
That being the position, the learned Sessions Judge had full jurisdiction to order for commitment."
The learned Judge further observed "Without expressing any opinion on the merits of the four cases, I would state, that, on the materials on record, the Sessions Judge was not unjustified in passing the impugned order for commitment of the accused in the four cases.
The order of the Magistrate refusing to frame a charge under section 386 or section 387 of the Indian Penal Code, which amounted to an order of the implied discharge of the accused, was improper in all the four cases." and dismissed the revision applications.
Am application was made for a certificate of fitness to appeal to this Court.
That was rejected and the appellants have come here by special leave.
745 The ambit of the powers of the Sessions Judge under section 437, Cr.P.C. has been considered by a Full Bench of the Allahabad High Court in Nahar Singh vs State(1).
In that case it was held that the powers conferred by that section are exercisable only in a case where a Magistrate by an express order discharges an accused person in respect of an offence exclusively triable by a court of Sessions.
The learned Judges constituting the Full Bench have taken the view that in the light of certain provisions of the Code to which they adverted, the failure of or refusal by a Magistrate to commit an accused person for trial by a court of Sessions does not amount to an implied discharge of the accused person so as to attract the power of the Sessions Judge under section 437, Cr.P.C. to direct the Magistrate to commit the accused person for trial by a court of Sessions on the ground that the offence is exclusively triable by a Court of Sessions.
The Full Bench decision has been followed in Sri Dulap Singh & ors.vs State through Sri Harnandan Singh(2).
Before us reliance is also placed on behalf of the appellants on the decision in Yunus Shaikh vs The State(3).
That decision, however, is of little assistance to them because the ground on which the High Court set aside the order of the Sessions Judge is not that he had no jurisdiction to make it under section 437, Cr.P.C. but that the action of the Magistrate in not framing a charge under section 366 of the Indian Penal Code but framing a charge only under section 498, T.P.C. did not, in the light of the material before him, amount to an improper discharge of the accused in respect of an offence triable by a Court of Sessions.
The view taken by the Allahabad High Court has been accepted as correct in Sambhu Charan Mandal vs The State(4 ) .
On the other hand a Full Bench of the Madras High Court has held in in re Nalla Baligadu(5) that where under section 209(1) a Magistrate finds that there are not sufficient grounds for committing the accused for trial and directs such person to be tried before himself or some other Magistrate, the revisional powers under section 437, Cr.P.C. can be exercised before the conclusion of the trial before such Magistrate.
The learned Judges expressly dissented from the view taken by the Full Bench of the, Allahabad High Court.
This decision has been followed in, Rambalam Pd.Singh vs State of Bihar(6).
Other decisions which take the same view as the Madras High Court are : Krishnareddi (1) I.L.R. [1952] 2 All. 152.(3) A.I.R. 1953 Cal.(5) A.I.R. 1953 Mad. 801.(2) A.I.R. 1954 All.(4) (6) A.I.R. 1960 Patna 507.746 v.Subbamma(1); Shambhooram vs Emperor(2); Sultan Ali vs Emperor( '); and in re Valluru Narayana Reddy & ors.(4 ) .
In order to decide the question which has been raised before us it would be desirable to bear in mind the relevant provisions of the Code of Criminal Procedure.
Section 207 provides that in every inquiry before a Magistrate where the case is triable exclusively by a Court of Sessions or High Court, or, which in the opinion of the Magistrate, ought to be tried by such Court, the Magistrate must in any proceeding instituted on a police report, follow the procedure specified in section 207 A. Under section 207 A the Magistrate, after perusing the police report forwarded under section 173, has to fix a date for hearing and require the production of the accused on that date.
He has also the power to compel the attendance of such witnesses or the production of any document or thing on that date if an application is made in that behalf by the officer conducting the prosecution.
On the date of hearing the Magistrate, after satisfying himself that copies of the documents referred to in section 173 have been furnished, has to proceed to take the evidence, of such persons, if any, as are produced as witnesses to the actual commission of the offence.
After the examination of those witnesses and after their cross examination by the accused the Magistrate may, if he thinks it necessary so to do in the interest of justice, take the evidence of any one or more of the other witnesses for the prosecution.
He has then to examine the accused for the purpose of enabling him to explain the circumstances appearing in the evidence against him and hear both the proseeution as well as the accused.
If at that stage he is of opinion that no round for committing the accused for trial exists, the Magistrate can, after recording his reasons, discharge the accused.
If, however, it appears to the Magistrate that such person should be tried by himself or some other Magistrate he must proceed accordingly.
This contingency will arise if the Magistrate forms an opinion that no case exclusively triable by a Court of Sessions is disclosed but a less serious offence which it is within the competence of the Magistrate to try is disclosed.
In that case he has to proceed to try the accused himself or send him for trial before another Magistrate.
Where the Magistrate is of opinion that the accused should be committed for trial he has to frame a charge and declare with what offence the accused should be charged.
With the remaining provisions of s, 207 A we are not concerned.
It will thus be seen that where the police report suggests the commission of an offence which is exclusively triable by a Court (1) I.L.R. (3) A.I.R. 1934 Lahore 164.(2) A.I.R. 1935 Sind 221.(4) A.I.R. 1955 Andhra 48.747 of Sessions, the Magistrate can nevertheless proceed to try the accused for an offence which is triable by him if he is of the view that no offence exclusively triable by a Court of Sessions is disclosed.
Similarly, even in a case where an offence is triable both by a Magistrate and a Court of Sessions, the Magistrate is of the view that the circumstances do not warrant a trial by a Court of Sessions he can proceed with the trial of the accused for that offence himself.
Section 347 which occurs in chapter XXIV headed "General provisions as to Inquiries and Trials" empowers a Magistrate to commit a person for trial by a Court of Sessions if in the course of the trial before him and before signing the judgment it appears to him at any stage of the proceeding that the case ought to be so tried.
These provisions would thus indicate that an express order of discharge is contemplated only in a case where a Magistrate comes to the conclusion that the act alleged against the accused does not amount to any offence at all and, therefore, no question of trying him either himself or by any other court arises.
They also show that where an accused person is being tried before a Magistrate in respect of an offence triable by that Magistrate it appears to the Magistrate that the act of the accused amounts to an offence which is triable either exclusively or concurrently by a Court of Sessions he has the power to order his committal.
This power, however, has to be exercised only before signing the judgment.
It cannot obviously be exercised thereafter because of the provisions of section 403(1) which bar the trial of the person again not only for the same offence but also for any other offence based on the same facts.
It would follow from this that where on a certain state of facts the accused is alleged by the prosecution to have committee an offence exclusively triable by a Court of Sessions but the Magistrate is of the opinion that the offence disclosed is only an offence which he is himself competent to try and either acquits or convicts him there is an end of the matter in so far as the very set of facts are concerned.
The facts may disclose really a very grave offence such as, say, one under section 302, I.P.C. but the Magistrate thinks that the offence falls under section 304 A which he can try and after trying the accused either convicts or acquits him.
In either case the result would be that the appropriate court will be prevented from trying the accused for the grave offence which those very facts disclose.
It is to obviate such a consequence and to prevent inferior courts from clutching at jurisdiction that the provisions of section 437, Cr.P.C. have been enacted.
To say that they can be availed of only where an express order of discharge is made by a Magistrate despite the wide language used in section 437 would have 748 the result of rendering those provisions inapplicable to the very class of cases for which they were intended.
When a case is brought before a Magistrate in respect of an offence exclusively or appropriately triable by a Court of Sessions what the Magistrate has to be satisfied about is whether the material placed before him makes out an offence which can be tried only by the Court of Sessions or can be appropriately tried by that Court or whether it makes out an offence which he can try or whether it does not make out any offence at all.
In Ramgopal Ganpatrai vs State of Bombay(1) this Court has pointed out : "In each case, therefore the Magistrate holding the preliminary inquiry, has to be satisfied that a prima facie case is made out against the accused by the evidence of witnesses entitled to a reasonable degree of credit and unless he is so satisfied, he is not to commit." It has, however, also to be borne in mind that the ultimate duty of weighing the evidence is cast on the court which has the jurisdiction to try an accused person.
Thus, where two views are possible about the evidence in a case before the Magistrate, it would not be for him to evaluate the evidence and strike a balance before deciding whether or not to commit the case to a Court of Sessions.
If, instead of committing the case to a Court of Sessions, he proceeds to try the accused upon the view that the evidence found acceptable by him only a minor offence is made out for which no commitment is required he would obviously be making an encroachment on the jurisdiction of the appropriate court.
This may lead to miscarriage of justice and the only way to prevent it would be by a superior court stepping in and exercising its revisional jurisdiction under section 437 Cr.P.C.
There is nothing in the language of section 437 from which it could be said that this power is not exercisable during the pendency of a trial before a Magistrate or that this power can be exercised only where the Magistrate has made an express order of discharge.
Express orders of discharge are not required to be passed by the Court in cases where, upon the same facts, it is possible to say that though no offence exclusively or appropriately triable by a Court of Sessions Judge is made out, an offence triable by a Magistrate is nevertheless made out.
One of the reasons given by the Allahabad High Court in support of the view taken by it is that a Magistrate has power even during the course of the trial to commit the accused to a Court of Sessions and that to imply a discharge from his omission to commit or refusal to commit (1) [1958] S.C.R.618.749 would not be consistent with the existence of the Magistrate 's power to order commitment at any time.
That does not, however, seem to be a good enough ground for coming to this conclusion.
The power to commit at any stage is exercisable by virtue of the express provisions of section 347 or section 236 and a previous discharge of an accused from a case triable by a Court of Sessions would not render the power unexercisable thereafter.
Moreover, even if an express order of discharge is made by a Magistrate in respect of an offence exclusively triable by a Court of Sessions but a trial on the same facts for a minor offence is proceeded with the Magistrate has undoubtedly power to order his commitment in respect of the very offence regarding which, he has passed an order of discharge provided of course the material before him justifies such a course.
There is nothing in section 347 which precludes him from doing this.
It will, therefore, be not right to say that the power conferred by section 437 is exercisable only in respect of express orders of discharge.
In this context it will be relevant to quote the following passage from the judgment of the Full Bench of the Madras High Court in Krishna Reddy 's case(1) : "I do not think that the order of the Sessions Judge was one which he had no jurisdiction to make.
In my view the decision of the Magistrate must be taken to be not only one of acquittal of an offence punishable under section 379, Indian Penal Code, but one of discharge so far as the alleged offence under section 477, Indian Penal Code is concerned.
The complaint against the accused was that he committed an offence punishable under section 477, Indian Penal Code.
Such offence is triable exclusively by the Court of Sessions.
The Magistrate could neither acquit nor convict him of such offence.
He was bound either to commit him to the Sessions Court or to discharge him.
He did not commit him.
The only alternative was to discharge him, and that, I take it, is what the Magistrate really did do.
It is not suggested that the charge under section 477 is still pending before the Magistrate.
It has been disposed of, and the only question is as to what the disposal has been.
It seems to me that the accused has been discharged so far as the charge under section 477 is concerned.
The Magistrate 's order, if stated fully,should have been 'I discharge him as regards the offence punishable under section 477, and I acquit him as regards the offence punishable under section 379 (1) L.L.R. 750
We agree and are, therefore, of the view that the High Court was right in holding that the Sessions Judge had jurisdiction to make an order directing the Magistrate to commit the case for trial by a Court of Sessions.
The provisions of section 437, however, do not make it obligatory upon a Sessions Judge or a District Magistrate to order commitment in every case where an offence is exclusively triable by a Court of Sessions.
The law gives a discretion to the revising authority and that discretion has to be exercised judicially.
One of the factors which has to be considered in this case is whether the intervention of the revising authority was sought by the prosecution at an early stage.
It would be seen that an attempt to have the case committed failed right in the beginning and was repeated not earlier than 15 months from that date.
The second attempt also failed.
Instead of filing an application for revision against the order of the Magistrate refusing to pass an order of commitment the prosecution chose to make a second application upon the same facts.
It may be that successive applications for such a purpose are not barred but where a later application is based on the same facts as the earlier one the Magistrate would be justified in refusing it.
Where the Magistrate has acted in this way the revisional court ought not to with propriety interfere unless there are strong grounds to justify interference.
While rejecting the application on January 25, 1962 the ground given by the learned Judge was that the case had already entered the defence stage and the attempt to have the committal was very belated.
Matters had advanced still further when a third attempt failed on March 30, 1962.
By that date not only had the defence been closed and arguments heard, but the case was actually closed for judgment.
It would be a terrible harassment to the appellants now to be called upon to face a fresh trial right from the beginning which would certainly be the result if the Magistrate were to commit the appellants for trial by a Court of Sessions now.
It is further noteworthy that after the last attempt failed it was not the prosecution which went up in revision before the Sessions Judge but the informants and, as pointed out earlier, in the matter concerning the appellants before us it was not even the informant Shyam Lall but one Sagarmal, the informant in another case who preferred a revision application.
In a case which has proceeded on a police report a private party has really no locus standi.
No doubt, the terms of section 435 under which the jurisdiction of the learned Sessions Judge was invoked are very wide and he could even have taken up the matter suo motu.
It would, however, not be irrelevant to bear in mind the fact that the court 's 751 jurisdiction was invoked by a private party.
The criminal law is not to be used as an instrument of wreaking private vengeance by an aggrieved party against the person who, according to that party, had caused injury to it.
Barring a few exceptions, in criminal matters the party who is treated as the aggrieved party is the State which is the custodian of the social interests of the community at large and so it is for the State to take all the steps necessary for bringing the person who has acted against the social interests of the community to book.
In our opinion it was injudicious for the learned Sessions Judge to order the commitment of the appellants particularly so without giving any thought to the aspects of the matter to which we have adverted.
Even the High Court has come to no positive conclusion about the propriety of the direction made by the Sessions Judge and has merely said that the Sessions Judge was not unjustified in making the order which he made in each of the applications.
For all these reasons we allow the appeals, quash the orders of the Sessions Judge as affirmed by the High Court and direct that the trials of each of the appellants shall proceed before the Magistrate according to law from the stages at which they were on the date on which the stay order became operative.
Appeals allowed.
[/INST]One Mst.
Raj Kaur was holding certain lands on different tenures under the Raja of Faridkot.
She had two daughters.
She adopted the son of one of them and put him in possession of all the lands.
He transferred a part of the lands to the second respondent who was son of the other daughter of Raj Kaur.
After Raj Kaur 's dearth the Raja filed suits for possession of the land, and in execution of the decree he obtained in those suits, took possession of the entire land, in October, 1938.
He then transferred the land, but the transferee was dispossessed by the appellants in June 1950, in execution of a decree they obtained, in a suit for preemption filed by them against the transferee.
The second respondent 's mother had died in 1938 and her sons the first and second respondents, filed a suit for possession of the entire land in February 1950, as heirs of Raj Kaur, but it was decreed only to the extent of their half share, and the decree was affirmed by the High Court.
In the appeal to this Court it was contended that the suit was governed either by article 142 or article 144 of the Indian Limitation Act, 1908, and on either basis, was barred by time.
HELD: (i) Article 142 would not be attracted to the suit.
In order that the article may be attracted the plaintiff must initially have been in possession of the property and should have been dispossessed by the defendant or some one through whom the defendant claims or alternatively, the plaintiff should have discontinued possession.
It was no one 's case that the first respondent was ever in possession of the property.
As regards the second respondent 's possession at one time of a part of the property, it was by reason of a transfer by the adopted son.
The claim in the instant case, however, was by succession, under a different title altogether, and so it must be held that the plaintiffs respondents, as heirs of Raj Kaur, were never in possession of the land.
[65H] (ii) Article 144 was applicable to the suit, but the suit was not barred by time.
Adverse possession against the respondents started in October.
1938, when the Raja took possession of the land.
To that adverse possession could be added that of his transferee and that of the appellants who had preempted the lands under the decree obtained by them against the transferee.
But, the sum total of the adverse possession of all those persons at the date of the respondent 's suit would be less than 12 years.
The adverse possession of the adopted son could not be tacked on to the adverse possession of the Raja and those who claim through him, because, in a suit to which Art 144 is attracted, the burden is on the defendant to establish that he was in adverse possession for 12 years before the date of suit, and for computation of that period, he can avail himself of the adverse possession of any person or persons through whom he claims but not the adverse possession of independent tres 64 passers.
The starting point of limitation in article 144 is the date when the possession of the defendant becomes adverse to the plaintiff.
The gist of the definition of the word "defendant" in section 2(4) of the Act is the existence of a jural relationship between the different persons referred to in the definition, and there can be no jural relationship between two independent trespassers.
[66 F H; 68C; 70B].
Ramayya vs Kotamma, Mad. 370, explained.
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<s>[INST] Summarize the judgementAppeals Nos. 54 to 65, 67 and 69 to 71 of 1963.
Appeals from the judgment and decree dated January 10, 1956 of the Madras High Court in Appeal Suit Nos. 223 and 224 of 1951, and 264 to 273, 275 and 277 to 279 of 1952.
R. Kesava Iyengar, R. Thiagarajan and R. Ganapathy Iyer, for the appellants (in all the appeals).
Bishan Narain and O. P. Malhotra, for respondent No. 1 (in C.A. Nos. 54 and 55 of 1963).
M. R. K. Pillai, for respondent No. 2 (in C.A. No. 55 of 1963) and for the respondents (in C.As.56 to 65, 67 to 71 of 1963).
The Judgment of the Court was delivered by Ramaswami, J.
These appeals are brought against the judgment and decree in A.S. nos.223 and 224 of 1951, 264 to 273 of 1952, 275 of 1952 and 277 to 279 of 1952 of the Madras High Court dated January _10, 1956 affirming the judgment and decree in O.S. nos.75, 77 to 81 of 1949 and 19 to 22, 24 to 26, 28 & 30 to 31 of 1950 of the Subordinate Judge, Tanjore.
The appellant instituted the above mentioned suits for re covery of possession from the respective defendants of the disputed lands and for payment of damages at the rate of Rs. 501per annum per acre.
The case of the appellant was that the disputed lands which were purchased by him by a sale deed dated November 11, 1948 (exhibit A 145) are situated in Orathur Padugai which is attached to Pannimangalam, one of the villages comprised in what is known as the "Tanjore Palace Estate", that 756 the said lands are not situated in an estate as defined by the Madras Estates Land Act 1 of 1908 (hereinafter referred to as the 'Act ') and in any event the said lands are 'private lands ' of the appellant and not 'ryoti lands ' as defined in the Act and the various defendants are trespassers in unlawful occupation of the lands and had no right to continue in possession and were therefore liable to ejectment.
The appellant also claimed that the defendants were liable to pay damages at the rate of Rs. 501 per, annum per acre in respect of the lands in their unlawful occupation.
The defence in all the suits was substantially the same.
it was contended by the defendants that the disputed lands are situated in an estate within the meaning of section 3 (2) (d) of the Act, that the lands are 'ryoti lands ' in which they have permanent right of occupancy and that they are not "private lands" as alleged by the appellant and the civil court had therefore no jurisdiction to entertain the suits and the Revenue Courts alone had jurisdiction.
By his two judgments dated October ')1, 1950 and February 2, 1951, the Subordinate Judge, Tanjore dismissed the suits, holding that the lands were situated in an estate and were 'ryoti lands ' in which the defendants were entitled to occupancy rights.
The appellant took the matter in appeal to the Madras High Court which affirmed the decision of the trial court and dismissed all the appeals.
The two principal questions which are presented for deter mination in these appeals are : (1) whether the suit lands are located in an estate within the meaning of section 3 (2) (d) of the Act, and (2 ' ) if the answer to the first question is in the affirmative, whether the suit lands are 'private lands ' or 'ryoti lands ' as defined in the Act.
Section 3 (2) (d) of the Act, as originally enacted states "3.In this Act unless there is something repugnant in the subject or context (2) 'Estate ' means (d) any village of which the land revenue alone has been granted in inam to a person not owning the kudivaram thereof, provided that the grant has been made, confirmed or recognised by the British Government, or any separated part of such village;" The section was amended by the Madras Estates Land (Third Amendment) Act 18 of 1936 to the following effect 757 " (d) any inam village of which the grant has been made, confirmed or recognised by the British Government, notwithstanding that subsequent to the grant, the village has been partitioned among the grantees, or the successors in title of the grantee or grantees.
Explanation (1): Where an inam village is resumed by the Government,it shall cease to be an estate; but, if any village so resumed is subsequently regranted by the Government as an main, it shall, from the date of such re grant be regarded as an estate.
Explanation (2): Where a portion of an inam village is resumed by the Government, such portion shall cease to be part of the estate, but the rest of the village shall be deemed to be an inam village for the purposes of this sub clause.
If the portion so resumed or any part thereof is subsequently regranted by the Government as an inam, such portion or part shall, from the date of such re grant be regarded as forming part of the inam village for the purposes of this sub clause.
" By section 2 of the Madras Act 11 of 1945 section 3 of the Act was further amended as follows "Section 2 : (1) In sub clause (d) of clause (2) of section 3 of the Madras Estates Land Act, 1908 (hereinafter referred to as the said Act) Explanations (1) and (2) shall be renumbered as Explanations (2) and (3) respectively and the following shall be inserted as Explanation (1)namely : Explanation (1): Where a grant as an inam is expressed to be of a named village, the area which forms the subject matter of the grant shall be deemed to be an estate notwithstanding that it did not include certain lands in the village of that name which have already been granted on service or other tenure or been reserved for communal purposes : (2)The amendment made by sub section (1) be deemed to have had effect as from the date on which the Madras Estates Land (Third Amendment) Act, 758 1936 came into force and the said Amendment shall be read and construed accordingly for all purposes;" Section 3(19) of the Act has defined a "Village" as follows " 'Village ' means any local area situated in or constituting an estate which is designated as a village in the revenue accounts and for which the revenue, accounts are separately maintained by one or more karnams or which is now recognised by the State Government or may hereafter be declared by the State Government for the purposes of this Act to be a village, and includes any hamlet or hamlets which may be attached thereto.
" The history of what is known as the "Tanjore Palace Estate" is well known and will be found in various reported decisions of the Judicial Committee and of the Madras High Court : (See Jijoyiamba Bayi Saiba vs Kamakshi Bayi Saiba(l), Sundaram Ayyar vs Ramachandra Ayyar(2), Maharaja of Kolhapur vs Sundaram Iyer (3) and Chota Raja Saheb Mohitai vs Sundram Iyer(4).
In 1799, Serfoji, the then Raja of Tanjore, surrendered his territory into the hands of the East India Company, but he was allowed to retain possession of certain villages and lands which constituted his private property.
When his son the last Raja died in 1855 without leaving male issue, the East India Company took possession of all his properties including his private property.
Thereupon the senior widow, Kamachee Boye Sababa filed a Bill on the Enquiry Side of the Supreme Court of Madras, and obtained a decree that the seizure of the private properties was wrong.
On appeal by the Secretary of State in Council of India, the Privy Council reversed the decree, and ordered the dismissal of the Bill.
Thereafter, a memorial was submitted to the Queen and in 1862 the Government of India which had succeeded the East India Company "sanctioned the relinquishment of the whole of the landed property of the Tanjore Raj in favour of the heirs of the late Raja".
Under instructions from the Government of India, the Government of Madras, on August 21, 1862, passed an order the material part of which is as follows : "In Col. Durand 's letter above recorded the Government of India have furnished their instructions with reference to the disposal of the landed property of the Tanjore Raj regarding which this Government addressed them under date the 17th May last.
Their decision is to the effect, that 'since it is doubtful whether the lands in question can be legally dealt with as State property, and since the plea in equity and policy, for treating them as the private property of the Raja is so strong that it commands the unanimous support of the members of the Madras Government, ' the whole of the lands are to be relinquished in favour of the heirs of the late Raja (page 228).
The Tan ore Palace Estate came into being as a result of this grant.
The question in these appeals is whether the property invol ved in the suits being a part of the Tanjore Palace Estate can be considered to be an "estate" within the meaning of the term in the Act.
It was conceded by the Counsel for the appellant that if it was part of an inam it would be an ,estate ' within the meaning of that Act.
It was, however, contended that the manner in which the property reverted to the widows of the Raja in 1862 after an act of State did not show that the estate was freshly granted but was restored to the widows who enjoyed both the warams, in the same way as the warams were enjoyed before.
To put it differently, the argument was that the effect of restoration or re linquishment was only the undoing of the wrong and therefore if the villages were the private properties of the Raja at the time of the seizure then the same character is maintained when they were handed back to his widow.
The contention was that what actually happened in 1862 was the restoration of the status quo ante rather than a fresh grant by the British Government.
The argument is not a new one but has been raised before and rejected in a number of authorities.
In Jijoyiama Bayi Saiba vs Kamakshi Bayi Saiba(1) it was held by the Madras High Court that the Government Order, 1862 was a grant of grace and favour to persons who had forfeited all claims to the personal properties of the Rajah by the act of State and was not a revival of any antecedent rights which they might have bad.
A similar opinion of the grant was expressed in a Full Bench case of the Madras High Court in Sundaram Ayyar vs Ramachandra Ayyar(2) But in Maharaja of Kolhapur vs Sundaram Iyer(3), Spencer, O.C.J., appeared to doubt the decision of Scotland, C.J., in Jijoyiamba Bayi Saiba vs Kamakshi Bayi Saiba(l) that there was a grant of grace and favour in 1862.
A similar view was taken in Sundaram vs Deva Sankara(4), but these cases have been subsequently explained or not accepted on this point.
In T.R. Bhavani Shankar Joshi vs Somasundra Moopanar(1), it was held by this Court that the act of State having made no distinction between the private and public properties of the Rajah the private properties were lost by the Act of State leaving no right outstanding in the existing claimants.
The Government Order, 1862 was therefore a fresh grant due to the bounty of the Government and not because of any antecedent rights in the grantees.
It was pointed out that the words "relinquished" or "restored" in the Government Order did not have the legal effect of reviving any such right because no rights survived the act of State.
The root of title of the grantees was the Government Order of l862 and it was therefore held that the restoration amounted to a grant in inam by the British Government within the meaning of the Act.
But the question whether with regard to any particular area what was granted in inam is a whole village or less than a whole village is a question that has to be decided with reference to the facts of each particular case.
The question therefore arises whether the area in question, viz., Orathur Padugai, constitutes a whole village and therefore an estate within the meaning of section 3 (2) (d) of the Act.
It was contended for the appellant that the suit lands were not comprised in a whole inam village.
The contention was rejected by both the lower courts which concurrently held that the lands were located in Orathur Padugai, a whole village by itself or a named village and therefore an estate within the meaning of the Act.
It was argued on behalf of the appellant that the finding of the lower courts is vitiated in law because it is based on no evidence.
In our opinion, there is no justification for this argument.
On behalf of the respondents reference was made to exhibit A 64, Pannimangalam Vattam Jamabandhi Account individual war, Fasli 1296, which shows in column No. 3 Orathur Padugai as a village .
Similarly, in exhibit A 78(a), Cess account for Pannimangalam Vattam and exhibit A 79, the Village war Jamabandhi Account Fasli 1309 Orathur Padugai village is shown as a whole village.
Exhibit A 82, Village war Jamabandhi Individual War, Fasli , Jamabandhi Ghoshpara for the village, Fasli 1311 and Exs.A 153 to A 157 all mention Orathur Padugai as a village.
All the leases, lease auctions and receipts given for payment of rent speak of Orathur Padugai as a separate village.
Even the sale deeds, Exs.B 6, B 31, B 32 and B 33 contain a recital of Orathur Padugai as a separate village.
It is manifest therefore that there is sufficient material to show that at least since 1830 onwards Orathur Padugai is a whole village.
On behalf of the appellant reference was made (1) 761 to exhibit A 128 and exhibit A 129 dated April 6, 1800 and July 5, 1800.
Exhibit A 128 is a letter from the President, Tanjore to the Secretary to the Government of Madras in which there is a reference to Pannimungalam.
It is stated therein 'that "the fields of Pannymungalam to the westward of Tanjore which from time immemorial have been reserved for the pasture of the circar cow do remain in the Raja 's possession.
There is neither village nor cultivation on these lands".
In answer to this letter there is a communication from the Chief Secretary to the Government to the Resident, Tanjore, exhibit A 129.
In para 5 of this letter it is stated: "The fields of Pucanymangalam containing neither village nor cultivation shall remain in the hands of Rajah for the pasturage of His Excellency 's cows.
" Much reliance was placed by Counsel for the appellant on these two documents, but the High Court has rightly pointed out that the identity of the lands referred to in Exs. A 128 and A 129 is doubtful.
The lands in suit ate situated at least 30 miles south east of Tanjore town in Mannaroudi taluk but in Exs.A 128 and A 129 the lands are described as westward of Tanjore.
That there was Orathur village in existence even as early as 1830 is clear from exhibit A 151 because in describing certain boundaries of another village it is mentioned as to the north of assessed Orathur village nadappu karai (bund pathway).
Exhibit A 4 of 1868 is a Debit and Credit Balance account relating to Orathur Padugai attached to Mukasa Pannimangalam Thattimal.
It is clear from this Exhibit that the entire village except the waste land was assessed.
From Exhibit A 5 dated September 4, 1870, it appears that the punja lands in Orathur village were taken on lease from the Collector of Tanjore who was the receiver and manager of the estate of the Rajah of Tanjore for a period of 5 years on payment of a total sum of Rs. 122/9/3.
Exhibits A 7, A 8, A 12 to A 16 and A 18 are either Adaiyolai muchilikas or lease deeds for leasing the lands in Orathur padugai village for a term ranted by the Collector of Tanjore.
In all these documents the description is that the lands are situated in Orathur Padugai in Mokhasa Pannymangalam Thattimal.
The documents range between the years 1870 to 1875.
In Ex.A 63 which is the individual war settlement register for Pannymangalam vattam for Fasli 1296 against column 6 it is stated that the income in the matter of the amani cultivation of sugarcane, etc., on 95 kullis is Rs. 4 and it is in Orathur padugai village, Pannymangalam vattam.
Exhibit A 61 is the debit and credit balance account of Orathur padugai for Fasli 1294.
Similarly, in exhibit A 64, the individual war settlement register for Pannimangalam vattam, column 3 relating to the village of Orathur states that the Orathur padugai is a village and the vattam is Pannimangalam.
There are similar des 762 criptions of Orathur as a village in exhibit A 65 which is the settlement register for Pannimangalam vattam for Fasli 1297.
Exhibit A 80 contains a similar description of Orathur village in Pannimangalam vattam.
Exhibits A 153 to A 155 and A 157 are all lease deeds between the years from 1901 to 1906 relating to lease of lands in Orathur padugai.
It is manifest that there is sufficient evidence to show that from 1868 right up to 1907 Orathur padugai was considered as a separate village.
It was contended for the respondents that even after the passing of the Act Orathur padugai was treated as a separate village.
Reference was made in this connection to a number of documents, Exs.A 158, A 105, A 159, A 106, A 116, A 161, B 17,A 117 to A 120, B 18, A 12 1, A 1 62 and A 1 63.
In our opinion, the finding of the lower courts that Orathur padugai is a whole village and therefore constitutes an 'estate ' within the meaning of the Act is supported by proper evidence and Counsel for the appellant is unable to make good his argument that the finding of the lower courts is in any way defective in law.
We proceed to consider the next question arising in this case, viz., whether the suit lands are 'private lands ' within the meaning of section 3 ( 1 0) (b) of the Act which reads as follows : "3.In this Act, unless there is something repugnant in the subject or context . . . . .(10) 'Private land ' (b) in the case of an estate within the meaning of sub clause (d) of clause (2), means (i) the domain or home farm land of the landholder, by whatever designation known, such as, kambattam, khas, sir or pannai; or (ii) land which is proved to have been cultivated as private land by the landholder himself, by his own servants or by hired labour, with his own or hired stock, for a continuous period of twelve years, immediately before the first day of July 1908, provided that the landholder has retained the kudivaram ever since and has not converted the land into ryoti land; or (iii) land which is proved to have been cultivated by landholder himself, by his own servants or by hired labour, with his own or hired stock, for a continuous period of twelve years immediately before the first day of November 1933, provided that the landholder has 763 retained the kudivaram ever since and has not converted the land into ryoti land; or (iv) land the entire kudivaram in which was acquired by the landholder before the first day of November 1933 for valuable consideration from a person owning the kudivaram but not the melvaram, provided that the landholder has retained the kudivaram ever since and has not converted the land into ryoti land, and provided further that, where the kudivaram was acquired at a sale for arrears of rent the land shall not be deemed to be private land unless it is proved to have been cultivated by the land holder himself, by his own servants or by hired labour, with his own or hired stock, for a continuous period of twelve years since the acquisition of the land and before the commencement of the Madras Estates Land (Third Amendment) Act, 1936.
" Section 3(16) of the Act defines 'Ryoti land ' as follows : "Ryoti land ' means cultivable land in an estate other than private land but does not include (a) beds and bunds of tanks and of supply, drainage, surplus or irrigation channels; (b) threshing floor, cattle stands, village sites, and other lands situated in any estate which are set apart for the common use of the villagers; (c) lands ranted on service tenure either free of rent or on favourable rates of rent if granted before the passing of this Act or free of rent if granted after that date, so long as the service tenure subsists.
" Section 185 of the Act enacts a presumption that land in inam village is not private land and reads as follows : "185.When in any suit or proceeding it becomes necessary to determine whether any land is the landholder 's private land, regard shall be had (1) to local custom, (2) in the case of an estate within the meaning of sub clause (a), (b), (c), or (e) of clause (2) of section 3, to the question whether the land was before the first day of July 1898, specifically let as private land, and (3) to any other evidence that may be produced Provided that the land shall be presumed not to be private land until the contrary is proved: 764 Provided further that in the case of an estate within the meaning of sub clause (d) of clause (2) of section 3 (i) any expression in a lease, patta or the like, executed or issued on or after the first day of July, 1918 to the effect or implying that a tenant has no right of occupancy or that his right of occupancy is limited or restricted in any manner, shall not be admissible in evidence for the purpose of proving that the land concerned was private land at the commencement of the tenancy; and (ii) any such expression in a lease, patta or the like, executed or issued before the first day of July 1918, shall not by itself be sufficient for the purpose of proving that the land concerned was private land at the com mencement of the tenancy.
" Section 6 is to the following effect "6.(1) Subject to the provisions of this Act, every ryot now in possession or who shall hereafter be admitted by a landholder to possession of ryoti land situated in the estate of such landholder shall have a permanent right of occupancy in his holding.
Explanation (1).For the purposes of this subsection, the expression 'every ryo t now in possession ' shall include every person who, having held land as a ryot continues in possession of such land at the commencement of this Act.
The Subordinate Judge and the High Court have concurrently come to the conclusion, upon consideration of the evidence, that the lands in suit are not private lands but ryoti lands.
On behalf of the appellant Mr. Kesava Iyengar conceded that onus is on the appellant to show that the lands are 'private lands ' within the meaning of the Act ', but the argument was stressed that the lower courts have failed to take into account certain important documents filed on behalf of the appellant, viz., A 128, A 129 and the Paimash account dated August 25, and the Land Register, exhibit A 134.
In our opinion, there is no warrant for the argument advanced on behalf of the appellant.
As regards Exs A 128 and A 129 it is apparent that apart from the question as to the identity of the land, they relate to a period previous to the grant of 1862 which alone constitutes the root of title of the grantees and there is no question of restoration or revival of any anterior right.
The same reasoning applies to the Paimash account dated August 25, which 765 cannot, therefore, be held to be of much relevance in this connection.
Reliance was placed on behalf of the appellant on exhibit A 134, the Land Register for Pannimangalam which shows that in Orathur Thattimal Padugai which consists of Punjais (dry lands) and are rain fed, the land holder (the Tanjore Palace Estate) owns both the warams (Iruwaram in vernacular).
It was argued for the appellant that the expression 'Iruwaram ' means that the land was owned as Pannai or private lands.
Reference was made to the record of rights and Irrigation Memoir dated January 13, 1935, exhibit B 8 which shows that the lands are lruwaram and there are no wet lands.
But the use of the expression "Iruwaram" in these documents is not decisive of the question whether the land is private land of the appellant or not.
Under section 3(10) of the Act, private land comprises of two categories, private lands technically so called, and lands deemed to be private lands.
In regard to private lands technically so called, it must be the domain or home farm land of the landholder a,,.understood in law.
The mere fact that particular lands are described in popular parlance as pannai kambattam, sir, khas, is not decisive of the question unless the lands so called partake of the characteristics of domain or homefarm lands.
In our opinion the correct test to ascertain whether a land is domain or home farm is that accepted by the Judicial Committee in Yerlagadda Malikarjuna Prasad Nayudu vs Somayya(1), that is, whether it is land which a zamindar has cultivated himself and intends to retain as resumable for cultivation by himself even if from time to time he demises for a season.
The Legislature did not use the words 'domain or home farm land ' without attaching to them a meaning; and it is reasonable to suppose that the Legislature would attach to these words the meaning which would 'be given to them in ordinary English.
It seems to us that the sub clause (b) (i) of the definition is intended to cover those lands which come obviously within what would Ordinarily be recognised as the domain or home farm, that is to say, lands appurtenant to the landholder 's residence and kept for his enjoyment and use.
The home farm is land which the landlord cultivates himself, as distinct from land which he lets out to tenants to be farmed.
The first clause is, therefore meant to include and signify those lands which are in the ordinary sense of he word home farm lands.
The other clauses of the definition appear to deal with those lands which would not necessarily be regarded as home farm lands in the ordinary usage of the term; and with reference to those lands there is a proviso that lands purchased at a sale for arrears of revenue shall not be regarded as private lands unless cultivated directly by the landlord for the required period.
It seeing to us that the definition reads as a whole (1) I.L.R. 3 Sup.CI/68 5 766 indicates clearly that the ordinary test for 'private land ' is the ' test of retention by the landholder for his personal use and cultivation by him or under his personal supervision.
No doubt, such lands may be let on short leases for the convenience of the landholder without losing their distinctive character; but it is not the intention or the scheme of the Act to treat as private those lands with reference to which the only peculiarity is the fact that the landlord owns both the warams in the lands and has been letting them out on short term leases.
There must, in our opinion be something in the evidence either by way of proof of direct cultivation or by some clear indication of an intent to regard these lands as retained for the personal use of the landholder and his establishment in order to place those lands in the special category of private lands in which a tenant under the Act cannot acquire occupancy rights.
In the present case there is no proof that the lands were ever directly cultivated by the landholder.
Admittedly, soon after the grant of 1862 the estate came under the administration of Receivers, who always let out the lands to the tenants to be cultivated.
In exhibit B 8, the Record of Rights the lands are entered in column 5 as Punja or dry land.
In column 4 which requires the entry to be made as private land they are not entered as private lands.
If was argued for the appellant that the lands are sometimes called 'Padugai ' and that the expression meant that the lands were within the flood bank and forming part of the river bed.
But the description of the land as 'Padugai ' is not of much consequence because they are also called as Orathur 'Thottam meaning a garden where garden crops are raised to distinguish it from paddy fields.
It appears that the lands actually lie between two rivers and comprise more than 100 acres, and by their physical feature cannot be 'padugai ' in the sense in which the term is normally used.
The argument was stressed on behalf of the appellant that leasing rights of the land were auctioned periodically.
But the High Court has observed that one and the same tenant continued to bid at the auction and there was evidence that tenants continued to cultivate the lands without break or change, and the fact that there were periodical auctions of the lease rights did not necessarily deprive the tenants of the occupancy rights which they e ' were enjoying.
We accordingly hold that the appellant has not adduced sufficient evidence to rebut the presumption under section 18: of the Act that the lands in the inam village are not private land and the argument of the appellant on this aspect of the case must be rejected.
For the reasons expressed we hold that the judgment of the Madras High Court dated January 10, 1956 is correct and these appeals must be dismissed with costs one set of hearing fee.
[/INST]When the Raja of Tanjore died in 1855 without leaving male issue the East India Company took possession of all his properties including his private property.
However on a memorial being presented by the senior widow of the late Raja, the Government of India in 1862 "sanctioned the relinquishment, of the whole of the landed property of the Tanjore Raja in favour of the heirs of the late Raja.
" The Tanjore Palace Estate thus came into existence.
In 1948 the appellant purchased certain lands situate in Orathur Padugai which was part of the aforesaid Tanjore Palace Estate, and thereafter instituted suits for possession of these lands from various defendants.
The trial court dismissed the suits on the ground that the lands were situated in an 'estate under section 3(2)(d) of the Madras Estates Lands Act 1 of 1908 and they were 'ryoti lands ' as defined in section 3(16) in which the defendants had acquired occupancy rights.
The Madras High Court affirmed the decree, whereupon the appellant came to this Court.
it was contended on behalf of the appellant that (i) the lands did not form an 'estate ' under section 3 (2) (d) of the aforesaid Act because the restora tion of the land to the widows of the Raja of Tanjore did not amount to a fresh grant but only a restoration of the status quo ante; (ii) that Orathur Padugai was not a whole village as required by the definition of 'estate '; (iii) the widows of the Raja enjoyed both the 'warams ' and the lands purchased by the appellant were 'private lands ' in section 3(10)(b) so that the defendants did not have any occupancy rights therein.
HELD: (i) The relinquishment by the Government of India in favour of the widows of the Raja in 1862 was a fresh grant as already held in several cases.
In view of the authorities it could no longer be questioned that the Tanjore Palace state was an 'estate ' within the meaning of section 3(2)(d) of the Madras Estates Lands Act.
[759 F 760 B] Jijoiamba Bayi Saiba vs Kamakshi Bayi Saiba, 3 M.H. C.R. 424, Sundaram Ayyar vs Ramachandra Ayyar, I.L.R. 40 Mad.
3891, Maharaja of Kolhapur vs Sondaram Iyer, I.L.R. 48 Mad. 1, Sundaram vs Deva Sankara, A.I.R. 1918 Mad.
428 and T. R, Bhavani Shankar Joshi vs Somasunakra Moopanar, , relied on.
Chota Raja.
Saheb Mahitai vs Suddaram Iyer, 63 I.A. 224, referred to.
(ii) There was sufficient material on the record to show that at least since 1830 onwards Orathur Padugai was a whole village and therefore an 'estate ' within the meaning of the Act.
[762 C] (iii) The lands in suit were 'ryoti lands ' and not 'private lands '.
The definition in section 3(10) read as a whole indicates clearly that the ordinary test for 'private land ' is the test of retention by the landholder 7 5 5 for his own personal use and cultivation by him or under his personal supervision.
No doubt, such lands may be let on short leases for the convenience of the landholder without losing their distinctive, character; but it is not ' the intention or the scheme of the Act to treat as private those lands with reference to which the only peculiarity is the fact that the landlord owns both the warams in the lands and has been letting them out on short ]cases.
1765 H 766 B) In the present case there was no proof that the lands were ever directly cultivated by the landholder.
The High Court had found that the same tenants continued to cultivate the lands without break or change, and the fact that there were periodical auctions of the lease rights did not necessarily deprive the tenants of the occupancy rights which they were enjoying.
The appellant had not been able to adduce sufficient evidence to rebut the presumption under section 185 of the Act that the lands in the inam village are not private lands.
[766 C G] Yerlagadda Malikarjuna Prasad Nayudu vs Somayya, I.L.R. , referred to with approval.
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<s>[INST] Summarize the judgementvil Appeal No. 10030 of 1983.
From the Judgment and Order dated 6.9.1983 of the Madhya Pradesh High Court in S.A. No. 475 of 1977.
A.B. Rohtagi and S.K. Gambhir for the Appellant.
V.M. Tarkunde and S.V. Deshpandey for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
This appeal is directed against the decree of the Madhya Pradesh High Court for eviction of the appellant from a house after holding him to be the respondents ' ten ant.
The appellant denied the title of the plaintiffs and their case that he has been in possession of the property as their tenant.
The trial court accepted the plaintiffs ' case and passed a decree in their favour, which was set aside on appeal by the first appellate court.
The decision was re versed by the High Court in second appeal by the impugned judgment.
Admittedly the house which was in possession of the defendant 's father Misri Lal as a tenant belonged to one Smt.
Raj Rani who sold the same on 11.8.1952 to the plain tiffs ' predecessor ininterest, Navinchand Dalchand.
In 1959 a suit for his eviction was filed by Navinchand, which was resisted on the ground that Smt.
Raj Rani had earlier trans ferred the house to a trust and she, therefore, could not later convey any title to Navinchand.
The trial court re jected the defence and passed a decree against which Misri Lal filed an appeal.
During the pendency of the appeal the parties resolved their dispute amicably.
Misri Lal accepted the title of Navinchand and a deed, Ext.
P. 20, creating a fresh lease in favour of Misri Lal under Navinchand as lessor, was executed with effect from 1.12.1962.
The appeal was disposed of by recording this fact and stating further that the arrears of rent had been paid off.
The compromise petition and the decree have been marked in the present suit as Ext.
P 21 and Ext.
Misri Lal continued to occupy the house till he died in 1972 leaving behind his son, the present appellant, as his heir and legal representative.
Navinchand sold the suit property to the plaintiffs respond ents on 4.1.1973, who sent a notice to the appellant on 14.3.1973.
Since the 538 appellant refused to recognise them as owners of the house, another notice terminating the tenancy was served in January 1976 and the present suit was filed in June of the same year.
The appellant resisted the claim in the plaint on the same old plea which his father Misri Lal had unsuccessfully taken in the earlier suit, namely, that Smt.
Raj Rani having transferred the disputed house to a trust in 1936 was not competent to re transfer it to Navinchand Dalchand, the vendor of the plaintiffs respondents.
The trial court disbe lieved the defence version holding that although Smt.
Raj Rani had executed a trust deed in 1936, but the same was not acted upon and the trust does not appear to have come into existence.
On appeal the first appellate court reversed the finding and further held that the defendant could not be estopped from challenging the title of the plaintiffs.
It has been the case of the appellant that the con sent of Misri Lal to the compromise in the earlier suit was obtained by force, but the plea was not substantiated by any evidence, and it has been pointed out by the High Court that the appellant admitted in his deposition that to his knowl edge no force had been used against Misri Lal.
The High Court further rightly rejected the argument that the decree, Ext.
P. 22, would not bind the parties since it was founded on a compromise and not on an adjudication by the court on the question of title.
The court also observed that the statements made in the compromise petition, Ext.
P. 21, in the earlier suit support the case of the plaintiffs inde pendently of the compromise decree, and further, the defence plea has to be rejected in view of the deed, Ext.
P. 20, creating a fresh lease.
These findings were sufficient for the disposal of the appeal but the High Court proceeded to consider the question whether Smt.
Raj Rani had in fact transferred the suit house in favour of a trust, and decided the issue against the appellant.
The grievance of Mr. Rohatagi, the learned counsel for the appellant, that in view of the limited scope of a second appeal under section 100 of the Code of Civil Procedure, the High Court was not justified in setting aside the find ing of the first appellate court on the question as to whether the property had been alienated in 1936 in favour of the trust or not is well founded.
After the court reached a conclusion against the defendant on the basis of the lease deed, Ext.
P. 20, the compromise petition, Ext.
P. 21, and the compromise decree, Ext.
P. 22, it should not have pro ceeded to decide the dispute relating to title on merits on the basis of the evidence.
However, this error cannot help 539 the appellant unless he is able to successfully meet the effect of Ext.
P. 20, Ext.
P. 21 and Ext.
P. 22.
It has been strenuously contended by Mr. Rohatagi that the principle that a tenant is estopped from challeng ing the title of his landlord is not available to the land lord 's transferee in absence of attornment by the tenant.
Reliance was placed on Kumar Krishna Prosad Lal Singha Deo vs Baraboni Coal Concern Ltd., and Others, A.I.R. 1937 P.C. 252; Mangat Ram and Another vs Sardar Meharban Singh and Others, ; D. Satyanarayana vs P. Jagdish, [ ; and Tej Bhan Madan vs 11 Addl.
District Judge and Others, ; , and a passage from Halsbury 's Laws of England 4th Edn.
16, Paragraph 1628.
The learned counsel strenuously contended that the appellant tenant cannot be estopped from challenging the derivative title of the plaintiffs as he was not inducted into the house by them.
He relied upon the comments of Sarkar on section 116 in his book on the . 7.
It is true that the doctrine of estoppel ordinarily applies where the tenant has been let into possession by the plaintiff.
Where the landlord has not himself inducted the tenant in the disputed property and his right, are founded on a derivative title, for example, as an assignee, donee, vendee, heir, etc., the position is a little different.
A tenant already in possession can challenge the plaintiff 's claim of derivative title showing that the real owner is somebody else, but this is subject to the rule enunciated by section 116 of the Evidence Act.
The section does not permit the tenant, during the continuance of the tenancy, to deny that his landlord had at the beginning of the tenancy a title to the property.
The rule is not confined in its application to cases where the original landlord brings an action for eviction.
A transferee from such a landlord also can claim the benefit, but that will be limited to the question of the title of the original landlord at the time when the tenant was let in.
So far claim of having derived a good title from the original landlord is concerned, the same does not come under the protection of the doctrine of estoppel, and is vulnerable to a challenge.
The tenant is entitled to show that the plaintiff has not as a matter of fact secured a transfer from the original landlord or that the alleged transfer is ineffective for some other valid reason, which renders the transfer to be non existent in the eye of law.
By way of an illustration one may refer to a case where the original landlord had the fight of possession and was, therefore, entitled to induct a tenant in the property but did not have any power of disposition.
the tenant in such a case can attack the derivative title of the transferee plaintiff but not on 540 the ground that the transferor landlord who had initially inducted him in possession did not have the right to do so.
Further since the impediment in the way of a tenant to challenge the right of the landlord is confined to the stage when the tenancy commenced, he is forbidden to plead that subsequently the landlord lost this right.
These exceptions, however, do not relieve the tenant of his duty to respect the title of the original landlord at the time of the begin ning of the tenancy.
Coming to the facts of the present case, it may be recalled that fresh tenancy had been created in favour of Misri Lal, father of the present appellant, under Navinchand by deed Ext.
P. 20, and this fact was fully established by the decree, Ext.
P. 22.
The appellant, in the shoes of his father, is as much bound by these documents as Misri Lal was, and he cannot be allowed to deny the relationship of landlord and tenant between Navinchand and himself.
It has not been the case of the appellant that Navinchand later lost the title or that he had transferred the same to anoth er person, nor does the appellant say that there has been any defect in the sale deed executed in favour of the present plaintiffs.
In other words, the acquisition of title by the plaintiffs from Navinchand, if he be presumed to be the rightful owner, is not impugned, that is, the derivative title of the plaintiffs is not under challenge.
What the appellant wants is to deny their title by challenging the title of their vendor Navinchand which is not entitled to do.
None of the decisions relied upon by Mr. Rohtagi assists him.
On the other hand, the judgments in Kumar Krishna Prosad Lal Singha Deo vs Baraboni Coal Concern Ltd. and Others, AIR 1937 PC 25 1 and Tej Bhan Madan vs Addl.
District Judge and Others, ; , demonstrate that the plea of estoppel of the plaintiffs is well founded.
The Privy Council Case arose out of a suit for realisation of royalties due on Coal raised by the lessee defendant company.
The original lease was granted by the father of the plaintiff, the Raja of Panchkote, in favour of one Radha Ballav Mukherjee.
The defendant was sued as assignee.
The original lease contained a clause giving the lessor a charge for royalties upon the collieries and its plant which was sought to be enforced.
Since there was some dispute about the ownership of the colliery, the defendant company by way of abundant caution obtained a second assignment from anoth er source, being the Official Assignee.
The plaintiff 's claim was denied by the company on the grounds that (i) his father the Raja was not the owner of the colliery and the company was in possession of the colliery as a lessee on the strength of the other assignment from the Official Assignee, 541 and (ii) the company, being merely a transferee from the original lessee Radha Ballav Mukherjee and not being itself the original lessee, could not be estopped from challenging the Raja 's or his son 's title.
While rejecting the defend ant 's stand the Privy Council observed thus: "What all such persons are precluded from denying is that the lessor had a title at the date of the lease and there is no exception even for the case where the lease itself dis closes the defect of title.
The principle does not apply to disentitle a tenant to dispute the derivative title of one who claims to have since become entitled to the reversion, though in such cases there may be other grounds of estoppel, e.g., by attornment, acceptance of rent, etc.
In this sense it is true enough that the principle only applies to the title of the landlord who "let the tenant in" 'as distinct from any other person claiming to be reversioner.
Nor does the principle apply to prevent a tenant from pleading that the title of the original lessor has since come to an end.
" The expression "derivative title" was referrable to the plaintiff, and the Privy Council concluded by observing that the case did not raise any difficulty as there was "no dispute as to the plaintiff 's derivative title".
While rejecting the argument on the basis that the company was not the original lessee and being merely an assignee was free to challenge the lessor 's title, it was said that "the tenancy under section 116 does not begin afresh every time the interest of the tenant or of the landlord devolves upon a new indi vidual by succession or assignment.
" The circumstances in the case before us are similar.
The appellant does not contend that Navinchand had subsequently lost his title or that there is any defect in the derivative title of the plaintiffs.
His defence is that Navinchand did not own the property at all at any point of time, and this he cannot be allowed to do.
He cannot be permitted to question his title at the time of the commencement of the tenancy created by Ext.
P. 20. 10.
In Tej Bhan Madan vs 11 Addl.
District Judge and Others, ; , the question was whether there was a disclaimer of the landlord 's title on the part of the appellant tenant so as to incur forfeiture of the tenancy.
The premises in question originally belonged to one Shamb hoolal Jain, who died leaving behind his wife, two sons and a daughter by the name of Mainawati.
The property was sold in execution of a money decree and was purchased by Maina wati in 1956.
Mainawati conveyed the property to one Gopi nath Agarwal and the 542 appellant who was in possession as tenant attorned the tenancy in his favour.
Subsequently Gopinath sold the same in favour of the third respondent, Chhaya Gupta, and both Gopinath and Chhaya Gupta asked the appellant to attorn the tenancy in favour of Chhaya Gupta.
The appellant declined to do so and challenged not only the title of Chhaya Gupta but also the validity of the sale in favour of Gopinath.
This led to the filing of the case for his eviction on the ground of disclaimer.
It is significant to note that the foundation of the proceeding for ejectment was the appellant 's denial of the title of Gopinath in whose favour he had earlier attorned the tenancy, and not the challenge of the deriva tive title of the third respondent.
Overruling the objec tions of the appellant, a decree for eviction was passed against him and his writ petition before the High Court was dismissed.
In this background he came to this Court and made an argument similar to the one pressed in the case before us.
Rejecting the appellant 's point, this Court observed thus: "The stance of the appellant against the third respondent 's title was not on the ground of any infirmity or defect in the flow of title from Gopinath, but on the ground that the latter 's vendor Mainawati herself had no title.
The derivative title of the third respondent is not denied on any ground other than the one that the vendor, Gopinath to whom appellant had attorned had himself no title, the implication of which is that if appellant could not have denied Gopinath 's title by virtue of the inhibitions of the attornment, he could not question third re spondent 's title either.
Appellant did himself no service by this stand.
" The case is clearly against the appellant.
The above passage as also the last sentence in paragraph 4 of the judgment which is mentioned below also indicates as to what can be termed as a derivative title which a tenant may be free to challenge: "But the appellant tenant declined to do so and assailed not only the derivative title of the third respondent to the property but also the validity of the sale in favour of Gopinath himself.
In D. Satyanarayana vs P. Jagdish, ; , the Court was dealing with one of the exceptions to the rule of estoppel which permitted a sub tenent: 543 "to show that since the date of the tenancy the title of the landlord came to an end or that he was evicted by a paramount title holder or that even though there was no actual eviction or dispossession from the property, under a threat of eviction he had attorned to the paramount title holder.
The facts were that the appellant was a sub tenant of the tenantrespondent and the landlord served a notice on him terminating the tenancy of the tenant respondent on the ground of unlawful subletting.
The appellant thereupon attorned in favour of the paramount title holder and started paying the rent directly to him.
The tenantrespondent, thereafter, commenced the eviction proceeding and a decree was passed which was challenged before this Court by the appellant tenant.
After enunciating the general rule of estoppel under section 116 of the Evidence Act the Court pointed out the exception where a tenant is evicted by the paramount title holder and is thereafter reinducted by him under a fresh lease.
Extending this exception to the tenant 's ap peal, it was held that the rule applied where the tenant can show: "That even though there was no actual eviction or dispossession from the property, under a threat of eviction he had attorned to the paramount title holder.
" The decision is patently not applicable to the case before us.
In Mangat Ram and Another vs Sardar Meharban Singh and Others, , the principle decided was stated in the following words: "The estoppel contemplated by section 116 is re stricted to the denial of title at the com mencement of the tenancy and by implication it follows that a tenant is not estopped from contending that the title to the lessor had since come to an end.
" The Lahore case is also clearly distinguishable.
After the death of the lessor her daughters claimed rent from the tenants.
The tenants disputed their derivative title and the court held that though the tenants would not dispute the title of the mother at the commencement of the lease, they were entitled to challenge the derivative title of the plaintiffs and that the daughters had to prove that the property was Sridhan of their mother which they inherited under the Hindu Law.
The principle was correctly enunciated there, but that does not help 544 the appellant at all.
To the same effect are the following observations in Halsbury 's Laws of England 4th Edn., Vol.
16, paragraph 1628 relied upon by Mr. Rohatgi: "Thus although an assignee of the lessor is to all intents and purposes in the same situation as the lessor, and takes the benefit of and is bound by a lease by estoppel, the lessee is not estopped from showing that the lessor had no such title as he could pass to the assign ee, or that the person claiming to be the assignee is not in fact the true assignee." (emphasis supplied) The significance of the words which have been underlined above has to be appreciated for correctly understanding the principle enunciated.
For the reasons mentioned above, we hold that the appeal has no merit and is accordingly dismissed with costs.
N.V.K. Appeal dis missed.
[/INST]Respondent No. 2, a scheduled caste, filed a case for restoration of lands sold to respondent Nos. 1, 3 and 4, non scheduled castes, on the ground that the sale was in viola tion of section 22 of the Orissa Land Reforms Act, 1960 as the requisite permission of the Revenue Officer was not obtained.
In the sale deed the transferor Respondent was described as 'Rajaka ' while in the caste certificate he was mentioned as ' Dhoba '.
The Revenue Officer rejected the ease.
Respondent No. 2 filed an appeal which was allowed by the Additional District Magistrate.
Against the order of Additional District Magistrate a revision was preferred by respondent No. 1 which was dismissed by the Special Officer, Land Reforms by holding that merely because the word 'Raja ka ' does not find mention in the Scheduled Caste Order, 1950 does not exclude it from the purview of such an order.
In the connected appeal respondent No. 5 filed a case for restoration of land sold to respondent No. 1 which was allowed by the Revenue Officer.
The appeal filed by respond ent No. 1 was dismissed by the Additional District Magis trate.
A Revision preferred by Respondent No. 1 was also dismissed by the Special Officer Land Reforms.
Respondent No. 1 filed writ petitions in the High Court which quashed the orders made by the Special Officer, hold ing that the Revenue Authorities committed a serious error of law in holding that 89 'Rajaka ' caste was included within the notified caste/commu nity of Dhoba '.
In these appeals it was contended on behalf of transfer ee respondents that the Caste 'Rajaka ' mentioned in the sale deeds cannot be taken to be synonym of caste 'Dhoba ' men tioned in Item 26 of the List in Scheduled Castes Order, 1950.
Allowing the appeals, this Court, HELD: 1.
Though the respondent Nos. 2 and 5 i.e. the transferors mentioned in the deeds of transfer their caste as 'Rajaka ' there is no such caste mentioned in the Consti tution (Scheduled Castes) Order, 1950.
In such circum stances, it is necessary and also incumbent on the Court to consider as to what caste they belong to.
[96B] B. Basavalingappa vs D. Munichinnappa, [1965] 1 S.C.R. 316, followed.
2. 'Rajaka ' is the literal synonym for the word 'Dhoba ' and according to the Purna Chandra Oriya Bhasakosh a which is a recognised authority, the definition of 'Dhoba ' is Rajaka washerman.
Therefore the submission that the caste 'Rajaka ' is different from caste 'Dhoba ' is not at all sustainable.
[96A] 3.
In the record of rights as well as the various cer tificates issued by the revenue authorities and the local M.L.As the transferors have been described as belonging to 'Dhoba ' community.
The irresistible conclusion that follows is that the respondent transferors belong to 'Dhoba ' caste which is one of the Scheduled Caste in the State of Orissa.
[96H, 97A] 3.1 Therefore the transfers made by respondent Nos. 2 and 5 in favour of respondent No. 1, who admittedly belongs to Brahmin caste, are hit by the provisions of Section 22 of the Orissa Land Reforms Act, 1960 in as much as the previous permission in writing of the Revenue Officer had not been obtained to the alleged transfers.
[95C] [The transferee respondents directed to restore the lands in question to the possession of the transferor respondents forthwith.] [97C]
</s>
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<s>[INST] Summarize the judgementivil Appeal No. 1743 of 1975.
(Appeal by special leave from the judgment and order dated 5.9.1975 of the Rajasthan High Court in S.B. Civil 2nd Appeal 302 of 1974) M. Jain,., for the appellant.
S.C. Agarwala and V.J. Francis, for Respondents 1 & 2.
The Judgment of Y.V. Chandrachud and P.K. Goswami, JJ. was delivered by Goswami, J.S. Murtaza Fazal Ali, J. gave a separate Opinion.
GOSWAMI, J.
The facts of the case relating to this appeal by special leave have been fully described in the judgment of our learned brother, Fazal Ali, J.
We agree with the conclusion reached by him that this appeal should be dismissed.
We also agree with our learned brother that the appeal should be dismissed on the merits.
However, so far as the question of law that arises in this appeal, we would like to confine our decision to the reasons given hereinafter.
The question of law ,that arises in this appeal is as to whether an application for special leave or an appeal by special leave to thin, Court is an "appeal" within the meaning of section 13A of the Rajasthan Premises (Control of Rent and Eviction) Act 1950, as amended by the Rajasthans Ordinance No. 26 of 1975 (briefly the Act).
We should, therefore, read section 13A: "13A. Special provisions relating to pend ing and other matters: Notwithstanding anything to the contrary in this Act as it existed before the commencement of the Ordinance or in any other law, (a) no court shall, in any proceeding pending on the date of commencement of the amending Ordinance pass any decree in favour of a landlord for eviction of a tenant on the ground of non payment of rent, the tenant applies under clause (b) and pays to 327 the landlord,.
or deposits in court, within such time such aggregate of the amount of rent in arrears, interest thereon and full costs of the suit as may be directed by the court under and in accordance with that clause; (b) in every such proceeding, the court shall, on the application of the tenant made within thirty days from the date of commence ment of the amending Ordinance, notwithstand ing any order to the contrary, determine the amount of rent in arrears upto the date of the order as also the amount of interest thereon at six per cent per annum and costs of the suit allowable to the landlord; and direct the tenant to pay the amount so determined within such time, not exceeding ninety days, as may be fixed by the court, and on such payment being made within the time fixed as aforesaid, the proceeding shall be disposed of as if the tenant had not committed any default; (c) the provisions of clause (a) and (b) shall mutatis mutandis apply to all appeals, or applications for revision, preferred or made after the commencement of the amending Ordinance, against decree$ for eviction passed before such commencement with the variation that in clause (b), for the expression "from the date of commencement of the amending Ordinance" the expression "from the date of the presentation of the memorandum of appeal or application for revision" shall be substi tuted; (d) no court shall in any proceeding pending on the date of commencement of the amending Ordinance, pass any decree in favour of a landlord for eviction solely on the ground that due to the death of the tenant as defined in clause (vii) of section 3 as it stood before the commencement of the amending Ordi nance, his surviving spouse, son, daughter and other heir as are referred to in sub clause (b) 04 clause (vii) of section 3 were not entitled to the protection against eviction under this Act as it stood before the com mencement of the amending Ordinance; (e) no decree for eviction passed by any court before the commencement of the amending Ordinance shall, unless the same already stands executed before such commencement, be executed against the surviving spouse, son, daughter and other heir as are referred to in sub clause (b) of the clause (vii) of section 3 if such decree was passed solely on the ground as is referred to in clause (d) and such decree shall be deemed to be a nullity as against them; and 5 1546SCI/77 328 (f) the provisions of clause (d) shall mutatis mutandis apply to all appeals, or appli cations for revision preferred or made, after the commencement of the amending Ordinance,and Explanation: For the purposes of this section : (a) amending Ordinance means the Rajas than Premises (Control of Rent and Eviction) (Amendment) Ordinance, 1975; and (b) 'proceeding ' means suit, appeal or application revision.
" Even in the original Act passed in 1950 section 13(1)(a) was there with two provisos and there was restriction against eviction.
Under section 13(4) of the original Act a right was conferred upon the tenant in a suit founded on the ground of non payment of rent to pay the arrears with inter est and costs as determined by the court on the first day of hearing within the outside limit Of fifteen days from the date of the order.
If ,the tenant complied with the order, the suit for eviction stood dismissed, By the Amending Rajasthan Act 12 of 1965 section 13A was introduced.
Sub section (4) of section.13 of the original Act was substituted by still preserving the tenant 's right to pay the arrears with interest and costs within the out side limit of two months and on payment of the same no decree for eviction on the ground of nonpayment of rent shall be passed.
The Rajasthan Ordinance No. 26 of 1975 inter alia has amended the opening non obstante clause of section 13A and except for substituting the word 'Act ' by 'Ordinance ' in clauses (a), (b) and (c) nothing else has been altered.
Section 13A is selective enough.
Only one type of eviction decree which is solely based on the ground of non payment of rent is taken care of extending still further the period for payment ,of arrears with interest and costs.
Under section 13A, as amended, the benefit is available in pending suits of that category, appeals therefrom and appli cations for revision pending on the date of commencement of the Ordinance, that is, on 29th September, 1975.
The decree of eviction with which we are concerned in this appeal is founded on the ground of non payment of rent as specified in section 13(1) (a).
There is a two fold submission bY the learned Counsel for the appellant.
First, in view of the fact that the appellant lodged on 23rd September, 1975, an application under Article 136 of the Constitution praying for special leave to appeal against the judgment of the High Court and the Ordinance was passed on 29th September, 1975, after that application, his case is governed by section 13A(a) and (b) of the Act.
In the alternative, the appellant submits that at any rate after the special leave had been granted by this Court there was an appeal reading against the judgment of the High Court 329 and since he submitted an application within 30 days from the grant of Special leave his case is covered by section 13A(c) of the ACt.
" With regard to the first submission it may be pointed out that an application for special leave under Article 136 of the Constitution against a judgment 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 leave does not come within the contemplation of appeal pending before the court under Section 13A(a).
It is true that the word "proceeding" winch appears in section 13A(a) and (b) means suit, appeal or application for revision according to the Explanation appended to section 13A.
Therefore, in order to attract section 13A(a), a suit, appeal or application for revision ,must be pending on the date of commencement of the Ordinance No. 26 of 1975.
In view of the connotation of the wordl "proceeding" as given under the Explanation to section 13A it is impermissi ble to extend the meaning of the word "proceeding" to in clude an application for Special leave under Article 136 of the Constitution.
The collocation of the Words, "suit, appeal or application for revision" in the Explanation to denote "proceeding" would go to show that suits, regular appeals therefrom, as provided under the ordinary law and applications for revision alone are intended.
It is incon ceivable that if the legislature had intended to include within the ambit of "proceeding" an application for special leave under Article 136 of the Constitution it would have omitted to mention it in express terms.
We will now deal with the second submission of the appellant.
which is the alternative argument.
It is submitted by the appellant that even if an appli cation for special leave is not an appeal for the purpose of section 13A(a) in view of the fact that leave of this Court had been obtained and an appeal had been pending in pursu ance of the grant of special leave he iS entitled to invoke the protection under section 13A(c).
It is on that basis that the appellant submitted a second application relying on section 13A(c).
Under Order XVI, rule 11 of the Supreme Court Rules, on the grant of special leave the petition for special leave shall, subject to the payment of additional court fee, if any, be treated as the petition of.
appeal and it shall be registered and numbered as such.
Under section 13A(c) read with section 13A(b), in a pending appeal, the tenant has to make an application within 30 days from the date of the presentation of the memorandum of appeal".
There is no provision in an appeal by special leave for presentation of a memorandum of appeal, but, as stated earlier, under rule 11 on the grant of special leave the petition for special leave is treated as the petition of appeal and registered and numbered as such.
We may in this connection contrast the provisions of the Civil Procedure Code where the proce dure is laid down for appeals.
Order 41, Civil Procedure 330 Code, deals with appeals from original decrees.
Under sub rule (1) of rule 1 of Order 41, every appeal shah be pre ferred in the form of a memorandum signed by the appellant or his pleader and presented to the court or to such officer as it appoints in this behalf.
Under Order 42, the rules of Order 41 shah apply, so far as may be, to appeals from appellate decrees.
Similarly the same procedure, as under Order 41, is provided for under Order 43, rule 2, with regard to appeals from orders.
It is, therefore, clear that under the Civil Procedure Code an appeal has to be preferred in the form of a memorandum and presented to the court or to such officer appointed by the court in that behalf.
The question of limitation provided under section 13A(b) and (c) is important and the terminus a quo for the purpose of section 13A (c) is from the date of presentation of the memorandum of appeal.
Since no petition of appeal has to be presented in this court after special leave is granted, such a contingency of appeal to this Court by way of special leave is not intended to be covered by section 13A(c).
On the other hand the expression "the presentation of the memorandum of appeal" in section 13A(c) chimes with the construction that the legislature clearly intended to in clude only the hierarchy of appeals under the Civil Proce dure Code wherein presentation of the memorandum of appeal is an obvious requisite.
We may next deal with the question whether section 22 of the Act is of assistance in deciding this controversy since our learned brother 's conclusion has received sustenance also from the said section.
We do not think so.
Before we proceed further we may turn to some of the material provisions in the Act.
Section 6 provides for fixation of standard rent and under sub section (1 ) thereof the landlord or the tenant may institute a suit in the lowest court of competent jurisdiction for fixation of standard rent for any premises.
Sub section (1) of section 7 provides for fixation of provisional rent by the same court upon the institution of a suit under section 6.
Under sub section (4) of section 7 any failure to pay the provisional rent for any month by the fifteenth day of the next following month shah render the tenant liable to eviction under clause (a) of sub section (1) of section 13, and all sums due from the tenant as such rent shall be recoverable from him as if the order under sub,section (1) were a decree of the court in a suit for periodical payments.
Section 11 provides for procedure for increasing rent and the landlord may bring a suit under subsection (3) of section 11 for increasing rent or standard rent in the lowest court of competent jurisdiction.
Under sub section 11(4) the court shall, after such summary en quiry, as it may think necessary, make orders according to law, and a decree shall follow.
Section 19A provides for payment, remittance and deposit of rent by tenants and the court for the purpose of that section as well as for sec tions 19B and 19C with respect to any local area means any civil court which may be specially authorised by the State Govern 331 ment by notification in this behalf, or where no civil court is so authorised; the court of the Munsif, and the court of the Civil Judge, where there is no court of Munsif having jurisdiction over the area.
Section 12 provides for dealing with disallowance of amenities by the landlord by the Magistrate.
The Magistrate means the sub Divisional Magistrate having jurisdiction.
over the place where the premises in question are situated and includes such other Executive Magistrate having juris diction over and sitting at that place, as the State Govern ment may empower in this behalf section 3(i)].
Under sub section (6) of section 12 the order of the Magistrate under subsection (3) shall be executed by the Munsif having juris diction, or where there is no Munsif, by the Civil Judge having jurisdiction over the area in which the premises are situated as if it were a decree passed by such Munsif or Civil.
Judge, as the case may be.
Next,section 17 describes the powers of a Magistrate to require premises to be let and certain orders can be passed under that section by the Magistrate.
Similarly section 19 enables the Magistrate to pass certain orders with regard to the vacant building sites.
From a conspectus of the above provisions it will be seen that there are two types of forums for instituting action under the Act.
One category of actions is taken to the lowest court of competent jurisdiction which is a civil court and the other category is lodged before the Magistrate on the executive side.
The word court, however, is not defined in the Act but for purposes of sections 19A, 19B and 19C.
While the forums are specified for certain types of actions enumerated in the Act no court as such is specified in the Act for entertaining suits of eviction by landlord against a tenant.
It is, therefore, manifest that such suits will lie in the ordinary civil court of competent jurisdiction.
That court will, however, have to take into account the relevant provisions of the Act, for the purposes of determination of controver sies raised before it.
The benefits conferred by the Act upon the tenants will have to be given by the civil court in trying eviction suits.
Where there is a bar of eviction under the Act the court will have to give effect to it.
As is clear from the above narration that there is a dichotomy of forums under the Act, some matters are lodged before the lowest court of competent jurisdiction and some others before the Magistrate.
There is a tertium quid, namely, the usual court which is available to the landlord for instituting suits for eviction against tenants.
The landlord, however, will have to take note of the provisions under the Act and comply with those provisions in such a litigation.
The tenant also, in such suits, will be able to claim all the benefits conferred upon him under the Act which the courts will, in appropriate cases, grant.
In the above background of the provisions in the Act section 22 which provides for appeals and revisions may be read: 332 "22(1) From every decree or order paSsed by a. court under this Act, an appeal shall lie to the court tO which appeals ordinarily lie from original decrees and orders passed by such former court.
(2) No second appeal shall lie from any such decree or order; Provided that nothing herein contained shall affect the powers of the High Court for Rajasthan in revision; (3) Any person aggrieved by an order of the.
Magistrate may, within fifteen days from the date of such order, appeal therefrom to the District Magistrate or such.
authority.
as the State Government may from time to time appoint in that month.
" It is very significant that while SectiOn 22( 1 ) quali ties the decree or order aS being "under this Act", Section 13A, on the contrary, does not describe "proceeding" to be under the Act.
Section 22(1) refers to every decree or order passed by a court under this Act.
The decree or order passed.
under this Act must,therefore, have reference to those passed under Sections 6, 7, 11, 19A and 19C. Sub section (2) pro vides that no second appeal shall lie from any such decree or order.
Such decrees or orders are, therefore, again referable to those passed under the above mentioned sections under the Act, While a second appeal is barred in case of those decrees and orders under the Act the High Court 's power of revision is not barred.
Sub section (3), of section 12 provides for appeals from an order of a Magistrate to the District Magistrate or such authority as may be appointed by the Government.
As noticed earlier Certain orders are passed by.the Magistrate under section 1,(3), Section.
17 and section 19 Section ,22(3) makes provision of appeal against such orders passed under section 12(3), section 17 and section 19.
It is, therefore, clear that the Act provides for the. institution of actions in two different forums and also makes provision for appeals and revisions against orders and decrees passed under the Act.
There is no provision in the Act for institution of suits for eviction which will, there fore, lie in the ordinary =courts of competent jurisdiction.
Appeals, also revisions, where competent, will lie against 'decrees in eviction suits in the usual hierarchy of Courts.
It is manifest from a perusal of the scheme of the Act that appeals or applications for revision under section 13A(c) relate only to decrees in :suits for eviction based on the ground.
of nonpayment of rent.
Such appeals or appli cations for revision under section 13A(c) are not contem plated under section 22 of the Act.
As shown above, decrees or orders passed by the court under the Act against which appeals and revisions are provided in Section 22 do not take in decrees or orders passed in a Suit for eviction.
Usual rights of appeal and revision will be available in the latter class of 333 suits.
To hold otherwise will be to deny a right of second appeal to a litigation, be he a landlord or tenant, against a decree in an eviction suit which is clearly not the inten tion of the legislature.
Second appeal is only barred in ease of decrees or orders passed under the Act to which a copious reference has been made hereinabove with reference to the various provisions of the Act.
With regard to execution proceedings, it. would appear that these are outside the scheme of clauses (a) to (c) of section 13A but it is unnecessary to express any firm opinion on that point since it does not arise in this ap peal.
We are of opinion that the appellant cannot take advan tage of section 13A in this appeal by special leave.
His applications under section 13A stand dismissed.
The appeal is, therefore, dismissed, but there will be no order as to costs.
FAZAL ALl, J.
This appeal by special leave involves a question of law regarding the ambit and.scope of section 13A of the Rajasthan Premises (Control of Rent and Eviction) Act, 1950 as amended by Ordinance No. 26 of 1975 dated September 29, 1975 which was later replaced by an Act.
The appeal arises in the following circumstances.
The defendant/appellant along with his two brothers Padam Chand and Tara Chand had taken on lease a shop at a monthly rent of Rs.60/ from the plaintiffs/respondents as far back as September 1, 1961.
The shop was situated in Tripolia Bazar, Jaipur City (Rajasthan).
The plaintiffs served a notice of eviction under section 106 of the Transfer.
of Property Act on the appellant and his two brothers terminating.
the tenancy and directing.
them to vacate the premlses.
As the tenants did not Vacate the premises, the plaintiffS instituted the present suit. in the Court of the Munsiff East, Jaipur City,_ claiming eviction of the appel lant and his two brothers on me ground that they had not paid or tendered rent for a period of, six months from Magh shukla 1, smvt.
In the plaint the plaintiffs also averted that the.
shop was required by them for their own use and occupation and that the tenants had sublet the shop to Rajasthan Bartan Bhandar.
without the consent of the plaintiffs.
We might mention here that these two grounds.
taken by the plaintiffs have been held by all the Courts to be completely disproved, and.the suit was decreed by the District Judge and the High Court mainly, on.
the ground that thetenants had defaulted in payment of rent for a PeriOd of six months and were, therefore, liable to be ejected under the provisions.
0f the Rajasthan premises (Control. of Rent and Eviction) Act, 1950 hereinafter referred to as 'the Act '.
It appears that after summonses were served on all the three defendants including the appellant, two of the brothers of the appellant, Viz., Padam Chand and Tara Chand put in their appearance, but the appel lant despite the service did not put in his appearance.
In fact the counsel who was appearing for the other two defend ants had been instructed to appear for the appellant also, but the Vakalatnama was not signed by the appellant.
The appellant appears to have taken advantage of 334 this lacuna in contending that he had not participated in the proceedings of the Trial Court.
On February 14.
1966 the defendant Tara Chand moved an application under section 13 of the Act praying to the Court that the rent due may be determined and the defendants may be directed to deposit the rent.
The Court accordingly determined the rent on March 1, 1966 and directed the defendants to deposit a sum of Rs.398 75 Paise on or before April 19, 1966.
As the rent was not deposited, the plaintiffs moved an application for striking out the defence of the defendants against eviction for their failure to comply with the provisions of section 13(4) of the Act.
The Court accordingly by its order dated December 14, 1966 struck out the defence of the defendants.
It may be pertinent to note that although the appellant had not put in his formal appearance he under stood the order of the Trial Court dated December 14, 1966 striking out the defence and treated the same as having been passed not only against his brothers Padam Chand and Tara Chand, the two defendants, but also against himself and accordingly he along with his brothers preferred an appeal against that order to the Senior Civil Judge, Jaipur City on October 30, 1967.
This appeal was ultimately dismissed and then the three defendants flied an application for revision before the High Court which was also dismissed by the High Court by its order dated September 19, 1968.
Thus it is manifest that the appellant was fully aware of the proceedings that had taken place as also of the order that had been passed against the defendants striking out their defence.
When the record was received back by the THai Court, Shri Tara Chand Jain Advocate of the defendants informed the Court on November 26, 1968 that he was holding brief only on behalf of the two defendants Padam Chand and Tara Chand and not on behalf of the appellant Gyan Chand.
The Court accordingly passed an order that the suit was to proceed ex parte against the appellant.
On November 30, 1968 the appellant flied an application for setting aside the ex parte order passed against him and this application found favour with the Trial Court and was accordingly allowed.
The appellant was allowed to file his written statement which he filed on January 27, 1969.
Thereafter the appellant applied to the Court for determining the rent due to the plaintiffs but that application was rejected on the ground that no amount of rent was payable as the entire rent due had already been paid by the other two defendants.
Thereafter the plaintiffs flied an application before the Trial Court for striking out the defence against Gyan Chand as he had not complied with the order under section 13(4) of the Act passed by the Court previously.
The Trail Court, however, did not pass any orders on that application and ultimately dismissed the suit holding that there was no default.
It may be.
stated at the outset that when the appellant applied for setting aside the ex parte order he gave no explanation whatsoever for his non appearance in the suit, after the summonses were served on him but merely tried to explain his absence on November 26, 1968.
We have already pointed out that the appellant knew very well that the defence had been struck ,out by an order of the Court and had actually joined in the appeal and the revision flied by the other two defendants.
In spite of that for two years he kept quiet and gave no explanation whatsoever for not appearing before the 335 Court and participating in the proceedings until November 30, 1968.
This delay of two years which has been seriously commented upon by the High Court has not been explained satisfactorily by the appellant.
After the suit was dismissed by the Trial Court, the plaintiffs filed an appeal before the Additional District Judge who allowed the appeal holding that the defendants were defaulters and accordingly decreed the suit.
The grounds of subletting and personal requirement as alleged by the plaintiffs were, however, held not proved.
Thereaf ter there was second appeal to the High Court which affirmed the judgment of the District Judge and maintained the decree passed by the District Judge.
The High Court has rightly pointed out that the conduct of the appellant in not giving any explanation for not participating in the proceed ings despite service of the summonses speaks volumes against him.
The argument of the appellant that the entire proceedings should be cancelled as they had taken place in his absence was rightly rejected by the High Court.
In view of the concurrent findings of fact recorded on this point by the District Judge and the High Court, we are not at all inclined to interfere, in this appeal by special leave, with the merits of the case decided by the Courts below we are satisfied that the appellant was not diligent at all and has to thank his stars if the decision of the Courts below went against him In these circumstances, we do not propose to enter into merits of the appeal.
Mr. Jain, however, raised a pure question of law flowing from the amendment by which section 13A was introduced in the Act by virtue of Ordinance No. 26 of 1975.
Mr. Jain submitted that the statutory benefit conferred by section 13A would have to be extended to the appellant before this Court also and since the rent due had already been paid and the appellant was prepared to pay the costs and interest, the suit should be dismissed.
In order to appreciate this point, it may be necessary to state the sequence of facts.
The High Court dismissed the second appeal of the appellant on September 5, 1975.
Against this judgment, the appellant filed an applica tion for special leave in this Court on September 23, 1975.
Six days later i.e. on September 29, 1975 Ordinance No. 26 of 1975 dated September 29.
1975 introduced section 13A by amend ing the Act.
On October 28, 1975 the appellant filed a Civil Miscellaneous Petition in this Court praying that the Court may issue directions under the newly amended section 13A (c) of the Act.
On November 14, 1975 this Court granted special leave.
On December 11, 1975 another Civil Miscella neous Petition was filed by the appellant renewing his prayer for directions to be given by this Court under section 13A of the Amending Act.
The significance of these Civil Mis cellaneous Petitions appears to have been that if the spe cial leave petition was not treated as an appeal, then the moment the special leave was granted by this Court the appeal stood admitted by this Court and, therefore, the second application was filed for directions under section 13A of the Act as amended.
Mr. Agarwala counsel for the respondents has vehemently contended that section 13A of the Act would have absolutely no application to appeal by special leave filed in this Court.
In order to appreciate 336 this point it may be necessary to examine the language and the circumstances under which section 13A was introduced.
It would appear that before the introduction of section 13A by virtue of the.
Ordinance there was no provision in the Act which prohibited the Court from passing any decree if at any stage the tenant was prepared to deposit the, entire rent, costs and interest as directed by the Court.
The Legisla ture in pursuance of its socialistic policies attempted to liberalise the conditions of tenancies so as to give the tenants special protection against frivolous evictions.
With this object in view, the Ordinance appears to have been passed which was later on replaced by an Act.
In the state ment of objects and reasons accompanying.the amending Act it is mentioned that the Legislature decided to provide relief to tenants occupying premises in urban areas and in clause (6) 0f the said statement, the following observations are made: "In relation to pending suits and pro ceedings for ejectment on ground of defaults, an opportunity had been given to tenants to deposit the arrears of rent within thirty days and upon such deposit no decree for ejectment will be passed on such ground against them." Thus a perusal of clause (6) of the statement of Objects and reasons would clearly show that the intention of ,the Legislature was to confer certain benefits on the tenants to pending suits and proceedings for ejectment only on ground of defaults by giving them an opportunity to deposit the arrears within a specified time.
It is nowhere mentioned in clause (6) that this benefit was to be extended beyond the frontiers of the State in appeals which Were not ordinary remedies but which were special remedies provided for under the Constitution.
Thus the scope of the amendment was to confine the protection given to the tenants within the limits of the hierarchy of courts mentioned by the Act, and to the.
Courts in the State of Rajasthan.
It may be noticed that the statement of,objects and reasons does not even give a hint that the benefit conferred by section 13A 'would ' be available even in the execu tion proeedings after the decree had` been passed.
We shall now analyse section 13A of the Act, against the background of the main objective of the Legislature.
Section 13A of the ACt as introduced by Ordinance No. 26 of 1975 and later re placed by the Act runs thus: "13A. Special provisions relating to pending and other matters Notwithstanding anything to the contrary, in 'this Act as it ' existed before the commencement of the ordinance or in: any other law: (a) no court shall, in any proceeding.
pending on the date of commencement of the amending ordinance pass any decree in favour of a landlord for eviction of a tenant on the ground of non payment of rent, if the tenant applies under clause (b) and pays to the landlord; or deposits in court, Within such time.
such aggregate of the amount of rent in arrears, interest 337 thereon and full costs of the suit as may be directed by the court under and in accordance with that clause;.
(b) in every such proceeding, the court shall on the application of the tenant made within thirty days from the date of commence ment of the amending ordinance, notwithstand ing any order to the contrary, determine the amount of rent in arrears upto the date of the order as also the amount of interest thereon at six per cent per annum and costs of the suit allowable to the landlord; and direct the tenant to pay the amount so determined within such time, not exceeding ninety days, as may be fixed by the ,court, and on such payment being made within the time fixed as afore said, the_proceeding shall be disposed of as if the tenant had not committed any default; (c) the provisions of clauses (a) and (b) mutatis mutandis apply to all appeals, or application for revisions, preferred or made after the commencement of the amending ordi nance, against decrees for eviction passed before such commencement with the variation that in clause (b), for the expression "from the date of commencement of the amending ordinance" the expression "from the date of the presentation of the memorandum of appeal or application for revision" shall be substi tuted; X X X Explanation: For the purpose of this section .
(a) "amending ordinance" means the Rajasthan Premises (Control of Rent and Eviction) (Amendment) Ordinance, 1975; and (b) "Proceeding" means suit, appeal or application for revision.
" Section 13A contemplates only three kinds of proceedings, namely, suits, appeals and applications for revisions and these proceedings must be under the Act ,itself.
Clause.
(a) of section 13A of the Act provides that no court after the commencement of the mending ordinance shall pass any decree on the ground of non payment of rent if the tenant applies and a s to the landlord the entire rent in arrears interest and full costs of the suit.
Clause (b) requires that such an application is to be made within thirty days of the com mencement of the amending ordinance on,Which the Court would determine the rent in arrears and direct, interest to be paid at the rate of six per cent per annum.
Clauses (a) and (b) obviously do not apply to the present case, because the proceedings were not pending in any court when the ordinance or the Act came into force.
Reliance was, however, placed on the word "proceeding" as appearing in clauses (a) and (b) in 338 order to plead an argument that the word "proceeding" was wide enough to include not.
only Suits, but appeals at all stages.
This argument in our opinion is based on a serious misconception of the interpretation of the word "proceeding".
The Legislature has not left the connotation of the word "proceeding" in doubt because clause (b) of the Explanation clearly indicates what "proceedings" contemplat ed by section 13A in clauses (a), (b) and (c) are.
The Expla nations clearly shows that "proceeding" means suit, appeal or application for revision.
A logical interpretation of clause (b) of the Explanation would clearly reveal that the Act itself has limited the scope of the proceeding to suits, appeals or applications for revision under the hierarchy of the statute.
In other words, the Explanation refers only to Such proceedings as may be pending in any suit, appeal or application for revision under the Act.
Section 22 of the Act runs thus: "22.
Appeals and Revisions : (1) From every decree or order passed by a Court under this Act, an appeal shall lie to the Court to which appeals ordinarily lie from original decrees and orders passed by such former court.
(2) No second appeal shall lie from any such decree or order; Provided that nothing herein contained shall affect the powers of the High Court for Rajasthan in revision; X X X X " Section 22 provides for an appeal to the Court where an appeal ordinarily ties, i.e. the Court of the District Judge in the instant case and thereafter an application in revi sion to the High Court.
The use of the words "such proceed ing" in clause (b) of section 13A fortifies our conclusion that the proceedings contemplated by section 13A are really the pro ceedings referred to in Explanation which means proceedings in the nature of suits, appeals or applications for revision as referred to in section 22 of the Act.
In these circumstances we are unable to agree with the learned counsel for the appellant that proceedings in this Court would fall within the ambit of clauses (a) and (b) of section 13A of the Act.
It was then submitted that at any rate clause (c).
of section 13A would apply to the facts of the present case and the appellant should be given the benefit of that provision.
It is true that clause (e) applied the provisions of clauses (a) and (b) mutatis mutandis to appeals and applications for revision.
It may be noticed, however, mat this benefit is not conferred even in the execution proceedings arising out of decrees passed in suits or appeals and upheld in revi sions.
The true interpretation of clause (c) of section 13A would, therefore, be that this clause also contemplated the same proceedings as contemplated by clauses (a) and (b), namely the proceedings indicated in the Explanation.
Thus the benefit conferred by clause (c) would apply only to appeals or applications for revisions filed under the 339 Act as provided by section 22 of the Act.
The Legislature never intended to confer this benefit beyond the frontiers of the State.
It was however, submitted that the word "appeal" is wide enough to include an appeal by special leave filed in this Court.
It is, however, not possible to accept this conten tion.
The amendment was passed some time in the year 1975 i.e. about 25 years after the Constitution had come into force.
An appeal by special leave was a special remedy provided for by article 136 of the Constitution and the State Legislature of Rajasthan must be presumed to be aware of this special remedy as also the nomenclature of this remedy.
If the intention was to extend the benefit to appeals for special leave it should have been so clearly stated in clause (c).
Furthermore, the Rules flamed by the Supreme Court, the knowledge of which also must be ascribed to the State Legislature, make a clear cut distinc tion between an application filed in the Court for grant of special leave and a petition of appeal after the leave is granted.
It was suggested that the application for special leave to appeal may be treated as the memorandum of appeal as referred to in clause (c) of section 13A.
It is, however, not possible to accept this ,contention, because the constitu ents and ingredients of an application for special leave to appeal are quite different from those of a memorandum of appeal preferred to an appellate Court under O. XLI r. 1(2) of the Code of Civil Procedure.
Under O. XVI r. 4 of the Supreme Court Rules, 1966 the petition for special leave is to contain only the necessary facts and not the grounds.
It is true, r. 11 of O. XVI of the Supreme Court Rules provides that the petition for special leave would be treated as a petition of appeal after the special leave is granted, but that also cannot be equated with a memorandum of appeal as contemplated by clause (c) of section 13A of the Act.
In contra distinction to the provisions of the Supreme Court Rules it would appear that O. XLI r. 1 (2) of the Code of Civil Procedure runs thus: "The memorandum shall set forth, con cisely and under distinct heads, the grounds of objection to the decree appealed from without any argument or narrative; and such grounds shall be numbered consecutively.
" It would thus appear that the provisions of r. 1 (2) of O. XLI Code of Civil Procedure require that the memorandum of appeal has to set forth under the distinct heads the grounds of objections to the decree appealed from.
No such requirement is to be found in the Supreme Court Rules either for an application for special leave to appeal or in the petition of appeal which is required to be field if certifi cate by High Court is granted.
The Legislature must be presumed to be aware of the difference between an applica tion for special leave to appeal and a memorandum of appeal.
If the intention was to extend the benefit of section 13A even to appeals before the Supreme Court, then apart from the word memorandum of appeal, the words "application for special leave to Supreme Court" should have been mentioned.
The fact that clause (c) of section 13A merely mentions the words "from the date of the presentation of the memorandum of appeal or application for revision" clearly indicate that 340 the remedies contemplated by the Act are the remedies of appeal and revision as provided for by section 22 of the Act.
In fact, as already pointed out, the benefit conferred by section 13A of the Act does not extend even to the.
execution pro ceedings and in these circumstances it cannot be assumed that it would have applied to a Court which is beyond the frontiers of the State and to a remedy which has been pro vided not by the State Legislature but by the Constitution itself.
For these reasons, therefore, we reject the argument of the appellant that clause (c) of section 13A of the Act would apply to the present appeal and that the appellant is, therefore,entitled to the benefit of this provision on the basis of the Civil MisCellaneous Petition filed by him.
We are clearly of the opinion, on an interpretation of the various clauses of section 13A of the Act and the Explanation thereto that.
the benefit under section 13A has been intended by the Legislature to be conferred only on the appellate and revisional courts and even execution proceedings have been excluded from the ambit Of the protection granted.
For these reasons I agree with the judgment proposed by my brother Goswami, J., and dismiss the appeal but in the peculiar circumstances of the case without any order as to costs.
P.B.R. Appeal dismissed.
[/INST]Section 13A was introduced in Rajasthan Premises (Con trol of Rent and Eviction) Act, 1950 by an Ordinance on September 29, 1975, The Ordinance was later replaced by an Act.
Clause (a)of the section provides that no Court shall, in any proceeding pending on the date of the commencement of the Amending Ordinance, pass any decree in favour of a landlord for eviction of a tenant on the ground of non payment of rent under certain circumstances.
Clause (b) provides that in every such proceeding the Court shall, on the application of the tenant, made within 30 days from the date of the presentation of the memorandum of appeal or application for revision, determine the amount of rent in arrears.
Clause (c) provides that the provisions of els.
(a) & (b) shall, mutatis mutandis, apply to all appeals, or applications for revision, preferred or made after the commencement of the Amending Ordinance.
Explanation (b) to the section defines a proceeding to mean a suit, appeal or application for revision.
Section 22(1) provides that from every decree or order passed by the Court under the Act, an appeal shall lie to the Court to which appeals ordinarily lie :from original decrees and orders passed by such former Court.
On the ground of non payment of rent, a decree of evic tion was passed against the appellant, who was the respond ent 's tenant.
The High Court having affirmed the decree on appeal, the appellant filed an application for special leave to this Court on September 23, 1975.
The Ordinance intro ducing section 19A was passed on September 29, 1975.
This Court granted special leave on November.
In appeal to this Court it was contended by the appel lant (1) that since the application for special leave was pending before this Court on the date of the commencement of the Ordinance, the case was governed by section 13A (a) and (b) of the Act; (2) in the alternative since, as a result of the grant of special leave, an appeal had been pending before this Court, the appellant was entitled to the protection of section 13A(c) of the Act.
Dismissing the appeal, HELD: (Per Chandrachud and Goswami, JJ) (1)(a) In order to attract section 13A(a) a suit, appeal or application for revision must be pending on the date of the commencement of the Ordinance.
An application for special leave under article 136 of the Constitution cannot be equated with the ordinary remedy of appeal as of right under any provision of law.
It is an extraordinary right conferred under the Constitution, within the discretion of the Supreme Court and an application for special leave does not come within the contemplation of appeal pending before the Court under section 13A(a).
The collocation of the words "suit, a. appeal or application for revision" used in the explanation to denote "proceeding", shows that the suits and regular appeals therefrom as provided under the ordinary law and applications for revision alone are intended.
[329C & B] 325 (b) The expression "presentation of memorandum of appeal" under section 13A (c) chimes with the construction that the legislature clearly intended to include only the hierarchy of appeals under the Code of Civil Procedure.
[330D] (c) Under section 13A(c) read with section 13A(b) in a pending appeal, the tenant has to make an application within 30 days "from the date of presentation of the memorandum of appeal".
There is no provision in an appeal by special leave for presentation of memorandum of appeal, under r. 11 of O.XVI.
of the Supreme Court Rules, on the grant of special leave, the petition for special leave is treated as the petition of appeal.
In contrast under O.41 r. 1(1) of the Code of Civil Procedure, every appeal shall be preferred in the form of a memorandum signed by the appellant and pre sented to the Court.
[329H] (d) The terminus a quo for the purpose of section 13A(c) is from the date of presentation of the memorandum of appeal.
Since no petition of appeal has to be presented in the Supreme Court after the special leave is granted, such a contingency of appeal to this Court by way of special leave is not intended to be covered by section 13A(c).
[330C] (2) Section 22 cannot assist the appellant in this case.
While section 22(1 ) qualifies the decree or order as being "under this Act" section 13A does not describe "proceeding" to be under the Act.
[330E; 332C] The Act provides for the institution of serious in two different forums namely, the lowest Court of competent jurisdiction, which is the Civil Court, and the other before a Magistrate on the executive side.
[332F] Appeals or applications for revision under section 13A(c) relate only to decrees in suits for eviction based on the ground of non payment of rent.
Such appeals or applications for revision under section 13A(c) are not contemplated under section 22.
Decrees or orders passed by the Court under the Act, against which appeals and revisions are provided in section 22, do not take in decrees and orders passed in a suit for eviction.
Usual rights of appeal and revision will be available in the latter class of suits.
To hold otherwise will be to deny a right of second appeal to a litigant, whether it is landlord or tenant, against a decree in an eviction suit which is clearly not the intention of the legislature.
Second appeal is only barred in case of de crees or orders passed under the Act.
[332H] (Per section Murtaza Fazal Ali, J.) Proceedings in this Court would not fall within the ambit of cls.
(a) and (b) of section 13A. [338F] (a) The Explanation to the section clearly shows that the word "proceeding" refers only to such proceedings as may be pending in any suit, appeal or application for revision under the Act.
The use of the words "such proceedings" in section 13A(b) shows that the proceedings contemplated by section 13A are really proceedings referred to in the explanation, which means proceedings in the nature of suits, appeals or appli cations for revision as referred to in section 22.
[338E F] (b) Section 13A(c) would not apply to the present case.
The benefit conferred by el.
(c) would apply only to appeals and applications for revision filed under the Act as provid ed by section 22.
The true interpretation of cl.
(c) would be that this clause contemplated the same proceedings as con templated by els.
(a) and (b), namely, proceedings indicated in the explanation.
[338G H] (c) An appeal by special leave is a special remedy provided by article 136 of the Constitution and the legislature must be presumed to be aware of this special remedy.
If the intention was to extend the benefit to appeals for special leave, it should have been clearly stated in el.
[339B] (d) The Supreme Court Rules make a clear cut distinction between an application filed for the grant of special leave and a petition of appeal, if the leave is granted.
The constituents and ingredients of an application for special leave to appeal are quite different from those of a memoran dum of appeal under O.X.LI r. 1(2) of the Code of Civil Procedure.
[339D] 326 (e) The provisions of O.XLI, r. 1(2) C.P.C. require that the memorandum of appeal has to set forth under distinct heads, the grounds of objections to the decree appealed from.
No such requirement is to be found in the Supreme Court Rules either for an application for special leave to appeal or in the petition of appeal which is required to be filed if certificate by the High Court is granted.
The legislature must be.
presumed to be aware of the difference between an application for special leave to appeal and a memorandum of appeal.
Though r. 11 of O.XVI of the Supreme Court Rules provides that the petition for special leave would be treat ed as a petition of appeal after the special leave is grant ed,it cannot be equated with a memorandum of appeal contem plated by section 13A(c) of the Act.
[339G H] (f) The fact that section 13A(c) mentions the words "from the date of the presentation of the memorandum of appeal or application for revision" clearly indicates that the reme dies contemplated by the Act are remedies of appeal and revision as provided for by section 22 of the Act.
[339H]
</s>
|
<s>[INST] Summarize the judgementivil Appeal No. 232 of 1955.
Appeal under Article 132 (1) of the Constitution of India from the Judgment and Order dated November 24, 1954, of the former Travancore Cochin High Court in Original Petition No. 53 of 1954.
T.N. Subramania Iyer and R. Ganapathy Iyer, for the appellant.
K.S. Krishnaswamy Iyengar and Sardar Bahadur, for the respondent.
April 2.
The Judgment of the Court was delivered by BHAGWATI J.
This appeal with a certificate of fitness under article 132 (1) of the Constitution is directed against the order of the High Court of Travancore Cochin dismissing the Original Petition No. 53 of 1954 filed by the appellant under article 226 for quashing the order of the Sales Tax Officer, 2nd Circle, Quilon, assessing him to sales tax on a net assessable turnover of Rs. 7,54,144 8 4 for the year 1951 52 (1st April, 1951 to 31st March, 1952) and for issuing proper directions to the Sales Tax Authorities to assess the same according to law.
The appellant is a registered manufacturer of cocoanut oil and cake who has obtained a certificate of registration in Form VI as per sub r.
(i) of r. 20 of the Travancore Cochin General Sales Tax Rules, 1950.
The business of the appellant for the purposes of this appeal consisted in the ' purchase of copra, manufacture of cocoanut oil and cake and sale of the same to parties inside the State of Travancore Cochin and sale of the oil to parties outside the State.
In the year 1951 52, the appellant purchased copra of the value of Rs. 7,16,048 1 4 and after manufacturing oil therefrom in his oil mills he sold the oil partly in the State and partly outside the State and the cake 839 entirely within the State.
, The total value of the oil sold was Rs. 6,76,719 0 11 out of which the sales outside the State were of the value of Rs. 3,67,816 10 1 and the value of the cake sold in the State was Rs. 67,155 155.
The total gross turnover of the appellant was thus Rs. 14,59,923 1 8 and he claimed to deduct therefrom the whole of the purchase price of the copra under r. 7 (1) (k) read with r. 20.
The net turnover according to him was therefore only Rs. 7,43,875 0 4 and he claimed to deduct out of this a further sum of Rs. 3,67,816 10 1 being the sale price of oil in inter State transactions which could not be taxed under article 286 of the Constitution, thus showing a net assessable turnover of only Rs. 3,76 058 6 3.
The Sales Tax Officer, 2nd Circle, Quilon, however fixed the net assessable turnover of the appellant at Rs. 7,54,144 8 4.
He took the purchase value of the copra at Rs. 7,16,048 1 4 but added thereto Rs. 3,08,902 6 10 and Rs. 67,155 15 5 being the respective values of the oil and the cake sold inside the State, excluding the sale price of inter State sales of oil, namely, Rs. 3,67,816 10 1, from such computation.
Having thus excluded the sale price of inter State sales of oil, he deducted only the value of the copra corresponding to the oil sold inside the State namely, Rs. 3,35,216 0 0, as against the sum of Rs.7,16,048 1 4 deducted by the appellant.
He added a sum of Rs. 3,385 0 3 being the price of gum sold by the appellant and deducted a further sum of Rs. 6,130 15 6 being the sales tax collected by him.
He thus arrived at the net assessable turnover of Rs. 7,54,144 8 4 and assessed the appellant for sales tax on the same.
The appellant preferred an appeal to the Assistant Sales Tax Commissioner (S.T.A. No. 1480 of 1953 54) who dismissed the same by his order dated May 10, 1954.
A further petition to the Government for redress met with the same fate and the appellant thereupon filed the petition in the High Court of Travancore.
Cochin being O.P. No. 53 of 1954 with the result indicated above.
The decision of this appeal turns on the construction of the relevant provisions of the Travancore Cochin 340 General Sales Tax Act, 1125 (Act XI of 1125 M.E.) and the Travancore Cochin General Sales Tax Rules, 1950, made thereunder which may be conveniently set out here.
The preamble to the Act stated that it was enacted to provide for the levy of a general tax on the sale of goods in the United State of Travancore and Cochin.
Section 2 (j) defined a " sale " as under: " Sale " with all its grammatical variations and cognate expressions means every transfer of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration. . . .
Explanation (2) Notwithstanding anything to the contrary in the Sale of Goods Act for the time being in force, the sale or purchase of any goods shall be deemed for the purpose of the Act, to have taken place in the United State wherever the contract of sale or purchase might have been made.
" Section 2 (k) defined " turnover " as " the aggregate amount for which goods are either bought by or sold by a dealer, whether for cash or for deferred payment or other valuable consideration, provided that the proceeds of the sale by a person of agricultural or horticultural produce grown by himself or grown on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, shall be excluded from his turnover. " An explanation was added to this definition ' which is, however, not material for our purpose.
Section 3 was the charging section and it provided for levy of taxes on sales of goods in the terms following: " (1) Subject to the provisions of this Act;(a) every dealer shall pay for each year a tax on his total turnover for such year; and (b) the tax shall be calculated at the rate of three pies for every Indian rupee in such turnover. . . (3) A dealer whose total turnover in any year is less than ten thousand Indian rupees shall not be liable to pay any tax for that year under sub section_ (1) or sub section (2).
841 (4) For the purposes of this section and the other provisions of this Act turnover shall be determined in accordance with such rules as may be prescribed.
(5) The taxes under sub sections (1) and (2) shall be assessed, levied, and collected in such manner and in such instalments, if any, as may be prescribed.
Provided that: (i) in respect of the same transaction of sale, the buyer or the seller but not both, as determined by such rules as may be prescribed, shall be taxed; (ii) where a dealer has been taxed in respect of the purchase of any goods in accordance with the rules referred to in clause (i) of this proviso, he shall not be taxed again in respect of any sale of such goods effected by him." Section 4 enacted that the provisions of the charging section shall not apply to the sale of electrical energy and any goods other than arrack and foreign liquor on which duty is or may be levied under the Travancore or Cochin Abkari Act, or the Travancore or Cochin Opium Act.
Section 24 conferred upon the Government power to make rules to carry out the purposes of the Act.
The Act as originally enacted received the assent of the Rajpramukh on January 5, 1950.
After the advent of the Constitution, however, the Act was amended by the Travancore Cochin General Sales Tax (Amendment) Act, 1951, and section 26 was added thereto which ran as under: ' " Notwithstanding anything contained in this Act : (a) a tax on the sale or purchase of goods shall not be imposed under this Act (i) where such sale or purchase takes place outside the State of Travancore Cochin; or (ii) where such sale or purchase takes place in the course of import of the goods into, or export of the goods out of, the territory of India ; (b) a tax on the sale or purchase of any goods shall not, after the 31st day of March, 1951, be imposed where such sale or purchase takes place in the course of inter State trade or commerce except in so far as Parliament may by law otherwise provide.
(2) The explanation to 842 clause (1) of article 286 of the Constitution of India shall apply for the interpretation of sub clause (i) of clause(a) of sub section (1).
" The Travancore Cochin General Sales Tax Rules, 1950, which were made by_the Government under the rule making power conferred upon it by sub sections 4 & 5 of section 3 read with section 24 of the Act laid down inter alia the provisions in regard to the determination of the total turnover of a dealer which was liable to be taxed.
Rule 4 provided for the determination of the gross turnover: " (1) Save as provided in sub rule (2) the gross turnover of a dealer for the purposes of these rules ,shall be the amount for which goods are sold by him.
(2) In the case of the undermentioned goods the gross turnover of a dealer for the purposes of these rules shall be the amount for which the goods are.
bought by him.
(a) Cocoanut, copra, ground nut and its kernel.
(b) Cashew, and its kernel.
Rule 7 provided that the tax or taxes under section 3 or 5 or the notification,or notifications under section 6 shall be levied on the net turnover of a dealer.
It further provided that in determining the net turnover, the amounts specified in cls.
(a) to (k) were, subject to the conditions specified therein, to be deducted from the gross turnover.
Clause (k) is relevant for our purpose.
It specified " all amounts which a registered manufacturer of cocoanut and/or groundnut oil and cake may be entitled to deduct from his gross turnover under Rule 20 subject to the conditions specified in the rule. " Rule 20 so far as it is material for our purpose provided: " 1.
Any dealer who manufactures cocoanut/ groundnut oil and cake from cocoanut and/or copra or groundnut and/or/kernel purchased by him may on application to the assessing authority having jurisdiction over the area in which he carries on his business, 843 be registered as a manufacturer of cocoanut/groundnut oil and cake and a certificate issued in Form VI. 2.
Every such manufacturer shall be entitled to a deduction under clause (k) of sub rule (i) of rule 7 equal to the value of the cocoanut and/or copra or groundnut and/or kernel purchased and converted by him into oil and cake provided that the amount for which the oil is sold is included in his turnover.
" It is not necessary to refer to any other rule for the purposes of this appeal.
The main controversy between the parties centres on the method of calculation of the net turnover.
The appellant contends that in the calculation of such net turnover he is entitled to include the total value of the oil sold by him, viz., Rs. 6,76,719 0 11, irrespective of the fact whether these sales were effected inside the State or outside the State and deduct therefrom the total value of copra purchased by him from which the whole quantity of oil sold by him was manufactured, viz., Rs. 7,16,048 1 4.
The resultant figure, according to him, represents the net assessable turnover on which the Sales Tax Authorities would be entitled to assess him to sales tax if the position in law was as is stood before the amendment of the Act by the Travancore Cochin General Sales Tax (Amendment) Act, 1951.
He next contends that section 26 which was added to the Act by the Travancore Cochin General Sales Tax (Amendment) Act 1951, prohibits the levy amongst others of a tax on the sale or purchase of goods where such sale or purchase takes place in the course of inter State trade or commerce.
This is an overriding provision which, it is contended, entitled him to deduct the value of the oil sold outside the State, viz., Rs. 3,67,816 10 1, from the assessable turnover arrived at as above.
The result of this mode of calculation is that he claims to deduct from the gross turnover the whole of the purchase price of copra, viz., Rs. 7,16,048 1 4 and not the purchase price of copra which can be allocated to his sales of oil inside the State.
The Sales Tax Authorities on the other hand, contend that the appellant is not entitled to take into 844 computation at all his 'sales of oil outside the State and is also not entitled to deduct from his gross turnover the purchase price of copra allocated to the oil sold to persons outside the State.
They claim to lift the whole of these sales of oil outside the State inclusive of the purchase price of the copra which can be allocated to them out of the calculations of the net turnover because of the provisions of section 26 set out above, relying upon the non obstante provision contained therein, viz., "Notwithstanding anything contained in this Act, a tax on the sale or purchase of goods shall not be imposed under this Act where such sale or purchase takes place in the course of inter State trade or commerce.
" We have to decide which of these calculations of the net turnover is correct having regard to the relevant provisions of the Act and the rules made there under.
The definition of 'sale" contained in section 2 (j) is wide enough to include, the sales of oil manufactured by the appellant whether these sales are effected inside the State or outside the State.
The definition of " turnover " contained in section 2 (k) of the Act also makes no distinction between the sales inside the State and out,side the State.
The " turnover " is there defined as the aggregate amount for which goods are either bought or 3old by a dealer and, that definition comprises within its scope both these types of sales whether inside the State or outside the State.
This turnover of a dealer is under section 3, sub section
(4) to be determined in accordance with such rules as may be prescribed.
Rule 4 made by the Government under the rule making power prescribes that the gross turnover of a dealer for the purposes of the rules shall be the amount for which the goods are sold by him.
This rule also does not make any distinction between sales inside the State or outside the State.
After having thus provided for the inclusion of all sales within the gross turnover, r. 7 provides that the tax or taxes under section 3 (which is the charging section) shall be levied on the net turnover of a dealer.
Such net turnover is to be arrived at after deducting from the gross turnover various 845 amounts specified in cls.
(a) to (k) thereof and cl.
(k) provides that a registered manufacturer of cocoanut and/or groundnut oil and cake will be entitled to deduct from his gross turnover such amounts as are mentioned in r. 20 subject to the conditions specified therein.
The deduction under r. 20 is available to a dealer who manufactures cocoanut/groundnut oil and cake from cocoanut and " /or copra or groundnut and/or kernel purchased by him and he is entitled to deduct the value of the cocoanut and/or copra or groundnut and/or kernel purchased and converted by him into oil and cake provided that the amount for which the oil is sold is included in his turnover.
Here also we find no distinction made between sales inside the State or outside the State.
On a prima facie reading of these provisions contained in the Act and the rules made thereunder it would appear that a manufacturer of cocoanut or groundnut oil and cake would be entitled to include in his gross turnover the total value of the oil sold by him Whether inside the State or outside the State and to deduct from such gross turnover the whole of the value of the copra purchased by him and converted into oil and cake irrespective of the fact whether such oil or cake was sold by him inside the State or outside the State.
The only thing which he had to do under r. 20, sub r.(2) was to include the amount for which the oil is sold in his turnover and he would then under r. 7(1)(k) be entitled to deduct from his gross turnover the whole of the price of the copra purchased and converted by him into oil and cake, again irrespective of the fact whether the same had been sold by him inside the State or outside the State.
This was certainly the position as it obtained prior to the addition of the section 26 to the Act by the Travancore Cochin General Sales Tax (Amendment) Act, 1951.
We have, therefore., to consider what is the impact of section 26 on the other provisions of the Act and the rules made thereunder.
The High Court decided against the appellant observing that the definitions given in section (2)(j) and (k) of the Act applied only in the absence of "anything 109 846 repugnant in the subject or context", and on a perusal of the relevant provisions of the Act and the rules made thereunder, it was of opinion that these definitions were clearly inapplicable for the following reasons: "There can be no doubt that what has been intended is a taxation of copra at the purchase point and the avoidance of sales tax in respect of the oil extracted by a registered manufacturer from such copra to the extent of the value of the copra used for the said manufacture in all those cases where but for the concession he would have been liable to pay both the purchase tax on copra and the sales tax on oil under the Travancore Cochin General Sales Tax Act, 1125.
In other words, the object is the avoidance of a double taxation by the State, one at the purchase point of copra and the other at the sale point of oil, and it is impossible to invoke the definition and say that the concession will be available to a registered manufacturer even in those cases where only one and not both the taxes can be realized from him under the provisions of the Act.
" The answer given by the learned counsel for the appellant to the above reasoning was that in fiscal statutes what you have got to look to is not the spirit of the statute but the letter of the law; and if you could not bring a particular tax within the letter of the law, the subject could not be made liable for the same.
Our attention was drawn in this connection to the observations of Lord Russell of Killowen in Inland Revenue Commissioners vs Duke of Westminster(1) : "I confess that I view with disfavour the doctrine that in taxation cases the subject is to be taxed if in accordance with a Court 's view of what it considers the substance of the transaction, the Court thinks that the case falls within the contemplation or spirit of the statute.
The subject is not taxable by inference or by analogy, but only by the plain words of a statute applicable to the facts and circumstances of his case." As Lord Cairns said many years ago in Partington vs The Attorney General (1): "As I understand the (1) , 24.
(2)(1869) , 122.
847 principle of all fiscal legislation it is this: if the person sought to be taxed comes within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be.
On the other hand, if the Crown, seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of the law the case might otherwise appear to be.
" The passage was quoted with approval by the Privy Council in the Bank of Chettinad vs Income Tax Commissioner (1) and the Privy Council registered its protest against the suggestion that in revenue cases "the substance of the matter" may be regarded as distinguished from the strict legal position.
(See also F. L. Smidth & Co. vs F. Greenwood (2)).
It is no doubt true that in construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law.
If the Revenue satisfies the Court that the case falls strictly within the provisions of the law, the subject can be taxed.
If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter.
We must of necessity, therefore, have regard to the actual provisions of the Act and the rules made thereunder before we can come to the conclusion that the appellant was liable to assessment as contended by the Sales Tax Authorities.
It may be noted at the outset that the main bulk of the Sales Tax Acts enacted by the various Provincial Legislatures was enacted before the Constitution.
There were on the Statute Book various Sales Tax Acts enacted by the Provincial Legislatures, viz., Bihar Sales Tax Act, 1947, Bengal Finance (Sales Tax) Act, 1941, Madhya Pradesh Sales Tax Act, 1947, Madras Sales Tax Act, 1939, Mysore Sales Tax Act, 1948, Orissa Sales Tax Act, 1947, East Punjab General Sales Tax Act, 1948, and the Uttar Pradesh Sales Tax Act, (1) A.I.R. (1940) P.C. 183.
(2) VIII T.C. 193, 206, 348 1948, all of which levied sales tax on a more or less uniform basis bringing within their ken not only the sales which were actually effected within the territory but also sales where adopting the nexus theory eve1 one of the ingredients of sale was found to have taken place within the territory.
The Assam Sales Tax Act, 1947, and the Hyderabad General Sales Tax Act, 1950, also followed the same pattern.
When the Constitution came to be inaugurated on January 26, 1950, article 286(2) laid down restrictions on the State Legislatures to enact laws imposing or authorising the imposition of tax on the sale or purchase of goods in certain cases therein specified, so that after January 26, 1950, no State could impose a tax on the sale or purchase of goods falling within these categories.
The Sales Tax Acts enacted by the various Provincial Legislatures had, therefore, to be brought in line with this provision of the Constitution and various expedients were devised by the State Legislatures in order to effectuate this object.
This object was sought to be achieved in the main bulk of the Sales Tax Acts by adding towards the end of the Acts sections like section 26 of the Travancore Cochin General Sales Tax Act, 1125, incorporating therein the terms of article 286 of the Constitution.
The non obstante provision was thus enacted in the main bulk of the Sales Tax Acts which laid down: "Notwithstanding anything contained in this Act the tax on the sales or purchase of goods shall not be imposed under this Act where. . . (and the provisions of article 286 were in terms incorporated therein).
" A different expedient was adopted in the Assam Sales Tax Act, 1947 and the Hyderabad General Sales Tax Act, 1950.
The Assam Sales Tax Act, 1947, had incorporated therein an addition to the charging section (section 3 of the Act) and section 3 (1 A) which was inserted by section 3 of the Assam Sales Tax (Amendment) Act, 1947 (Assam Act IV of 1951) was to the following effect: "Nothing in sub section (1) shall,except in cases covered by the first proviso to sub section (12) of section 2 of this Act be deemed to render any dealer 849 liable to tax on the sale of goods where such sale takes place: (1) outside the State of Assam; (2) in the course of the import of the goods into, or export of the goods out of, the territory of India; or (3) in the course of inter State trade or commerce except in so far as Parliament may by law otherwise provide.
The Hyderabad General Sales Tax Act, 1950 had a similar provision incorporated in its definition of sale given in section 2 (k) of the Act.
The Explanation (2) which was substituted for the original Explanation (2) by section 2 of the Hyderabad General Sales Tax (Amendment) Act, 1950 (Hyderabad Act XXXII of 1950) read as under: Explanation (2) " Notwithstanding anything to the contrary in any other law for the time being in force, a transfer of goods in respect of which no tax can be imposed by reason of the provision contained in Article 286 of the Constitution, shall not be deemed to be "sale" within the meaning of this clause.
" A further expedient which was adopted in this connection may be noted in r. 5 of the Bombay Sales Tax Rules, 1952, enacted under the Bombay Sales Tax Act, 1952 (Bombay Act XXIV of 1952), which authorised the deduction of certain sales coming within article 286 of the Constitution while calculating the taxable turnover of a dealer.
We are not called upon to express any opinion as to whether the incorporation of the provisions of article 286 of the Constitution in the charging section as it was done in the Assam Sales Tax Act, 1947, or in the definition of "sale" as it was done in the Hyderabad General Sales Tax Act, 1950, or even in the rules in regard to the calculation of taxable turnover as it was done in the Bombay Sales Tax Rules, 1952, had the effect of taking the sales falling within the categories specified in article 286 out of the purview of the respective Sales Tax Acts, so that they would not be included at all within the calculation of the net turnover on which only the sales tax could be levied.
What was done in the instant case before us as in the bulk of the Sales 850 Tax Acts above noted was the incorporation of those provisions of article 286 of the Constitution therein by adding a non obstante provision at the end of the respective Sales Tax Acts in the manner above indicated.
The definition of "sale" was not amended nor was the charging section.
The rules as to the calculation of the net turnover also remained the same, without any deduction in regard to sales coming within article 286 of the Constitution being incorporated therein, with the result that the Sales Tax Authorities founded themselves upon the non obstante provision incorporated in the Act by the addition of section 26 therein by the Travancore Cochin General Sales Tax (Amendment) Act, 1951.
What, then, is the effect of this non obstante provision ? This Court in Aswani Kumar Ghosh vs Arabinda Bose (1) made the following observations in connection with the non obstante clause: "It should first be ascertained what the enacting part of the section provides on a fair construction of the words used according to their natural and ordinary meaning, and the non obstante clause is to be understood as operating to set aside as no longer valid anything contained in relevant existing laws which is inconsistent with the new enactment.
" The same ratio applies to the construction of the non obstante provision contained in section 26 of the Act with reference to all the other provisions of the Act that preceded the same.
In our opinion, section 26 of the Act, in cases falling within the categories specified under article 286 of the Constitution has the effect of setting at nought and of obliterating in regard thereto the provisions contained in the Act relating to the imposition of tax on the sale or purchase of such goods and in particular the provisions contained in the charging section and the provisions contained in r. 20 (2) and other provisions which are incidental to the process of levying such tax.
So far as sales falling within the categories specified in article 286 of the Constitution and the corresponding section 26 of the Act are concerned, they are, as it were, (1) ; , 21, 22.
851 taken out of the purview of the Act and no effect is to be given to those provisions which would otherwise have been applicable if section 26 had not been added to the Act.
If these provisions of the Act and the rules made thereunder do not apply to.
the sales falling within those categories, the value thereof cannot be included in the turnover of the dealer and no question would &rise of the applicability of r. 7 (1) (k) and r. 20 (2) at all to these cases.
The amount for which the oil is sold in inter State trade or commerce would not be lawfully included in the turnover of the dealer and if the amount for which such oil is sold cannot thus be included in his turnover no occasion would arise for the deduction under r. 7 (1) (k) of the value of the cocoanut and/or copra or groundnut and/or kernel purchased and converted by the dealer into such oil and cake.
A distinction was sought to be made between the inclusion of the value of such oil in the turnover of the dealer for the purpose of assessment and the levy of tax thereupon.
It was urged that the inclusion of such oil in the turnover for the purpose of assessment was quite distinct from the liability for tax which was the only thing prohibited by section 26 of the Act and therefore the value of such oil could be lawfully included in the turnover involving as a necessary consequence the deduction of the value of the copra purchased by the dealer and converted by him into such oil from such turnover, the resultant turnover being the net turnover for the purposes of assessment, the value of the oil sold in the course of inter State trade or commerce being further deducted therefrom by reason of the operation of section 26 of the Act, thus making in effect a distinction between assessable turnover and the taxable turnover.
Reliance was placed in support of this position on the observations of this Court in Messrs. Chatturam Horilram Ltd. vs Commissioner of Income Tax, Bihar and Orissa(1): " As has been pointed out by the Federal Court in Chatturam vs C.I.T., Bihar(,) (quoting from the (1) ; , 297.
(2) , 126.
852 judgment of Lord Dunedin in Whitney vs Commissioners of Inland Revenue (1) 'there are three stages in the imposition of a tax.
There is the declaration of liability, that is the part of the statute which determines what person in respect of what property are liable.
Next, there is the assessment.
Liability does not depend on assessment.
That, ex hypothesi, has already been fixed.
But assessment particularises the exact sum which a person liable has to pay.
Lastly, come the methods of recovery if the person taxed does not voluntarily pay" The appellant, however, forgets that the three stages in the imposition of a tax which are laid down here predicate, in the first instance, a declaration of liability as the starting point.
If there is a liability to tax, imposed under the terms of the taxing statute, then follow the provisions in regard to the assessment of such liability.
If there is no liability to tax there cannot be any assessment either.
Sales or purchases in respect of which there is no liability to tax imposed by the statute cannot at all be included in the calculation of turnover for the purpose of assessment and the exact sum which the dealer is liable to pay must be ascertained without any reference whatever to the same '.
There is a broad distinction between the provisions contained in the statute in regard to the exemptions of tax or refund or rebate of tax on the one hand and in regard to the non liability to tax or non imposition of tax on the other.
In the former case, but for the provisions as regards the exemptions or refund or rebate of tax, the sales or purchases would have to be included in the gross turnover of the dealer because they are prima facie liable to tax and the only thing which the dealer is entitled to in respect thereof is the deduction from the gross turnover in order to arrive at the net turnover on which the tax can be imposed.
In the latter case, the sales or purchases are exempted from taxation altogether.
The Legislature cannot enact a law imposing or authorising the imposition of a tax thereupon and they are not liable to any such imposition (1) 853 of tax.
If they are thus not liable to tax, no tax can be levied or imposed on them and they do not come within the purview of the Act at all.
The very fact of their non liability to tax is sufficient to exclude them from the calculation of the gross turnover as well as the net turnover on which sales tax can be levied or imposed.
If this distinction is borne in mind, it is clear that section 26 of the Act enacts a provision with regard to nonliability of these transactions to tax and these transactions were therefore taken out of the purview of the Act.
We are therefore of opinion that the non obstante provision contained in section 26 of the Act has the effect of taking these transactions out of the purview of the Act with the result that the dealer is not required nor is he entitled to include them in the calculations of his turnover liable to tax thereunder.
This position is not at all affected by the provision with regard to registration and submissions of returns of the sales tax by the dealers under the Act.
The legislature, in spite of its disability in the matter of the imposition of sales tax by virtue of the provisions of article 286 of the Constitution, may for the purposes of the registration of a dealer and submission of the returns of sales tax include these transactions in the dealer 's turnover.
Such inclusion, however, for the purposes aforesaid would not affect the non liability of these transactions to levy or imposition of sales tax by virtue of the provisions of article 286 of the Constitution and the corresponding provision enacted in the Act, as above.
We are, therefore, of opinion that the conclusion reached by We are therefore therefore, of opinion that the conclusion reached by the High Court was correct; the calculations of the net turnover made by the Sales Tax Authorities were also correct; and this appeal must stand dismissed with costs.
Appeal dismissed.
[/INST]By these two petitions, the petitioner challenged the constitutional validity of the Bombay Land Requisition Act, 1948, as amended by the two amending Acts of 1950, and the enforceability of an order of requisition made by the Governor of Bombay under section 6 (4) (a) of the Act.
The petitioner as the widow of the tenant claimed to be in possession, while the case made on behalf of the Government was that the tenant had before his death vacated the premises and handed over possession to a lodger.
A copy of the order of requisition was affixed to the premises and the petitioner moved the High Court for a writ of mandamus, but the petition was dismissed.
The Act was passed by the State Legislature on April 11, 1948, and by the first amending Act its life was extended for two years and by the second the words " the purpose of the State or any other public purpose" were substituted for the words ,,any purpose" occurring in section 5 of the Act with retrospective effect from the date of the Constitution.
The Act came up for consideration in a previous decision of this Court and arguments were confined to grounds other than those specifically covered by that decision.
It was contended on behalf of the petitioner that the Act was in conflict with article 3I (2) and became invalid at the commencement of the Constitution and the amending Acts, for which the assent of the President had admittedly not been obtained, were ineffective under article 31 (3) of the Constitution.
It was further contended that sections 5 and 6 of the Act which made the relevant findings of the Government conclusive had the effect of impairing the powers of the Court, that it was nevertheless open to the Court to judge whether the facts found constituted vacancy in law and, lastly that the order in question was ineffective as the tenant was dead on the date it was made.
Held, that the contentions raised on behalf of the petitioner must be negatived.
93 722 The constitutional validity of the Act was no longer open to question under articles 19 (1) (f) and 31 (2) of the Constitution in view of the decision of this Court in State of Bombay vs Bhanji Munji (1955) 1 S.C.R. 777.
The Act, which did not obviously come within the mischief of cl.
(6) of article 31, fell within the saving clause, cl. 5 (a), of the Article and was an existing law within the meaning of the Constitution and, therefore, valid at the commencement of the Constitution, although it did not contain the expression " for a public purpose " as required by cl.
(2) of the Article.
Clause (3) of the Article, which in terms applied to laws made after the commencement of the Constitution, had no application to the amending Acts which were in no way concerned with the main substantive provisions of the Act already passed, and the want of the President 's assent in no way affected their validity.
As the Act was valid at the commencement of the Constitution and continued to be so thereafter, not being in any way inconsistent with the provisions of Part III of the Constitution so as to attract the operation of article 13, the Amending Acts were equally valid in law.
Held further, that although in a proper case the High Court or this Court in the exercise of their special jurisdictions under the Constitution had power to determine how far the provisions of the Act had or had not been complied with, the finding of the State Government under section 5 Of the Act that the tenant had not actually resided in the premises for a continuous period of six months immediately preceding the date of the order,and that under s.6, the premises had become vacant at about the time indicated in the order, are conclusive and not collateral so as to be liable to be re opened and could not, therefore, be questioned either in this Court under article 32 or in the High Court under article 226 of the Constitution.
Rai Brij Raj Krishna vs section K. Shaw, ; applied.
Hubli Electricity Co. Ltd. vs Province of Bombay, (1948) L.R. 76 I.A. 57, held inapplicable.
Mohsinali Mohomed Ali vs The State of Bombay, (1951) 53 Bom.
L.R. 94: A.I.R. 1951 Bom.
303, referred to.
The words " or otherwise " occurring in explanation (a) to section 6 of the Act could not be construed as ejusdem generis with the words immediately preceding them and must be held to cover all possible cases of vacancy due to any reason whatsoever.
Skinner & Co. vs Shaw & Co., (I893) , referred to.
An order of requisition passed under section 6 (4) (a) of the Act was not of the nature of an order passed in a judicial proceeding and the death of one of the parties could not make it wholly ineffective, the only consequence being that his name as one of 723 the parties to be served under section 13 Of the Act must be removed from the order.
</s>
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<s>[INST] Summarize the judgementCivil Appeal No. 1390/1978.
Appeal by special leave from the Judgment & Order, dated 26 3 1976 of the Punjab & Haryana High Court in Civil Writ Petition No 506/76.
Baldev Raj in person.
U.R. Lalit and Miss A. Subhashini for the Respondent.
432 The Judgment of the Court was delivered by KRISHNA IYER, J.
The appellant, an Accounts Officer compulsorily retired betimes, appearing in person, has painstakingly and proficiently presented his case which calls for mercy, if not justice obsession with one 's own case and inability to see things in perspective are often a frailty of a party who spends the enormity and anguish of his superannuated leisure on the main pursuit of his litigative points, and this makes for prolixity and subjectivity of submissions, which are not the persuasive but the provocative part of the art of advocacy.
Even so, we have listened with sympathy to the studious orality and read with patience the manuscript arguments emanating from the appellant.
He was an Accounts officer since December 30, 1961, having been so promoted and appointed by the Comptroller and Auditor General of India (C & AG).
The story of his career was snapped when he was compulsorily retired 'in the public interest ' on August 27, 1975 under; F.R. 56(j)(i) by the Accountant General (A.G.).
Had he run his full course, his continuance until April 1980 would have been sure.
Finding himself an uneasy casualty when the easy axe of F.R. 56(j)(i) fell on him, the appellant challenged the premature retirement in the High Court only to be greeted with a dismissal in limine.
Here he has arrived by special leave and argued before us that his forced retirement is dubious and violative, in many ways, of F.R. 56(j)(i).
The Fundamental Rules govern the Central Civil Services and ensure the career security which is the sine qua non of contended service.
But potential compulsory retirement under F.R. 56(j)(i) haunting the afternoon of official life injects an awesome uncertainty which makes even the honest afraid, the efficient tremble and almost everyone genuflect not a happy prospect for a civil servant too young to sit idle and too old to get a new job.
A jetsam has no option but to become driftwood or join the other profession where everyone, desirable and undesirable, has a chance.
We stress his deleterious latency of F.R. 56(j)(i) to underscore the unwitting harm to public interest it does in the name of public interest.
Judicial monitoring becomes an unpleasant necessity where power may be humour and a career may be a victim.
The grounds on which the order of retirement has been challenged by the appellant may be formulated immediately after quoting the rule itself: 56(j): Notwithstanding anything contained in this rule the appropriate authority shall, if it is of the opinion that it is the public interest to do so have the absolute right to retire any 433 Government servant by giving him notice of not less than three months in writing or three months ' pay and allowances in lieu of such notice.
(i) If he is in Class I or Class II service or post and had entered Government service before attaining the age of thirty five years after he has attained the age of fifty years.
Note 1: Appropriate authority, means the authority which has the power to make substantive appointment to the post or service from which the Government servants is required or wants to retire.
A break down of the provision brings out the basic components.
The order to retire must be passed only by 'the appropriate authority '.
That authority must form the requisite opinion not subjective satisfaction but objective and bona fide and based on relevant material.
The requisite opinion is that the retirement of the victim is 'in public interest ' not personal, political or other interest but solely governed by the interest of public service.
The right to retire is not absolute, though so worded.
Absolute power is anathema under our constitutional order. 'Absolute ' merely means wide, not more.
Naked and arbitrary exercise of power is bad in law.
These essentials once grasped, the appellant 's submissions become self evident.
His principal contentions, not all the secondary details, alone need detain us.
His first challenge is to the competence of the Accountant General compulsorily to retire him because, according to the appellant, he is not the 'appropriate authority ' within the meaning of the rule.
The appointing authority who actually appointed the appellant was the C & AG, but the A.G. retired him on the assumption that he had the requisite power.
Article 311(1) insists that a civil servant shall not be dismissed or removed by an authority "subordinate to that by which he was appointed".
The appellant, by parity of reasoning, argues that the A.G., being subordinate to the C & AG, has no power to retire him.
The fallacy in the argument lies in the confusion between 'dismissal ' and 'compulsory retirement '.
The two cannot he equated and the constitutional bar cannot be operative.
Therefore, we have to find, on an independent enquiry, as to who is the appropriate authority under r. 56(j)(i).
Under Note 1 to F.R. 56, the authority entitled to make substantive appointments is the appropriate authority to retire government servants under the said rules.
From this Note, which is virtually a part of the rule, the respondents contend that the power of the appropriate authority in respect of 434 Accounts Officers like the appellant has been vested in the A.G. by Notification of the Ministry of Finance dated 29 11 1972.
Since the A.G. has been clothed, from that date, with power to appoint substantively Accounts Officers, he has become the appropriate authority for compulsory retirement even though the appellant Accounts Officer had been appointed by the & AG prior to 29 11 1972.
In the light of the note which is part of the rule, read with the notification delegating the power to the A.G., we see no flaw in the order impugned.
No doubt, ordinarily the appointing authority is also the dismissing authority but the position may be different where retirement alone is ordered.
There, the specific provision in the Note to FR 56 must hold good and article 311 is not violated either.
Nor is there any discrimination, as contended for, because retirement is a category different from the punishments covered by article 311.
Who is the retiring authority on a given date? This is answered by the Note which, in substance, says that he who is empowered to appoint the Accounts officer is also the appropriate authority to retire compulsorily, on that date.
In this view, we cannot nullify the retirement of the appellant for want of competence.
This takes us to the meat of the matter, viz., whether the appellant was retired because and only because it was necessary in the public interest so to do.
It is an affirmative action, not a negative disposition, a positive conclusion, not a neutral attitude.
It is a terminal step to justify which the onus is on the Administration, not a matter where the victim must make out the contrary.
Security of tenure is the condition of efficiency of service.
The Administration, to be competent, must have servants who are not plagued by uncertainty about tomorrow.
At the age of 50 when you have family responsibility and the sombre problems of one 's own life 's evening!, your experience, accomplishments and fullness of fitness become an asset to the Administration, if and only if you are not harried or worried by 'what will happen to me and my family? ' 'Where will I go if cashiered? ' How will I survive when I am too old to be newly employed and too young to be superannuated? ' These considerations become all the more important in departments where functional independence.
fearless scrutiny, and freedom to expose evil or error in high places is the task.
And the ombudsmanic tasks of the office or audit vested in the C & AG and the entire army of monitors and minions under him are too strategic for the nation 's financial health and discipline.
that immunity from subtle threats and oblique overawing is very much in public interest.
So it is that we must emphatically state that 435 under the guise of 'public interest ' if unlimited discretion is regarded acceptable for making an order of premature retirement, it will be the surest menace to public interest and must fail for unreasonableness, arbitrariness and disguised dismissal.
To constitutionalise the rule, we must so read it as to free it from the potential for the mischiefs we have just projected.
The exercise of power must be bona fide and promote public interest.
There is no demonstrable ground to infer mala fides here and the only infirmity alleged which deserves serious notice is as to whether the order has been made in.
public interest.
When an order is challenged and its validity depends on its being supported by public interest the State must disclose the material so that the court may be satisfied that the order is not bad for want of any material whatever which, to a reasonable man reasonably instructed in the law, is sufficient to sustain the grounds of 'public interest ' justifying forced retirement of the public servant.
Judges cannot substitute their judgment for that of the Administrator but they are not absolved from the minimal review well settled in administrative law and founded on constitutional obligations.
The limitations on judicial power in this area are well known and we are confined to an examination of the material merely to see whether a rational mind may conceivably be satisfied that the compulsory retirement of the officer concerned is necessary in public interest.
We will consider this question to the extent disclosed by the record and in the light of the submissions made by both the parties.
The whole purpose of the rule is to weed out the worthless without the punitive extremes covered by article 311 of the Constitution.
After all, administration, to be efficient, must not be manned by drones, do nothings, incompetents and unworthies.
They may not be delinquent who must be punished but may be a burden on the Administration if by insensitive, insufficient, unintelligent or dubious conduct impede the flow or promote stagnation, in a country where speed, sensitivity, probity.
and non irritative public relations and enthusiastic creativity are urgently needed but paper logged processes and callous cadres are the besetting sin of the Administration.
It is in public interest to retire a never do well, but to juggle with confidential reports when a man 's career is at stake is a confidence trick contrary to public interest.
Moreover, confidential reports are often subjective, impressionistic and must receive sedulous checking as basis for decision making.
The appropriate authority, not the court, makes the decision, but, even.
so, a caveat is necessary to avoid misuse We are inclined to ignore the case that the appellant was retired because he had declined 'to proceed on leave forcibly in September 1974 '.
While it is reprehensible for Government or any in the higher 436 echelons to compel a civil servant to go on leave on pain of being suspended, retired or transferred to a far off place or indifferent post and the court may readily infer mala fides in the subsequent order if there is proof of antecedent pressure to take forced leave we cannot judge the legality of a compulsory retirement on suspicions and apprehensions invariably urged even by deserving victims.
Let us look at the facts from these broad lines of Law.
The A.G. has, in vindication of his action, submitted that "the impugned order of compulsory retirement was made by the Accountant General on the basis of the recommendations dated 23 8 1975 of the Reviewing Committee constituting the following officers: 1.
Accountant General 2.
Senior Deputy Accountant General (IC) 3.
Senior Deputy Accountant General (Administration) Punjab 4.
Deputy Accountant General (Administration) Office of the Accountant General, Haryana.
The said Committee reviewed the service record of the appellant and found adverse entries in various confidential reports, and inter alia, held that the appellant was unable to perform his duty efficiently and effectively in the post held by him and recommended compulsory retirement under FR 56(j)(i).
The appellant was accordingly retired by the Accountant General on 27 8 1975".
We are not inclined to agree with the appellant that the Reviewing Committee is an illegal body and taking its recommendations into consideration vitiates the A.G. 's order.
On the other hand, it is clear that the decision to retire is surely that of the A.G., and the Reviewing Committee 's presence is persuasive, not decisive, and prevents the opinionatedness of one by the collective recommendations of a few.
Now we will enter the substantive dispute and search for the presence of public interest as the basis of the impugned order.
The A.G., Mr. Khanna has, in his affidavit in this court, sworn: In this connection I respectfully submit that the Petitioner 's work was found to be below average and that fact was noted by the appropriate authority in the confidential reports of the 437 petitioner as per details given below: ____________________________________________________________ Period of Adverse Remarks Date of Report Communication ____________________________________________________________ 1961 62 Yes.
An Average Officer.
Though he did try to tackle the arrears in the GAD section under his charge.
I was unhappy to observe that he was trying to shield those who shirked work.
I also noticed that while he was anxious to bring to my notice persons who did their duties well, he was willing to play down the lapse on their part, if any, without adequate justification.
5.12.1962 14.12.64 A mediocrity who should take more Adverse to interest in the work remarks 20.3.65 noted on 15.1.66 29.7.69 Industry and application.
Poor to 15.11.70 Ability to organise and manage Poor, sections competently.
Adverse remarks communica ted on May 1970.
General Assessment:An average officer who would do better if he showed more initiative and resourcefulness.
1.4.70 1.Technical ability:Below average to 3(a) Ability to organise and manage 9.12.70 sections competently.
Poor (b) Ability to control subrodi nates and get the best out of them.
Poor 10.
General Assessment:Below Adverse Average.
My remarks against remarks 1,3(a)(b) and 10 may be seen.
communica The performance of Shri ted, on Chaddha as the officer in 29th Sept. charge of the Account Current 1971.
sections was not upto the mark and consequently he had to be given a change.
This officer is definitely below average.
438 The aforementioned adverse remarks in the confidential reports of the petitioner were communicated in all the cases to the Petitioner and the Petitioner made representation which was rejected by the competent authority after due consideration.
At the time of the review of the retention of the petitioner and other accounts officers, a Committee consisting of Accountant General, Senior Deputy Accountant General (IC), Senior Deputy Accountant General, (Admn.), Office of the Accountant General, Haryana was constituted to review the cases of the Accounts officers for their retention, on their attaining the age of 50 years.
The said Committee was constituted on 23 8 1975.
The said Committee after careful assessment of the performance of the employees concerned depicted in their confidential reports found that the persons including the Petitioner who were not able to perform their duty efficiently and effectively in the posts held by them at that time and the Committee therefore recommended to retire the Petitioner among others under F.R 56(j)(i).
A copy of the minutes of the meeting held is annexed herewith as Annexure Y. The Reviewing Committee report runs thus: "The Committee after a careful assessment of the performance of the employees concerned as depicted in their confidential reports have come to the conclusion that the persons mentioned below are not able to perform efficiently and effectively the duties of the posts held by them.
(1) Shri Baldev Raj Chadda, Accounts Officer.
" A bare glance at the confidential reports of the appellant brings out the striking fact that they relate to 1961 62 to the end of 1970.
The appellant was promoted only in 1961 and was regularly drawing increment for well over a decade, without let or hindrance.
What is far more significant is the further fact that the Reviewing Committee and the A.G. appear to have ignored entries in yearly/half yearly reports in the seventies.
The appellant states categorically: "A perusal of the extract from the Confidential reports would show that there were no adverse remarks in the Confidential Reports of the Appellant for the year 1971 72, 1972 73, 1973 74, 1974 75 and 1975 76 till the date of his retirement from service on 27 8 75." He further rightly points out that the stand of the A.G. before the High Court was that the impugned order was not grounded on the adverse entries: Since the adverse entries in the Confidential Reports of the petitioner were not, in terms, stated to be the ground for exer 439 cising the powers under F.R. 56(j), it was not necessary for the Respondent to deal with the various allegations levelled by the petitioner against the higher authorities in this regard.
We must read these materials against the further background set out by the appellant: If I was considered to be unsuitable to continue to officiate as Accounts officer even after 14 years of continuous service without break and after I reached the maximum of the scale both old/revised without being held up or even delayed at E.B. or for increment, then the proper course open to the authorities was to take action against me under C.C.S. (C.C.A.) Rules 1965 to revert me and not to retire me by taking shelter under F.R. 56(j)(i) to avoid initiating disciplinary action.
This is thus a clear case of vindictive misuse of powers by the Appointing Authority under F.R. 56(j).
One wonders how an officer whose continuous service for 14 years crossing the efficiency bar and reaching the maximum salary in the scale and with no adverse entries at least for five years immediately before the compulsory retirement, could be cashiered on the score that long years ago, his performance had been poor, although his superiors had allowed him to cross the efficiency bar without qualms.
A short cut may often be a wrong cut.
The order of compulsory retirement fails because vital material, relevant to the decision, has been ignored and obsolete material, less relevant to the decision, has influenced the decision.
Any order which materially suffers from the blemish of overlooking or ignoring, wilfully or otherwise, vital facts bearing on the decision is bad in law.
Likewise, any action which irrationally digs up obsolete circumstances and obsessively reaches a decision based thereon, cannot be sustained.
Legality depends on regard or the totality of material facts viewed in a holistic perspective.
For these reasons, the order challenged is obviously bad and we quash it.
It is, however, open to the A.G. to take a fresh decision based on legal material and guided by legal principles.
The appellant has, by now, reached the age of superannuation in the normal course.
The result is that the consequence of any fresh order may only be financial.
It is for the A.G. to consider whether in the circumstances, a fresh evaluation for the purpose of compulsory retirement is called for.
We merely allow the appeal, quash the order of compulsory retirement and leave the law to take its course.
The appellant will be entitled to costs which we quantify at Rs. 2,000.
N.K.A. Appeal allowed.
[/INST]Before June 27, 1973, a Section Officer in the Tamil Nadu Secretariat used to be a non Gazetted officer.
The Government by order G.O. Ms. No. 1616, Public (Services J) dated June 13, 1973 made the post of a Superintendent of the Secretariat a Gazetted post and re designated it as Section Officer, and by Government order No. 1782, Public (Services J.), dated June 27, 1973, provided that in all matters relating to appointments, transfers, postings punishments and drawl of pay, they continued to be treated as non gazetted Government servants until further orders The respondent was recruited as a Clerk in the Indian Army in the year 1943 and after demobilization was appointed in the Revenue Secretariat of the State Government (Appellant) from March 1948.
He was promoted as Section Officer in April 1969 and he continued in the post till March 2, 1976 when he was compulsorily retired from service under Fundamental Rule 56(d).
The respondent challenged his compulsory retirement in the High Court contending that the procedure set out in G.O. No. 761 dated March 19, 1973, envisaged that the Review Committee that had to consider the cases of Gazetted Government officers in the Secretariat should be headed by the Chief Secretary and not by the Departmental Secretary and since the Committee which reviewed his case was headed by a Departmental Secretary, the violation had vitiated the retirement order.
The High Court accepted this contention and quashed the retirement order In the appeal to this Court it was contended on behalf of the appellant that though under G. O. No. 1782 Public (Service J) dated June 27, 1973, all Superintendents or Section officers were given the status of Gazetted Officers in matters like appointments, transfer and posting they continued to be treated as non gazetted officers and that the constitution of the Review Committee headed by a Departmental Secretary was valid.
It was also contended that in the aforesaid order, the word 'appointments ' includes compulsory 'retirements ', also.
On the respondent 's behalf it was submitted that the word 'appointments ' in the order dated June 27, 1973 cannot be construed to include 'retirements ' from or 'terminations ' of service, for if that had been the intention there would not have been no difficulty in adding the word 'retirements ' or terminations ' along 472 with the words 'appointments, transfers, postings and punishments ' in the Government order and consequently a restricted interpretation should be placed on this expression.
Allowing the appeal, ^ HELD: 1.
The order of the High Court is set aside and the order or the respondent 's compulsory retirement upheld.
[475 H] 2.
Unless a contrary intention appears from the context, a power to appoint should include a power to terminate the appointment including termination by compulsory retirement in accordance with the terms and conditions of service.
This fundamental principle underlies Section 16 of the General Clauses Act.
[474 H 475 A] 3.
The power to terminate the appointment by compulsory retirement or otherwise is a necessary adjunct of the power of appointment and is exercised as an incident to or consequences of that power.
Nothing in the Government Order No. 1782, dated June 27, 1973, militates against this rule of construction.
[475 B] 4.
The "decision ' of the Review Committee had no force proprio vigore.
The 'decisions ' were mere recommendations which did not, and could not, have a peremptory effect.
The ultimate power to accept or not to accept the recommendations of the Review Committee and to take an effective and definitive decision vests in the Government.
Even if there was some irregularity in the constitution of the Review Committee, that could not by itself, have the effect of vitiating the order of the respondent 's compulsory retirement.
[475E F] In the instant case it was not the respondent alone (from the category of Section Officers) whose case was reviewed by the Review Committee in question.
The cases of all the Section officers of the Secretariat, were reviewed by the same committee.
The respondent had therefore not been singled out for a differential treatment.
[475G]
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<s>[INST] Summarize the judgementAppeal No. 64 of 1953.
Appeal by special leave from the Judgment and Decree, dated the 29th November, 1951, of the Court of the Judicial Commissioner for Himachal Pradesh at Simla in Civil Revision No. 52 of 1951.
Gopal Singh for the appellants.
section C. Isaacs (Amar Nath Chona, with him) for the respondents.
January 19.
The Judgment of the Court was delivered by DAS J.
This is an appeal by special leave against the order made on the 20th November, 1951, by the Judicial Commissioner of Himachal Pradesh in proceedings instituted by the respondents under articles 226 and 227 of the Constitution of India.
There is no substantial dispute as to the facts leading up to the present appeal.
The 'appellants 567 were tenants of a certain shop premises situate in Solan Bazar in the district of Mahasu in Himachal Pradesh.
On the llth October, 1947, they had executed a rent deed by which they agreed to pay an annual rent of Rs. 175 payable as to Rs. 50 on the last of Baisakh and as to the balance of Rs. 125 in the month of October, in default of which payment,% the respondents, as landlords, would be entitled to recover the whole of the said rent in one lump sum.
The tenancy created by the rent deed was only for one year in the first instance but it provided that if the tenants desired to continue in occupation they must execute a further rent deed before the expiration of the said term.
The appellants never executed any further rent deed but held over and continued in occupation of the demised premises.
The appellants fell into arrears with the payments of rents due for the years 1948 and 1949 and the respondents made applications to the Rent Controller for eviction of the appellants under section 13 (2) (i) of the East Punjab Urban Rent Restriction Act, 1949, as extended to Himachal Pradesh.
The appellants, however, paid up the arrears of rent into court and claimed the benefit of the proviso to section 13 (2) (i).
The claim was allowed and the said applications were dismissed accordingly on the 18th December, 1950.
The appellants again fell into arrears with the pay ment of rent due for the year 1950.
On the 26th December, 1950, the respondents served on the appellants a notice c alling upon the latter to pay whole of the said rent forthwith but the appellants failed to do so.
The respondents thereupon, on the 2nd January, 1951, filed an application under section 13 (2) (i) for the eviction of the appellants on the ground of nonpayment of rent.
Thereafter, on the 10th January, 1951, the appellants made an application to the Rent Controller for the fixation of a fair rent under section 4 of the said Act.
On the 25th January, 1951, the appellants filed their written statements in the proceedings under section 13 568 (2) (i) admitting the nonpayment of rent and the receipt of the notice but pleaded (i) that the respondents ' application was barred by reason of the rejection of the previous applications for eviction made by the respondents and (ii) that the present application could not be entertained in view of the pendency of their application for fixation of a fair rent under section 4 of the said Act.
On the 20th February, 1951, the Rent Controller framed the following issues: (1) Whether the application in question was not entertainable in view of the judgment of the District Judge, dated the 18th December, 1950 Onus on defendants.
(2) If issue No. I is not proved, had the opposite party (tenants) not paid the rent and as such were they liable to be ejected? Onus on plaintiffs.
(3) Have the opposite party already filed an application in the said court for the fixation of rent and are they, therefore, not liable for ejectment pending the decision on the application and what is its effect on the said application? Onus on defendants.
By his judgment, dated the 29th May, 1951, the Rent Controller held that as the previous applications related to non payment of rents for the years 1948 and 1949 the present application which was founded on non payment of rent for 1950 was not barred under section 14 of the said Act but, although the fact of rent being in arrears was admitted, the Rent Controller did not think fit to make an order directing the appellants to put the respondents in possession of the demised premises.
The reasons given by him were as follows: " Regarding the non payment of the rent when the plea of the tenant is only that he is waiting for the fixation of fair rent by the Rent Controller there is not enough ground for ejectment.
A civil suit for the recovery of the rent would have been a more appropriate method of obtaining that rent.
I therefore dismiss the suit. ' The parties should bear their own 569 The respondents preferred an appeal to the District Judge of Mahasu under section 15 of the said Act.
The learned District Judge dismissed the appeal observing "On behalf of the landlord it was urged that under section 13 (2) of the Punjab Urban Rent Restriction Act, as applied to Himachal Pradesh, the Controller, if it came to the finding that rent had not been paid, had no option but to direct the tenant to put the landlord in possession.
Undoubtedly, that is the correct legal position, but in the present case the non payment of rent was due to a misapprehension of the legal position created by the tenant filing an application for fixing fair rent.
1, therefore, think that this case can be distinguished and does not fall within section 13 (2), Punjab Urban Rent Restriction Act.
" The respondents moved the Judicial Commissioner, Himachal Pradesh, under articles 226 and 227 of the Constitution of India for setting aside the order of the District Judge.
The learned Judicial Commissioner held that in view of the admitted failure to pay the rent as provided by the rent deed or at the first hearing of the court under the proviso to section 13 (2) (i) the courts below had acted arbitrarily in refusing to make an order for ejectment against the tenants who had not done what was incumbent on them to do under the law and that such a situation called for inter ference by the court of the Judicial Commissioner in order to keep the subordinate courts within the bounds of their authority.
He accordingly set aside the orders of the courts below and allowed the application for ejectment but gave the appelants three months ' time for vacating the premises.
The appellants have now come up before this court on appeal by special leave obtained from this court.
Learned advocate appearing in support of this appeal urges that the learned Judicial Commissioner acted wholly without jurisdiction inasmuch as (1) the Rent Controller or the District Judge exercising powers 570 under the Act was not amenable to the jurisdiction of the High Court and, therefore, article 227 confers no power on the court of the Judicial Commissioner over the Rent Controller or the District Judge, and (2) that article 227 read with article 241 confers no power of judicial superintendence on the court of the Judicial Commissioner.
Re. l.
The court of the Judicial Commissioner of Himachal Pradesh exercises jurisdiction in relation to the whole of the territories of Himachal Pradesh.
The Rent Controller and the District Judge exercising jurisdiction under the Act are certainly tribunals, if not courts, and they function within the territories of Himachal Pradesh.
Therefore, article 297 (1) read with article 241 confers on the court of the Judicial Commissioner power of superintendence over such tribunals.
The words " in relation to which " obviously qualify the word " territories " and not the words "courts and tribunals".
2.The material part of article 227 substantially reproduces the provisions of section 107 of the Government of India Act, 1915, except that the power of superintendence has been extended by the article also to tribunals.
That the Rent Controller and the District Judge exercising jurisdiction under the Act are tribunals cannot and has not been controverted.
The only question raised is as to the nature of the power of superintendence conferred by the article.
Reference is made to clause (2) of the article in support of the contention that this article only confers on the High Court administrative superintendence over the subordinate courts and tribunals.
We are unable to accept this contention because clause ( 2) is, expressed to be without prejudice to the.generality of the provisions in clause (1).
Further, the preponderance of judicial opinion in India was that section 107 which was similar in terms to section 15 of the High Courts Act, 1861, gave a power of judicial superintendence to the High Court apart from and independently of the provisions of other laws conferring revisional jurisdiction on the High Court.
In this connection it has to 571 be remembered that section 107 of the Government of India Act, 1915, was reproduced in the Government of India Act, 1935, as section 224.
Section 224 of the 1935 Act, however, introduced sub section (2), which was new, providing that nothing in the section should be construed as giving the High Court any jurisdiction to,question any judgment of any inferior court which was not otherwise subject to appeal or revision.
The idea presumably was to nullify the effect of the decisions of the different High Courts referred to above.
Section 224 of the 1935 Act has been reproduced with certain modifications in article 227 of the Constitution.
It is significant to note that sub section (2) to section 224, of the 1935 Act has been omitted from article 227.
This significant omission has been regarded by all High Courts in India before whom this question has arisen As having restored to the High Court the power of judicial superintendence it had under section 15 of the High Courts Act, 186 1, and section 107 of the Government of India Act, 1915.
See the cases referred to in Moti Lal vs The State through Shrimati Sagrawati(1).
Our attention has not been drawn to any case which has taken a different view and, as at present advised, we see no reason to take a different view.
This power of superintendence conferred by article 227 is, as pointed out by Harries C. J., in Dalmia Jain Airways Ltd. vs Sukumar Mukherjee(2), to be exercised most sparingly and only in appropriate cases in order to keep the Subordinate Courts within the bounds of their authority and not for correcting mere errors.
As rightly pointed out by the Judicial Commissioner in the case before us the lower courts in refusing to make an order for ejectment acted arbitrarily.
The lower courts realised the legal position but in effect declined to do what was by section 13 (2) (i) incumbent on them to do and thereby refused to exercise jurisdiction vested in them by law.
was, therefore, a case which called for an interference by the court of the Judicial Commissioner and it acted (1) I.L.R. [1952] 1 All.
558 at p. 567, (2) A.I.R. 1951 Cal.
75 572 quite properly in doing so.
In our opinion there is no ground on which in an appeal by special leave under article 136 we should interfere.
The appeal, therefore, must stand dismissed with costs.
Appeal dismissed.
[/INST]The respondent concern had a rule in its packing and labelling department that if a woman employee got married her service would stand automatically terminated.
The appellant union raised an industrial dispute on this question and it was referred to the Industrial Tribunal, Maharashtra.
The Tribunal held that the rule was justified whereupon, the appellant came to this Court by special leave.
The justification given on behalf of the respondent for the said rule was that in the particular department where the rule operated team work was required for which regular attendance was necessary, and married women, for obvious reasons, could not be expected to be regular in attendance.
It was also contended for the respondent that industrial adjudication should not interfere with the employer 's right to impose any condition in the matter of employment when he employs new workmen.
Rule 5(3) of the Indian Administrative Service (Recruitment) Rules, 1964, was referred to as carrying a similar condition.
HELD: (i) There was nothing to show that married women would by the more likely to be absent than unmarried women or widows.
The only difference was that married women would ask for maternity leave.
This could be provided for by having a few extra women as leave reserve.
So far as efficiency was concerned it could hardly be said that married women would be less efficient than unmarried ones or widows.
The economic interest of the concern was also not affected in any material way.
There was thus no good and convincing reason why such a rule should continue in one department of the pharmaceutical industry.
The fact that such a rule existed in other concerns also was no justification, if the rule could not be justified on its own merits.
The rule, therefore, had to be abrogated.
[495E, G H; 496A B, D] (ii) It is too late in the day to stress the absolute freedom of an employer to impose any condition which he likes on labour.
It is always open to industrial adjudication to consider the conditions of employment of labour and to vary them if it is found necessary.
[496 E F] (iii) Rule 5(3) of the Indian Administrative Service (Recruitment) an unmarried woman marries subself the maintenance of the efficiency her to resign.
This rule does on marriage as a matter of course as the case of the respondent concern.
[497 B C]
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<s>[INST] Summarize the judgementCivil Appeal No. 136 of 1958.
Appeal by special leave from the decision dated April 30,1956, of the Labour Appellate Tribunal of India at Lucknow in Appeeal No. III 45 of 1956, lip 919 arising out of the award dated February 6, 1956 of the State Industrial Tribunal, Allahabad, in reference No. 96 of 1955.
Ram Lal Anand, I.M. Lal and section section Sukla, for the appellants.
B. D. Sharma, for respondents Nos.
1 to 5.
C.P. Lal and G. N. Dikshit, for respondent No. 6. 1960.
February 9.
The Judgment of the Court was delivered dy SUBBA RAO, J.
This is an appeal by special leave against the order of the Labour Appellate Tribunal of India setting aside the award of the Industrial Tribunal, Allahabad, and directing the reinstatement of the workers in Kundan Sugar Mills at Amroha.
" Kundan Sugar Mills " is a partnership concern and owns a sugar mill at Amroha.
The respondents I to 4 were employed by the appellant as seasonal masons in the year 1946.
In 1951 the partners of the appellant Mills purchased the building machinery and other equipment of another sugar mill at Kiccha in the district of Nainital.
They closed the said mill at Kiccha and started it at Bulandshahr.
The new factory was named Pannijee Sugar & General Mills, Bulandshahr.
On January 19, 1955, the General Manager of the appellant Mills ordered the transfer of the respondents I to 4 from the appellant Mills to the new mill at Bulandshahr.
The said respondents through their representative, the fifth respondent, protested to the General Manager against the said transfer.
But the General Manager, by his letter dated January 22/24, 1955, insisted upon their joining the new mill at Bulandshabr.
But the said respondents did not accede to his request.
On January 28, 1955, the General Manager served a notice on the respondents 1 to 4 stating that they had disobeyed his orders and thereby committed misconduct under Standing Order No. L(a).
They were asked to submit their explanation as to why action should not be taken against them under the Standing Order.
The Labour Union, by its letter dated January 31, 1955, denied the charges.
On February 2, 1955, the General Manager made an order dismissing the respondents 1 to 4 from service on the ground that 117 920 they had disobeyed his order of transfer and thus they were guilty of misconduct under Standing Order No. LI(a).
The Labour Union thereafter raised an industrial dispute and the Government of U.P. by its notification dated November 7, 1955, referred the following issue for decision to the State Industrial Tribunal for U, P. at Allahabad: " Whether the employers have wrongfully and/or unjustifiably terminated the services of Sarva Shri Zia Uddin, Raisuddin, Shafiquddin and Ahmed Bux for refusal to obey the orders of tranfer to M/s. Pannijee Sugar and General Mills Co., Bulandshahr.
If so, to what relief are the workmen entitled.
" The State Industrial Tribunal by its order dated February 6, 1956, made its award holding that the management was within its rights and that, as the respondents 1 to 4 had disobeyed the order of the management, they were properly dismissed by the management.
The said respondents through their Union, respondent No. 5, perferred an appeal to the Labour Appellate Tribunal of India and the said Appellate Tribunal held that the management had no right to transfer the respondents 1 to 4 to the new factory and therefore the order dismissing them was illegal.
The management has preferred the present appeal against the said order of the Labour Appellate Tribunal.
Learned counsel for the appellant raised before us the following two questions: (1) The right to transfer an employee by an employer from one of his concerns to another is implicit in every contract of service; (2) the State Industrial Tribunal having held that both the concerns, i.e., the mills at Amroha and the mills at Bulandshahr, formed one unit, the Appellate Tribunal had no jurisdiction to set aside that finding under section 7(1) of the Industrial Disputes (Appellate Tribunal) Act, 1950.
To appreciate the first contention, it is necessary to notice the undisputed facts in this case.
It is true that the partners of the Sugar Mills at Amroha own also the Sugar Mills at Bulandshahr; but they were proprietors of the former Mills in 1946 whereas they purchased the latter mills only in the year 1951 and 921 started the same in Bulandshahr in or about 1955.
The respondents 1 to 4 were employed by the owners of the appellant Mills at the Sugar Mills at Amroha at a time when they were not proprietors of the Sugar Mills at Bulandshahr.
It is conceded that it was not an express term of the contract of service between the appellant and the respondents I to 4 that the latter should serve in any future concerns which the appellant might acquire or start.
It is also in evidence that though the same persons owned both the Mills they were two different concerns.
In the words of the Appellate Tribunal, the only connection between the two is in th identity of ownership and, but for it, one has nothing to do with the other.
It is also in evidence that an imported workman at Amroha is entitled to house rent, fuel, light and travelling expenses both ways, while at Bulandshahr the workmen are not entitled to any of these amenities.
The workmen at Amroha are entitled to benefits under the Kaul Award while those at Bulandshahr are not so entitled.
The General Manager, E.W.1, in his evidence stated that the interim bonus of the Bulandshahr factory as ordered by the Government in November 1955 was Rs. 1 1,000 while for Amroha it: was nearly 1 1/2 lacs ".
He also stated that "the bonus for last year at Amroha would be probably equal to II months ' wages and at Bulandshahr equal to about 4 or 5 days ' wages.
" It is also in evidence that apart from the disparity in the payment of bonus, the accounts are separately made up for the two mills.
It is clear that the two mills are situated at different places with accounts separately maintained and governed by different service conditions, though they happened to be under the common management; therefore, they are treated as two different entities.
The question of law raised in this case must be considered in relation to the said facts.
The argument of the learned counsel for the appellant that the right to transfer is implicit in every contract of service is too wide the mark.
Apart from any statutory provision, the rights of an employer and an employee are governed by the terms of contracts between them or by the terms necessarily implied therefrom.
It is 922 conceded that there is no express agreement between the appellant and the respondents where under the appellant has the right to transfer the respondents to any of its concerns in any place and the respondents the duty to join the concerns to which they may be transferred.
If so, can it be said that such a term has to be necessarily implied between the parties ? When the respondents 1 to 4 were employed by the appellant, the latter was running only one factory at Amroha.
There is nothing on record to indicate that at that time it was intended to purchase factories at other places or to extend its activities in the same line at different places.
It is also not suggested that even if the appellant had had such an intention, the respondents I to 4 had knowledge of the same.
Under such circumstances, without more, it would not be right to imply any such term between the contracting parties when the idea of starting new factories at different places was not in contemplation.
Ordinarily the employees would have agreed only to serve in the factory then in existence and the employer would have employed them only in respect of that factory.
The matter does not stop there.
In the instant case, as we have indicated, the two factories are distinct entities, situated at different places and, to import a term conferring a right on the employer to transfer respondents I to 4 to a different concern is really to make a new contract between them.
The decisions cited at the Bar do not in the least sustain the appellant 's broad contention.
In Alexandre Bouzourou vs The Ottoman Bank (1) the appellant was an employee of the respondent bank.
The bank transferred him from one branch to another branch of the bank situated in different towns.
As he refused to comply with the order of transfer, he was dismissed.
Thereafter, he filed a suit to recover damages from the bank for wrongful dismissal.
It was argued before the Judicial Committee that under the terms of his contract of service the sphere of his employment included only the head office and not the branches of the bank.
The evidence in that case showed that transfer was one of the ordinary incidents of the bank 's employment, being usually concurrent with an (1) A.T.R. , 119.
923 increase of salary and responsibility, and suggest no more than that the bank considered their officials convenience where possible.
Indeed the appellant therein did not even suggest in his correspondence thatthe transfer was a breach of his contract.
On these circumstances the Judicial Committee observed as follows at p. 119: " From the point of view of proper organization of their staff it is difficult to assume that the Bank would willingly agree that their employees should not be bound to serve outside the place where the contract was made except with their consent, and, in their Lordships ' opinion such a condition of the contract would require to be clearly established.
" The essential distinction between that case and the present one is that there the bank with its branches was one unit and the records clearly indicated that transfer was one of the ordinary incidents of service in the Bank.
In such circumstances when a person joined such a service, the Privy Council found it easy to imply a term of transfer.
That decision is therefore not of any relevancy to the present case.
In Mary (Anamalai Plantation 'Workers ' Union) vs Seliparai estate (2), labour was recruited in the plantations without any differentiation being made between factory and field workers and it had been the common practice prevailing for several years to transfer the factory workers to the field and vice versa, according to the exigencies of work.
A worker who had been appointed in such a plantation was transferred, owing to mechanisation in the factory, from the factory to the field.
The Labour Appellate Tribunal of India held that in the circumstances of the case the liability to be so transferred must be deemed to be an implied condition of service.
So too in Bata Shoe Company, Ltd. vs Ali Hasan (Industrial Tribunal, Patna & Ors.) (3) transfer of an employee in the circumstances of that, case from one post to another was held not to be an alteration of any service condition within the meaning of section 33 of the Industrial Disputes Act.
That was a case of a management employing a worker in one concern and transferring him from one post to (2) [1956] I.L.L.J. 343.
(3) 924 another.
In such a case it was possible to imply the condition of right of the management to transfer the employee from one post to another.
section N. Mukherjee vs Kemp & Co. Ltd. (4) was a case arising out of section 23 of the Industrial Disputes (Appellate Tribunal) Act, 1950.
The complaint there was that an employee was transferred by the management with a view to victimize him and that it amounted to alteration in the conditions of employment.
It was held that if an employer employed a person it was implicit in the appointment that he could be transferred to any place where the business of the employer in the same line was situated, unless there was an express condition to the contrary in the contract of employment.
In that case the worker was employed by Kemp & Co., Limited, which had branches in different places.
The decision assumed that the business was one unit and that the only question raised was that he should not be transferred to a place different from the place where he was actually discharging his duties.
These observations must be limited to the facts of that case.
It is not necessary to multiply the citation, for the other decisions relied on by the learned counsel for the appellant pursue the same reasoning followed in the aforesaid cases.
We have referred to the decisions only to distinguish them from the present case, and not to express our opinion as to the correctness of the decisions therein.
It would be enough to point out that in all the said decisions the workers had been employed in a business or a concern and the question that arose was whether in the circumstances of each case the transfer from one branch to another was valid or amounted to victimization.
None of these decisions deals with a case similar to that presented in this appeal, namely, whether a person employed in a factory can be trans ferred to some other independent concern started by the same employer at a stage subsequent to the date of his employment.
None of these cases holds, as it is suggested by the learned counsel for the appellant, that every employer has the inherent right to transfer his employee to another,place where he chooses to start (4) 925 a business subsequent to the date of the employment.
We, therefore, hold that it was not a condition of service of employment of the respondents either express or implied that the employer has the right to transfer them to a new concern stared by him subsequent to the date of their employment.
The respondents also relied upon a Government Order No. 6122 (ST)/XXXVI A 640(S) T 1953 in support of their contention that the order of transfer was bad.
By this Order the Government of U. P. had directed that the employment of seasonal workmen in all vacuum pan sugar factories in the Uttar Pradesh should be governed by the rules contained in the annexure thereto.
Rule I in the said annexure is to the following effect: " A worker who has worked or but for illness or any other unavoidable cause would have worked in a factory during the whole of the second half of the last preceding season will be employed in this season in such factory.
" This rule has no relevancy to the question raised in the present case.
This rule only enjoins upon an employer to employ a worker in the circumstances mentioned therein in the same factory in which he was working in the previous season during the next season also.
This does not prevent the employer to transfer an employee if he has the right to do so under the contract of service or under any statutory provisions.
We have already held that the employer in the present case has no such right.
Lastly it is said that the Appellate Tribunal had no jurisdiction to set aside the finding of the State Industrial Tribunal, as it did not give rise to any substantial question of law within the meaning of section 7(1) of the Industrial Disputes (Appellate Tribunal) Act, 1950.
The question raised was one of law, namely, whether the appellant had the right to transfer the respondents 1 to 4 from one concern to another.
A substantial question of law involved between the parties and that raised also an important principle governing the right of an employer to transfer his employees from one concern to another of his in the circumstances of this case.
We, therefore, hold that 926 a substantial question of law arose in the case and that it was well within the powers of the Labour Appellate Tribunal to entertain the appeal.
In the result the appeal fails and is dismissed with costs.
Appeal dismissed.
[/INST]A mortgage was executed by several persons on the 28th July, 1931.
The term of the mortgage, namely six years, expired in July 1937, the mortgagees instituted a suit in May 1938 and a decree was passed in March 1939.
An applica tion for relief under the U.P. Debt Redemption Act (XIII of 1940) was made on 11th April, 1942, and this application was resisted on the ground that S, one of the mortgagors, had been assessed to income tax and was therefore not an agri culturist, and the suit was not consequently "a suit to which the Act applied.
" The evidence showed that S was earning a monthly salary of Rs. 90 and that from February 1932 he had been assessed to income tax till the year 1936.
The High Court held, relying on the Full Bench ruling in Ketki Kunwar vs Ram Saroop (I.L.R. 1943 All. 35), that under sec.
21 of the Act the mortgage money could be recovered only from the mortgaged property and not personally and that the proviso to sec.
2 (9) of the Act had therefore no application and the question whether S was an agriculturist on the date of the mortgage was immaterial.
As S was admit tedly an agriculturist on the date of the suit, the High Court held that the judgment debtors were entitled to relief under the Act.
On appeal Held, that, assuming that the proviso to sec.
2 (9) applied and that in order to be a "loan" within the meaning of the Act it must be shown that the advance was made to one who at the date of the advance was an agriculturist, S was not an agriculturist on the 28th.
July, 1931, as the Indian Finance (Supplementary and Extending)Act of 1931 which reduced the taxable minimum from Rs. 2,000 to Rs. 1,000 was passed only in November 1931 and income tax was first deducted from his salary only in February, 1932.
Quaere: Whether the Full Bench decision in Ketki Kuwar vs Ram Saroop (I.L.R. 1943 All. 35) is correct.
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<s>[INST] Summarize the judgementivil Appeal Nos.
537 539 of 1970.
Appeals by Special Leave from the Judgment and Order dated 20 8 1968 of the Madhya Pradesh High Court in Misc.
Petition Nos. 282, 283 and 293 of 1968.
section K. Gambhir for the Appellant.
section section Khanduja for the Respondents.
787 The Judgment of the Court was delivered by UNTWALIA, J.
These three appeals by special leave are from the common judgment of the Madhya Pradesh High Court allowing the Writ Petitions filed by the six respondents and quashing the orders of their transfer made by the State Government in exercise of their power under section 94(7) of the Madhya Pradesh Municipalities Act, 1961, hereinafter called the Act.
The respondents were employees of the Municipal Council, Sagar.
They were employed as lecturers and teachers in the various Municipal Higher Secondary Schools run and managed by the said Municipal Council.
Three orders were issued by the State Government on various dates in June, 1968 transferring certain lecturers and teachers serving under a particular Municipal Council to the schools run and managed by another Municipal Council.
The six respondents were transferred by the said orders to various places.
They challenged the order of transfer in the High Court on the ground that the State Government had no power to transfer them under section 94(7) of the Act.
The High Court has accepted their contention and hence these appeals.
We shall quote the relevant provisions of section 94 of the Act as they stood at the relevant time from the judgment of the High Court.
There have been some amendments in the year 1973 with which we are not concerned.
They read as follows: "94.
Appointment of staff: (1) Every Council having an annual income of five lakhs of rupees or more shall, subject to rules framed under section 95, appoint a Revenue Officer and an Accounts Officer and may appoint such other officers and servants as may be necessary and proper for the efficient discharge of its duties.
(2) Every Council not falling under sub section (1) shall, subject to rules framed under section 95, appoint a Sanitary Inspector, an Overseer, a Revenue Inspector, and an Accountant and may appoint such other officers and servants as may be necessary and proper for the efficient discharge of its duties: . . . . . . . . (7) The State Government may transfer any officer or servant of a council mentioned in sub sections (1) & (2) and in receipt of total emoluments exceeding one hundred rupees to any other Council.
" 788 The High Court has taken the view that the words "any officer or servant of a Council mentioned in sub sections (1) and (2)" occurring in sub section
(7) mean "any officer or servant as enumerated or specified in sub sections
(1) and (2): that is to say, the officers who can be transferred under sub section
(7) are only Revenue Officer, Accounts Officer, Sanitary Inspector and an Overseer, a Revenue Inspector or an Accountant.
No other officer or servant can be transferred.
We do not think that the High Court is right in putting this restricted interpretation to sub section
(7) of section 94.
Other officers and servants who can be appointed by the Municipal Councils either under sub section
(1) or under sub section
(2) are also the officers and servants mentioned in these sub sections for the purposes of sub section
Theoretically, therefore, the power does exist in the State Government to transfer them.
We must, however, hasten to add that in case of employees getting small emoluments the power seems to be meant to be sparingly exercised under some compelling exigencies of a particular situation and not as a matter of routine.
If it were to be liberally exercised, it will create tremendous problems and difficulties in the way of Municipal employees getting small salaries.
There may be hardly an employee serving under any Municipal Council who cannot be theoretically and literally covered by sub sections
(1) and (2) and subjected to the exercise of power of transfer under sub section
The High Court in support of its view has referred to sub section
(4) of section 94 wherein only the officers enumerated in sub sections
(1) and (2) are specified.
Obviously the said sub section does not cover the cases of other officers and servants as mentioned in sub sections
(1) and (2).
The language of sub sec.
(7) is in contrast to that of sub section
(4) and, instead of lending support to the view of the High Court, goes against it.
It was argued for the respondents that they are employees of the Schools run and managed by the Municipal Councils but not of the Councils themselves.
We do not think that this argument has got any substance.
Education department is one of the departments of a Municipal Council.
Duties of the Council are enumerated in sub section
(1) of section 123, clause (v) which provides for "establishing and maintaining primary schools".
Under section 124 "a Council may, at its discretion, provide, either wholly or partly out of the Municipal property and fund, for all or any of the following matters, namely (c) furthering educational objects." Thus establishment and running of Higher Secondary Schools by Municipal Councils are envisaged under the Act and the lecturers and teachers appointed in the various schools 789 are undoubtedly the officers and servants of the Municipal Councils.
For the reasons stated above we hold that the State Government had the power to transfer the respondents.
But it is not clear why the power was exercised in the case of the respondents.
In any event, learned counsel for the appellant assured us that the State is more anxious for the correct interpretation of the law engrafted in section 94(7) of the Act than to enforce the order of transfer against the respondents.
In the result while clarifying the position of law, we dismiss the appeals but make no order as to costs.
N.K.A. Appeals dismissed.
[/INST]The respondents were employed as lecturers and teachers in the various Municipal Higher Secondary Schools run and managed by a Municipal Council in the State.
The State Government transferred certain lecturers and teachers serving under a particular Municipal Council to the Schools run and managed by another Municipal Council.
The respondents writ petition challenging the order of their transfers was allowed by the High Court on the ground that no officer other than those mentioned in section 94(7) namely Revenue Officer, Accounts Officer etc.
could be transferred.
In the State 's appeal the respondents contended that they were employees of schools run and managed by Municipal Councils but not of the Councils.
^ HELD: 1.
The High Court was not right in putting a restricted interpretation on section 94(7) of the Act.
The other officers and servants who can be appointed by the Municipal Councils under sub section (1) or sub section (2) of Section 97 are also officers and servants mentioned in these sub sections for the purposes of sub section (7).
Theoretically, therefore, the power does exist in the State Government to transfer them.
[788 B C] 2.
The argument that the respondents are the employees of schools run and managed by the Municipal Councils but not of the councils themselves has no substance.
Education department is one of the departments of a Municipal Council.
Section 124 envisages the establishment and running of Higher Secondary Schools by Municipal Councils and therefore the lecturers and teachers appointed in the various schools are officers and servants of the Municipal Councils.
[788 G H, 789 A] 3.
In case of employees getting small emoluments the power to transfer should be sparingly exercised under some compelling exigencies of a particular situation and not as a matter of routine.
[788 C D]
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<s>[INST] Summarize the judgementAppeal No. 761 of 1976.
(Appeal by Special Leave from the Judgment and Order dated 28 5 1976 of the Karnataka High Court in Writ Appeal No. 665/75 ).
CIVIL APPEAL No 'section 845 854 of 1976.
(Appeals by Special Leave from the Judgment and Order dated 28 6 1976 of the Karnataka High Court in Writ Appeal Nos.
247, 237, 241,243 246, 248 and 250/76 respectively.) S.V. Gupte, S.B. Wad, A.K. Ganguli and Mrs. Jayashree wad, for the Appellants in all the Appeals.
M.P. Chandrakantraj Urs and B.R.G.K. Achar, for Respond ents 1 to 3 in CA 761/76.
Narayan Nettar, for Respondent 4 in CA.
No. 761/76.
A.K. Sen, M.P. Chandrakantraj Urs and Narayan Nettar, for the respondents in CA.
No. 845/76.
M.P. Chandrakantaraj Urs and Narayan Nettar, for Re spondents 1 3 in CAs 846 849/76.
B.R.G.K. Achar for Respondent 1 in CAs.
850 854/76.
M.P. Chandrakantaraj Urs and Narayan Nettar, for Re spondents 1 3 in CAs.
850 854/76.
Narayan Nettar for Respondent 7 in CAs.
845 846/76.
The Judgment of the Court was delivered by BHAGWATI, J.
This group of appeals raises a common question of law affecting Senior Health Inspectors on deputation with the Municipal Corporation of the City of Bangalore (hereinafter referred to as the Corporation).
The facts giving rise to the appeals are identical and may be briefly stated as follows.
The appellants are Senior Health Inspectors in the Karnataka State Civil Service.
It seems that prior to 3rd March, 1971, when the City of Bangalore Municipal Corpora tion Services (General) Cadre and Recruitment Regulations, 1971 (hereinafter referred to as the Cadre and Recruitment Regulations) came into force, the practice 793 of the Corporation was to have one half of the cadre of Senior Health inspectors manned by deputation of Senior Health Inspectors from the Karnataka State Civil Service and in accordance with this practice, the appellants were taken on deputation by the Corporation from the Karnataka State Civil Service.
While the appellants were working as Senior Health Inspectors on deputation, the Corporation passed a resolution dated 30th December, 1974 approving the report of the Commissioner that sixteen Senior Health Inspectors, including the appellants, who were working under the Corpo ration on deputation should "be absorbed in the interest of work if they are :willing on then ' own pay and accept their seniority as Juniors to the Senior Health Inspectors of the Corporation.
" It is the case of the appellants that on the same day, immediately :after the passing of this Resolution, they addressed a communication to the Mayor of the Corpora tion intimating to him that they were willing to be absorbed as Senior Health Inspectors under the Corporation on their own pay and with ranking below the Senior Health Inspectors of the Corporation.
The factum of this communi cation was disputed by the Corporation as well as by the State Government, but in the view we are taking, it will not be necessary for us to examine this question.
continue further with the narration of facts, the Corporation sent the Resolution dated 30th December, 1974 to the State Gov ernment for according its sanction and the State Government by an order dated 6th May, 1975 accorded sanction "to the Corporation 's resolution dated 30th December, 1974 regarding the absorption of the Senior Health Inspectors" mentioned the Resolution under section 89 of the City of Bangalore Municipal Corporation Act, 1949 (hereinafter referred to as the Act).
The term of the Corporation in the meantime came to an end and since fresh elections were not held to elect the members of the Corporation, an administrator was ap pointed ' by the Government to manage the affairs of the Corporation.
The administrator requested the State Government to defer implementation of the proposal contained in the Resolution dated 30th December, 1974 since the perma nent officials of the Corporation were considerably dis turbed by this proposal as it prejudicially affected their chances of promotion by reason of the absorption of sixteen deputationist Senior Health Inspectors from the Karnataka State Civil Service.
The State Government on the basis of the communication addressed by the Administrator in this behalf passed another order dated 25th August, 1976 with drawing the sanction accorded under the earlier order dated 6th May, 1975.
The appellants being prejudicially affected by the withdrawal of the sanction.
preferred writ petitions in the High Court of Karnataka contending that as soon as the State Government gave its sanction on 6th May, 1975 to the Resolution of the Corporation dated 30th December, 1974, they were absorbed as permanent employees of the Corporation and they ceased to be Government servants and the State Government thereafter had no authority to withdraw the sanction granted by it under the earlier order dated 6th May, 1975 and the subsequent order dated 25th August 1975 was invalid and inoperative.
These writ petitions came up for hearing before a Single Judge of the High Court who rejected them by a judgment dated 22nd September, 1975.
The appellants thereupon preferred appeals under section 4 of the Karnataka High Court Act.
794 1961, but the appeals 'were unsuccessful and they were rejected by a Division Bench of the High Court by a judgment dated 28th May, 1976.
Hence the present appeals by the appellants with special leave obtained from this Court.
The principal question which arises for determination in these appeals is whether the appellants who are Senior Health Inspectors mentioned in the Resolution of the Corpo ration dated 30th December, 1974 became permanent employees of the Corporation and ceased to be Government servants as soon as the State Government passed the order dated 6th May, 1975 according its sanction to the Resolution of the Corpo ration.
There can be no doubt that if the effect of the Government order dated 6th May, 1975 was to snap the status of the appellants as Government servants and to absorb them as permanent employees of the Corporation, the State Govern ment could not thereafter by its unilateral action reverse the process and annihilate the relationship of employer and employee between the Corporation and the appellants and restore their status as Government servants.
The main issue which, therefore, falls for determination is as to what legal effect flowed from the Government order dated 6th May, 1975: did it have the effect of absorbing the appellants as permanent employees of the Corporation with simultaneous termination of their employment as Government servants ? To answer this issue it is necessary to refer to a few relevant provisions of the Act and the Cadre and Recruitment Regula tions.
The provisions in regard to the establishment of the Corporation are to be found in sections 84 to 95 of the Act.
Section 84 provides for appointment of a Health Officer, an Engineer, a Revenue Officer and other heads of departments working under the Commissioner while section 85 deals with special superior appointments.
We are not concerned with either of these two sections since Senior Health Inspectors do not fall within the categories of officers dealt with in these two sections.
Section 86 provides that if a. vacancy occurs in any office specified in sections 84 and 85 or in any office under the Corporation the maximum monthly salary of which exceeds two hundred and fifty rupees, the Corporation shall, subject to the confirmation of the Gov ernment, within two months of the date of occurrence of the vacancy, appoint a duly qualified person to hold such of fice.
The office of Senior Health Inspector is undoubtedly an office the maximum monthly salary of which exceeds two hundred and fifty rupees and therefore, a vacancy in that office is liable to be filled by the Corporation, subject to confirmation by the Government, under this section.
Sections 87 and 88 are not material for our purpose and we need not pause to consider them.
Section 89 says that, subject to the provisions of sections 84, 85, 86 and 88, appointments to the Corporation establishment shall be made by the Corpo ration if the maximum monthly salary of the office exceeds two hundred and fifty rupees.
It is clear on a conjoint reading of sections 86 and 89 that it is the Corporation which is entitled to make appointment to the office of Senior Health Inspector and such appointment is subject to confirmation by the Government.
Then comes section 90 which provides that the Commissioner shall from time to time lay before the Standing Committee 795 a Schedule setting forth the designations and grades of officers and servants who should in his opinion constitute the Corporation establishment and embodying his proposals in regard to salaries, fees and allowances payable to them and the Standing Committee may either approve or amend such Schedule as it thinks fit and shall lay it before the Corpo ration and the Corporation shall then sanction such Schedule with or without modifications and may also from time to time amend it at the instance of the Commissioner and the Stand ing Committee.
There is a proviso to this section which says that no new office shall be created without the sanction of the Government, if the maximum monthly salary exceeds two hundred and fifty rupees.
This proviso, however, has no application in the present case, since the Schedule sanc tioned by the Corporation set out the office of Senior Health Inspector and the absorption of the appellants as Senior Health Inspectors on the Corporation establishment did not involve the creation of any new office which was not already enumerated in the Schedule.
Section 91 provides that no officer or servant shah be entertained on the Corporation establishment unless he has been appointed under section 84, 85, 86 or 88 or unless his emoluments are included in the Schedule sanctioned under section 90.
But this section also does not stand in the way of the absorption of the appel lants as Senior Health Inspectors on the Corporation estab lishment, since they are purported to be absorbed by the Corporation by its resolution dated 30th December, 1974 and the Government Order dated 6th May, 1975 is tantamount to confirmation of such absorption and hence section 86 is complied with and the office and emoluments of Senior Health Inspector are also included in the Schedule sanctioned under section 90.
The other sections dealing with the establish ment of the Corporation are not material except section 94 which confers power on the Standing Committee to frame regulations in respect of the Corporation establishment in regard to various matters.
It will, therefore, be seen that there is nothing in the Act which debarred absorption of the appellants as permanent employees of the Corporation under the Corporation Resolution dated 30th December, 1974 read with the Government Order dated 6th May, 1975.
But the argument of the State Government and the Corpo ration was, and this argument found favour with the Division Bench of the High Court, that until the Cadre and Recruit ment Regulations were amended, it was not competent to the Corporation to absorb the appellants as permanent Senior Health Inspectors on the establishment of the Corporation and the Resolution of the Corporation dated 30th December, 1974, though sanctioned by the Government by its order dated 6th May, 1975, was not effective to bring about absorption of the appellants as permanent employees of the Corporation with simultaneous termination of their service as Government servants.
This argument requires consideration of some of the relevant provisions of the Cadre and Recruitment Regula tions.
The Cadre and Recruitment Regulations were framed under sections 7, 84, 85, 88 and 94 of the Act and they were sanctioned by the State Government under section 94(g) of the Act and they came into force with effect from 3rd March, 1971 being the date on which they were published in the Government 19 1234SCI/76 796 Gazette.
Regulation 3 laid down the method of recruitment and minimum qualifications for recruitment to various posts enumerated in the Schedule.
One of the posts enumerated in the Schedule was the post of Senior Health Inspector and it was provided in Column 2 of the Schedule that the method of recruitment to the post of Senior Health Inspector shall be: "50% by promotion from the Cadre of Junior Health Inspectors of the Corporation, 50% by deputation from the State Directorate of Health Services.
" The Cadre and Recruitment Regulations thus recognised only two modes of recruitment to the post of Senior Health Inspector, namely, promotion from the cadre of Junior Health Inspectors and deputation from the State Directorate of Health Services and one half of the cadre was to be drawn from each of these two sources.
No other mode of recruitment could be resorted to by the Corporation under the Cadre and Recruitment Regulations.
it is difficult to see how in the face of this provision which has admittedly statutory effect, the posts of Senior Health inspector could be filled in by absorption of deputationist Senior Health Inspectors from the Karnataka State Civil Service.
Senior Health In spectors from the State Directorate of Health Services could only be on deputation to the extent of one half of the number of posts of Senior Health Inspectors on the Corpora tion establishment and they could not be absorbed as perma nent Senior Health Inspectors under the Corporation without violating the aforesaid statutory provision.
This statu tory provision does not contemplate any Senior Health Inspectors on the establishment of the Corporation who are drawn from the State Directorate of Health Services other wise than on deputation and to absorb Senior Health Inspec tors from the State Directorate of Health Services as perma nent employees of the Corporation (otherwise than on deputa tion), would be plainly contrary to its express mandate.
It was, however, contended on behalf of the appellants that when they were absorbed as permanent Senior Health Inspec tors on the establishment of the Corporation, they were already in the cadre of Senior Health Inspectors under the Corporation, filling 50% of the posts and their absorption as permanent Senior Health Inspectors did not constitute fresh entry into the cadre so as to require compliance with the Cadre and Recruitment Regulations.
The position, accord ing to the appellants, was similar to that of an employee Who is initially OffiCiating in a pOSt in a cadre and is subsequently confirmed in the post.
This contention, we do not think, is well founded.
It is only by way of deputation that Senior Health Inspectors from the State Directorate of Health Services can find place in the Cadre of Senior Health Inspectors on the establishment of the Corporation.
Not only their entry but also their continuance in the cadre of Senior Health Inspectors on the Corporation establishment depends on their being on deputation.
There is no scope under the Cadre and Recruitment Regulations for their ab sorption as permanent Senior Health Inspectors under the Corporation.
In fact, it is impermissible to do so.
The category of Senior Health Inspectors, who are regular em ployees of the Corporation, can be drawn only by promotion from Junior Health 797 Inspectors and that too, to the extent of only one half the number of posts.
It is, therefore, obvious that without amendment of the Cadre and Recruitment Regulations permit ting appointment and absorption is really nothing but appointment of Senior Health Inspectors drawn from the State Directorate of Health Services as permanent Senior Health Inspectors under the Corporation, the appellants could not be absorbed as permanent Senior Health Inspectors on the Corporation establishment.
The conclusion must irresistibly follow that the Resolution of the Corporation dated 30th December, 1974 read with the Government order dated 6th May, 1975 did not operate to put an end to the status of the appellants as Government servants and to create the relationship of master and servant between the Corporation and the appellants and in the circumstances, it was competent to the State Government to pass the Order dated 25th August, 1975 withdrawing the sanction granted by it under the earlier Order dated 6th May, 1975.
This view taken by us renders it unnecessary to consider whether the communication dated 30th December, 1974 was addressed by the appellants to the Mayor of the Corporation expressing their willingness to be absorbed as Senior Health Inspectors under the Corporation on the terms set out in the Resolution dated 30th December, 1974.
Even if any such communication was sent, it could have no legal effect because, as already pointed out by us.
the appellants could not be absorbed as permanent Senior Health Inspectors under the Corporation, unless and until the Cadre and Recruitment Regulations were first amended so as to permit such absorption.
The appeals are accordingly dismissed, but in the pecul iar facts and circumstances of the ease, we make no order as to costs.
[/INST]Certain lands were sought to be acquired by the State Government under the provisions of the Land Acquisition Act, 1894, the public purpose stated being the development and utilisation of the lands as a residential and industrial area.
Identical notifications under section 4 were issued in all the cases.
In one group of lands, declarations that the provisions of section 5A shall not apply in respect of the lands were issued under section 17(4).
With respect to a second group, declarations under section 17(4) were issued but were not fol lowed up with the section 6 notification.
With respect to a third group no notification under section 17(4) was issued but after the petitioners filed objections, the section 6 notifica tion was issued accompanied by the declaration of urgency under 8.
17(4).
The owners of the land sought to have the proceedings quashed on the grounds that, (1) there was no public pur pose, and that (2) there was no urgency justifying the notification under section 17(4) and dispensing with the enquiry under section 5A.
The High Court held that, (1) the notifications under section 4(1) were valid, and that (2) the State had not discharged its burden of showing facts constituting the urgency which impelled it to issue the declarations under section 17(4) dis pensing with the enquiry under section 5A, and, therefore, those declarations were invalid, and that the parties were rele gated to the position they could take up in the absence of declarations under section 17(4).
Both sides appealed to this Court.
In the appeals by the State, it was contended by the appellant State that the burden of proving that there was No. urgency was on the owners of the. lands.
Dismissing all the appeals, HELD: (1) The notifications under 8.
4(1) of the Act were valid in all the cases.
[769 G] (2) (a) The rules regarding burden of proof are set out in the .
Section 101 of the Evi dence Act lays down that whoever desires any Court to, give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist, and section 102 provides that the burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side.
Section 103 provides that the burden of proof as to any particular fact lies on that person who wishes the 'Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.
Section 106 lays down that when any fact is especially within the knowledge of any person the burden of proving that fact is upon him.
Section 114 of the Evidence Act covers a wide range of presumptions of fact which can be used by the Courts in the course of administration of justice to remove lacunae in the chain of direct evidence before it.
[774 C E; 775 C E] (b) The result of a trial or proceeding is determined by a weighing of the totality of facts, circumstances and presumptions operating in favour of one party as against those which may tilt the balance in favour of another.
Such weighment always takes place at the end of a trial or pro ceeding which cannot, for purposes of this final weighment be split up into disjointed and disconnected parts.
What is weighed at the end is one totality against another and not 17 1234SCI/76 764 selected bits or scraps of evidence against each other.
Such total effect of evidence is determined at the end of a proceeding not merely by considering the general duties imposed by sections 101 and 102 but also by the special or par ticular ones imposed by other provisions such as sections 103 and 106.
In judging whether a general or particular or special onus has been discharged the Court will not only consider the 'direct effect of the oral and documentary evidence led but also what may be indirectly inferred because certain facts have been proved or not proved though easily capable of proof if they existed at all and such proof of other facts may raise either, a presumption of law or fact.
The party against which a presumption may operate can and must lead the evidence to show why the presumption should not be given effect to.
If the party which initiates the proceed ing or comes with a case to Court offers no evidence in support of it.
the presumption is that such evidence does not exist and if some evidence is shown to exist on a ques tion in issue but the party which has it within its power to.
produce it does not, despite notice to do so, produce it, the natural presumption is that it would, if produced, have gone against it.
Similarly, a presumption arises from failure to discharge a special or 'particular onus.
The doctrine of onus of proof becomes unimportant when there is sufficient evidence before the Court to enable it to reach a particular conclusion in favour of or against a party.
The principle of onus of proof becomes important in cases of either paucity of evidence or where evidence given by two sides is so equivalenced that the Court is unable to hold where the truth lay.
The question whether an onus probandi has been discharged is one of fact.
Sufficiency of evidence to discharge the onus probandi is not examined by this Court as a rule in appeals by special leave granted under article 136 of the Constitution,.
but placing an onus where it did not lie may be.
so examined in appropriate cases.
[775 H; D G; 778 C D; 774 G] Swadeshi Cotton Mills Co. Ltd. vs The State of U.P. & Ors. ; 434 and Raja Anand Brahma Shah vs State of U.P. & Ors.
; at 381 referred to.
I. G. Joshi etc.
vs State of Gujarat & anr.
; held inapplicable.
(c) Section 17(4) of the Land Acquisition Act has to be read with sections 4(1) and 5A of the Act.
The immediate purpose of a notification under section 4(1) of the Act is to enable those who may have any objections to lodge them for purposes of an enquiry under section 5A.
Considering the nature of the objections which are capable of being successfully taken under section 5A, the enquiry should be concluded quite expedi tiously.
The purpose of section 17(4) is obviously not merely to confine action under it to waste and arable land but also to situations in which an enquiry under section 5A will serve no useful purpose, or, for some overriding reason, it should be dispensed with.
The mind of the officer or authority con cerned has to be applied to the question whether there is an urgency of such a nature that even the summary proceedings under section 5A of the Act should be eliminated.
It is not just the existence of an urgency but the need to dispense with an inquiry under section 5A which has to be considered.
[781 G H; 782] (d) Even a technically correct recital in an order or notification stating that the conditions precedent to the exercise of a power have been fulfilled may not debar the Court in a given case from considering the question whether, in fact, those conditions have been fulfilled.
And, a fortiori the Court may consider and decide whether the authority concerned has applied its mind to really relevant facts of a case with a view to determining that a condition precedent to the exercise of a power has been fulfilled.
If it appears upon an examination of the totality of facts in the case, that the power conferred has been exercised for an extraneous or irrelevant purpose or that the mind has not been applied at all to the real object on purpose of a power, so that the result is that the exercise of power could only serve some other or collateral object, the Court will interfere.
[779 E F] (e) The High Court was wrong in the present case in laying down a general proposition that the presumption of regularity attaching to an order containing a technically correct recital did not Operate in cases in which section 106, Evidence Act, was applicable.
An order or notification containing a recital technically correct on the face of it raises a presumption of fact under section 114, illustration 765 (e) That presumption is based on the maxim omain praesumun tur rite esse acta, that, is, all acts are presumed to have been rightly and regularly done. 'This presumption, however, is one of fact.
It is an optional presumption which can be displaced by circumstances indicating that the power lodged in an authority or official has not been exercised in ac cordance with tile law.
The totality of circumstances has to be examined including the recitals to determine whether and to what extent each side had discharged its general or particular onus.
[777 E F] (f) The High Court had, however, correctly stated the limited grounds on which even a subjective opinion as to the existence of the need to take action under section 17(4) of the Act can be challenged, namely, main fides, no application of mind and total want of material on which the opinion is formed.
Therefore, it is for the petitioner to substantiate the grounds of his challenge under sections 101 and 102.
That is, the.
petitioner has to either lead evidence or show that some evidence has come from the other side to indicate that his challenge to a notification or order is made good.
If he does not succeed in discharging that duty his petition will fail.
[776 B C] In the present case, in addition to the bare assertions of the owners of the land that the particular urgency contem plated 'by section 17(4) did not exist there were other facts and circumstances including non disclosure of any facts and circumstances which could easily justify the use of section 17(4) and which could have been disclosed if they existed; and, therefore, the petitioners should be held to have discharged their general onus under section 101 of the Evidence Act.
Thus the High Court was right in quashing the notifications under section 17(4).[778 E] (g) In the present case, the public purpose.
was suffi ciently specified to he prima facie a legally valid purpose.
The High Court thought it vague; but, that did not really affect the judgment of the High Court so much as the total absence of facts and circumstances which could possibly indicate that this purpose.
necessarily to be carried out in such a way as to .exclude the application of section 5A of the Act.
Therefore, a .triable issue did arise in these cases and was decided by the High Court.
This issue was whether the conditions precedent to exercise of power under section 17(4) had been fulfilled or not.
Such a question can only be decided rightly after determining what was the nature of compliance with the conditions of section 17(4) re quired by the Act.
[776 D E] (i) The public.
purpose indicated is.
the development of an area for industrial and residential purposes.
This, in itself, did not make the taking of immediate possession imperative without holding even a summary enquiry under section 5A.
On the other hand, the execution of such .schemes generally take sufficient period of time to enable at least summary inquiries under section 5A of the Act to be completed without any impediment to the execution of the scheme.
(ii) All schemes relating to development of industrial and resi dential areas must be urgent in the context of the.
coun try 's need for increased production and more residential accommodation.
Yet, the very nature of such schemes of development does not appear to demand such emergent action as to eliminate summary enquiries under section 5A. (iii) There is no indication whatsoever in the affidavit filed on behalf of the State that the mind of the Commissioner was applied at all to the question whether it was a case necessitating the elimination of the enquiry under section 5A.
The recitals in the notification on the contrary indicate that elimination of the enquiry under section 5A was treated as an automatic consequence of the opinion formed on other matters.
The recital does not say at all that any opinion was formed on the need to dispense with the enquiry under section 5A. [782 G; 783 C D] The burden, therefore, rested upon the State to remove the defect, if possible, in recitals by evidence to show that some exceptional circumstances existed which necessi tated the elimination of an enquiry under section 5A and that the mind of the Commissioner was applied to this essential question.
[783 E] (h) The High Court has thus correctly applied the provi sions of section 106 of the Evidence Act to place the burden upon the State to prove those special circumstances, although the High Court was not quite correct in stating that 766 some part of the initial burden of the petitioners under sections 101 and 102 of the Evidence Act had been displaced by the failure of the State to discharge its duty under section 106 of the Act.
The correct way of putting it would have been to say that the failure of the State to produce the evidence of facts especially within the knowledge of its officials, which rested upon it under section 106 of the Evidence Act, taken together with other evidence and the attendant facts and circumstances, including the contents of recitals, had enabled the petitioners to discharge their burdens under sections 101 and 102 Of the Evidence Act in these particular cases.
[783 F G] ARGUMENTS For the Appellant: It was urged on behalf of the appellant State that the High Court was in error in placing the burden of proof on the State.
Reliance was placed on the decision of the Su preme Court in ; (pages 432, 433 and 434).
In particular it was urged that where a statute prescribes something as a condition precedent for the exercise of statutory power, and there is a recital of existence of that condition in the notification then it is presumed that the statutory condition exists and it is for the ' other side to bring material before the Court to show that recital is not supported on any evidence or is made malafide.
Similarly, in ; Raja Anands case the very scope of section 17(4) was discussed and the State relied on the observations at page 381 indicating the scope of judicial review original petitioners have not brought their case within the grounds mentioned in this case.
The Barium Chemicals case and other cases cited can be easily distinguished on the ground that the statutory re quirements for the exercise of particular power, for example under section 237 of the Companies Act are differently worded where certain circumstances are required to be present.
The Land Acquisition Act does not require the existence of any such circumstances.
Besides, a decision of the Supreme Court has clearly indicated the scope of judi cial review in [967] 1 S.C.R. 373 and the respondents have not shown why any different view should not be taken.
Cases like ILR 67 Gujarat 620, AIR 1964 Punjab 477 and ILR 1970 Cuttack 21 can be easily distinguished.
There specific allegations were made by the petitioners giving reasons as to why they challenged the notifications.
In reply thereto the State was bound to bring the material to negative those charges.
In the present case if such allega tions were made by the writ petitioners the State would have certainly placed all the necessary materials to negative those allegations.
In the absence of any such allegation the correct rule to apply was the one stated in ; & 433.
Apart from this it may be noticed that by amending paragraph XVI (ARP) was introduced which made some effort to make concrete allegations regarding the invalidity of the notification under section 17(4).
The ' substance of these allegations is that out of the whole area which is to be acquired urgency clause has been applied only to some areas and, therefore, petitioners prayed that an inference of ' exercise of powers in a casual and lighthearted manner should be drawn.
To this averment, and since such concrete allegation was made a concrete reply has been given by the State in para 6 at Record Page 55 explaining why some lands were selected for urgency clause and why some notifications were issued earlier and why others came to be issued later.
It is not open to.
the respondents to enlarge their attack on grounds other than those which are stated in para.
16A. Lastly it was urged that the satisfaction under section 17(4) is not subjective satisfaction but must be an objec tive test because section 17(4) should be deemed to be controlled by section 17 sub sections 1 and 2.
In the first place such a, contention was never raised in the High Court.
Secondly, there are number of decisions of the Supreme Court where the opinion which is to be formed on section 17(4) is held to be subjective satisfaction.
Thirdly, 767 the contention does not interpret complete provisions of section 17(1), 17(2) and 17(4).
It is submitted under section 17(1) and 17(2) on one ' hand ,and the power under 17(4) are two separate and independent powers which can be exercised at different stages of the Land Acquisition pro ceedings.
Vide AIR 1970 Allahabad 151 Hakim singh versus State of Uttar Pradesh, under 17(1) possession can be taken without there being an award under section 11 but there has to be a publication of a notice under section 9(1) and also a notification under section 6 preceded by an inquiry under section 5(a).
In such cases and the cases covered by 17(2) the urgency may be determined on an objec tive basis but the whole purpose of section 17(4) is to dispense with an enquiry under section 5(a) which is to be followed again by a notification under section 6 and for such a purpose all that is required is that in the case of any land in the opinion of the appropriate Government the provision of sub section 1 or sub section 2 are applica ble.
In other words the lands must be either waste of arable lands (which is, of course to be determined objec tively) but so far as the question of urgency is concerned it is the opinion that the Government has to form and that is not to be established by any objective test but its subjective satisfaction.
For the Respondents: The Appellant (the State of Maharashtra) tried to argue that lack of bonafides were not argued in the Court below.
In the pleadings of the Respondents (the writ petitioners) it was urged at pages 10 and 11 of the record that in fact it is significant that in some cases the lands which are sought to be acquired for the same purpose vis a vis for development and utilisation of the land as industrial and residential area the urgency clause has not been applied.
It was further stated at page 11 that the power under Section 17(4) has 'been exercised in casual and light heart ed manner .
without there being any proper application of mind to the condition requisite for the exercise of that _power.
The said point was argued before the High Court and the High Court dealt with the same at pages 61 to 70 of the record.
It was argued before this Honble Court that the circumstances under Section 17(4) is not subjective satis faction but an objective test since Section 17(4) is con trolled by Section 17(1) and (2).
It was further argued that the Government never applied its mind nor did it place before the High Court any material to show that there was any urgency with respect to some of the lands and no urgency in respect to the others.
It is admitted that the lands in all these cases were acquired for the same purpose inter alia for the development and utilisa tion of the said lands as an industrial and residential area.
It was further argued that the burden of proof on the facts of these cases would be on the State since the reasons for urgency are only in the knowledge of the authority issuing the Notification.
The cases cited by the Counsel for the State have no application since in those cases the petitioners could establish that the impugned notification was not bona fide.
In this case the respondent, land owners, had in their Writ Petitions specifically raised the question that the authority had not applied its mind and treated it light heartedly 'and the Notification was not bona fide.
The State however did not place any material before the Court to show that the authority had applied its mind or there was any clue to the urgency.
The respondents have 'been deprived of their right to prefer objections under Section 5A of the Act and those objections are to be filed within 30 days.
The notifications in this case have been made at the interval of months and even more than a year.
The notification under Section 17(4) was made with respect to some lands and it was not made with respect to other.
The State has not satisfactorily ex plained the reasons for this.
From all these facts and circumstances the respondents argue that the notification under 768 Section 17(4) was not bonafide and the authority had not applied its mind, and the High Court was right in setting aside the said notification.
</s>
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<s>[INST] Summarize the judgementition Nos 5880 82, 6176 A 77, 5921, 5922, 6220, 6426 27, 6355 56, 6264 70,6276, 6178 79, 6191, 1718 of 1980 and 220 22, 2113 of 1981.
(Under Article 32 of the Constitution) K K Venugopal, (6355 56 of 1980) (In W P. Nos. 6212, 6427 & 5880 82/80) F.S. Nariman, (In W.P. Nos. 6264 70/80) R.K Gargo, (In W.P. Nos. 6191 & 6426/80), S.N. Kackar, (In W.P.
Nos: 5921/80 & 220/81 and G.L. Sanghi, (In W.P. No. 1718/81) for the Petitioners.
C.S. Vaidyanathan, Vineet Kumar, Parthasarathi, A.T.M. Sampath.
Miss Lily Thomas, N.A. Subramanium, Naresh Kumar, Mahakir Singh and section Srinivasan for the Petitioners.
Lal Narayan Singh, Attorney General (In W.P.
No 5880180) M.R Banerjee, Addl.
Solicitor General (In W.P. No. 6355/80) R. Rrishnamoorthy, Adv.
T.N. (In W.P. Nos.
1718 & 6276/ 1980) for the Respondents.
D Dr. Y. section Chitale, (In W.P. No. 6426/80), L. M. Singhvi, (In W.P. 6264/80) Mr. Laxmi Kant Pandey and S.S. Ray, (In W.P. 6212 of 1980) for the Respondents.
A.V. Rangam, (In all matters) for the Respondents.
In these writ petitions, the petitioners who were holders of posts of part time village officers in the State of Tamil Nadu or associations of such persons have questioned the constitutional validity of the Tamil Nadu Abolition of posts of part time Village officers ordinance, 1980 Tamil Nadu ordinance No. 10 of 1980) (hereinafter referred to as 'the ordinance ') and the Tamil Nadu Abolition of posts of part time Village officers Act, 1981 (Tamil Nadu Act No. 3 of 1981) (hereinafter referred to as 'the Act) which replaced the ordinance.
The total number of posts abolished by the Act is 23,010 In Tamil Nadu, as in other parts of India, the village has been the basic unit of revenue administration from the earliest times of which we have any record.
The administration was being carried on at the lowest level by a chain of officers in regular gradation one above the other at the commencement of the Christian era.
The 634 same system has been in vogue uptil now.
It was generally known as the borabaluti system ordinarily consisting of twelve functionaries.
In Tamil Nadu, these functionaries were known as (I) headman, (2) karnan or accountant, (3) shroff or notazar, (4) nirganti, (5) toty or taliary, (6) potter, (7) smith, (8) jeweller, (9) carpenter, (10) barber, (11) washerman and (12) astrologer.
Of them, the first five only rendered service to Government.
The headman who goes by various names such as monigar, potail, naidoo, reddy, peddakapu etc.
is an important officer.
He represented the Government in the village, collected the revenue and had also magisterial and judicial powers of some minor nature.
As a magistrate he could punish persons for petty offences and as a Judge could try suits for sums of money or other personal property upto Rs. 10/ in value, there being no appeal against his decision.
With the consent of the parties, he could adjudicate civil claims upto Rs. 100 in value.
The headman has been generally one of 1 the largest landholders in the village having considerable influence over its inhabitants.
The karnam or the village accountant maintained all the village accounts, inspected all fields in the village for purposes of gathering agricultural statistics, fixation of assessment and prevention and penalisation of encroachments, irregular use of water and verification of tenancy and enjoyment.
The nirgantis guarded the irrigation sources and regulated the use of water.
The toty or taliary assisted the village accountant in his work.
By the end of the nineteenth century, two Acts were brought into force in the Presidency of Madras for the purpose of regulating the work of some of the village officers.
The Madras Proprietary states ' Village Service Act, 1894 (Madras Act No. II of 1894) dealt with three classes of village officers viz. village accountants, village headmen and village watchmen or police officers in permanently settled estates, in unsettled palaiyams and in inam villages.
It provided for their appointment and remuneration and for the prevention and summary punishment of misconduct or neglect duty on their part and generally for securing their efficiency.
The Madras Hereditary Village offices Act, 1895 (Madras Act No. III of 1895) regulated the succession to certain other hereditary village offices in the Presidency of Madras; for the hearing and disposal of claims to such offices or the emoluments annexed thereto; for the appointment of persons to hold such offices and the control of the holders thereof.
The Village officers dealt with by this Act were (i) 635 village munsifs, (ii) potels, monigars and peddakapus, (iii) karnams, (iv) nirgantis, (v) vettis, totis and tar dalgars and (vi) talayaris in ryotwari villages or inam villages, which for the purpose of village administration, were grouped with ryotwari villages.
Under both these statutes, the village offices were considered as hereditary in character and the succession to all hereditary village offices devolved on a single heir according to the general custom and rule of primogeniture governing succession to impartible zamindaris in Southern India.
When the person who would otherwise be entitled to succeed to a hereditary village office was a minor, such minor was being registered as the heir of the last holder and some other person qualified under the statutes in question to discharge the duties of the office was being appointed to discharge the duties of the office until the person registered as heir on attaining majority or within three years thereafter was qualified to discharge the duties of the office himself when he would be appointed thereto.
If the person registered as heir remained otherwise disqualified for three years after attaining majority, he would be deemed to have forfeited his right to office and on such forfeiture or on his death, the vacancy had to be filled up in accordance with the provisions of the statutes as if he was the last holder of the office.
It is stated that in cases to which the above two statutes were inapplicable, provision had been made by the Standing orders promulgated by the Board of Revenue which were known as the Board 's Standing orders for appointing village officers again generally on a hereditary basis.
Some of the other distinct features of the service conditions of the village officers appointed under the Madras Act No. II of 1894 of the Madras Act No. III of 1895 or the Board 's Standing orders were that they were part time employees of the Government; that the records maintained by them were allowed to be retained in their houses that there was no attendance register and no fixed hours of duty were prescribed in their case.
They were appointed directly by the Revenue Divisional officer and against his order, an appeal lay to the District Revenue officer and then a revision to the Board of Revenue and a second revision to Government.
They were not constituted into any distinct service, There was no provision for reservation of posts of village officers G for Scheduled Castes/Scheduled Tribes and backward classes There was no minimum general qualification prescribed prior to the year 1970 for persons to be appointed as village officers under the said statutes or the Board 's Standing orders.
It was enough if they were able to read and to write.
No period of probation was pres 636 cribed after they were appointed.
The Fundamental Rules applicable to all other State Government servants, the Pension Rules and the Leave Rules were not applicable to these village officers.
They could take up part time work or occupation after securing necessary permission from the concerned Revenue authorities.
There was no age of superannuation fixed in their case and they were not entitled to retirement benefits such as gratuity and pension.
All village head men including those who belonged to Scheduled Castes and Scheduled Tribes had to furnish security in the form of property or cash the estimated value of which was not less than half the amount of land revenue and loan demand of the village.
They could not be transferred outside their district.
In fact very rarely they were transferred.
During the period of leave, no honorarium was paid to them and during the period of suspension, no subsistence allowance was paid.
The honorarium paid to them was a fixed amount with no element of dearness allowance.
In M. Ramappa vs Sangappa & Ors.
where this Court had to consider whether the officers holding the hereditary village offices under the Mysore Village offices Act, 1908 which contained provisions similar to the provisions of the two Madras Acts referred to above were qualified for being chosen as members of the State Legislative Assembly, it was held that such officers who were appointed to their offices by the Government, though it might be that the Government had no option in certain cases but to appoint an heir of the last holder, held offices of profit under the State Government since they held their office by reason of appointment made by the Government and they worked under the control p and supervision of the Government and that their remuneration was paid by the Government out of the Government funds and assets.
Accordingly this Court came to the conclusion that such village officers were disqualified under Article 191 (I)(a) of the Constitution from contesting at an election to the State Legislative Assembly.
In Gazula Dasaratha Rama Rao vs The State of Andhra Pradesh & Ors this Court held that section 6(1) of the Madras Hereditary Village offices Act, 1895 (Madras Act No. 3 of 1895) which Provided that in choosing Persons to fill the new village offices of 637 an amalgamated village under that Act, the Collector should select the persons whom he considered to be the best qualified from among the families of the last holders of the offices in the villages which had been abolished as a consequence of such amalgamation was void as it contravened Article 16 (2) of the Constitution.
After the above decision, instructions were issued by the Madras Board of Revenue on March 12, 1962 to the effect that in respect of future vacancies in village offices governed by the Madras Act No. II of 1894 and the Madras Act No. III of 1895 the appointments should be made on temporary basis only following the procedure prescribed under the Board 's Standing order No. 156.
Since it was felt that the above two Madras Acts which contained provisions providing for appointment to village offices on hereditary basis were violative of Article 16 of the Constitution in view of the pronouncement of this Court in Gazula Dasaratha Rama Rao 's case (supra), the State Legislature passed the Madras Proprietary Estates ' Village Service and the Madras Hereditary Village offices (Repeal) Act, 1968 (Madras Act No. 20 of 1968) repealing the above two statutes viz. the Madras Act No. II of 1894 and the Madras Act No. III of 1895.
The said Act was brought into force with effect from December 1, 1968.
It extended to the whole of the State of Madras, except the Kanyakumari district and the Shencottah taluk of the Tirunelveli district (vide section I (2) of the Madras Act No. 20 of 1968).
Sub section (3) of Section 2 of that Act, however, provided that every holder of a village, office, appointed under the Acts repealed by it would, notwithstanding the repeal continue to hold office subject to such rules as may be made under the proviso to Article 309 of the Constitution.
Section 3 of that Act directed that any vacancy arising after the date of the commencement of that Act in the village once referred to in subsection (3) of section 2 thereof should be filled up in accordance with the provisions of the Rules made under the proviso to Article 309 of the Constitution.
On December 1, 1968, the Governor of Tamil Nadu promulgated a Rule under the proviso to Article 309 of the Constitution providing that "the Standing orders of the Board of Revenue applicable to non hereditary village offices shall apply to every holder of a village office to which the Madras Proprietary Estates Village Service Act, 1894 (Madras Act No. II of 1894) or the Madras Hereditary Village offices Act, 1895 (Madras Act No. Ill of 1895) was applicable immediately before the 1st day of December, 1968" on which date the Madras Act No. 20 of 1968 came into force.
Pursuant to section 3 of the Madras Act No. 20 of 1968, the Governor of Tamil Nadu 638 promulgated under the proviso to Article 309 of the Constitution the Tamil Nadu Village officers Service Rules, 1970 providing for the constitution of the Tamil Nadu Village officers Service consisting of (i) village headman, additional village headman, (ii) village karnam, additional village karnam and (iii) talayari and nirganti and the method of recruitment to the said posts.
The said Rules came into force on December 16, 1970 and they extended to the whole of the State of Tamil Nadu except the Kanyakumari District and the Shenootah taluk of the Tirunelveli district and the city of Madras.
Rule 18 of the said Rules, however, stated that nothing contained in them would apply to persons, who on the date of coming into force of the said Rules, were holding the posts of village headman or additional village headman, village karnam or additional village karnam either temporarily or permanently.
Consequently the said Rules were not applied to the holders of village offices who had been appointed temporarily or permanently under the two repealed Acts and under the Board 's Standing orders before the date on which the said Rules came into force.
These Rules prescribed that every person who made an application for appointment the post of village headman or additional village headman or village karnam or additional village karnam should possess the following qualifications, namely (i) he should have completed the S.S.L.C. Examination held by the Government of Tamil Nadu and (ii) he should have secured a pass in the special tests specified in cl.
(2) of the table given in Rule S thereof in respect of the posts specified in column (I) thereof.
On the same date, the Tamil Nadu Village officers (Classification, Control and Appeal) Rules, 1970 and the Tamil Nadu Village officers Conduct Rules, 1970 promulgated under the proviso to Article 309 of the Constitution by the Governor of Tamil Nadu came into force.
These Rules were applicable not merely to the village officers appointed after that date but also to those who had been appointed under the repealed Acts and under the Boards Standing order prior to December 16, 1970.
The Tamil Nadu Civil Services (Classification, Control and Appeal) Rules dealt with the disciplinary proceedings that might be instituted against the village officers governed by the them.
The Tamil Nadu Village officers Conduct Rules provided that the Tamil Nadu Government Servants Conduct Rules, 1960 as amended from time to time would apply to the village officers subject to the modification specified in rule 3 thereof which provided that the village officers being part time Government servants might take up part time work or occupation 639 provided that (I) such part time work or occupation did not interfere A with their legitimate duties as village officers and (2) the previous permission in writing had been applied for and obtained from the Revenue Divisional officer concerned if the work or occupation was confined to the charge village and from the District Collector concerned if the work or occupation extended beyond the charge village.
From November 15, 1973 all the three sets of Rules which came into force on December 16, 1970, as stated above, became applicable to the village officers in the Kanyakumari district and the Shencottah taluk of the Tirunelveli district also.
They, however, continued to be inapplicable to the city of Madras.
In the year 1973, the Administrative Reforms Commission headed by Mr. T.A. Verghese, I.C.S. recommended that the existing part time village officers should be replaced by regular whole time transferable public servants and that they should form part of the Revenue hierarchy, disciplined in the tradition of that department and motivated by the incentive of career advancement available in that department.
They also recommended that 16,585 survey villages in the State of Tamil Nadu should be grouped into 11,9554 revenue groups.
The Commission further recommended that the 11,954 revenue groups should be regrouped into larger village panchayats with a population of about 5,000 and the 8 annual panchayat tax demand of the order of Rs. 5,000.
The Commission envisaged that with some marginal adjustment the enlarged village panchayat would be of the order of 4,000 in the State of Tamil Nadu and that there should be a village officer, a village clerk and a village peon in respect of each such enlarged village panchayat and on appointment to these offices, the holders of village offices appointed under, the two repealed statutes and the Board 's Standing orders should be removed and the former village offices should be abolished since the Commission felt that "the administration at the grass root level, provided by the present generation of village officers with feudal traditions, is inconsistent with the egalitarian principles aimed at in our democratic constitution".
The Commission further felt that "the reform of village administration has high priority, as it would benefit the whole mass of rural population." The Commission, however, took note of the fact in paragraph 2.11 of its Report that the Government had, in the recent years, attempted to remedy the situation by repealing the Madras Hereditary Village offices Act, 1895 and by framing a set 640 Of new service rules for village establishment under Article 309 of the Constitution.
But it was of the opinion that the said Rules, however, did not go far enough as they were not applicable to the existing set of village officers.
It was of the view that full time officers could be expected to service a much larger area than the existing villages or groups of villages and such regrouping of villages into larger groups had to be done carefully taking into account local conditions such as compactness of the group, easy intercommunications, nature of land, number of holdings etc.
The Commission, however, was of the view that such of those among the existing village headmen and karnams, who had passed the S.S.L.C. Examination might be considered for the posts of the village officers and village clerks on their past performance.
Similarly as regards village officers working in the Kanyakumari district and the Shencottah taluk of the Tirunelveli district which came over to the State of Tamil Nadu from Kerala in 1956 on the reorganisation of States, the Commission observed that l most of the village officers of those transferred territories who were qualified and full time Government servants should be absorbed in the new set up as envisaged by the Commission.
On May 17,1975, the Governor of Tamil Nadu promulgated the Tamil Nadu Village officers (appointed under B.S. Os) Service Rules, 1974 under the proviso to Rule 309 of the Constitution in respect of the village officers appointed prior to December 16, 1970.
The above Rules were, however, kept in abeyance by an order made on July 1, 1975 on receipt of representations from the village officers in regard to the fixation of the age of superannuation at SS years.
On August 24,1977, the Chief Minister of Tamil Nadu announced on the floor of the Legislative Assembly that the Government proposed to set up a Committee to .
examine whether the posts of karnams could be dispensed with.
Thereafter on October 9,]978, the Tamil Nadu Village officers (appointed under B.S.Os) Service Rules, 1978 were issued fixing the age of retirement of the village officers at 60 years.
Sub rule (2) of & Rule I of the said Rules stated that the said Rules would apply to all village officers holding the posts of village headman or additional village headman, village karnam or additional village karnam, talayari, vetti or nirganti either permanently or temporarily on December 16, 1970 provided that at the time of their appointment, they were qualified under the Board 's Standing orders.
The Government thought that the said Rules would be applicable to all village officers who were holding village offices on December 16,1970 refer 641 red to in Rule 1(2).
But some of the holders of the village offices who had been appointed under the Madras Act No. III of 1895 prior to the decision of this Court in Gazula Dasaratha Rama Rao 's case (supra) which as rendered on December 6, 1960, filed writ petitions on the file of the High Court of Madras stating that the Tamil Nadu Village officers (appointed under the b.) Service Rules, 1978 which fixed the age of superannuation of village officers at 60 years were not applicable to them since on a true construction of the said Rules, they were inapplicable to them.
The High Court of Madras allowed the said writ petitions by its judgment dated August 18, 1980 holding: "We have already extracted sub rule (2) of rule 1 of the rules.
That rule expressly states that the rules will apply to village officers, who, at the time of their appointment, were qualified under the Board 's Standing orders applicable to them and their appointment had been made by the authority competent under the Board 's Standing orders.
In respect of these petitioners, who were appointed under the provisions of Madras Act 3 of 1895 before 6th December, 1960, there was no question of their being qualified to be appointed to the village office under the Board 's Standing orders applicable to them, and their qualifications and appointment rested solely on the provisions contained in Section 10 of the Act.
Consequently the petitioners herein will not answer the description contained in sub rule (2) of rule (1) of the rules.
If they do not answer the description contained in sub rule (2) of rules, the rules are not applicable to them and therefore, they can not be required to retire under rule 4 (1) of the rules.
" It would appear that some of the other village officers to whom the said Rules had been made applicable had also filed writ petitions on the file of the High Court questioning the validity of the Rules on the ground that the said Rules made a discrimination between them and the village officers who were holding office prior to December 16, 1970 to whom the said Rules were held to be inapplicable by the judgment of the High Court delivered on August 18, 1980 and those petitions were posted for hearing during the first week of December, 1 980.
Before the said petitions were taken up for hearing the Governor of Tamil Nadu issued the ordinance on November 13, 1980 abolishing the posts of part time village officers in the State of Tamil Nadu.
Immediately after the promulgation of the ordinance, steps were taken to take possession of all the records with the village officers who were holding offices on that day and to replace them by Officers appointed under 642 section 14 of the ordinance.
Immediately after the promulgation of the said ordinance, some of the village officers who were affected by it questioned its validity before this Court in Writ Petitions Nos.
5880 82 of 1980 and 5921 of 1980.
The other connected writ petitions came to be filed thereafter.
In the meanwhile the Tamil Nadu State Legislature passed the Act which is impugned in these petitions replacing the ordinance.
The petitioners have challenged in these writ petitions the Act also by seeking appropriate amendment of their petitions.
The broad features of the Act are these: The object of the Act is set out in its preamble.
Because the State Government was of the opinion that the system of part time village officers was outmoded and did not fit in with the modern needs of village administration and the State Government had after careful consideration taken a policy decision to abolish all the posts of part time village officers on grounds of administrative necessity and to introduce a system of whole time officers to be incharge of village administration, the Act came to be enacted with effect from November 14, 1980 in the place of the ordinance.
The Explanatory Statement attached to the ordinance also contained a statement to the same effect indicating the object of the Ordinance.
The expression 'part time village officers ' is defined in section 2 (e) of the Act as village headman (including additional village (headman village) karnam (including chief karnam and additional village karnam) or Triune officer (who was exercising functions of three different village officers) appointed under the Madras Act II of 1894, the Madras Act III of 1895, the Board 's Standing orders, the Tamil Nadu village Service Rules, 1970 officers Kuvalar, or any other law but does not include, Grama Kavalar Grama Paniyalar and Pasana Kavalar.
Village Administrative officer means an officer appointed under section 4(1) of the Act.
By sec.
3 of the Act, the posts of part time village officers were abolished with effect from November 14, 1980 and every officer holding post so abolished ceased to hold such post.
The Act provided for appointment of Village Administrative officers.
Section 5 of the Act provided for payment of compensation to those who ceased to be part time village officers calculated in accordance with the formula mentioned in it.
Section 10 of the Act provided that the Act would not apply to the posts of karnams which were held by whole time Government servants in the city of Madras and the posts of village officers and village assistants which were held by the whole 643 time Government servant in the Kanyakumari district and Shencottah taluk of the Tirunelveli districts.
Three principal points are urged before us by the petitioners in these petitions (i) that the ordinance and the Act are violative of article 19(1)(g) of the Constitution, (ii) that they are violative of Article 311 (2) of the Constitution and (iii) that they contravene Article 14 of the Constitution.
The State Government contends that since by the ordinance and the Act, certain posts have been abolished, the officials who were incumbents of the abolished posts cannot raise any of the grounds raised by them.
Entry 41 in List II of the Seventh Schedule to the Constitution confers the power on the State Legislature to make laws with respect to State public services subject to the provisions of the Constitution.
Article 309 of the Constitution provides that subject to the provisions of the Constitution, the State Legislature may regulate the recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the State.
Article 311 (2) of the Constitution states that no person who is a member of a civil service of the Union or an all India service or a civil service of a State or holds a civil post under the State shall be dismissed or removed or reduced in rank except after an inquiry in which he has been informed of the charges against him and given a L reasonable opportunity of being heard in respect of those charges.
Article 14 of the Constitution guarantees equality before the law and equal protection of the laws.
It is not disputed that any law that is passed in relation to a Government employee should not contravene any of these provisions Article 19 (1)(g), Article 311 (2) and Article 14 of the Constitution.
We shall now proceed to examine the case with reference to each of them.
The power to abolish a civil post is inherent in the right to create it.
The Government has always the power, subject, of course, to the constitutional provisions, to reorganise a department to provide efficiency and to bring about economy.
It can abolish an office or post in good faith.
The action to abolish a post should not be just a pretence taken to get rid of an inconvenient incumbent.
We have the following statement of the law in American Jurisprudence 2nd, Vol. 63 at Pages 648 649 : 644 "37.
Manner, sufficiency, validity, and effect.
It is not always easy to determine whether a public office has been abolished.
It is not sufficient merely to declare that a particular office is abolished, if in fact it is not abolished, and the duties thereof are continued.
An office is abolished when the act creating it is repealed.
But the repeal of the statute creating an office, accompanied by the re enactment of the substance of it, does not abolish the office.
Abolition of an office may also be brought about by a constitutional provision, or by a new constitution or a constitutional amendment.
A non constitutional office may be indirectly abolished as by legislating away the duties and emoluments of the office.
The legislature may not evade constitutional provisions by a sham or pretended abolition of an office, as where there is mere colorable abolition of the office for the purpose of getting rid of its incumbent.
This may happen where an office is abolished in terms and promptly recreated under the same or a different name, provided the legislature does not attach duties and burdens to the new office of a character such as to make it in reality a different office.
Where an office is duly abolished by the legislature or the people, it ceases to exist and the incumbent is no longer entitled to exercise the functions thereof, or to claim compensation for so doing, unless he is under contract with the state so as to come within the protection of the constitutional inhibition against impairment of the obligation of contract.
Since a de jure office is generally essential to the existence of a de facto officer, persons cannot act as de facto officers of an office which has been abolished.
" H. Eliot Kaplan writes in his book entitled "The Law of Civil Service" at pages 214 115 thus : "8. "Good Faith" in Abolition of Positions There of course, is no vested right to employment in the public service.
The notion, much too prevalent, that any one who has been appointed after a competitive examination is entit 645 led to be retained in the service is erroneous.
Where there is any reasonable justification for eliminating positions in the public service, even where such abolition of positions may be subject to judicial review, the inclination of the courts is not to interfere, avoiding substitution of judicial wisdom or judgment for that of the administrator.
A position is not lawfully abolished solely because it has been left vacant for a short period of time and subsequently filled by another appointee than the one laid off and entitled to re employment.
Good faith of a head of department in abolishing a position on alleged grounds of economy has often been challenged.
Most courts have held that the issue of good faith on the part of an administrative official is one of law solely for the court to pass on, and not an issue of fact which may be submitted to a jury for determination.
The jury may determine the facts, which the court in turn may find as a matter of law constitute bad faith; but a verdict by a jury that a department head had acted in bad faith in abolishing a position was set aside as a conclusion of law, and not properly finding of fact.
What constitutes bad faith as a matter of law in abolishing positions must be determined by the precise facts in each case.
As a general rule, where positions are purported to be eliminated and incumbents laid off, and thereafter identical or similar positions are re established and the positions filled by others not entitled under the Civil service law and rules to such employments, the courts will not hesitate to order re employment of the laid off employees.
" The above passages sum up the law on the question of abolition of posts in civil service as it prevails in United States of America.
In England too there is provision for compulsory premature retirement in the public interest on structural grounds, grounds of limited efficiency and redundancy.
(Vide paragraph 1303, Vol.
8 Halsbury 's Laws of England 4th Edn.) 646 In the instant case, the abolition of the posts of village officers is sought to be achieved by a piece of legislation passed by the State Legislature.
Want of good faith or malafides cannot be attributed to a Legislature.
We have only to see whether the legislation is a colourable one lacking in legislative competence or whether it transgresses any other constitutional limitation.
So far as the argument based on Article 19 (1) (g) of the Constitution is concerned, we are bound by the view expressed by the Constitution Bench of this Court in Fertilizer Corporation Kamgar Union (Regd), Sindri & Ors.
vs Union of India & Ors.
in which Chandrachud, C.J. has observed at pages 60 61 thus : "The right to pursue a calling or to carry on an occupation is not the same thing as the right lo work in a particular post under a contract of employment.
If the workers are retrenched consequent upon and on account of the sale, it will be open to them to pursue their rights and remedies under the Industrial Laws.
But the point to be noted is that the closure of an establishment in which a workman is for the time being employed does not by itself infringe his fundamental right to carry on an occupation which is guaranteed by Article 19 (1) (g) of the Constitution.
Supposing a law were passed preventing a certain category of workers from accepting employment in a fertiliser factory, it would be possible to contend then that the workers have been deprived of their right to carry on an occupation.
Even assuming that some of the workers may eventually have to be retrenched in the instant case, it will not be possible to say that their right to carry on an occupation has been violated.
It would be open to them, though undoubtedly it will not be easy, to find out other avenues of employment as industrial workers.
Article 19 (1) (g) confers a broad and general right which is available to all persons to do work of any particular kind and of their choice.
It does not confer the right to hold a particular job or to occupy a particular post of one 's choice.
Even under Article 311 of the Constitution, the right to continue in service falls with the abolition of the post in 647 which the person is working.
The workers in the instant case can no more complain of the infringement of their fundamental right under Article 19 (1) (g) than can a Government servant complain of the termination of his employment on the abolition of his post.
The choice and freedom of the workers to work as industrial workers is not affected by the sale.
The sale may at the highest affect their locum, but it does not affect their locus, to work as industrial workers.
This is enough unto the day on article 19 (1) (g).
" In view of the above ruling, it is not possible to hold that the Act violates Article 19 (1) (g) as it does not affect the right of any of the incumbents of the posts to carry on any occupation of their choice even though they may not be able to stick on to the posts which they were holding.
We shall next examine the argument based on Article 311 (2) of the Constitution.
We have already seen in the Fertilizer Corporation Kamgar Union 's case (supra) the observation to the effect 'Even under Article 311 of the Constitution, the right to continue in service falls with the abolition of the post in which the person is working. ' It is said that the 'act of removing a person from a chair is different from the act of removal of the chair itself ' although the incumbent loses the chair in both the cases.
Since it is.
strenuously urged before us that there is some amount of contradiction in some of the rulings of this Court, we shall review the legal position to the extent necessary before reaching our own conclusion on the question.
The doctrine that the tenure of a holder of a civil post is dependent upon the pleasure of the Crown is peculiar to English law.
In India, Article 310 of the Constitution of India provides : "310 (1) Except as expressly provided by this Constitution, every person who is a member of a defence service or of a civil service of the Union or of an all India service or holds any post connected with defence or any civil post .
under the Union holds office during the pleasure of the President, and every Person who is a member of a civil 648 service of a State or holds any civil post under a State holds office during the pleasure of the Governor of the State.
(2) Notwithstanding that a person holding a civil post under the Union or a State holds office during the pleasure of the President or, as the case may be, of the Governor of the State, any contract under which a person, not being a member of a defence service or of an all India service or of a civil service of the Union or a State, is appointed under the Constitution to hold such a post may, if the President or the Governor, as the case may be, deems it necessary in order to secure the services af a person having special qualifications, provide for the payment to him of compensation, if before the expiration of an agreed period that post is abolished or he is, for reasons not connected with any misconduct on his part, required to vacate that post.
" While the doctrine of pleasure incorporated in Article 310 cannot be controlled by any legislation, the exercise of that power by the President or the Governor, as the case may be, is however made subject to the other provisions of the Constitution, one of them being Article 311, which is not made subject to any other provision of the Constitution and is paramount in the field occupied by it.
The contention urged before us is that every kind of termination of employment under Government would attract Article 311 (2) of the Constitution and a termination on the abolition of the post cannot be an exception.
While construing Article 311 (2) of the Constitution, as it stood then, in Parashotam Lal Dhingra vs Union of India, Das, C.J. Observed : "The Government cannot terminate his service unless it is entitled to do so (I) by virtue of a special term of the contract of employment, e.g., by giving the requisite notice provided by the contract or (2) by the rules governing the conditions of his service, e.g., on attainment of the age of superannuation prescribed by the rules, or on the fulfillment of rule conditions for compulsory retirement or subject to certain safeguards, on the abolition of the post or on being 649 found guilty, after a proper enquiry on notice to him, of misconduct, negligence, inefficiency or any other disqualification." (emphasis added) Again at pages 857 858 in the same judgment, the learned Chief Justice observed : "The foregoing conclusion, however, does not solve the entire problem, for it has yet to be ascertained as to when an order for the termination of service is indicted as and by way of punishment and when it is not.
It has already been said that where person is appointed substantively to a permanent post in Government service, he normally acquires a right to hold the post until under the rules, he attains the age of superannuation or is compulsorily, retired and in the absence of a contract, express or implied, or a service rule, he cannot be turned out of his post unless the post itself is abolished or unless he is guilty of misconduct, negligence, inefficiency or other disqualifications and appropriate proceedings are taken under the service rules read with article 311 (2).
" (emphasis added) It may be mentioned here that the words "subject to certain safeguards" found in the earlier extract are not used with reference to abolition of posts in the above extract.
Later on, Das, C.J observed that the Court should apply two tests namely (1) whether the servant had a right to the post or the rank or (2) whether he had been visited with evil consequences such as loss of pay and allowances, a stigma affecting his future career in order to determine whether the removal of an officer from a post attracted Article 311 (2).
The decision in Parshotam Lal Dhingra 's case (supra) was reviewed by a Bench of seven Judges of this Court in Moti Ram Deka etc.
vs General Manager, N.E.F. Railways, Maligaon, Pandu vs etc.
In that case the question which arose for consideration was whether Rules 148 (3) and 149 (3) of the Indian Railway Establishment Code violated either Article 311 (2), or Article 14 of the Constitution.
Sub rules (1) and (2) of Rule 148 dealt with temporary railway servants and apprentices respectively.
The relevant part of Rule 148 (3) read thus : 650 "148 (3) other (non pensionable) railway servant: The service of other (non pensionable) railway servants shall be liable to termination on notice on either side for the periods shown below.
Such notice is not however required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of Clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity.
" Rule 149 was brought into force in the place of Rule 148 in the case of pensionable servants in November, 1957.
Here again, sub rules (1) and (2) of Rule 149 dealt with temporary railway servants and apprentices.
Rule 149 (3) read thus: "149 (3) other railway servants: The services of other railway servants shall be liable to termination on notice on either side for the periods shown below.
Such notice is not however, required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity.
" The majority judgment in this case, however, observed that a Government servant on being appointed to a post permanently acquired a right to hold the post under the Rules until he attained the age of superannuation or was compulsorily retired or was found guilty of an act of misconduct in accordance with Article 311(2).
It disapproved the statement found in Parshotam Lal Dhingra 's case (supra) at pages 857 858 to the extent it recognised the removal of a permanent Government servant under a contract express or imp lied or a service rule.
After referring to one passage at page 841 and another at page 843 in Parsotam Lal Dhingra 's case, Gajendragadkar, J. (as he then was), who delivered the majority judgment in Moti Ram Deka 's case (supra) observed at pages 718 719 thus: 'Reading these two observations together, there can be no doubt that with the exception of appointments held under special contract, the Court took the view that wherever a civil servant was appointed to a permanent post substantively, he had a right to hold that post until.
he reach ed the age of superannuation or was compulsorily retired, 651 or the post was abolished.
In all other cases, if the services of the said servant were terminated, they would have to be in conformity with the provisions of article 311(2), because termination in such cases amounts to removal.
The two statements of the law to which we have just referred do not leave any room for doubt on this point." (emphasis added) It may be noticed that removal of a Government servant from a post on its abolition is recognised in the above passage as a circumstance not attracting Article 311(2) of the Constitution.
The Court after a review of all the decisions before it including the decision in Parshotam Lal Dhingra 's case (supra) held that the above two Rules 148 (3) and 149 (3) which authorised the removal officers holding the posts substantively by issuing a mere notice infringed Article 311 (2) of the Constitution.
The question of abolition of posts did not arise for consideration in this case.
The validity of removal of a Government servant holding a permanent post on its abolition was considered by Desai, J. and Chandrachud, J. (as he then was) in P.V. Naik & Ors.
vs State of Maharashtra & Anr.(1) The learned Judges held that the termination of service of a Government servant consequent upon the abolition of posts did not involve punishment at all and therefore did not attract Article 311(2).
Since much reliance is placed by the petitioners on the decision of this Court in State of Mysore vs H. Papanna Gowda & Anr.
etc.(2) it is necessary to examine that case in some detail.
The facts of that case were these: The respondent in that case was holding the post of a chemical assistant in the Agricultural Research Institute, Mandya in the Department of Agriculture of the State of Mysore.
Under the Mysore University of Agricultural Sciences Act, 1963 which came into force on April 24, 1964, the University of Agricultural Sciences was established.
Sub section (5) of section 7 of that Act provided: "7.
(5) Every person employed in any of the colleges specified in sub section (1) or in any of the institutions referred to in sub section (4) immediately before the appointed 652 day or the date specified in the order under sub section (4), as the case may be, shall, as from the appointed day or the specified date, become an employee of the University on such terms and conditions as may be determined by the State Government in consultation with the Board.
" The Board referred to in the above sub section was the Board of Regents of the University.
By a notification dated September 29, 1965 issued under section 7(4) and (5) of that Act, the control and management of a number of research and educational institutions under the Department of Agriculture were transferred to the University.
Alongwith them, the Institute in which the respondent was working was also transferred to the University.
The result was that the respondent ceased to be an employee of the State Government and became an employee of the University.
Thereupon he questioned the validity of sub sections (4) and (5) of section 7 of the said Act on the ground that they contravened Article 311(2) of the Constitution before the High Court of Mysore, which upheld his plea.
The State Government questioned the decision of the High Court before this Court in the above case.
This Court affirmed the decision of the High Court holding that Article 311(2) of the Constitution had been contravened as the prospects of the respondent in Government service were affected.
In this case the parties proceeded on the basis that there was no abolition of post as such as can be seen from the judgment of the High Court.
The only ground was whether when the post continued to exist though under a different master, in this case it being the University, it was open to the State Government to transfer its employee to the control of a new master without giving an option to him to state whether he would continue as a Government employee or not.
The court was not concerned about the consequences of abolition of a post as such in this case.
As can be seen from the judgment of the High Court in this case (vide Papanna Gowda vs State of Mysore(1) one serious infirmity about the impugned provisions was that whoever was holding the post in any of the institutions transferred to the University automatically ceased to be the Government servant.
Even if the case was one where abolition of the post was involved, the law should have made provision for the determition of the employees in the cadre in question who would cease to be 653 Government employees with reference to either the principle of 'last come, first go ' or any other reasonable principle and given them an option to join the service under the new master instead of just transferring all the employees who were then working in the institutions to the University.
The impugned provisions were not rules dealing with the age of superannuation or compulsory retirement.
Nor the case was dealt with on the principle of abolition of posts.
The decision in this case takes its colour from the peculiar facts involved in it.
One principle that may be deduced from this decision is that if a post is not a special post and its incumbent is a member of a cadre his rights as a member of the cadre should be considered before deciding whether he has cased to be a government employee on the abolition of the post.
It is likely that on such scrutiny the services of another member of the cadre may have to be terminated on its abolition or some other member of the cadre may have to be reverted to a lower post from which he may have been promoted to the cadre in question by the application of the principle of 'last come, first go '.
If, however, where the post abolished is a special post or where an entire cadre is abolished cadre and there is no lower cadre to which the members of the abolished can reasonably be reverted, the application of this principle may not arise at all.
In the circumstances, the petitioners cannot derive much assistance from this decision.
The question whether Article 311(2) would be contravened if Government servant holding a civil post substantively lost his employment by reason of the abolition of the post held by him directly arose for consideration before this Court in M. Ramanatha Pillai vs The state of Kerala & Anr.(1) Two points were examined in that case: (i) whether the Government had a right to abolish a post in a service and (ii) whether abolition of a post was dismissal or removal within the meaning of Article 311 of the Constitution.
The Court held that a post could be abolished in good faith but the order abolishing the post might lose its effective character if it was established to have been made arbitrarily, mala fide or as a mask of some penal action within the meaning of Article 311 (2).
After considering the effect of the decisions in Parashotam Lal Dhingra 's case (supra), Champaklal Chimanlal Shah vs The Union of India,(2) 654 Moti Ram Deka 's case (supra), Satish Chandra Anand vs The Union of India (1) and Shyam Lal vs State of U.P. and Union of India.(2) This Court observed in this case at page 526 thus: "The abolition of post may have the consequence of termination of service of government servant.
Such termination is not dismissal or removal within the meaning of Article 311 of the Constitution.
The opportunity of showing cause against the proposed penalty of dismissal or removal does not therefore arise in the case of abolition of post.
The abolition of post is not a personal penalty against the government servant.
The abolition of post is an executive policy decision.
Whether after abolition of the post, the Government servant who was holding the post would or could be offered any employment under the State would therefore be a matter of policy decision of the Government because the abolition of post does not confer on the person holding the abolished post any right to hold the post.
" The true effect of the decision in Moti Ram Deka 's case (supra) on the question of applicability of Article 311 (2) of the Constitution to a case of abolition of post has been clearly explained in this case and we have very little to say anything further on it.
Suffice it to say that the Moti Ram Deka 's case (supra) is no authority for the proposition that Article 311 (2) would be attracted in such a case.
The above view was followed by this Court in State of Haryana vs Des Raj Sangar & Anr.(1) to which one of us (Murtaza Fazal Ali, J.) was a party.
Khanna, J. speaking for the Court observed at pages 1037 38 thus: "Whether a post should be retained or abolished is essentially a matter for the Government to decide.
As long as such decision of the Government is taken in good faith the same cannot be set aside by the court.
It is not open to the court to go behind the wisdom of the decision and substitute its own opinion for that of the Government on the point as to whether a post should or should not be 655 abolished.
The decision to abolish the post should, however, as already mentioned, be taken in good faith and be not used as a cloak or pretence to terminate the services of a person holding that post.
In case it is found on consideration of the facts of a case that the abolition of the post was only a device to terminate the services of an employee, the abolition of the post would suffer from a serious infirmity and would be liable to be set aside.
The termination of a post in good faith and the consequent termination of the services of the incumbent of that post would not attract Article 311.
" Before concluding our discussion on this topic, it is necessary to refer to a decision of the Jammu and Kashmir High Court in Abdul Khalik Renzu & Ors.
vs The State of Jammu and Kashmir(1) to which one of us (Murtaza Fazal Ali, J. (as he then was) was a party in which the validity of the abolition of posts constituting the special police squad of the State of Jammu and Kashmir was questioned.
In that case, the High Court while recognising the power of the State Government to abolish the posts and to terminate the services of the incumbents of such posts held that such action could be validly taken only subject to certain safeguards and in the absence of any such safeguards the abolition was bad.
The High Court did not clearly spell out the nature and extent of safeguards referred to therein.
The High Court relied on the words 'subject to certain safeguards, on the abolition of posts ' in the passage occurring at page 841 in Parshotam Lal Dhingra 's case (supra) which is extracted above to reach the conclusion that unless the abolition of posts was accompanied by such safeguards, Article 311 would be infringed.
With respect, it should be stated that the High Court did not notice that in another passage at pages 857 858 in the same decision, which is also extracted above, the abolition of posts referred to therein was unqualified.
In this passage there is no reference to any safeguards at all.
Probably the 'safeguards ' referred to in the passage at page 841 in Parshotam Lal Dhingra 's case (supra) meant an abolition of posts which was in good faith and not a pretence of abolition of a post resorted to in order to get rid of its incumbent and the creation of the same post with a different form or name with a new incumbent.
The above view of the High Court of Jammu and Kashmir is however, in conflict with the decision in Ramanatha 656 Pillai 's case (supra) and hence must be considered as having been overruled by this Court.
In modern administrations, it is necessary to recongnise the existence of the power with the Legislature or the Executive to create or abolish posts in the civil service of the State.
The volume of administrative work, the measures of economy and the need for streamlining the administration to make it more efficient may induce the State Government to make alterations in the staffing patterns of the civil service necessitating either the increase or the decrease in the number of posts.
This power is inherent in the very concept of governmental administration.
To deny that power to the Government is to strike at the very roots of proper public administration.
The power to abolish a post which may result in the holder thereof ceasing to be a Government servant has got to be recognised.
But we may hasten to add that any action legislative or executive taken pursuant to that power is always subject to judicial review.
It is no doubt true that Article 38 and Article 43 of the Constitution insist that the State should endeavour to find sufficient work for the people so that they may put their capacity to work into economic use and earn a fairly good living.
But these articles do not mean that every body should be provided with a job in the civil service of the State and if a person is provided with one he should not be asked to leave it even for a just cause.
If it were not so, there would be no justification for a small percentage of the population being in Government service and in receipt of regular income and a large majority of them remaining outside with no guaranteed means of living.
It would certainly be an ideal state of affairs if work could be found for all the able bodied men and women and everybody is guaranteed the right to participate in the production of national wealth and to enjoy the fruits thereof.
But we are today far away from that goal.
The question whether a person who ceases to be a Government servant according to law should be rehabilitated by giving an alternative employment is, as the law stands today, a matter of policy on which the Court has no voice.
On a fair construction of the provisions of Article 311 (2) of the Constitution and a consideration of the judicial precedents having a bearing on the question, we are of the view that it is not possible to hold that the termination of service brought about by 657 the abolition of a post effected in good faith attracts Article 311 (2).
An analysis of Article 311 (2) shows that it guarantees to a person who is a member of a civil service of the Union or an all India service or a civil service of a State or holds a civil post the right to defend himself in any proceeding leading to his dismissal, removal or reduction in rank.
It requires that in such a case an inquiry should precede any such action, at that inquiry he should be informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges.
Where it is proposed after such inquiry to impose upon him any such penalty, such penalty may be imposed on the basis of the evidence adduced during such inquiry and it shall not be necessary to give such person any opportunity of making representation on the penalty proposed.
The second proviso to Article 311 (2) of the Constitution sets out the circumstances when that clause would not apply.
These provisions show that Article 311 (2) deals with the dismissal, removal, or reduction in rank as a measure of penalty on proof of an act of misconduct on the part of the official concerned.
This fact is emphasised by the introduction of the words 'an inquiry in which he has been informed of the charges against him ' in article 311(2) when it was substituted in the place of the former clause (2) of Article 311 by the Constitution (Fifteenth Amendment) Act, 1963 which came into force on October 5, 1963.
In the circumstances, it is difficult to hold that either the decision in Moti Ram Deka 's case (supra) or the decision in Papanna Gowda 's case (supra) lays down that the provisions of Article 311 (2) should be complied with before the services of a Government servant are terminated as a consequence of the abolition of the post held by him for bona fide reasons.
In view of the foregoing, it cannot be said that the Act impugned in these petitions by which the village offices in the State of Tamil Nadu were abolished contravenes Article 311(2) of the Constitution.
We have now to consider the submission based on Article 14 of the Constitution.
This aspect of the case has to be examined from two angles (i) whether the step taken by the Legislature to abolish the village offices in question is so arbitrary as to conflict with Article 14 of the Constitution and (ii) whether unequals have been treated as equals by the Legislature.
While dealing with the first point it is to be observed that the posts of village officers which were governed by the Madras Act II of 1894, the Madras Act III of 1895 and the Board 's Standing Orders 658 were feudalistic in character and the appointments to those posts were governed by the law of primogeniture, the family in which the applicant was born, the village in which he was born, and the fact whether he owned any property in the village or not.
Those factors are alien to modern administrative service and are clearly opposed to Articles 14 and 16 of the Constitution.
No minimum educational qualifications had been prescribed.
It was enough if the applicants knew reading and writing in the case of some of them.
The posts were not governed by the regular service rules applicable generally to all officials in the State service.
Rightly therefore, the Administrative Reforms Commission recommended their abolition and reorganisation of the village service.
The relevant part of the Report of the Administrative Reforms Commission reads thus: "The concept of service was conspicuously absent in this relationship.
Village officers were part time employees and not subject to normal civil service discipline.
They do not function from public offices where they were expected to receive people and transact public business.
All accounts, survey and registry records were in their private custody.
Villagers had to go to the residences of Village officers and await the latter 's convenience for referring to public records or for getting extracts from them.
This reduced the accessibility particularly of "high caste" village officers to the poor farmers of the "backward and untouchable" communities.
Their emoluments for the part time service, were meagre and appeared to be an honorarium rather than a living wage.
Communications and living conditions in villages being difficult, subordinate inspecting officers were dependent on the private hospitality of village officers during their official visits.
These factors led to the village officers developing an attitude of condescension in their dealings with villagers.
Even though the hereditary principle was held to be unconstitutional recently, the members of their families still get preferential treatment, even if informally, in filling up vacant offices.
In recent times, village officers have generally ceased to be leading and affluent riots and are reduced to earn their livelihood largely through the misuse of their position.
" 659 The problems involved in the reorganisation of Revenue villages in Tamil Nadu were also discussed in the Report of Mr. S.P. Ambrose, I.A.S. submitted to the State Government in January, 1980.
In the course of the Report, he observed: "4.2 Reorganization of Revenue Villages 4.2.1.
In view of the considerable increases in the total beriz of villages, particularly those with extensive irrigated areas, new rules for the regulation and distribution of water in the project areas and in old ayacut areas, and the reduced work and responsibilities of the talayaris on account of the increase in the strength of the regular Police establishments the norms, for determining the strength of the villagee establishment, as laid down in B.P. Ms. No. 324, dated the 9th December 1910, read with B.P. Ms. No. 231, dated the 23rd February 1921, no longer held good.
4.2.2.
The size of the survey villages vary widely; 4.77 hectares is the extent of the smallest village and 20,947 hectares is the extent of the biggest village.
In terms of population, the smallest has population of 33, while the largest has a population of 12,777.
Even though survey villages have been grouped to form convenient revenue groups for purposes of village administration, the size of revenue groups also vary widely.
With the increases in the area cultivated, area irrigated (both from Government and private sources) and the number of pattas the work load in most villages has increased considerably now.
The question for consideration is whether a comprehensive exercise to reorganise the revenue villages into convenient and viable village administrative units with reference to the existing work load should be attempted, and thereafter to revise the strength of the village establishment by laying down fresh norms for determing its strength.
This will be a major administrative exercise.
If convenient village administrative units with, more or less, equal work load are to be constituted, several factors like area cultivated (gross and net), area irrigated, crop pattern, population, number of pattadars and beriz have to be taken into account 660 Before this is attempted, the major policy issue is whether to continue the present part time system of village officers or to have regular, transferable Government servants as Village Officers in charge of bigger administrative units as recommended by the Administrative Reforms Commission." Having regard to the abolition of similar village offices in the neighbouring States of Karnataka and Andhra Pradesh and the agitation in the State of Tamil Nadu for reorganisation of village service, it cannot be said that the decision to abolish the village offices which were feudalistic in character and an achronisms in the modern age was arbitrary or unreasonable.
Another aspect of the same question is whether the impugned legislation is a colourable one passed with the object of treating the incumbents of village offices in an unjust way.
A similar contention was rejection by this Court in B.R. Shankaranarayana and Ors.
vs The State of Mysore and Ors.(1) in which the validity of the Mysore Village Offices Abolition Act (14 of 1961) which tried to achieve more or less a similar object arose for consideration, with the following observations at pages 1575 1576: "(13) As pointed out by this Court in Gajapati Narayan Deo 's case; , , the whole doctrine of colourable legislation resolves itself into the question of competency of a particular legislature to enact a particular law.
If the legislature is competent to pass the particular law, the motives which impel it to pass the law are really irrelevant.
It is open to the Court to scrutinize the law to ascertain whether the legislature by device, purports to make a law which, though in form appears to be within its sphere, in effect and substance, reaches beyond it.
(14) Beyond attempting the argument that the impugned Act is a piece of colourable legislation, learned Counsel for the appellant has not succeeded in substantiating his contention that the Act and the rules made there under are merely a device for removing the present incumbents from their office.
The provisions of the Act and the 661 rules made thereunder plainly provide for the abolition of hereditary village offices and make those offices stipendiary posts.
The Act makes no secret of its intention to abolish the hereditary posts.
(15) It is argued that even after abolition, the same posts are sought to be continued.
It is no doubt true that the names of the offices have not been changed but there is a basic structural difference between the posts that have been abolished.
The posts created by the new Act are stipendiary posts.
They carry salaries according to the grades created by the rules.
The incumbents are transferable and their service is pensionable.
Different qualifications are prescribed for the new posts.
From a consideration of the incidents attaching to the new posts it is clear that the old posts have been abolished and new posts have been created and that the whole complexion of the posts has been changed.
(16) The result is that in our opinion the impugned Act cannot be held to be a piece of colourable legislation and as such invalid.
" A learned discussion on all the points raised in the above case is found in the judgment of the High Court of Mysore in B.H. Honnalige Gowda vs State of Mysore and Anr.(1) Hence the above contention has to be rejected.
The next contention of the petitioners which is of some substance and which is based again on Article 14 needs to be examined here.
It is seen from section 2 (e) of the Act that the expression 'part time village officer ' is defined as follows: "2.
(e) "part time village officer" means Village Headman (including Additional Village Headman, Village Karnam (including Chief Karnam and Additional Village Karnam) or Triune Officer appointed under 662 (i) the Madras Proprietary Estates ') Village Service Act, 1894 (Madras Act II of 1894) or the Madras Hereditary Village offices Act, 1895 (Madras Act III of 1895); (ii) the Board 's Standing orders; (iii) the Tamil Nadu Village officers Service Rules, 1970 or any other rules made under the proviso to Article 309 of the Constitution; or (iv) any other law, but does not include Grama Kuvalar, Grama Paniyalar and Pasana Kavalar;" By section 3 of the Act, the posts held by the part time village officers, as defined above, are abolished.
As a consequence of the above provision not merely posts of officers appointed under the Madras Act No. II of 1894, the Madras Act No. III of 1895 and the Board 's Standing orders prior to December 16, 1970 but also the posts held by officers appointed after that date under the Rules made under the proviso to Article 309 of the Constitution i.e. The Tamil Nadu Village Officers Service Rules, 1970 or any other rule made by the Governor have been abolished.
It is argued that the abolition of posts of officials appointed after December 16, 1970 under the Rules made under the proviso to Article 309 of the Constitution is violative of Article 14 of the Constitution.
We have given our anxious consideration to this submission.
Any classification should satisfy two tests (i) that there exists an intelligible differentia between those who are grouped together and those who are not included in the group and (ii) that there exists a reasonable nexus between the differentia and the object for which classification is made.
As stated earlier the object of the impugned legislation is to abolish posts which were part time in nature and which had come into existence under laws which were feudalistic in character and to replace them by posts held by new incumbents who are recruited under it.
The question for consideration is whether the grouping together of the part time posts mentioned in section 2 (e) of the Act is unconstitutional.
There is no dispute that upto December 16, 1970 all appointments to village offices were being made under the two Madras Acts referred to above and the Board 's 663 Standing orders on the basis of factors dealt with above.
But after December 16, 1970, recruitment was being made in accordance with the Tamil Nadu Village Officers Service Rules, 1970 By the said Rules a new service of part time village officers was constituted.
Rule 5 thereof prescribed the minimum educational qualification and the tests which an applicant had to be eligible for being appointed.
The Rules fixed the age of superannuation at 55 years.
But even under these Rules, the persons who were appointed were part time village officers who were paid a fixed amount every month by way of remuneration.
The nature of duties performed by them and the responsibilities they had to discharge were also the same.
The posts held by them were non pensionable posts.
Under the Act and the Rules framed thereunder, the village administrative officers to be appointed are to be recruited directly.
No person shall be eligible for appointment to the post of a village administrative officer unless he possesses the minimum general educational qualification referred to in Rule 12 (a) (i) of Part II of the Tamil Nadu State Subordinate Services Rules and prescribed Schedule I to the said Part II.
Every person appointed to the post has within a period of one year from the date on which he joins duty to undergo the training and pass the tests prescribed by Rule 9 of the Rules made under the Act.
Every person appointed as a village administrative officer is liable to be transferred from one place to another.
The age of superannuation is fixed at 58 years.
The said posts are no longer part time posts and the holders thereof are full time Government officials entitled to draw salary every month in the scale of Rs. 350 10 420 15 600 and other allowances and these posts are pensionable posts.
It is also to be seen from the recommendations of the Administrative Reforms Commission and other material placed before us that the revenue village will be reorganised so as to form viable administrative units which would require the services of a whole time village administrative officer.
The area under a village administrative officer is much larger than many of the existing revenue villages.
When such reorganisation of the village administration is contemplated, it would not be possible to allow charges of diverse sizes to continue to remain in any part, of the State of Tamil Nadu.
In these circumstances, even though the village officers appointed after December 16, 1970 are in a way different from the village officials appointed prior to that date, they too cannot be equated with the new village administrative officers who will be appointed under the Act and the Rules made thereunder.
664 It cannot, therefore, be held that Article 14 of the Constitution has been violated in abolishing the posts held by those appointed after December 16, 1970.
The petitioners in Writ Petitions Nos. 6191, 6355 and 6356 of 1980 who are holders of village offices in Tiruttani Taluk and Pallipatu area have questioned the impugned Act on the ground that the State Legislature could not pass the law without the previous approval of Central Government as required by the proviso to sub section (4) of section 43 of the (Central Act 56 of 1959).
The area in which these petitioners were working as village officials forms part of the transferred territories transferred from Andhra Pradesh to Tamil Nadu under the aforesaid Act.
Their contention is that since they were working as village officials in the said area prior to the commencement of the above said Act the conditions of their service could not be altered to their prejudice without obtaining the previous approval of the Central Government.
Section 43 of the reads: "43.
Provisions relating to services (1) Every person, who immediately before the appointed day, is serving in connection with the affairs of Andhra Pradesh or Madras shall, as from that day, continue so to serve, unless he is required by general or special order of the Central Government to serve provisionally in connection with the affairs of the other State.
(2) As soon as may be after the appointed day, the Central Government shall by general or special order, determine the State to which every person provisionally allotted to Andhra Pradesh or Madras shall be finally allotted for service and the date from which such allotment shall take effect or be deemed to have taken effect.
(3) Every person who is finally allotted under the provisions of sub section (2) to Andhra Pradesh or Madras shall, if he is not already serving therein, be made 665 available for serving in that State from such date as may be agreed upon between the two State Governments or in default of such agreement, as may be determined by the Central Government.
(4) Nothing in this section shall be deemed to affect, after the appointed day, the operation of the provisions of Chapter I of of the Constitution in relation to the determination of the conditions of service of persons serving in connection with the affairs of Andhra Pradesh or Madras.
Provided that the conditions of service applicable immediately before the appointed day to the case of any person provisionally or finally allotted to Andhra Pradesh or Madras under this section shall not be varied to his disadvantage except with the previous approval of the Central Government.
(5) The Central Government may at any time before or after the appointed day give such directions to either State Government as may appear to it to be necessary for the purpose of giving effect to the foregoing provisions of this section and the State Government shall comply with such directions.
" The answer of the State Government to the above contention is that the petitioners in these petitions are not allotted under section 43 (2) of the above said Act to the State of Tamil Nadu and hence the proviso to sub section (4) of section 43 is not applicable.
The petitioners have not shown any such order of allotment under section 43 (2).
Hence the proviso to sub section (4) of section 43 is not attracted.
Under section 43 (4) of the above said Act, the State Government is entitled to deal with all the officials in the areas transferred to them in accordance with Chapter I of Part XIV of the Constitution.
The above contention is, therefore, rejected.
In the course of the hearing on a suggestion made by the Court, the learned Attorney General filed a memorandum which reads as follows: 666 "All the erstwhile Village officers who possess the minimum general educational qualification as required under the Abolition Act and irrespective of their age (but subject to the rule of retirement framed under the Abolition Act and the Rules framed thereunder) will be screened by a Committee to be appointed by the Government.
They need not make any application and they need not also appear for any test conducted by the Tamil Nadu Public Service Commission for the post of Village Administrative officer.
Guidelines to the Committee will be as follows: (1) Punishment (2) Physical condition.
All the persons selected by the Committee will be appointed by the competent authorities and relaxation in respect of age will be given.
They will be new appointees under the Abolition Act and will be governed by the provisions of the Act and the rules made thereunder.
Compensation will not be available to those who are so appointed.
The remaining vacancies will be filled up from among the candidates already selected by the Tamil Nadu Public Service Commission.
" After the above petitions were filed under the interim order passed in these cases all the officials involved in these cases are being paid the honorarium by the State Government.
Those who fail in these petitions would have become liable to repay the amount which they have thus drawn in excess of the compensation, if any, they may be entitled to.
It is submitted by the learned counsel for the State of Tamil Nadu that the State Government will not take steps to recover such excess amount.
The above statement is recorded.
The attitude displayed by the State Government in filing the memorandum referred to above and in making a statement to the effect that the amount paid pursuant to the interim orders in in excess of the compensation payable the village officials concerned will not be recovered is a highly commendable one and we record 667 our deep appreciation for the laudable stand taken by the Government.
It was, however, strenuously urged by Shri R. K. Garg that those who have to vacate the posts would be without any work and some of them have large families and that compensation, if any, payable to them is very inadequate He urged that it was the duty of the State Government to make adequate provision pursuant to Article 38 and Article 43 of the Constitution.
These Articles are in Part IV of the Constitution.
They are not enforceable by the courts but they are still fundamental in the governance of the country.
The nature of the relationship that exists or ought to exist between the Government and the people in India is different from the relationship between the ruler and his subjects in the West.
A study of the history of the fight for liberty that has been going on in the West shows that it has been a continuous agitation of the subjects for more and more freedom from a king or the ruler who had once acquired complete control over the destinies of his subjects.
The Indian tradition or history is entirely different.
The attitude of an Indian ruler is depicted in the statement of Sri Rama in the Ramayana thus: Kshatrirairdharyate chapo nartshabdo bhavaideeti (Ramayana III 10 3) (Kshatriyas (the kings) bear the bow (wield the power) in order to see that there is no cry of distress (from any quarter).
The duty of the administrator, therefore, is that he should promptly take all necessary steps to alleviate the sufferings of the people even without being asked to do so.
While attending to his duties an administrator should always remember the great saying of the Tamil saint Tiruvalluvar: 668 Do nought that soul repenting must deplore, If thou hast sinned, "its well if thou dost sin no more.
(Let a minister never do acts of which he would have to grieve saying, "What is this I have done", (but) should he do (them), it were good that he grieved not.) (No. 655 in Tirukkural: Translation by Rev. Dr. G.U. Pope and others (Reprint 1970) p. 175).
An administrator 's actions should be such as he is not driven to repent for the mistakes he may have committed.
But if he has committed any mistakes in the past he should try to avoid a repetition of such mistakes.
It is significant that in Tamil language the equivalent of the word 'people ' is 'Makkal ' which is also sometimes used as the equivalent of 'children '.
It is for the State Government to consider what can be done to those who fail in the petitions.
This observation is made particularly in regard to those who were recruited after December 16, 1970 under the rules made under the proviso to Article 309 of the Constitution in view of the fact that their recruitment was not made on the hereditary principle.
Those who have passed S.S.L.C. examination amongst them come within the scope of the statement made by the learned Attorney General.
But those who have merely completed S.S.L.C. examination but not passed it fall outside the scope of that statement even though they have gained experience while they were in office.
We hope and trust that the State Government will look into this matter purely from a humanitarian point of view.
This is only a suggestion and not a direction.
In the result the petitions are dismissed subject to the following: (i) The State Government will give effect to the memorandum filed on its behalf which is incorporated in this judgment in the case of those who possess the minimum general qualifications prescribed under the Act and the Rules made thereunder and who were holding the posts of part time village officers immediately before the Act came into force.
The State Government shall re employ all such persons who have not crossed the age of superannuation and who are selected as per the 669 memorandum in the new cadre within four months from today.
Until they are so selected, they will not be paid any remuneration.
Even if they are re employed, the amount paid to them pursuant to the interim orders will not be recovered from them.
(ii) The compensation, if any, payable by the State Government under section 5 of the Act to those who cease to be village officers shall be adjusted against the amount paid pursuant to the interim orders passed in these cases.
The State Government will not recover from them any amount paid to them pursuant to the interim orders passed in these cases in excess of the compensation, if any, payable to them.
(iii) The interim orders stand vacated with effect from April 15, 1982.
(iv) No costs.
[/INST]The Rajasthan Children Act, 1970, provides that any person below the age of 16 years should be presumed to be a child and that a delinquent child should be tried by a Children 's court in accordance with the procedure laid down therein.
The appellant was charged under sections 364 and 302, I.P.C., in connection with an occurrence that took place in Tonk district on March 12, 1973.
A preliminary objection that the Sessions Judge was not competent to try the case of The appellant as he was a child under the provisions of the Children Act was overruled by the trial court.
The revision filed by the appellant against the decision of the trial court was dismissed by the High Court which held that the Children Act was not applicable to the appellant as that Act had not been enforced in Tonk district on the date of the occurrence.
The High Court further held that the appellant had failed to prove that he was below the age of 16 years.
On being directed by this Court to ascertain the actual date of birth, the High Court held that the date of birth of the appellant was September 22, 1956; and, therefore, he was over 16 years on the date of the occurrence.
The High Court rejected the documents produced from the first two schools attended by the appellant which showed his date of birth to be June 22, 1957, for the reason that those documents had not been kept or made by a public officer; it relied on an affidavit furnished by the father of tho appellant while admitting him to the third school in which the date of birth had been changed to September 22, 1956.
The explanation of the appellant 's father that the date of birth had been changed to fulfil the requirement of age under the Rajasthan Board of Secondary Regulations to enable the appellant to appear in the Higher Secondary Examination at the appropriate time was not accepted.
Allowing the appeal, 584 ^ HELD: 1.
(a) The relevant date for applicability of the Rajasthan Children Act, 1970 so far as the age of the accused, who claims to be a child, is concerned, is the date of the occurrence and not the date of the trial as is clear from the provisions of sections 3 and 26 of the Act.
[594 C] (b) At the time of the occurrence, the appellant was undoubtedly a child within the provisions of the Act.
[592 H] (c) The question whether the appellant could be tried as a child if he had become more than 16 years by the time the case went up to the court, does not survive as the Act has now been enforced in the entire State.
A combined reading of sections 3 and 26 clearly shows that the statute takes care of contingencies where proceedings in respect of a child were pending in any court on the date on which the Act came into force.
Section 26 in terms lays down that the court should proceed with the case but after having found that the child has committed the offence it is debarred from passing any sentence but is obliged to forward the child to the Children 's court for passing orders in accordance with the Act.
[592 H; 593 A; 593 F G] (d) The judgment of the Sessions Judge as affirmed by the High Court be set aside and the Additional Sessions Judge, Jaipur, be directed to try the accused and if he gave a finding that the accused was guilty, he shall forward the accused to the Children 's court for receiving sentence in accordance with the provisions of the Act.
[594 E] 2.
There is no legal requirement under section 35 of the Evidence Act that the public or other official book should be kept only by a public officer; all that is necessary is that the document should be maintained regularly by a person whose duty it is to maintain the document.
[588 G; 589 C] Mohd.
Ikram Hussain vs State of U.P., [1964] 5 S.C.R. 86, 100 & Abdul Majid vs Bhargavam, A.I.R. 1963 Ker. 18 referred to.
The Rajasthan Children Act being a piece of social legislation is meant for the protection of infants who commit criminal offences and, therefore, its provisions should be liberally and meaningfully construed so as to advance the object of the Act.
The Children Act was enacted to protect young children from the consequences of their criminal acts on the footing that their mind at that age could not be said to be mature for imputing mens rea as in the case of an adult.
[524 D; 593 H; 594 A] In the instant case there are two documents of two different schools showing the date of birth of the appellant as June 22, 1957 and both these documents have been signed by his father and were in existence ante litem motam.
Hence, there could be no ground to doubt the genuineness of these documents.
At the time when the age of the appellant was first mentioned in the admission form, there was absolutely no dispute about the date of birth and there could Dot have been any motive on the part of the parents to give a false date of birth because it was his first admission to a school at a very early age.
The school to which the appellant was admitted enjoyed good reputation of authenticity.
585 there had been any element of suspicion, the admission register and the scholar 's register would have been corrected by the headmistress of the school.
[591 D; 590 D; 590 H] M/s. Gannon Dunkerlay & Co. Ltd. vs Their Workmen, referred to.
The appellant 's father has given a cogent reason for changing the date of birth and there is no reason for not accepting his explanation particularly because the offence was committed seven years after changing the date of birth.
[592 C]
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<s>[INST] Summarize the judgementAppeal No. 284 of 1972.
(From the Judgment and Order dated 3 5 1971 of the Delhi High Court in I.T. Case No. 6 D of 1964) A.K. Sen, V.S. Desai and Bishamber Lal, for the appellant.
G.C. Sharma and S.P. Nayar, for the respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
This is an appeal by special leave direct ed against the Judgment of the Delhi High Court answering in favour of the Revenue a question which was directed to be referred by the Tribunal under section 66(2) of the Indian Income Tax Act, 1922.
The controversy between the parties arises out of an assessment made on the assessee as a Hindu Undivided Family for the assessment year 1948 49, the corre sponding accounting year being the financial year 1947 48.
The assessee was at the material time a Hindu Undivided Family with one Roshan Lal as its manager and karta.
Till June 1947 the assessee was carrying on business in gold and jewellery at Chowk Surjan Singh in Lahore.
In view of the impending partition of India Roshan Lal decided to move out of Lahore and accordingly he transferred a sum of Rs. 12,094/ from the account of the assessee with the Lahore Branch of the Punjab National Bank Ltd. to the New Delhi Branch of that bank in June 1947.
He also transferred from the Lahore 156 Branch of the punjab National Bank Ltd. to the branch of that bank at New Delhi two sums of Rs. 13,000/ and Rs. 6,000/ , the former in his own name and the latter in the name of his wife and obtained fixed deposit receipts for these two amounts from the New Delhi Branch of the Bank in July 1947.
He left Lahore in June 1947 and proceeded to Mussoorie but on his way he stopped at Amritsar for a few days.
He opened an account with the Amritsar Branch of the Imperial Bank of India by depositing a sum of Rs. 300/ with a view to obtaining a locker in the safe deposit vault where he could deposit for sale custody a trunk which he had brought with him from Lahore containing gold ornaments, jewellery and cash.
It seems that a locker was not avail able and hence he deposited the trunk in a sealed condition with the Amritsar Branch of the Imperial Bank of India on 25th june, 1947.
The sealed trunk, according to the asses see, contained gold ornaments of the value of Rs. 1,19,320/ , gold rawa of the value of Rs. 1,69,020/ and stones of the value of Rs. 4,000/ .
Roshan Lal then went to Mussoorie via Haridwar and stayed at Mussoorie until about October 1947.
The case of the assessee was that during this period Roshan Lal did not carry on any business nor did he have any other means of income.
In October 1947 Roshan Lal came over to Delhi and rented a house in Kinari Bazar with a view to settling down in Delhi.
He started looking for suitable premises for commencing business and it was only in February 1948 that he succeeded in securing suitable prem ises at Dariba Kalan in Delhi.
He then started gold and jewellery business in these premises in the name and style of Roshan Di Hatti on 30th March, 1948.
The business was joint family business of the assessee and the first entry made in the books of account of the assessee was dated 30th March, 1948 and it was as follows: Gold Ornaments Rs. 1,19,320/ Gold Rawa Rs. 1,69,020/ Stones Rs. 4,000/ Bank balance with the Imperial Bank of India, Delhi Rs. 35,053/ Bank balance with Hindustan Commercial Bank, Delhi Rs. 221/ Cash Rs. 2,800/ .
The assessee thus brought in an aggregate capital of Rs. 3,33,414/in the business on 30th March, 1948.
It appears that the assessee prospered in this gold and jewellery business of Roshan Di Hatti but it did not file any return of income nor paid any income tax.
It came to the notice of the Income Tax Officer some time in the beginning of 1957 that the assessee had made considerable income in its gold and jewellery business but had failed to pay any tax on such income and hence the Income Tax Officer issued a notice to the assessee under section 34(1)(a) of the Indian Income Tax Act, 1922 for bringing the income of the assessee for the assessment year 1948 49 to tax.
The assessee filed its return of income and in the course of the assessment pro ceedings, the Income Tax Officer, called upon the assessee to explain the nature and source of the capital of Rs. 3,33,414/ brought by it into the business on 30th March, 1948.
The assessee pointed 157 out that gold rawa, ornaments and cash representing this capital were brought by Roshan Lal when he migrated from Lahore and they were kept in a sealed trunk with the Amrit sar Branch o[ the Imperial Bank of India and when Roshan Lal came over to Delhi in October 1947, he.
deposited the same in a locker in the safe deposit vault of Hindustan Commer cial Bank at Delhi and when the business of the assessee was commenced, he surrendered the locker and brought the entire gold, jewellery and cash into the business.
It was empha sised by the assessee as a supportive fact that after Roshan Lal migrated from Lahore in June 1947 until the assessee started the business of Roshan Di Hatti on 30th March, 1948, neither the assessee nor Roshan Lal had any other business or means of income from which the assets of Rs. 3,33,414/ could have been earned.
This explanation was given in the course of various statements made by the asses see from time to time before the Income Tax Officer.
The assessee also examined Hira Lal, Father in law of Roshan Lal and filed affidavits of Mulk Ram, Bills Mal, Dalai, Wazir Chand, Devidas Mehra and Panna Lal before the Income Tax Officer for the purpose of showing that the assessee was having a large gold and jewellery business in Lahore before migration and that it did not carry on any business in India before starting the business of Roshan Di Hatti on 30th March, 1948.
The Income Tax Officer also examined Prem Nath and Kishan Chand, brothers of Roshan Lal.
The statement of Prem Nath was to the effect that their father was a man of ordinary means who was almost reduced to penury by about 1940 and that he had given a sum of Rs. 2000/ to his son Roshan Lal for starting gold and jewellery business in 1935 and he had also subsequently lent some monies to Roshan Lal at nominal interest.
Prem Nath deposed that for the purpose of the business of the assessee, Roshan Lal was occupying a shop belonging to his father but he was not paying rent though demanded on the ground that he did not have sufficient income to pay the rent It was also stated by Prem Nath that before the partition of the country the standard of living of Roshan Lal and his family was no higher than that of Prem Nath who was getting a salary of Rs. 150/ per month.
The statement of Prem Nath was clear ly directed towards showing that the assessee did not have any flourishing business or large income prior to partition.
The Income Tax Officer, on the basis of this material before him, rejected the explanation offered by the assessee and came to the conclusion that it was not possible to believe that the assessee had been able to accumulate capital to the extent of Rs. 3,33,414/ out of income from the business carried on by it in Lahore and since the nature and source of the capital of Rs. 3,33,414/ credited in the books of account of the business on 30th March, 1948 was not satis factorily explained, the Income Tax Officer, gave credit only for a sum of Rs. 20,000/ and treated the balance of Rs. 3,13,414/ as income of the assessee from undisclosed sources.
The assessee appealed against this order of the Income Tax Officer and on appeal, the Appellate Assistant Commis sioner took the view that, on the facts as disclosed by the material placed on record in the proceedings, a much larger allowance should have been made in respect of the capital brought by the assessee from Lahore and he allowed a further sum of Rs. 80,000/ .
The reason given by the Appellate 158 Assistant Commissioner for taking this view are a little material and they may be reproduced as follows: "There is documentary evidence to show that assessee transferred an amount of Rs. 12,094/ from the Punjab National Bank account at Lahore to the same bank in New Delhi in June 1947.
It is also seen that he also transferred two amounts Rs. 13,000/ in his own name and Rs. 6,000/in his wife 's name from the Punjab National Bank, Lahore, to the same Bank at Minto Road, New Delhi and fixed deposit receipts were taken for this total sum of Rs. 19,000/from the Delhi Bank in July 1947.
All these monies including the realised fixed deposits later on went into the asses see 's account with the State Bank of India which reveals a credit balance of Rs. 35,053/ as on 30 3 1948.
This at least shows that the assessee was not a man of very small means while he was at Lahore.
He was having four accounts in different banks at Lahore.
The particulars, however, are not available and it is also stated that most of these accounts were very small; but even then a man of very modest means would not normally have so many bank accounts.
Moreover, while at Lahore Shri Roshan Lal had taken life insur ance Policies Rs. 22,000/ .
A number of letters and receipts regarding business trans actions in Lahore were also filed which indi cate that the Lahore business was not as small as the Income Tax Officer has taken it to be.
There are some papers which relate to deals worth Rs. 10,000/ or more at one time.
There are also several vouchers relating to adver tisement charges paid at Lahore All these things together with the fact that the asses see was in position to transfer a sum of Rs. 31,000/ approx.
through banks indicate that he was doing fairly well in the business at Lahore.
How he could have managed to evade tax at Lahore for all these years, is a mys tery; but from the circumstances of the case it appears that the assessee had certainly assessable incomes while he was doing business there during the pre partition period.
There is another factor which has also to be given its due weight.
While leaving Lahore and coming over to India in JUne 1947, the assessee stopped for few days at Amritsar.
There on the 25th June, 1947 he deposited a sealed box with the State Bank of India Amritsar Branch.
This box was withdrawn by him on the 20 10 47.
These facts are corroborated by the bank certificate.
The assessee claims that he had considerable amount of jewellery and gold etc.
(part of his trading stock in Lahore) as well as cash, in this box that is why he did not take the risk of carrying.
it with him on his way to Mussoo rie, but kept in deposit with the State Bank at Amritsar till such time.
as he was able to settle down in India.
The contents of the seated box are unknown to the bank and so it is not possible to ascertain what the box actually contained.
But it is reasonable to 159 presume that there must have been something quite valuable in the box as otherwise the assessee would not have kept it in the custody of a bank like State Bank of India.
It must also be noted that as early as June, 1947, the assessee hired a locker in the Hindustan Commercial Bank Ltd., New Delhi.
It is clear therefore, that when in June, 1947, the asses see was leaving Lahore he must have had with him quite a substantial amount either in the form of jewellery etc., or cash, as otherwise he would not have taken the precaution of either depositing the sealed box with the State Bank of India at Amritsar or opening a locker in a New Delhi Bank.
Considering all the evidence discussed above, I am of the opinion that the Income Tax Officer 's allowance of Rs. 20,000/ only as capital brought over from Pakistan is too low.
It is true that the capital disclosed in the books as on 30 3 1948 is mostly unverifiable and even assuming that the assessee was doing reasonably well in his business at Lahore, there are hardly any reasons to believe that he could have accumulated so much capital and could have brought all that capital safely into India; but the circumstances of the case do in my view justify a much larger allowance for old capital than has been allowed by the Income Tax Officer.
In my opinion, a reduction of the. assessment by Rs. 80 '000/will meet the requirement of the case.
" The Appellate Assistant Commissioner thus reduced the figure undisclosed income of the assessee to Rs. 2,33,414/ .
But this relief was not enough and the assessee pre ferred a further appeal to the Tribunal.
When the appeal came to.
be heard by the Tribunal, Roshan Lal, who was present at the hearing, was asked by the Members of the Tribunal as to how he had brought gold and jewellery from Lahore and he stated that it was brought in train in a box of the size of 2 1/2 'x l1/2 'x 1 ' and he was then asked what was the weight of the box, to which he replied stating that the weight of the contents of the box was about eight seers.
The Tribunal then, after hearing the arguments of the par ties, rejected the appeal.
The main arguments which weighed with the Tribunal in negativing the appeal of the assessee were: first, if the weight of the contents of the box was only eight seers, the value of gold and jewellery in the box could not be more than Rs. 66,000/ at the then current rate of gold at Rs. 90/ per tola; secondly, the Government of India had issued a Press Note in January 1952 requiring all evacuees to declare the amounts of money brought by them from Pakistan and assuring them that in case they did so, no further enquiries would be made from them as to how they had earned the same and whether they had paid any tax on it and yet the assessee had not declared 'before the Revenue au thorities until the commencement of the assessment proceed ings in 1957 that it had brought the capital of Rs. 2,33,414/ from Pakistan; thirdly, the assessee claimed to have a flourishing business in Lahore in the course of which it was supposed to have earned enough to enable it to save a capital of Rs. 3,33,414/ and yet it had not filed 160 any income tax return nor was it ever assessed to income tax in Lahore and fourthly, the depositions of Mulk Ram, Billa Mal, Dalai, Wazir Chand, Devidas Mehra and Panna Lal were vague and based on hearsay and they had no evidentiary value in the absence of contemporaneous primary evidence.
The Tribunal, accordingly, held that the assessee could not have brought assets worth more than Rs. 1,00,000/ from Lahore and the estimate made by the Appellate Assistant Commissioner did not call for any interference and in this view, the Tribunal confirmed the assessment of the bal ance of Rs. 2,33,414/ as the undisclosed income of the assessee for the assessment year 1948 49.
The assessee applied to the Tribunal for referring to the High Court the question of law arising out of its order but the Tribunal declined to make a reference on the ground that in its opinion no question of law arose out of its order.
This led to the making of an application to the High Court under section 66(2), but the High Court also took the same view and rejected the application.
The assessee there upon preferred an appeal to this Court by special leave and in the appeal, an order was made by this Court referring the following question for the opinion of the High Court: Whether there was material for coming to the conclusion that Rs. 2,33,414/ , out of the capital of Rs. 3,33,414/credited in the books of account of the assessee on 31st March, 1948, represented income from undis closed source ? Pursuant to this order the Tribunal stated a case for the opinion of the High Court and the High Court answered the question referred to it in favour of the Revenue by holding that there was material on the basis of which the Tribunal could come to the conclusion that Rs. 2,33,414/ represented the undisclosed income of the assessee.
Hence the present appeal by the assessee with special leave ob tained from this Court.
Now, the law is well settled that the onus of proving the source of a sum of money found to have been received by an assessee is on him.
If he disputes the liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt from taxation under the provi sions of the Act.
In the absence of such proof, the Revenue is entitled to treat it as taxable income.
This was laid down as far back as 1958 when this Court pointed out in A. Govindarajulu Mudaliar vs Commissioner of Income tax (1) that "there is ample authority for the position that where an assessee fails to prove satisfactorily the source and nature of certain amount of cash received during the ac counting year, the Income Tax Officer is entitled to draw the inference that the receipts are of an assessable nature".
To put it differently, where the nature and source of a receipt, whether it be of money or of other property, cannot be satisfactorily explained by the assessee, it is open to the Revenue to hold that it is the income of the assessee and no further burden lies on the Revenue to show that that income is from any particular source.
Vide Com missioner of Income Tax, U.P. vs Devi Prasad Vishwanath Prasad(2).
Here, (1) (2) 161 in the present case, the assessee introduces in the books of account of its business on 30th March, 1948, capital of Rs. 3,33,414/ which consisted of gold rawa, gold ornaments, stones and cash.
The burden of accounting for the receipt of these assets was clearly on the assessee and if the assessee failed to prove satisfactorily the nature and source of these ' assets, the Revenue could legitimately hold that these assets represented the undisclosed income of the assessee.
The assessee offered the explanation that these assets had been brought by Roshan Lal when he migrated from Lahore in June 1947 and they represented the entire savings of the assessee in Pakistan.
This explanation was disbe lieved.
by the Tribunal which took the view that, on the material on record, it was not possible to hold that the assessee must have brought more than Rs. 1,00,000/ from Lahore and hence the Tribunal added the balance of Rs. 2,33,414/ as undisclosed income of the assessee.
This conclusion reached by the Tribunal was clearly a finding of fact and hence it could be assailed only if it was shown that the Tribunal had acted without any material or upon a view of the facts which could not reasonably be entertained or the facts found were such that no person acting judicial ly and properly instructed as to the relevant law would have come to that determination.
Vide Mehta Parikh & Co. vs Commissioner of Income Tax, Bombay(1).
Let us consider what were the primary facts established by the material on record.
The assessee was admittedly carrying on the business of Roshan Di Hatti in Lahore from 1935 until June 1947 when Roshan Lal migrated from Lahore.
It is true that the assessee was not paying any Income tax in Lahore but, as pointed out by the Appellate Assistant Commissioner in his order, a number of letters and receipts regarding business transactions in Lahore were filed by the assessee which showed that the business in Lahore was not small and there were documents and papers which referred to.
dealings involving Rs. 10,000/ or more at a time and there were also several vouchers produced by the assessee relating to advertising charges paid at Lahore.
The busi ness carried on by the assessee at Lahore was, therefore, a reasonably large business though its extent could not be verified by any reliable material produced by the assessee.
The assessee undoubtedly filed affidavits of Mulk Ram, Billa Mal, Dalai, Wazir Chand, Devidas Mehra and Panna Lal, but, as commented upon by the Tribunal, these affidavits were vague and could not be regarded as having much evidentiary value.
Still they did go to show that the Lahore business of the assessee was a fairly large business.
The Tribunal was no doubt right in commenting that primary evidence with regard to the extent of the Lahore business of the assessee was not forthcoming, but it must be remembered that the assessee was being called upon to prove the extent of its business in a territory from which the members of the Hindu Undivided Family had to flee for their lives and from where it was totally impossible to produce any primary evidence.
Be that as it may, it was found as a fact by the Appellate Assistant Commissioner and this finding was not disturbed by the Tribunal that the assessee "was doing fairly well in the business in Lahore".
Roshan Lal, in anticipation of the partition of the country which was soon to follow, decided to move out of Lahore in June 1947 at a time when massacre and holocaust had not yet started 162 and he was in a position to remove his belongings.
He migrated from Lahore with all his belongings and came over to Amritsar and he brought with him a trunk which he wanted to keep in a locker in Safe Deposit Vault of the Imperial Bank of India.
He could not obtain a locker and hence he deposited the sealed trunk with the Amritsar Branch of the State Bank of India instead of carrying it with him to Mussoorie.
There is no documentary evidence to show as to what were the contents of the sealed trunk but, as pointed out by the Appellate Assistant Commissioner and not dissented by the Tribunal, "it is reasonable to presume that there must have been something quite valuable in the box as otherwise the assessee would not have kept the custo dy of a bank like the State Bank of India".
There can be no doubt, as observed by the Appellate Assistant Commissioner, and not disputed by the Tribunal that the assessee "must have had with him quite a substantial amount either in the form of jewellery etc.
or cash, or otherwise he would not have taken the precaution of either depositing the sealed box with the State Bank of India, Amritsar opening a locker in a New Delhi Bank".
The clear finding of the Appellate ASsistant Commissioner, affirmed by the Tribunal, therefore, was that Roshan Lal did bring ornaments, jewellery and cash with him when he migrated from Lahore in June 1947 and kept the same in a sealed trunk with the Amritsar Branch of the State Bank of India.
If that be so, then on what material could it be said that the ornaments, jewellery and cash brought by the assessee and kept in the sealed trunk were of the value of only Rs. 1,00,000/ and no more.
What were the materials on the basis of which the claim of the assessee that Roshan Lal had brought gold, ornaments and cash of the value of Rs. 3,33,414/ could be rejected ? The only materials relied upon by the Tribunal was that the assessee had never filed any income tax return nor ever paid any tax on the income of its business in Lahore and the presumption must, therefore, be that the assessee did not earn any assessable income before migration from Lahore.
Now, it is true that where an assessee has not paid income tax, the presumption ordinarily must be that the assessee had no assessable income, but here the fact remains that the assessee transferred no less than an aggregate sum of Rs. 31,094/ from Lahore to New Delhi and also brought sub stantial amount either in the form of jewellery etc.
or cash" and deposited the same in a sealed trunk with the Imperial Bank of India, Amritsar Branch in June 1947.
obviously the assessee could not have done unless it had a reasonably large business in Lahore and, therefore, the fact that the assessee did not pay income tax in Lahore cannot have much evidentiary value.
All that it would show is that, as pointed out by the Tribunal, "the assessee has not been very straightforward in his dealings with the income tax departments".
The Tribunal also relied upon certain answers given by Roshan Lal when he was questioned by the Members of the Tribunal at the hearing of the appeal.
It must be pointed out straight away that 163 these answers given by Roshan Lal could not be relied upon by the Tribunal for the purpose of coming to any conclusion adverse to the assessee, because there is a procedure pre scribed in Rules 29. 30 and 31 of the Income Tax Appellate Tribunal Rules for taking additional evidence before the Tribunal and if the Members of the Tribunal wanted to exam ine Roshan Lal on any aspects of the case they should have followed this procedure.
But unfortunately the Members of the Tribunal, disregarding the prescribed procedure, put questions to Roshan Lal in an informal manner unauthorised by the Rules.
The answers given by Roshan Lal could not in the circumstances form part of the record and the Tribunal was not entitled to reply upon the same in arriving at its findings of fact.
It may be noted that the High Court also took the view that the procedure adopted by the Tribunal was irregular and the answers given by Roshan Lal should be left out of account.
One other circumstance on which the Tribunal relied was that notwithstanding the Press Note issued by the Government of India in January 1952 the assessee did not declare that.
it had brought assets of the value of Rs. 3,33,4/4/ from Pakistan and this circumstance, according to the Tribunal, cast considerable doubt on the version put forward by the assessee.
Now, the Press Note of Government of India was not produced before us but we will assume that it did promise a certain concession to the evacuees.
who declared the assets brought by them from Pakistan.
Even so, we fail to see how it could be utilised as a circumstance militating against the explanation of the assessee.
Both according to the Appellate Assistant Commissioner as well as the Tribunal, the assessee did bring assets worth Rs. 1,00,000/ from Lahore in June 1947 and these assets were admittedly not disclosed by the assessee despite the Press Note issued by the Government of India.
Then, how could any inference be drawn from the non disclosure of the assets by the assessee that the assessee must not have brought assets represent in the balance of Rs 2,33 414/ 9 Whether the assets brought by the assessee were Rs 1,00,000/ or Rs. 3,33,414/ the fact remains that they were not disclosed by the assessee despite the Press Note of the Government of India and hence no adverse reference could be drawn from the fact of non disclosure of the assets by the assessee.
It will, therefore, be seen that there was no mate rial on the basis of which the Tribunal could come to the conclusion that though the assessee had a fairly large business in Lahore and had brought its entire ornaments, jewellery and cash from Lahore and deposited the same in a sealed trunk with the Amritsar Branch of the Imperial Bank of Inaia, these ornaments, jewellery and cash were worth not more than Rs. 1,00,000/ .
One may also ask the question that if the assessee did not bring assets worth more than Rs. l,00,000/ from Lahore, where and how did it get the remaining assets of the value of Rs 2 33 414/ ? Roshan Lal had come away from Lahore as a refugee and conditions in post partition India were also highly unsettled and the clear and undoubted evidence was that neither Roshan Lal nor the assessee had any business or other means of 164 income in India until 30th March, 1948.
In this situation, it is impossible to believe that the assessee could have earned such a huge amount of profit as Rs. 2,33,414/ within a few months, even if it be assumed that some business was started by it in October 1947 when Roshan Lal came down to Delhi.
The utter improbability, amounting almost to, impossibility, of the assessee having earned such a large amount of Rs. 2,33,414./ as profit within a few months in the disturbed conditions which then prevailed in India was a circumstance which ought to have been taken into account by the Tribunal but which the Tribunal unfortunately failed to do.
It may be pointed out that it was not the case of the Revenue that the books of account of the business were subsequently written up and the entry crediting the capital of Rs. 3,33,4.14/ on 30th March, 1948 was not a genuine entry and the undisclosed profits of the subsequent years were sought to be concealed by the showing a bogus entry of Rs. 3,33,414/ as capital contribution on 30th March, 1948.
If such had been the case, the present argument as to the improbability of the assessee having earned such a huge amount of Rs. 2,33,414/ within a few months, would not have been available to the assessee.
But the Revenue did not dispute the correctness of the entry and accepted that assets worth Rs. 3,33,414/ were introduced in the business on 30th March, 1948 and sought to include the amount of Rs. 3,33,414/ representing the value of these assets as undis closed income of the assessee for the assessment year 194849.
The only question could, therefore, be whether these assets were brought by the assessee from Lahore in June 1947 or they represented the concealed income earned by the assessee during the period June 1947 to 30th March, 1948.
The impossibility of the assessee having earned such a huge amount of profit within a a few months immediately after migration to India in the disturbed and unsettled conditions which then prevailed must, therefore, necessarily support the inference that the assessee must have brought these assets from Lahore.
We are, therefore, of the view that in reaching the conclusion that out of the capital of Rs. 3,33,414/ I credited in the books of the assessee on 30th March, 1948, assets of the value of Rs. 2,33,414/represented undisclosed income of the assessee for the assessment year 1948 49, the Tribunal acted without any material or in any event, the finding of fact reached by the Tribunal was unreasonable or such that no person acting judicially and properly instruct ed as to the relevant law would come to such finding.
We accordingly allow the appeal, set aside the order of the High Court and answer the question referred by the Tribunal in the negative.
The 'Commissioner will pay the costs of the appeal to the assessee.
P.H.P. Appeal allowed.
[/INST]The assessee, a Hindu Undivided Family, was carrying on business in gold and jewellery in Lahore till June 1947.
In view of the impending partition of India Roshan Lal decided to move out of Lahore and accordingly transferred sums of Rs. 12,094/ , Rs. 13,000/ and Rs. 6,000/ from Lahore Banks to New Delhi Banks.
He left Lahore and pro ceeded to Mussoorie in June, 1947.
On his way, he stopped at Amritsar for a few days and opened an account with the Imperial Bank of India with a view to obtaining a locker in the Safe Deposit Vault but a locker was not available and hence he deposited a trunk which he had brought from Lahore containing gold ornaments, jewellery and cash with the Imperial Bank of India.
The assessee came to Delhi in October, 19.,7.
and rented a house.
In February, 1948.
he succeeded in securing business premises and started busi ness on 30.3.1948.
The first entry in the books of account on 30.3.1948 showed gold ornaments of Rs. 1,19,320/ , Gold Rawa Rs. 1,69,020/ Stones worth Rs. 4,000/ Bank balance with the Imperial Bank of India, Delhi Rs. 35,053/ Bank Balance with Hindustan Commercial Bank.
Delhi Rs. 221/ and Cash of Rs. 2.800/.
The assessee thus brought in an aggre gate capital of Rs. 3,33,414/ in the business on 30.3.1948.
in 1957.
it came to the notice of the Income Tax Officer that the assessee had made considerable income in his gold and jewellery business but had failed to pay any tax on such income and hence issued a notice to the assessee under section 34(1)(a) of the Indian Income Tax Act, 1922, for bringing the income of the assessee for the assessment year 1948 49 to tax.
The assessee flied his return.
In the course of the assessment proceedings the I.T.O. called upon the assessee to explain the nature and source of the capital of Rs. 3,33,414/ .
The assessee contended that he brought the gold Rawa, ornaments and cash representing the capital when he migrated from Lahore and they were kept in a sealed trunk with the bank at Amritsar and thereafter brought over to Delhi and deposited in the Safe Deposit Vault of Hindustan Commercial Bank at Delhi.
When the business of the asses see was commenced,he surrendered the locker and brought the entire gold, jewellery and cash into the business.
The assessee observed that till he started his business in March 1948, neither the ,assessee nor Roshan Lal had any other business or means of income from which the amount of Rs. 3,33,414/ could have been earned.
The assessee examined some witnesses.
The ITO also examined the broth ers of Roshan Lal who stated that the father of Roshan Lal was a man of ordinary means who was almost reduced to penury by about 1940 and that he had given a sum of Rs. 2000/ to his son Roshan Lal for starting gold and jewellery business in 1935 and he had also subsequently lent some tooroes to Roshan Lal on nominal interest.
The Income Tax Officer rejected the explanation offered by the assessee and came to the conclusion that it was not possible to believe that the assessee had been able to accumulate capital to the extent of Rs. 3.33,414/ out of income from the business carried on.
The Income Tax Officer gave credit for a sum of Rs. 20,000/ and treated the balance of Rs. 154 3,30,414/ as income of the assessee from undis closed source.
On appeal,the Appellate Assistant Commis sioner allowed a further sum of Rs. 80,000./ on the follow ing grounds: (1) That the assessee transferred a sum of Rs.12,004/ ,Rs./3,000/ and Rs. 6,000/ from Banks as Lahore to the Bank at New Delhi.
This shows that the assessee was not a man of very small means while he was at La hore.
(2) He was having accounts in 4 different Banks and a man of very modest means would not have normally so many Bank accounts.
(3) While at Lahore.
Roshan Lal had taken Life Insurance Policies worth Rs. 22.000/ .
A number of letters and receipts regarding business transactions in Lahore Indicated that the Lahore business was not as small as the Income Tax Officer had taken it to be.
The assessee stopped at Amritsar and opened an account and took Safe Deposit Vault where he deposited a sealed box.
It is reasonable to presume that there must have been something quite valuable in the box.
A further appeal filed by the assessee to the Tribunal failed.
The tribunal, when the appeal came to be heard, put a question to Roshan Lal as to how he had brought gold and jewellery from Lahore and enquired about the weight of the box.
The Tribunal after hearing the arguments of the parties rejected the appeal.
The main arguments which weighed with the Tribunal were: (1) that the weight of the box was too less: (2) that the assessee did not disclose his assets under the scheme of the Government of India published in the Press Note in January 1952, requiring all evacuees to declare the amounts of money brought by them from Paki stan.
(3) that the assessee did not file any income tax returns in Lahore.
The High Court con firmed the finding of the Tribunal in the reference.
Allowing the appeal, HELD: (1) The law is well settled that the onus of proving the source of a sum of money found to have been received by an assessee is on him.
[160 E] A A.Govindaralulu Mudaliar vs Commissioner of Income Tax and Commissioner of Income Tax, U.P. vs Devi Prasad Vishwanath Prasad followed.
(2) The conclusion of the Tribunal on a finding of fact can be assailed only if it is shown that the Tribunal had acted without any matenal or upon a view of the facts which could not reasonably be entertained or the facts found were such that no person acting judicially and properly instructed as to the relevant law would have come to that determination.
[161 C D].
Mehta Parikh & Co. vs Commissioner of Income Tax Bombay , followed.
(3) The Tribunal was right in commenting that primary evidence with regard to the extent of the Lahore business of the assessee was not forthcoming but it must be remem bered that the assessee was being called upon to prove the extent of his business m a territory from which the member of the Hindu undivided family had to .flee for their lives and from where it was totally impossible to produce any primary evidence. The.
finding of the AAC that the assessee was doing fairly well m the business m Lahore was not disturbed by the Tribunal. The .AAC found that it was reasonable to presume to at there Was something.
quite valuable m the box .and this finding was also not dissented by the Tnbunal.
There was no material to show that the orna 155 ments, jewellery and cash brought by the assessee and kept in the sealed trunk were of the value of only Rs. 1 lac and not more.
The circumstances that the assessee had not filed any Income Tax return could be of no avail to the Revenue because admittedly the assessee had brought substan tial amount from Lahore.
[161 D G] (4) The Tribunal was wrong in relying upon certain answers given by Roshan Lal, about the weight of the sealed box when he was questioned by the Tribunal at the hearing of the appeal.
It must be pointed out straightway that the answer given by Roshan Lal could not be relied on by the Tribunal because there is a procedure prescribed in rules 29.
30 and 31 of the Income Tax Appellate Tribunal Rules for taking additional evidence before the Tribunal and if the members of the Tribunal wanted to examine Roshan Lal on any aspects of the case.
they should have followed this procedure.
The answers given by Roshan Lal disregarding the perscribed procedure could not form part of the record and the Tribunal was not entitled to rely upon the same.
[162 H, 163 A C] (5) The Tribunal erred in relying on the Press Note be cause admittedly the assessee had brought a sum of Rs. 1 lac to India and even that was not declared to the Government of India.
[163 E F] (6) There was no material on the basis of which the Tribunal could come to the conclusion that the ornaments.
jewellery and cash were not worth than Rs. 1 lac.
It was not proved that Roshan Lal or the assessee had any business or other means of income in India until 30.3.1948.
The genuineness of the entry of March 1948 was also not chal lenged.
It is utterly improbably amounting almost to impossibility that the assessee could have earned such a large amount of Rs. 2.33.414/ as profit within a few months in the disturbed conditions which then prevailed in India.
[164 B E] (7) The Tribunal acted without any material and in any event, the finding of fact reached by the Tribunal was unreasonable or such that no person acting judicially and properly instructed as to the relevant law would come to such finding.
[164 F G]
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<s>[INST] Summarize the judgementivil Appeal Nos.896 to 899 of 1988 and Civil Appeal No. 3352 of 1988.
From the Judgment and Order dated 2.9.1987 of the Delhi High Court in C.W.P. No. 2131,2082 of 1984 respectively.
PG NO 257 G. Ramaswami, Additional Solicitor General, R.K. Jain, P.P. Rao, M.S. Gujaral, section Rangarajan, A.K. Sanghi, Mrs. Madhu Kapur, Arun Kr.
Vijayesh Roy, Sanjay Kr.
Kaul, Sardar Bahadur, V.B. Saharaya, R.K. Khanna, Vishnu Mathur, Ashok Aggarwal, R.N. Keswani and R.S. Sodhi for the appearing parties.
The Judgment of the Court was delivered by VENKATACHALIAH, J.
These four Civil Appeals by Special Leave and the Special Leave Petition arise out of and are directed against the common Judgment dated 2.9.1987, of the High Court of Delhi in C.W.P. No. 2132 and C.W.P. No. 2082 of 1984 in which the principal controversy was whether the Rules prescribing different conditions of eligibility for Diploma Holders and Graduates for promotion from the cadre of Junior Engineers to that of Assistant Engineers and from the cadre of Assistant Engineers to that of Executive Engineers in the Public Works Department of the Delhi Development Authority (DDA) is violative of Articles 14 and 16 of the Constitution and would, therefore, require to be declared void.
The High Court, in the writ petitions filed by the Diploma Holders, has held that such differential treatment of Diploma Holders and Graduates by the prescription of different standards of service experience for purposes of eligibility for promotion to the higher cadres is unconstitutional.
The D.D.A. which is the appellant in Civil Appeals No.898 of 1988 and No. 899 of 1988 assails the correctness of the view taken by the High Court.
Civil Appeals No. 896 of 1988 and 897 of 1988 are by the Graduate Engineers who were respondents before the High Court and who are, similarly, aggrieved by the decision under appeal SLP 6181 of 1988 is by the DDA Graduate Engineers Association" which seeks to espouse the cause of the Graduate Engineers.
We grant Special Leave in SLP.
All the five appeals are heard and disposed of by this common judgment.
PG NO 258 C.A.899 of of 1988 and SLP 6181 arise out of C.W.P. 2132 of of of 1988 arise out of C.W.P. 2082 of 1984.
The D.D.A. by its resolution No. 574 dated 13.11.1963 adopted, pro tanto, the rules of the Central Public Works Department (CPWD) in regard to the mode of recruitment both by direct recruitment and by promotion to the posts of Asst.
Engineers.
The rules, so adopted, in substance, stipulate and provide that 50% of the posts be filled by direct recruitment or by deputation and that the other 50% be filled up by promotion from the cadre of Junior Engineers.
The cadre of Junior Engineers itself comprises of both Graduates in Engineering and Diploma Holders in Engineering.
The two categories of officers in the cadre of Junior Engineers were provided with promotional opportunities to the post of Asst.
Engineers in the equal ratio (50%:50%) of the promotional posts.
Half of it, i.e., 25% was to be filled up by promotion of Graduate Engineers with three years ' service experience as Junior Engineers; the other 25% to be filled up from Diploma Holder Junior Engineers who were diploma holders who had 8 years ' service experience as Junior Engineers.
By resolution No. 105 dated 16.6.1971 the DDA similarly adopted the relevant rules in the CPWD in the matter of recruitment to the posts of Executive Engineers.
The Executive Engineers ' post in the DDA thus became purely promotional and Graduate Asst.
Engineers with 8 years ' service experience and diploma Asst.
Engineers with 10 years ' service experience were eligible for promotion.
No inter se quota between the two class of officers was prescribed.
The following table delineates the effect and purport of the rules adopted under resolution No. 574 dated 13.11.1963 and No. 105 dated 16.6.1971.
The table also indicates the mode of initial recruitment to the cadre of Junior Engineers: PG NO 259 EXECUTIVE ENGINEERS [By promotion] Asst.
Engrs. ' Asst.
Engrs. ' [Degree] + [Diploma] 8 years +10 years service service ASSISTANT ENGINEERS Graduates and Dimploma holders 50%by promotion 50%.By Direct recruitment 25% 25% Jr. Enger.
[Degree] [Diploma] +3 yrs.
+ 8 years service service JUNIOR ENGINEERS [Sectional Officers] Direct recruitment Graduates in Diploma Engineering holders [No prior [with 2 experience years Prescribed] experience In the years 1984 the Diploma Holder in the cadre of Junior Engineers and in he cadre of Asst.
Engineers sought to assail, by means of two writ petitions presented to the Delhi High Court, the Constitutional validity of the prescriptions made by the rules in the matter of requirement of differential service experiences between the Graduates and Diploma Holders for promotion to the higher cadres viz. of Asst.
Engineers and Executive Engineers respectively.
They also assailed the promotions of Graduate Engineers to the higher cadres made on the strength of the Rules.
2132 of 1984 pertained to the resolution No. 574 dated 13.11.1963 adopting the relevant CPWD Rules prescribing 3 years ' and 8 years ' service experience for Graduates and Diploma Holders respectively and the discrimination thus brought about between them.
CWP No. 2082 of 1984 pertained to the contitutionality of the analogous provisions in the rules adopted by resolution No. 105 dated 16.6.1971.
PG NO 260 The High Court heard these two petitions together and by its common judgment dated 2.9.1987 upheld the challenge and declared the different standards of service experience prescribed for Degree Holders and Diploma Holders in respect of both the cadres as violative of Articles 14 and 16 of the Constitution.
The principal question that arises in these appeals is whether, where, as here, recruitment to a particular cadre of posts is made, from two different sources, different conditions, based on the differences in educational qualifications, can be prescribed conditioning the eligibility for further promotion to a higher cadre in service.
The High Court, by the judgment now under appeal, has held that such prescription of differential standards based even on the differences in technical, educational qualifications is violative of Article 14 and 16 of the Constitution.
In reaching such conclusions as it did on the point, the High Court placed reliance on the pronouncement of this Court in Mohammad Shujat Ali vs UOI and Others,[1975] 1 SCR 449, H. C. Sharma and Ors.
vs Municipal Corporation of Delhi and Ors., ; and Punjab State Electricity Board,Patiala, and Anr.
vs Ravinder Kumar Sharma & Ors.
,[1986] 4 SCC 617 and T.R: Kapur and Others vs State of Haryana and Others, ; The High Court distinguished the decision of this (Court in State of Jammu & Kashmir vs Triloki Nath Khosa & Ors., l1974] 1 SCR 771.
The High Court drew a distinction between the situation where diploma holders were wholly excluded from eligibility for promotion to the higher cadre and the situation where, while they were considered eligible for promotion, however, were subjected to more onerous and less advantageous conditions for such promotion.
The High Court distinguished Triloki Nath Khosa 's case observing: "7.
This was a case where diploma holders were found completely ineligible for promotion to the higher post for lack of essential educational qualification but the considerations may vary if they are found eligible for promotion to the higher post but still certain conditions are laid as distinct from degree holders before they become eligible for promotion.
The question then would arise whether such distinction can be justified and is based on any rationality or not . " PG NO 261 Answering this point in favour of the "Diploma Holders" the High Court held: ".
The moment the diploma holders and degree holders are considered to constitute one class for purposes of promotion there cannot be any differentiation between the two vis a vis the qualification for promotion.
It could be that for reasons of efficiency in administration the authorities may lay down that diploma holders are not at all eligible for promotion to the higher post and such a bar can be upheld in view of the ratio laid down in the case of Triloki Nath Khosa but after the authorities considered them eligible for promotion there could be no rationale in their making any distinction between the degree holders and diploma holders for granting promotion to them to the higher post. " (Emphasis Supplied) The point of distinction, as apprehended by the High Court, is that in the present case a Diploma, ipso facto, qualifies for promotion.
The real question is whether this assumption is correct and whether the relevant Rules determine the eligibility for promotion on the basis of a Diploma, or for that matter even a Degree, Or whether the eligibility for promotion is determined not with reference merely to the educational attainments but on the basis of educational qualifications plus a measure of service experience, stipulated differently for Graduates and Diploma Holders.
Learned counsel for the appellants, contended that the view that commended itself to the High Court is demonstrably erroneous and is opposed to principles which, by now, should be considered well settled.
They submitted that the High Court fell into an obvious error in its view that in Shujat Ali 's case ( ; , this Court had stuck down the service rule impugned in that case.
Learned Counsel submitted that the fundamental distinction between the two sets of cases, one of which Triloki Nath Khosa 's case is represents, and the other typified by Shujat Ali 's case, was lost sight of by the High Court and the error pervading the judgment is the result of overlooking this essential distinction between the two sets of cases.
It was contended for the appellants that the present case was not one in which the Diploma Holders proprio vigore, and without more, were held eligible for promotion.
If the effect and intent of the rules were such as to treat PG NO 262 Diploma as equivalent to a Degree for purposes of further promotion then, the view of the High Court that having considered both class of officers equally eligible for promotion on the mere strength of their educational qualifications, any further discrimination brought about by subjecting the Diploma Holders alone to a more onerous and less advantageous stipulation for such promotion would violate, the constitutional pledge of equality might have some qualification.
But in the present case, counsel contended, that is not the position.
The educational qualification of a Diploma in engineering was not treated as equivalent to a Degree for purposes of determining eligibility.
Nor the Degree itself was determinative of eligibility for promotion.
The eligibility for promotion is, it is urged, based on a combination of factors which vary according as the basic educational qualification of the two classes of engineers; that this distinction was germane to the requirements of higher technical and academic quality for the higher posts which involved expertise in structural design etc.
Learned counsel submitted that even where recruitment to a particular cadre was made from different sources, resulting in the formation of single a homogeneous cadre, it was not impermissible to make a further classification amongst the members of such a cadre for purposes of further promotion based on the higher educational qualification of the candidates.
Learned counsel for the respondent diploma holders, while seeking to support the judgment of the High Court urged that this Court had, more than once, cautioned against undue accent, in the matter of promotional opportunities, on academic qualification alone which might lead to elitist preferences and tend to obscure the egalitarian principle and social justice.
It was, therefore, contended that the effect of the distinction, in the ultimate analysis, is really an imperceptible extension or magnification of insubstantial factors sub verting the precious guarantee of equality.
Sri Gujral, learned Senior Counsel, sought to impart to the situation a dimension of social justice and made an impassioned plea that to discriminate between Diploma Holders and Graduates who belong to the same cadre and hold inter changeable posts, both in the present cadre and in the prospective promotional posts, on the mere lack of some higher academic attainment is to place a high premium on those social and economic ills of the society which rendered the further academic pursuits for the economically disadvantaged difficult.
A large number of authorities were cited on either side.
We by first examine the cases relied upon by the High Court in support of its conclusion.
The inherent distinction PG NO 263 between a person with a Degree and one who is merely a Diploma Holder is much too obvious.
But the question that falls for consideration, in the context such as the present one, is whether the differences have a reasonable relation to the nature of the office to which the promotion is contemplated.
The idea of equality in the matter of promotion can be predicated only when the candidates for promotion are drawn from the same source.
If the differences in the qualification has a reasonable relation to the nature of duties and responsibilities, that go with and are attendant upon the promotional post, the more advantageous treatment of those who possess higher technical qualifications can be legitimised on the doctrine of classification.
There may, conceivably, be cases where the differences in the educational qualifications may not be sufficient to give any preferential treatment to one class of candidates as against another.
Whether the classification is reasonable or not must, therefore, necessarily depend upon facts of each case and the circumstances obtaining at the relevant time.
When the state makes a classification between two sources, unless the vice of the classification is writ large on the face of it, the person assailing the classification must show that it is unreasonable and violative of Article 14.
A wooden equality as between all classes of employees irrespective of all distinctions or qualifications, or job requirements is neither constitutionally compelled nor practically meaningful.
This Court in Central Railway vs
A.V.R. Siddhanti; , at 214 observed: ".
A wooden equality as between all classes of employees regardless of qualifications, kind of jobs, nature of responsibility and performance of the employees is not intended, nor is it practicable if the administration is to run.
Indeed, the maintenance of such a 'classless and undiscerning 'equality ' where, in reality, glaring inequalities and intelligible differentia exist, will deprive the guarantee of its practical content.
Broad classification based on reason, executive pragmatism and experience having a direct relation with the achievement of efficiency in administration, is permissible .
In T. Devadasan vs The Union of India,[1964]4 SCR 680 at 689 & 690 this Court observed: ".
What is meant by equality in this Article is, equality amongst equals.
It does not provide for an absolute equality of treatment to all persons in utter disregard PG NO 264 in every conceivable circumstance of the differences such as age, sex, education and so on and so forth as may be found amongst people in general.
Indeed, while the aim of this Article is to ensure that invidious distinction or arbitrary discrimination shall not be made by the State between a citizen and a citizen who answer the same description and the differences which may obtain between them are of no relevance for the purpose of applying a particular law reasonable classification is permissible.
It does not mean anything more.
But then the process of classification is in itself productive of inequality and in that sense antithetical of equality.
The process would be constitutionally valid if it recognises a pre existing inequality and acts in aid of amelioration of the effects of such pre existent inequality.
But the process cannot in itself generate or aggravate the inequality.
The process cannot merely blow up or magnify in substantial or microscopic differences on merely meretricious or plausible dif ferences.
The over emphasis on the doctrine of classification or any anxious and sustained attempts to discover some basis for classification may gradually and imperceptibly deprive the article of its precious content and end in replacing Doctrine of equality by the doctrine of classification.
The presumption of good faith in and of constitutionality of a classification cannot be pushed "to the point of predicating some possible or hypothetical but undisclosed and unknown reason for a classification rendering the precious guarantee of equality "a mere rope of sand".
"To overdo classification is to undo equality".
The idea of similarity or dissimilarity of situations of persons, to justify classification, cannot rest on merely differentia which may, by themselves be rational or logical, but depends on whether the differences are relevant to the goals sought to be reached by the law which seeks to classify.
The justification of the classification must needs, therefore, to be sought beyond the classification.
All marks of distinction do not necessarily justify classification irrespective of the relevance or nexus to objects sought to be achieved by the law imposing the classification.
In Mohd. Sujat Ali 's case the validity of a prescription of the rules of the State of Andhra Pradesh treating Graduate Engineers, on the one hand, and engineers with diploma or equivalent qualification, on the other, differently for purposes of promotion arose for consideration.
Strictly speaking, the High Court was not right in its under standing of the actual result of the PG NO 265 ease.
The High Court, in para 8 of the judgment observed: "The Supreme Court had then struck down this rule as violative of fundamental rights enshrined in Articles 14 and 16 of the Constitution of India. " But it is to be noticed that the writ petitions were ultimately dismissed by this Court.
There are, of course, certain observations which caution against too readily resorting to the expedience of classification.
After referring to Triloki Nath Khosa 's ease it was observed: ". .But from these decisions it cannot be laid down as an invariable rule that whenever any classification is made on the basis of variant educational qualification.
, such classification must be held to be valid irrespective of the nature and purpose of the classification or the quality and extent of the differences in the educational qualifications.
It must be remembered that "life has relations not capable always of division into inflexible compartments".
The moulds expand and shrink.
The test of reasonable classification has to be applied in each ease on its peculiar facts and circumstances . . " (Emphasis Supplied) This echoes what Vivian Bose, J. had earlier said in Bidi ,Supply Co. vs Union of lndia ; "Article 14 sets out, to my mind, an attitude of mind,a way of life.
rather than a precise rule of law . ". .In a given case that it falls this side of the line or that and because of that decisions on the same point will vary as conditions vary, one conclusion in one part of the country and another somewhere else; one decision today and another tomorrow when the basis of society has altered and the structure of current social thinking is different.
It is not the law that alters but the changing conditions of the times and Article t4 narrows down to a question of fact which must be determined by the highest Judges in the land as each ease arises. ." Shujat Ali 's ease itself recognised the permissibility and validity of such classification if the nature of the PG NO 266 functions and duties attached to the promotional posts are such as to justify the classification in the interest of efficiency in public service; but, where both graduates and non graduates were regarded as equally fit and eligible for promotion,the denial of promotion to a person otherwise eligible and due for promotion on the basis of a quota was not justified.
On this point it was observed by this Court in Shujat Ali 's case: ". .But where graduates and non graduates are both regarded as fit and, therefore, eligible for promotion,it is difficult to see how, consistently, with the claim for equal opportunity, any differentiation can be made between them by laying down a quota of promotion for each and giving preferential treatment to graduates over non graduates in the matter of fixation of such quota.
The result of fixation of quota of promotion for each of the two categories of supervisors would be that when a vacancy, arises in the post of Asst.
Engineer, which, according to the quota is reserved for graduate supervisors, a non graduate supervisor cannot be promoted to that vacancy, even if he is senior to all other graduate supervisors and more suitable than they.
His opportunity for promotion would be limited only to vacancies available for non graduate supervisors.
That would clearly amount to denial of equal opportunity to him In the present appeals before us, the Graduates and Diploma Holders were not treated equal in the mattes of eligibility for promotion.
What is, therefore, assailed is not the aspect of the mere fixation of a quota as between the Diploma Holders and the Graduates in the promotional posts, but the very prescription of different standards or conditions of eligibility.
In Shujat Ali 's case the infirmity of the differential treatment stemmed from the fundamental basis that, at that point, both Graduates and Diploma holders were equally eligible but the Rule operated to deny promotion to a Diploma holder on the basis of a quota.
The observations in that case pertained to a stage which arose after the equality of eligibility for promotion between the two classes of persons had been recognised.
But in the present appeals the different prescriptions for conditioning eligibility are themselves questioned which need to be decided on the basis whether the discrimination contemplated and brought about in the matter of promotional opportunities between graduates and non graduates, based on the differences in the quality of their technical qualifications, were relatable to, and justified on the PG NO 267 basis of, the requirements of the promotional posts.
It is relevant to mention here that the different standards and Conditions for eligibility were prescribed with a view to injecting a higher technical quality in the promotions cadre based on the recommendations of a committee, called "Vaish Committee", constituted for the purpose.
H.C. Sharma 's and Punjab State Electricity Board 's cases were also matters where Graduates and Diploma holders were merged into and formed part of a homogenious cadre with equal eligibility for promotion and what fell for consideration was the validity of the further prescription of quotas between them.
Here again, no question of the validity of the different standards prescribed for the very eligibility for promotion fell for consideration.
The present cases, however, are those where, havig regard to the requirements of the promotional posts, different conditions of eligibility for promotion on the differences based on the educational qualifications and service experience were prescribed.
In State of Mysore vs Narasinga Rao,[1968] 1 SCR 40 1 higher educational qualifications were considered relevant for fixation of higher pay scales.
In Union of India vs Mrs. S.B. Kohli, the requirement of a post graduate specialisation in the particular discipline was considered not irrelevant and a classification based on such specialisation was upheld.
Triloki Nath Khosa 's case is more directly in point.
There, Graduate Engineers and Diploma Holders were in a common cadre of Asst.
Engineers.
But for purposes of further promotion to the higher cadre of Executive Engineers only the Graduate were held eligible.
Diploma Holders were barred for promotion.
Repelling the challenge to this provision made by the Diploma Holders, this Court said: "The classification of Assistant Engineers into Degree holders and Diploma holders could not be held to rest on any unreal or unreasonable basis.
The classification was made with a view to achieving administrative efficiency in the Engineering services.
If this be the object, the classification is clearly correlated to it for higher educational qualifications are at least presumption evidence of a higher mental equipment." "Classification on the basis of educational qualifictions made with a view to achieving administrative PG NO 268 efficiency cannot be said to rest on any fortuitous circumstances and one has always to bear in mind the facts and circumstances of the case in order to judge the validity of a classification." "Though persons appointed directly and by promotion were integrated into a common class of Assistant Engineers, they could, for purposes of promotion to then cadre of Executive Engineers, be classified on the basis of educational qualifications the rule providing that graduates shall be eligible for such promotion to the exclusion of diploma holders does not violate Articles 14 and 16 of the Constitution and must be upheld.
" (Emphasis Supplied) In Triloki Nath 's case diploma holders were not considered eligible for promotion to the higher post.
Here, in the present case, the possession of a diploma, by itself and without more, does not confer eligibility.
Diploma, for purposes of promotion, is not considered equivalent to the degree.
This is the point of distinction in the situations in the two cases.
If Diploma Holders of course on the justification of the job requirements and in the interest of maintaining a certain quality of technical expertise in the cadre could validly be excluded from the eligibility for promotion to the higher cadre, it does not necessarily follow as an inevitable corollary that the choice of the recruitment policy is limited only two choices, namely either to consider them "eligible" or "not eligible".
State, consistent with the requirements of the promotional posts and in the interest of the efficiency of the service, is not precluded from conferring eligibility on Diploma Holders conditioning it by other requirements which may, as here, include certain quantum of service experience.
In the present case, eligibility determination was made by a cumulative criterion of a certain educational qualification plus a particular quantum of service experience.
It cannot, in our opinion, be said, as postulated by the High Court, that the choice of the State was either to recognise Diploma Holders as "eligible" for promotion or wholly exclude them as "not eligible".
If the educational qualification by itself was recognised as conferring eligibility for promotion, then, the super imposition of further conditions such as a particular period of service, selectively, on the Diploma Holders alone to their disadvantage might become discriminatory.
This does not prevent the State from formulating a policy which prescribes as an essential part of the conditions for the vary eligibility that the candidate must have a particular qualification plus a stipulated quantum of service PG NO 269 experience.
It is stated that on the basis of the "Vaish Committee" report, the authorities considered the infusion of higher academic and technical quality in the personnel requirements in the relevant cadres of Engineering Services necessary.
These are essentially matters of policy.
Unless the provision is shown to be arbitrary, capricious, or to bring about grossly unfair results, judicial policy should be one of judicial restraint.
The prescriptions may be somewhat cumbersome or produce some hardship in their application in some individual cases; but they can not be struck down as unreasonable, capricious or arbitrary.
The High Court, in our opinion, was not justified in striking down the Rules as violative of Articles 14 and 16.
Accordingly, all the Appeals are allowed, the Judgment of the High Court dated 2.9.1987 set aside and the Civil Writ Petitions No. 2 132 of 1984 and 2082 of 1984 in the High Court dismissed.
However, the parties are left to bear and pay their costs, both here and below.
A.P.J .
Appeals allowed.
[/INST]The Rules of the Central Public Works Department (CPWD) adopted by the Delhi Development Authority (DDA) stipulate and provide that 50% of the posts of Assistant Engineers in DDA be filed up by promotion from the cadre of Junior Engineers comprising of both Graduates in Engineering and Diploma Holders in Engineering in the equal ratio (50%:50%) of the promotional posts.
Half of it, i.e. 25% were to be filled up by promotion of Graduate Junior Engineers with three years ' service experience as Junior Engineers; the other 25% to be filled up from Diploma Holder.
Junior Engineers.
who had X years service experience as Junior Engineers.
The Rules further provide that the Executive Engineers ' post in DDA were purely promotional and Graduate Assistant Engineers with 8 years ' service experience and Diploma Holder Assistant Engineers with 10 years ' service experience were eligible for promotion.
No inter se quota between the two class of officers; was prescribed.
The Diploma Holders in the Cadres of .junior Engineers and Assistant Engineers filed separate writ petitions in the High Court assailing the constitutional validity of the prescriptions made by the rules in the matter of requirement of differential service experiences between the Graduates and the Diploma Holders for promotion to the higher caders of Assistant Engineers and Executive Engineers respectively.
They also assailed the promotion of Graduate Engineers to the higher cadres made on the strength of the Rules.
PG NO 253 PG NO 254 The High Court allowed the writ petitions and declared the different standards of service experience prescribed for Degree Holders and Diploma Holders in respect of both the cadres as violative of Articles 1 1 and 16 of the Constitution.
In the appeal to this Court, on behalf of appellants it was contended; (l) that the view taken by the High Court is demonstrably erroneous and opposed to well settled principles; (2) that the High Court took an erroneous view that in Shujat Ali 's case ; this Court struck down the service rule impugned in that case; (3) that the fundamental distinction between Triloki Nath Khosa 's, case ; and Shujat Ali 's case was lost sight of by the High Court;(4) that the present case was not one in which the Diploma Holders, proprio vigore and without more, were held eligible for promotion.
The educational qualification of a Diploma in engineering was not treated as equivalent to a Degree for purposes of determining eligibility.
Nor the Degree itself was determinative of eligibility for promotion.
The eligibility of promotion is based on a combination of factors which vary according to the basic educational qualification of the two classes of engineers; (5) that this distinction was germane to the requirements of higher technical and academic quality for the higher posts which involved expertise in structural design.
and (6) that even where recruitment to a particular cadre was made from different sources,resulting in the formation of a single homogeneous cadre it was not impermissible to make a further classification amongst the members of such a cadre for purposes of further promotion based on the higher educational qualification of the candidates.
On behalf of the respondent Diploma Holders it was contended(1) that this Court had, more than once.
cautioned against undue accent, in the matter of promotional opportunities, on academic qualification alone which might lead to elitist perferences and tend to obscure the egalitarian principle and social justice; (2) that the effect of the distinction is really an imperceptible extension or magnification of insubstantial factors subverting the precious guarantee of equality and(3) that to discriminate between Diploma Holders and Graduates who belong to the same cadre and hold inter changeable posts, both in the present cadre and in the prospective promotional posts, on the mere lack of some higher academic attainment is to place a high premium on these social and economic pursuits for the economically disadvantaged difficult.
Allowing the Appeals, PG NO 255 HELD: l.
The inherent distinction between a person with a Degree and one who is merely a Diploma Holder is much too obvious.
But the question for consideration, in the present context, is whether the differences have a reasonable relation to the nature of the office to which the promotion is contemplated.
The idea of equality in the matter of promotion can be predicated only when the candidates for promotion are drawn from the same source.
If the differences in the qualification has a reasonable relation to the nature of duties and responsibilities.
that go with and are attendant upon the promotional post, the more advantageous treatment of those who possess higher technical qualifications can be legitimised on the doctrine of classification.
There may,conceivably, be cases where the differences in the educational qualifications may not be sufficient to give any preferential treatment to one class of candidates as against another.
Whether the classification is reasonable or not must, therefore, necessarily depend upon facts of each case and the circumstances obtaining at the relevant time.
When the State makes a classification between two sources, unless the vice of the classification is writ large on the face of it, the person assailing the classification must show that it is unreasonable and violative of Article 14.
[263A C ] 2.
A wooden equality as between all classes of employees irrespective of all distinction or qualifications, or job requirements is neither constitutionally compelled nor practically meaningful.
[263D] The process of classification is in itself productive of inequality and in that sense antithetical of equality.
The process would be constitutionally valid if it recognises a pre existing inequality and acts in aid of amelioration of the effects of such pre existent inequality.
The the process cannot merely blow up or magnify in substantial or microscopic differences on merely meretricious or plausible.
The over emphasis on the doctrine of classification or any anxious and sustained attempts to discover some basis for classification may gradually and imperceptibly deprive the article of its precious content and end in re placing doctrine of equality by the doctrine of the classification.[264C D] 4.
The presumption of good faith in and of constitutionality of a classification cannot be pushed to the point of predicating some possible or hypothetical but undisclosed and unknown reason for a classification rendering the precious guarantee of equality "a mere rope of sand".
[264E] PG NO 256 Central Railway vs A.V.R. sidhanti; , at 214 and T.Devadasan V. The Union of India, [1964] 4 SCR at 689 & 690 followed.
5."To overdo classification is to undo equality".
The idea of similarity or dissimilarity of situations of persons to justify classification, cannot rest on merely differentia which may, by themselves rational or logical, but depends on whether the differences are relevant to the goals sought to be reached by the law which seeks to classify.
The justification of the classification must, therefore, be sought beyond the classification.
All marks of distinction do not necessarily justify classification irrespective of the relevance or nexus to objects sought to be achieved by the law imposing the classification.
[264F G] State of Jammu & Kashmir vs Triloki Nath Khosa & Ors.,[1974] I SCR 771; Bidi Suppy Co.v.
Union of India; , , relied no; Mohammad shujat Ali vs UOI and others, [1975]1 SCR 449; H.C. Sharma and Ors.
vs Municipal Corporation of Delhi and Ors., [1983]3 SCR 372 and Punjab State Electricity Board, Patiala, and Anr.v.
Ravinder Kumar Sharma & Ors.
,[1986] 4 SCC 617 distinguished; State of Mysore vs Narasinga Rao, ; and Union of India vs Mrs. S.B. Kohli, [1973]3 SCR 117, referred to.
In the present case, the possession of a diploma.
by itself and without more, does not confer eligibility.
Diploma, for purposes of promotion, is not considered equivalent to the degree.
[268d] 7.If the educational qualification by itself was recognised as confering eligibility for promotion, then the super imposition of further conditions such as a particular period of service, selectively, on the Diploma Holders alone to their disadvantage might become discriminatory.
This does not prevent the State from formulating a policy which prescribes as an essential part of the conditions for the very eligibility that the candidate must have a particular qualification plus a stipulated quantum of service experience.[268G H;269A]
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<s>[INST] Summarize the judgementAppeal No. 1768 of 1969.
Appeal by special leave from the judgment and order dated October 8, 1968 of the Mysore High Court in Writ Petition No. 657 of 1968.
189 M. C. Setalvad, Ram Punjwani and section P. Nayar, for the appellants.
R. B. Datar and M. section Narasimhan, for the respondent.
M. K. Ramamurthi, Shyamala Pappu and J. Ramamurthi, for intervener No. 1.
section Ramasubramanian and J. Ramamurthi, for intervener No.2.
The Judgment of the Court was delivered by Vaidialingam, J.
In this appeal, by special leave, the question that arises for consideration is regarding the validity of the new Note substituted in place of the old Note on December 23, 1967 to cl.
(b) of rule 2046 (F.R. 56) of the Indian Railway Fundamental Rules.
The High Court by its judgment and order, under appeal, dated October 8, 1968, has struck down the new Note as dis criminatory and violative of article 14 of the Constitution.
The respondent was originally an employee of the Madras and Southern Mahratta Railway Company (hereinafter to be referred as the Company) having joined the service on August 16, 1927 as Clerk Grade 1.
His date of birth, there is controversy, was April 15, 1910.
The Company was amalgamated with the Indian Railway Administration in the year 1947 and on .such amalgamation, the respondent became the employee of the Indian Railway Administration.
There is also no controversy That he came within the classification of a "ministerial railway servant" within the meaning of that expression, occurring in rule 2046.
Rule 2046 deals with retirement of a railway servant At the time of amalgamation, under cl.
(1) of the said rule, the date of retirement of a railway servant, other than a ministerial railway servant was the date on which he attained the age of 55 years.
It was also provided therein that the said railway servant, ,after attaining the age of retirement, may be retained in service with the sanction of the competent authority on public ground to be recorded in writing.
But there was a prohibition regarding retention of such a railway servant after the age of 60 years except in very special circumstances.
Clause (2) of the said rule, which deals with a ministerial railway servant, under which category the respondent falls, at the time of amalgamation was as follows : "2046 (2) (a) A ministerial servant, who is not governed by sub clause (b), may be required to retire at the age of 55 years, but should ordinarily be retained in service, if he continues efficient up to the age of 60 190 years.
He must not be retained after that age except in very special circumstances, which must be recorded in writing, and with the sanction of the competent authority.
(b) A ministerial servant (i) who has entered Government service on or after the 1st April, 1938, or (ii) who being in Government service on the 31st March, 1938 did not hold a lien or a suspended lien on a permanent post on that date.
shall ordinarily be required to retire at the age of 55 years.
He must not be retained after that age except on public grounds which must be recorded in writing,, and with the sanction of the competent authority and he must not be retained after the age of 60 years except in very special circumstances.
" It will be noted that under sub clause (a), quoted above, a ministerial servant, who is not governed by sub clause (b) may be required to retire at the age of 55 years; but if he continues to be efficient, he should ordinarily be retained in service upto the 'date of 60 years.
Retention in service after the age of 60 years, can only be under very special circumstances, to be recorded in writing and with the sanction of the competent authority.
There was a further special provision made under cl.
(b) in respect of a ministerial servant who had entered Government service on or after April 1, 1938 or being in Government service on that date, did not hold a lien or a suspended lien on a permanent post oh that date.
On December 5, 1962, the Railway Board addressed a com munication to the General Managers of All Indian Railways that the Government were considering the question for some time whether the age of compulsory retirement of railway servants should be raised above 55 years.
It is further stated that the President is pleased to direct that the age of compulsory retirement of railway servants should be 58 years subject to the three exceptions mentioned in the order.
The only relevant exception is Exception No. 1 relating to ministerial railway servants, which was as follows : "(i) The existing rule 2046 (F.R. 56) (2)(a) RII, under which ministerial railway servants who held a lien or suspended lien on a permanent post on 31st March, 1938 are to be retained in set vice upto the age 191 of 60 years subject to their continuing to be efficient and physically fit after attaining the age of 55 years, will remain in force.
It will be seen from the decision,of the Government, as com municated in the above letter, that the age of retirement of railway servants was raised from 55 to 58 years.
But this was subject to the restriction regarding the continuance of a ministerial servant after 55 years upto the age of 60 years as provided for under sub clause (b) of cl.
(2) of rule 2046.
On January 11, 1967, the old rule 2046 as amended in 1962 was substituted by the new rule.
The new rule consisted of four clauses, but we are not concerned with clauses (c) and (d) The material part of the said rule relevant to be noted are clauses (a) and (b) together with the note to clause (b) which ran as follows : "2046 (FR. 56) (a) Except as otherwise provided in this rule, every railway servant shall retire on the day he attains the age of fifty eight years.
(b) A ministerial railway servant who entered Government service on or before the 31st March, 1938 and held on that date (i) a lien or a suspended lien on a permanent post, or (ii) a permanent post in a provisional substantive capacity under Clause (d) of Rule 2008 and continued to told the same without interruption until he was confirmed in that post,shall be retained in service till the day he attains the age of sixty years.
NOTE : For the purpose of this Clause, the expression "Government Service" include service rendered in ex company,, and ex State Railways, and in a former provincial Government." Two aspects broadly emerge from the above new rule : (a) every ministerial railway servant who had entered Government service on or before March 31, 1938 and who satisfied the conditions mentioned in sub clause (i) or (ii) of clause (b) had a right to continue in service till he attained the age of sixty years; and (b) under the Note, the expression "Government Service" in clause (b) takes in service rendered in ex company, ex State Railways and in a former provincial Govern 192 ment.
There is no controversy that the respondent held a permanent post in the Company on March 31, 1938.
Therefore,, under this new rule, he would be entitled to continue in service till he attained the age of sixty years, as provided in cl.
(b) read with the Note thereto.
On December 12, 1967, the Note to cl.
(b) of rule ' 2046 defining the expression "Government Service" as per the order dated January 11, 1967 was deleted, and a new Note was substituted in its place.
The order dated December 23.
1967 together with the new Note is as follows : "For the existing note, substitute the following For the purpose of this clause the expression "Government Service" includes service rendered in a former provincial government and in ex.
Company and ex.
State Railways, if the rules of the Company or the State had a provision similar to Clause (b) above.
" From the new Note, extracted above, it will be seen that the definition of the expression "Government Service" was changed.
The effect of the new Note, so far as the respondent is concerned, is that whereas he was entitled to continue in service upto 60 years, as per clause (b) read with the note thereto under rule 2046 as substituted on January 11, 1967, now he can get service upto 60 years only if the Company had a provision similar to cl.
(b) of rule 2046.
There is no dispute, that under the service conditions applicable to the respondent, when he was an employee of the Company, he had no right to continue in service till he attained the age of sixty years.
On the other hand, under the service conditions of the Company he had to retire at the age of 55 years.
It appears, that after the introduction of the new rule 2046 on January 11, 1967, the Divisional Accounts Officer, Hubli, passed an order on March 31, 1967 that the respondent was entitled to continue in Office till he attained the age of 60 years.
But after the new Note to cl.
(b) to rule 2046 was substituted on December 23, 1967, the Divisional Accounts Officer, Hubli, passed an order on January 17, 1968 to the effect that the respondent is to retire from service on April 14, 1968 on which date he would be attaining the age of 58 years.
The said order also states that this action was being taken in view of the new Note substituted on December 23, 1967 to cl.
(b) of rule 2046.
The respondent filed on March 6, 1968 in the Mysore High Court, Writ Petition No. 657 of 1968 challenging the legality and validity of the order dated January 17, 1968 retiring him from service with effect from April 4, 1968.
In the writ petition 193 he had referred to his previous service in the Company and to the latter being amalgamated with the Indian Railway Administration in 1947.
According to him, after such amalgmation he has become a ministerial railway servant under the Indian Railway Administration and all the rules applicable to the employees of the latter became applicable to him.
In particular, he pleaded that he was entitled to continue in service, until he attained the age of sixty years, as per the new rule 2046 introduced on January 11, 1967, as he satisfies all the conditions prescribed under cl.
(b) thereof.
He particularly attacked the new Note to cl.
(b) substituted on December 23, 1967 as discriminatory and violative of article 14 of the Constitution.
According to him, the members of the Indian Railway Service, similarly situated like him, will be.
entitled to continue in service till 60 years, whereas that right has been denied, to persons like him, under the new Note.
He also referred to the order passed on March 31, 1967 by the Divisional Accounts Officer, Hubli in and by which it was directed that he was entitled to continue in service till 60 years.
According to the respondent, the Railway Administration was not entitled to go back on this order.
On these grounds, the respondent challenged the validity of the order directing him to retire on the basis of the new Note.
The appellant contested the writ petition on the ground that the order dated March 31, 1967 was passed on the basis of the rule 2046, read with the Note, as it existed on January 11, 1967 But the position was changed by the deletion of the original Note to cl.
(b) and its substitution by the new Note on December 23, 1967.
The appellant claimed that the service conditions of persons, like the respondent, have always been different from those serving under the Railway Administration and that by the introduction of the new Note, no discrimination has been practised on any officer.
On the other hand, according to the appellant, the new Note only gave effect to the conditions of service, which obtained in the Company, where the respondent originally joined service.
The appellant further pleaded that the new Note does not violate article 14 of the Constitution.
The High Court, by its judgment and order dated October 8, 1968 has accepted the contentions of the respondent and held that the new Note substituted to cl.
(b) of rule 2046 on December 23, 1967 is discriminatory and violative of article 14 of the Constitution.
In this view, the said Note was struck down.
In consequence, the High Court set aside the order dated January 17, 1968 and gave a declaration that the respondent was entitled to continue in service till he attained the age of sixty years.
Mr. M. C. Setalvad, learned counsel for the appellant, Rail way Board, has strenuously attacked the finding of the High 194 Court that the new Note, substituted on December 23, 1967 to cl.
(b) is discriminatory and violative of article 14 of the Constitution.
On the other hand, he urged that a distinction has always been made in the case of ministerial railway servant who is governed by cf.
(b) and those who are not so governed by that clause of rule 2046.
Different provisions regarding the age of retirement have been provided in respect of those two classes of ministerial railway servants.
The new Note, Mr. Setalvad pointed out only gives recognition to the practice that has been obtain ing in respect of the ministerial railway servants under their previous employers.
He further pointed out that the Note to cf.
(b) of rule 2046, incorporated on January 11, 1967 gave the benefit of the expression "Government Service ' 'to persons, like the respondent, who have previously been working in ex Company, provincial Government or ex State Railways.
The new Note keeps the same categories of employees within the expression "Government Service", but adds a qualification that in order to have the benefit of a longer period of service, they should have had such benefit under their previous employers.
Mr. Setalvad further pointed out that a government servant has no right to continue in service till the age of 60 years and that the option to so continue him upto that age, vests exclusively within the discretion of the authority concerned.
For this proposition the counsel relied on the decision of this Court in Kailash Chandra vs Union of India(1) interpreting clause (2) of rule 2046 as it existed prior to the amendment in 1962.
In any event, Mr. Setalvad pointed out, that the officers who had worked under a former provincial Government, Ex Company or Ex State Railways and who have been dealt with under the new Note substituted on December 23, 1967 form a class by themselves and therefore there is a reasonable classification of such officers, and that satisfies the requirement of article 14 of the Constitution.
On all these grounds, Mr. Setalvad urged that the new Note is not discriminatory and it does not violate article 14 of the Constitution.
Mr. R. B. Datar, learned counsel for the respondent and M/s M. K. Ramamurthi and J. Ramamurthi, who appeared for the two interveners have supported the reasoning of the High Court for holding that article 14 is violated by the new Note to cl.
(b) of rule 2046.
We are of the opinion that the contentions of Mr. Setalvad cannot be accepted.
No doubt, the counsel is justified in his contention only to this limited extent, namely, that under cl.
(2) of rule 2046, as it existed prior to its amendment on January 11, 1967 that ministerial railway servant falling under that clause, has no right to continue in service beyond the age of 55 and that (1) ; 195.
the appropriate authority has the option to continue him in service after his attaining the age of 55 years, subject to the condition that the servant continues to be efficient.
This Court in Kailash Chandra 's case(1) had an occasion to consider rule 2046 (2) (a) as it originally stood.
It was held that the ministerial railway servants falling under the said clause may be compulsorily retired on attaining the age of 55 years.
But when the servant is between the age of 55 and 60 years, the option to continue him in service, subject to the servant continuing to be efficient, exclusively vests with the appropriate authority.
It was further laid down that the authority is not bound to retain a railway servant after the age of 55 years, even if the continues to be efficient.
It was.
further emphasised that the rule gave no right to a ministerial railway servant to continue in service beyond the age of 55 years.
It is in view of the above principles laid down by this Court,.
we have observed, earlier, that Mr. Setalvad 's contention in respect of the rule 2046, as it originally stood, is well founded.
But this Court, in the above decision, had no occasion to consider the problem that now arises, by virtue of the new Note added to, cl.
(b) of rule 2046.
There is no controversy that after the amalgamation of the Company with the Indian Railway Administration, the respondent has become an employee of the latter.
If so, in our opinion, the respondent is entitled to be given the same rights and privileges that are available to the other emplo yees employed by the Indian Railway Administration.
That exactly was the position under the rule 2046, as it originally stood; after its amendment on December 5, 1962 increasing the age of retirement to 58 years; as also under the new rule 2046, incorporated on January 11, 1967.
All these rules upto and inclusive of January 11, 1967 treated the former employees of the Ex Company, Ex State Railways and former provincial Governments, who were amalgamated with the Indian Railway Administration in 1947, on a par the other original employees of the Indian Railway Administration.
In fact, the Note to cl.
(b) of rule 2046 incorporated on January 11, 1967, reinforced this position, by making it clear that the expression "Government Service ' 'in cl.
(b) will include service under the various employers referred to therein.
Mr. Setalvad placed reliance on the fact that rule 2046, as it existed upto and inclusive of January 11, 1967, dealt differently with the age of retirement in respect of : (i) a railway servant coming under cl.
(a) and (ii) a ministerial railway servant coming under cl.
He further pointed out that even in respect of a ministerial railway servant coming under cl.
(b), the latter, in order to be eligible to have a longer age of retirement should be one who complies with the conditions mentioned there 1. ; 196 in.
These conditions are as per el.
(b) existing on January 1 1, 1967, that the officer should have entered government service on ,or before March 31, 1938.
The said officer should also have the ,one or the other of the qualifications mentioned in sub clauses (i)and (ii).
That is, according to the learned counsel, if a ministerial railway servant has not entered government service before March 31, 1938, he will not be eligible for the longer age ,of retirement.
These circumstances will clearly show, according to Mr. Setalvad that the rule has been through out maintaining a distinction even amongst the ministerial railway servants working under the Indian Railway Administration.
This argument, may on the face of it appear to be attractive; but in our opinion, it cannot be accepted.
The point to be noted is that though a distinction has been made in the rule between a railway servant coming under el.
(a) and a ministerial railway servant coming under el.
(b), those clauses will apply uniformly to all members of the Indian Railway Administration depending upon whether .they are railway servants coming under el.
(a) or a ministerial railway servant coming under el.
(b), as the case may be.
To all railway servants coming under el.
(a) the age of retirement is the same.
Similarly to all ministerial railway servants coming under el.
(b), the age of retirement is again the same.
Further .if a ministerial railway servant does not satisfy the requirements of cl.
(b) he will not be eligible to get the extended period Of retirement.
That again will apply to all ministerial railway servants, who do not satisfy the requirements of el.
We are emphasising this aspect to show that no distinction has been made either in el.
(a) or el.
(b) regarding the uniform application in respect of the age of retirement to the officers mentioned ,therein and who are governed by those clauses.
That is, there is no inter se distinction made.
The distinction made in el.
(b) regarding the ministerial railway servants who entered government service on or before March 31, 1938 is again of uniform application.
That rule only makes a broad distinction between the ministerial railway servants who entered government service on or before March 31, 1938 and who entered government service after that date.
As per the Note to el.
(b) to rule 2046, incorporated on January 11, 1967, the respondent is a person who has entered government service on or before March 31, 1938 .and satisfies also the requirements under sub cl.
(ii) or el.
(b) Similarly, another railway servant may have entered government service under the Indian Railway Administration on or before March 31, 1938.
He also, under el.
(b) will be a ministerial railway servant who has entered government service on or before March 31, 1938 and if he satisfies one or other of the conditions mentioned in sub clauses (i) and (ii) of el.
(b), he will be entitled to continue in service till 60 years.
That means both persons, like the respondent, and the officers who have straight 197 joined the service under the Indian Railway Administration, prior March 31, 1938 and who satisfy the requirements under sub clause (i) or sub clause (ii) of clause (b) will be equally entitled continue in service till they attain the age of 60 years.
These acts clearly show that cls.
(a) and (b) of rule 2046 had uniform application to all the employees of the Indian Railway Administration.
Coming to the new rule 2046, incorporated on January 11, 1967, the conditions of service of persons, like the respondent, have been better crystalised.
Read with the Note, under cl.
(b), the respondent is a ministerial railway servant, who had entered government service on or before March 31, 1938.
By virtue of cl.
(b), he was entitled to be retained in service till he attains the age of 60 years.
It is to be noted that there is no option left with the employer, but to retain such a ministerial railway servant upto 60 years.
In other words, if the ministerial railway servant satisfies the requirements of cl.
(b), he is, as of right, entitled to be in service, till he attains the age of 60 years.
Similarly, cl.
(a) introduced on January 11, 1967, gives a right to a railway servant to continue in office, till he attains the age of 58 years.
Here again, there is no option vested with the authorities except to continue him till that age.
The option to extend the period of service of the officers mentioned in cls.
(a) and (b) is dealt with under sub,, clauses (d) and (c) respectively, which we have not quoted.
Sub clauses (c) and (d) deal with the granting of extension of service beyond the period mentioned in sub clauses (b) and (a).
The option to extend the service beyond the period mentioned in sub causes (a) and (b) may be with the authorities; but they have no voice in a railway servant coming under cl.
(b), continuing upto 60 years.
That the authorities also understood the position in the manner mentioned above, is clear from the order dated March 31, 1967, of the Divisional Accounts Officer, Hubli declaring the right of the respondent to continue in service upto 60 years.
in fact, this order was passed in consequence of the new rule 2046 substituted on January 11 1967.
Therefore, from what is stated above, it is clear that upto and inclusive of January 11, 1967, no distinction inter se apart from that made by clauses (a) and (b), between the officers of the Indian Railway Administration, from whatever source they may have come, was made.
Even at the risk repetition, we may state that under cl.
(b) of rule 2046, as introduced on January 11, 1967, the original employees of the Indian Railway Administration, as well as persons, like the respondent, who came into the Indian Railway Administration in 1947, were both entitled, as of right, to continue in service till they attained the age of 60 years.
This position admittedly has been changed, by altering the definition of the 198 ,expression "Government Service" by the new Note to cl.
(b) introduced on December 23, 1967.
Under that Note, it cannot be gain said, that a distinction has been made between the original employees of the Indian Railway Administration, and the new ,employees, who were amalgamated with the Indian Railway Administration in 1947, but who had their previous service, with either a former provincial Government, or an Ex Company or Ex State Railways.
In the case of such employees, the benefit ,of the extended age of retirement, that has been given to the other employees of the Indian Railway Administration, was made available, only if the new 'employees had the same benefit under their previous employers.
Therefore, the position is that on and after December 23, 1967, though all the employees are under the Indian Railway Administration, there will be two sets of rules relating to the age of retirement, depending upon the fact whether they were in the original employment of the Indian Railway Administration or on the fact of their coming from one or , the ,other of the employers mentioned in the new Note.
It is in consequence of the new Note, that the order dated January 17.
1968 was issued by the Divisional Accounts Officer, Hubli, that the respondent has to retire at the age of 58 years, on April 14, 1968.
The question is whether the distinction made under the new Note to cl.
(b) substituted on December 23, 1967 valid? In our opinion, such a rule, which makes a distinction between the employees working under the same Indian Railway Administration is not valid. The position, after the new Note was added, is that the employee who had through out been under the Indian Railway Administration is entitled to continue in service till he attains the age of 60 years; whereas the persons, like the respondent, who are also the employees of the Indian Railway Administration, but whose previous services were with the Company, will have to refire at the age of 58 years, because a provision similar to cl.
(b) did not exist in the service conditions of the Company.
Discrimination, on the face of it, is writ large in the new Note, which is under challenge.
Mr. Setalvad, no doubt, urged that the ministerial railway servant, who was originally employee of a Company, Ex State Railway or a former Provincial Government dealt with under the new Note are a class by themselves, and, therefore, there is a reasonable classification.
Once the employees dealt with under the new Note, have taken up service under the Indian Railway Administration and have been treated alike upto January 11, 1967, it follows, in our opinion, that they cannot again be classified separately from the other employees of the lndian Railway Administration.
Therefore, we are not inclined to accept the 199 contention that the classification of these officers, under the new Note, is a reasonable classification and satisfies one of the essential requisites of article 14 of the Constitution, as interpreted by this Court.
We will assume, that in dealing with the types of employees under the new Note, there is a reasonable classification.
Nevertheless, the further question arises whether the reasonable classification, with the added condition in the Note incorporated on December 23, 1967, can be said to have a nexus or a relation to the object sought to be achieved by cl.
(b) of rule 2046 ? The object of rule 2046 itself is to provide for the age of retirement of the two types of officers coming under cls.
(a) and (b).
Where there is no indication that any further distinction inter se is sought to be made amongst the officers mentioned in cls.
(a) and (b) and when an uniform age of retirement has also been fixed in respect of the officers coming under these two clauses, the classification, carving out the ex employees of the three authorities mentioned therein, with the added condition that the rules of the Company or the State should have a provision similar to clause (b), has, in our opinion, no nexus or relation to the object of the rule.
For the reasons given above, we are of the view that the High Court was justified in striking down the order of the Divisional Accounts Officer, Hubli, dated January 17, 1968 directing the respondent to retire from service on April 14, 1968, on which date he will attain the age of 58 years.
However, it is not clear from the judgment of the High Court whether the entire new Note substituted under cl.
(b) of rule 2046 on December 23, 1967 has been struck down or whether it has struck down only the new condition incorporated in the said Note.
Even as per the Note under cl.
(b), incorporated along with the new rule 2046 on January 11, 1967, the expression "Government Service" included service rendered in Ex Company, Ex State Railways and in a former provincial Government, and such a provision is beneficial to the employees like the respondent.
In the new substituted Note dated December 23, 1967.
the first part of the Note including in "government service" any service rendered in a former provincial Government, Ex Company and Ex State Railways is more or less identical with the original Note of January 11, 1967, though in the new Note the order of the former employees has been slightly changed.
In our opinion, that part of the new rule providing that for the purpose of cl.
(b) the expression "Government Service" includes service rendered in a former provincial Government and in a Ex Company and Ex State Railways can be allowed to stand to this extent.
Therefore, the offending part in the new Note are the further words "if the 200 rules of the Company or the State had a provision similar to Clause (b) above".
This offending part can be deleted without doing violence to the definition of the expression "Goverment Service" even under the new Note.
Therefore, it is only necessary to strike down the offending part in the Note, namely, "if the rules of the Company or the State had a provision similar to Clause (b) above" and this part of the Note alone is struck down as discriminatory and violative of article 14 of the Constitution.
Subject to the above directions, the judgment and order of the High Court are confirmed and this appeal dismissed.
Special leave to appeal has been granted on August 7, 1969 subject to the conditions that the appellant is to pay the costs of the respondent in any event.
The respondent, accordingly, will be entitled to his costs in the appeal.
K.B.N. Appeal dismissed.
[/INST]Rule 2046 (F.R. 56) of the Indian Railway Fundamental Rules was substituted on January 11, 1967, by a new Rule.
Undo cl.
(b) of the new Rule 2046 every ministerial railway servant who had entered government service on or before March 31, 1938 and who satisfied the conditions mentioned in sub cls.
(i) and (ii) of cl.
(b) had a right to continue in service till he attained the age of 60 years.
The Note to the Rule, defined the expression 'government service ' as including service rendered in ex company and ex State Railway, and in a former provincial government.
On December 23, 1967 a new Note was substituted which stated that the expression "government service" ' included "service rendered in a former provincial government and in ex company and ex State Railways, if the rules of the company or the State had a provision similar to cl.
(b) above".
The respondent joined the service of the Madras and Southern Mahratta Railway company on August 16, 1927.
The company was amalgamated with the Indian Railway Administration in 1947 and on such amalgamation the respondent became the employee of the Indian Railway Administration He was a "ministerial servant" within the meaning of that expression in r. 2046.
On March 31, 1938, he held a permanent post in the company.
After the introduction of r. 2046 on January 11, 1967, the Divisional Accounts Officer passed an order that the respondent was entitled to continue in office till he attained the age of 60 years.
But, after the new Note to cl.
(b) to r. 2046 was substituted on December 23, 1967, another order was passed to the effect that the respondent was retired from service on April 14, 1968, on attaining the age of 58 years.
The order also stated that this action was being taken in view of the new Note substituted on December 12, 1967.
The respondent filed a writ petition in the High Court challenging the legality of the order retiring him from service.
The High Court struck down the order and gave a declaration that the respondent was entitled to continue in service till he attained the age of 60 years, on the ground that the order was discriminatory and, therefore, violative of article 14 of the Constitution.
Dimissing the appeal to this Court, HELD : The High Court was justified in striking down the order directing the respondent to retire from service.
(1) Rule 2046 as it stood originally and on January 11, 1967 treated the former employees of the ex company, ex State Railway and former provincial Government 188 who were amalgamated with the Indian Administration in 1947 on a par with the other original employees of the Indian Railway Administration.
In fact the Note to cl .
(b) of r. 2046 incorporated in January 11, 1967 only reinforced this position.
Read with the Note, under el.
(b), the respondent is a ministerial servant who had entered government service on or before March 31, 1938 and, therefore, by virtue of el.
(b) he was entitled to be retained in service till he attained the age of 60 years.
C] (2) Up to and inclusive of January 11, 1967, no distinction, inter se, apart from that made by cls.
(a) and (b) between officers of Indian Railway Administration, from whatever source they may have I come, was made.
The position admittedly has been changed by altering the definition of the expression "government service" by the new Note to el.
(b) Thus on and after December 23, 1967, though all the employees are under the Indian Railway Administration, there will be two sets of rules relating to the age of retirement, depending upon the fact whether they were in the original employment of Indian Railway Administration or on the fact of their coming from one or the other employers mentioned in the new Note.
Discrimination, is writ large on the face of the new Note.
Once the employees dealt with under the new Note have taken up service under the Indian Railway Administration and have been treated alike up to January 11, 1967, if follows that they cannot again be classified separately from the other employees of the Indian Railway Administration.
Therefore the classification of these officers under the new Note is not a reasonable classification.
[197 G, 198 F] (3) Assuming there is a reasonable classification, the classification cannot be said to have a nexus or relation to the object sought to be achieved by el.
(b) of r. 2046 which is to provide for the age of retirement of the two types of officers coming under cls.
(a) and (b).
Where there is no indication that any further distinction inter se is sought to be made amongst the officers mentioned in cls.
(a) and (b) and when a uniform age of retirement has also been fixed in respect of officers coming under these two clauses, the classification carving out the ex employees of the three authorities mentioned therein with the added condition that the rules of the company or the State should have a provision similar to el.
(b) has no nexus or relation to the object of the Rule.
[199 B] (4) Though a distinction has been made in the Rule between a railway servant coming under el.
(a) and a ministerial railway servant coming under el.
(b) in regard to age of retirement, those clauses will apply uniformly to all members of the Indian Railway Administration depending upon whether they are railway servants coming under el.
(a) or ministerial railway servants coming under el.
The distinction made in el.
(b) regarding the ministerial railway servants who entered government service on or before March 31, 1938, is again of uniform application.
[196 H] (5) It is only necessary to strike down the offending part in the Note, namely, "if the rules of the company or the State had a provision similar to el.
(b)," and this part of the Note alone is struck down as discriminatory and violative of article 14 of the Constitution.
[200 B]
</s>
|
<s>[INST] Summarize the judgementCivil Appeal No. 4134 of 1991.
From the Judgment and Order dated 30.8.1991 of the Bombay High Court in Writ Petition No 3580 of 1991.
J.P.Pathak and P.H. Parekh for the Appellants.
A.M. Khanwilkar and S.K. Parshankar for the Respondents.
The Judgment of the Court was delivered by 229 KASLIWAL, J.
This appeal by grant of special leave is directed against the judgment of the Bombay High Court dated 30th August, 1991 in a suit for possession under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (hereinafter referred to as the Act).
The suit was dismissed by the 7th Additional Small Causes Judge.
On appeal the learned 10th Additional District Judge, Pune by Judgment dated 25.4.1991 set aside the order of the trial court and decreed the plaintiff 's suit for possession.
The tenants filed the writ petition in the High Court challenging the order of the Additional District Judge, But the same was dismissed and the decree for possession passed by the Additional District Judge was affirmed.
The trial court held that the service of notice dated 7.8.1980 on the defendant tenants was not held proved.
The plaintiffs were unable to prove that the postal acknowledgement Exhibit 51 Contained the signatures of defendant no 2 or 3.
It was held that on the point of service of notice the case of the plaintiff was rather confusing and not clear.
It was held that even assuming that the notice had been served yet the case did not fall under Section 12(3) (a) of the Act.
The trial court also held that the case did not fall under Section 12(3) (b) of the Act as the defendants had paid Rs. 55,800 on 16.1.1984 and thereafter made regular payment of Rs. 600 every month.
According to the learned trial court the issues were framed on 26.8.1985 and before that the defendants had made full payment as demanded in the notice and as such no decree can be passed under Section 12(3)(b) of the Act.
Learned Additional District Judge reversed the above finding of the trial court and held that the evidence of the plaintiff showed that the copy of the notice was sent to all the defendants by registered post.
The postal receipts have been filed as exhibits 52, 53 and 54.
Learned Additional District Judge further held that when the notices are sent by registered post it is presumed to have been served and mere denial by the tenants had no value, unless they proved some extraordinary happenings or events which prevented following of usual course of business.
Learned Additional District Judge further held that the notice was sent on the address given in the plaint and it was admitted by the defendant in his statement that it contained the correct address.
A presumption of service of notice was drawn under Section 27 of the General Clauses Act and Section 114 of the Evidence Act.
Learned additional District Judge though affirmed the finding of the trial court that the case is not covered under section 12(3)(a) of the Act, but the plaintiffs were entitled to a decree under Section 12(3) (B) of the Act.
In this regard learned Additional District Judge recorded the finding that the entire arrears of rent amounted to Rs. 71,088 but the defendant tenant only 230 deposited Rs 66.000 till the first date of hearing and thus remained in arrears of Rs. 5,088.
It was also held that the provisions of 12(3)(b) of the Act are mandatory provisions and those are required to be strictly complied with by the tenants during the pendency of the suit and also appeal when the landlord claims possession of the suit premises on the ground of Section 12(3)(b) of Act.
The defendant tenant did not deposit the entire arrears on the first date of hearing and did not deposit the further rent during the pendency of the appeal.
Thus the defendant persistently committed defaults during the pendency of the suit and also the appeal in paying the rent.
We have heard learned counsel for the parties and have thoroughly gone through the record.
It is important to note that M/s Kulkarni Patterns Pvt. Ltd/. (defendant No.1) Was the tenant, defendant No 2 Shri D G. Kulkarni was the Chairman of the company and defendant No 3 Mrs M.D. Kulkarni was the wife of defendant No 2 and Director of defendant No 1.
The plaintiffs sent a notice dated 7.8.1980 to all the defendants vide postal receipts Exhibit 52,53 and 54.
Exhibit 51 is only one acknowledgement receipt which has been produced on record.
It has been contended on behalf of the appellants that the learned Additional District Judge was wrong in drawing presumption of service of service of notice in the facts of the present case.
It was submitted that the plaintiff initially stated that the acknowledgement receipt Exhibit 51 contained the signatures of defendant NO.3, but subsequently admitted that it contained the signature of defendant No. 2.
It was further argued that defendant No.2.
had appeared in the witness box and clearly denied his signatures on Exhibit 51.
It was thus contended that the presumption of service of notice was rebutted and thereafter the burden lay on the plaintiffs to prove the service of notice by examining the postman or by other evidence and the plaintiffs having failed to do so, the service of notice having not established, the suit was liable to be dismissed.
Reliance in support of the above contention was placed on a decision of this Court to which one of us was a party in Green view Radio Service vs Laxmibai Ramji And Another.
, Reliance was placed on the following observations made in the above case.
"In this connection, we may also point out that the provisions of section 106 of the Transfer of Property Act require that notice to quit has to be sent either by post to the party or be tendered or delivered personally to such party or to one of his family members or servants at his residence or if such tender or delivery is not practicable, affixed to a conspicuous part of the 231 property.
The service is complete when the notice is sent by post.
In the present case, as pointed out earlier, the notice was sent by the plaintiff 's advocate by registered post acknowledgement due.
The acknowledgement signed by the party was received by the advocate of the plaintiff.
Thus in our view the presumption of service of a letter sent by registered post can be rebutted by the addressee by appearing as witness and stating that he never received such letter.
If the acknowledgement due receipt contains the signatures of the addressee himself and the addressee as a witness states that he never received such letter and the acknowledgement due does not bear his signature and such statement of the addressee is believed then it would be a sufficient rebuttal of the presumption drawn against him.
The burden would then shift on the plaintiff who wants to rely on such presumption to satisfy the court by leading oral or documentary evidence to prove the service of such letter on the addressee.
This rebuttal by the defendant of the presumption drawn against him would of course depend on the veracity of his statement.
The court in the facts and circumstances of a case may not consider such denial by the defendant as truthful and in that case such denial alone would not be sufficient.
But if there is nothing to disbelieve the statement of the defendant then it would be sufficient rebuttal of the presumption of service of such letter or notice sent to him by registered post.
" In the present case the plaintiffs had sent a copy of the notice to all the three defendants by registered post.
Three postal receipts Exhibits 52, 53 and 54 have been filed in the present case and Exhibit 51, one acknowledgement receipt.
As regards Exhibit 51, the defendant No.2 has appeared in the witness box and has denied his signatures.
However, it has not been shown that this acknowledgement receipt was related to which of the three notices sent vide postal receipts Exhibits 52,53 and 54.
The plaintiffs have clearly proved that three notices were sent by registered post and which is clearly born out from the three postal receipts.
Admittedly the premises were taken on rent in the name of the defendant No.1 namely Kulkarni Patterns.
Pvt. Ltd. and it is proved that one of the notices by registered post was also sent to the company.
It has been admitted by the defendant No.2 in his statement that the notice was sent on the correct address.
The defendant No.2 in his statement has nowhere stated that no notice has bee received by the company.
The only denial is in respect of the acknowledgment receipt Exhibit 51 and the only inference which could legitimately be drawn is that in respect of one notice, it was not proved as 232 to who acknowledged the receipt of the notice.
We do not approve the following statement of law made by the learned Additional District Judge "that the evidence of the defendant did not show any extraordinary happenings or the events which prevented the following of usual course of business and thus, his mere denial has no value".
However, in the present case three notices were sent by registered post and one of which was sent in the name of the defendant company who was the tenant, a presumption can legitimately be drawn that the notice dated 7.8.1980 had been served on the company.
There is no rebuttal on behalf of the defendant as regards the notice served on the company and in the facts and circumstances of the present case we hold that notice dated 7.8.1980 sent by registered post was served on the defendant company, In Green View Radio Service (supra) it was held that the acknowledgement due receipt contained the signature of the addressee himself and the addressee as a witness stated that he never received such letter and the acknowledgement due did not bear his signature and such statement of the addressee if believed then it would be a sufficient rebuttal of the presumption drawn against him.
The burden will then shift on the plaintiff who wants to rely on such presumption to satisfy the court by leading oral or documentary evidence to prove the service of such letter on the addressee.
Even applying this statement of law in the facts of the present case, the rebuttal, if any, made by defendant No.2 can be related only with regard to Exhibit to Exhibit 51 for one notice but not with regard to all the three notices sent by registered post vide exhibits 52 to 54 Thus, in the facts of the case in hand before us we are fully convinced that the service of notice shall have to be presumed so far as defendant company is concerned and there is no rebuttal to such presumption by the defendant appellants.
The requirement of sending notice under Section 12(2) of the Act is to be done in the manner prescribed under paragraph two of Section 106 of the Transfer of Property Act which reads as under.
"Every notice under this Section must be in writing signed by or on behalf of the person giving it and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants, at his residence, or (if such tender or delivery is not practicable ) affixed to a conspicuous part of the property." The reading of the above provision clearly shows that the notice can be sent by post to the party who is intended to be bound by it.
Thus, the notice sent by registered post in the name of the defendant company who 233 is the tenant is fully in accordance with the requirement of section 106 of A the Transfer of Property Act.
So far as the finding recorded by the learned Additional District Judge that the defendants were defaulter in the payment of rent and full amount of rent was not paid or deposited on the first date of hearing and no rent was paid month by month during the pendency of the appeal could not be assailed by the learned counsel for the appellants.
Thus, the learned Additional District Judge as well as High Court was right in passing a decree for possession under section 12(3)(b) of the Act.
As a result of the above discussion and findings recorded by us, we find no force in this appeal and the same is dismissed with costs.
Y.L Appeal dismissed.
[/INST]A notification u/s.4(1) of the Land Acquisition Act, 1894 was issued for acquisition of the questioned lands along with some other lands for the purpose of development of the town.
On 17.9.80 the same was quashed.
In 1985 another similar notification was issued u/s 4(1) of the Act, for acquisition of the same lands for the Scheme No.23 framed under Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973.
The respondents challenged the notification before the High Court under Article 226 of the Constitution.
The High Court allowed the writ petitions annulling the notification and holding that the Scheme No.23 did not operate against certain specified lands of the respondents.
It also found that the statutory requirements for completing the scheme were not complied with and therefore, no action for acquisition under the Scheme could be taken.
These appeals were filed by the Development Authority against the High Court judgments by special leave.
Disposing of the appeals, this Court, HELD: 1.
The pre conditions had not been complied with strictly under the statutory provisions.
The High Court has not found any malafides.
The Development Authority in ques tion consisted of only one person.
His own order was perhaps taken by him and the gov 248 ernmental authorities as the requisite resolution.
The respondents did not take the ground that there was no valid authority behind the scheme.
[249 E F] 2.
The huge patch of land has been substantially improved upon under the scheme.
Cancellation of the notifi cation does not bring the matter to an end.
Obviously, fresh proceedings would be taken after complying with the defect if the judgment of the High Court is allowed to stand.
If the acquisition is not made the respondents should enjoy usual benefits of their land on account of the development of the neighbouring area and if the re acquisition is not made there would be claim for higher compensation.
[249 G250 A] 3.
It is directed that the acquisition remain to subject, to the condition that the notification under sec tion 4(1) of the Act issued in 1985 shall be deemed to be one dated 1.1.88 and the market value of the land for the acquisition shall be determined with reference to that date, and that as the deemed date of the notification under sec tion 4(1) to be postponed by almost three years and during this period since the appellant has brought about the bulk of the improvements in the neighbourhood, 25 per cent of the potential value of the land relatable to the improvements made by the appellant would only be available to the re spondents, but in fixing market value all other legitimate considerations shall be taken into account.
There is no intention to extend the benefit under section 28 of the Act to the owners of the lands already acquired under the noti fication of 1980 or 1985 on the basis of court 's direction that the respondents ' lands shall be deemed to have been notified under section 4(1) of the Act on 1.1.1988.
[250 B D]
</s>
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<s>[INST] Summarize the judgementtition (Civil) Nos.
507 and 1260 of 1989.
(Under Article 32 of the Constitution of India).
M.K. Ramamurthy, Rajinder Sachhar, Dr. Francis Julion, Ms. Aruna Mathur, A. Mariarputham, Ms. section Dikshit, section Va sudevan and Pradeep Misra for the Petitioners.
For the Respondents Nemo.
The following Order of the Court was delivered by 496 section RANGANATHAN, J. This order will dispose of a prelimi nary objection raised on behalf of the respondents that these writ petitions should be dismissed because the peti tioners have suppressed certain material facts from this Court and have also tried to abuse the process of court in the manner hereinafter appearing.
Writ Petition No. 507 of 1989 has been filed by the All India State Bank Officers ' Federation (hereinafter called 'the Federation ') through its President.
It was filed in this Court on 21st April, 89 and was supported by an affida vit of Umed Singh, President of the Federation, affirming the contents of the petition to be true to his personal knowledge.
By this writ petition the Federation seeks to impugn a new promotion policy decided upon by the State Bank of India (hereinafter called 'the Bank ').
In paragraph 9(mm) of the petition it is stated that the petitioners are ap proaching this Court in great haste as the Bank is moving with great speed and is likely to constitute Departmental Promotion Committees and declare the results of the inter views in implementation of the new promotion policy within the next two or three days.
In the affidavit of Umed Singh, referred to earlier, it has been stated in para 4 that the petitioners have not filed any other similar writ petition in this Honourable Court or any other High Court.
In the counter affidavit filed on behalf of Bank, it is stated that the statement in paragraph 4 of the petition in support of the writ petition is false.
It is pointed out that the Federation through its Deputy General Secretary had filed Writ Petition No. 5286 of 1989 in the High Court of Andhra Pradesh at Hyderabad along with an application No. 6969 of 1989, seeking stay of the promotion policy.
On 13.4.89 the Andhra Pradesh High Court admitted the writ petition but the learned judge rejected the application for interim stay observing "that he was prima facie satisfied that the selection is going on according to a fair procedure and that there is no need to stay any of the interviews or the appointment".
It is further pointed out that another petition has also been filed by the State Bank of India Officers ' Association (Karnataka) having its office at Bangalore in the Karnataka High Court, being Writ Petition No. 7848 of 1989.
It is, therefore, submitted that the petitioners have suppressed from this Court the material fact that a writ petition has already been filed by them in the Andhra Pradesh High Court and that an application for stay had been made and rejected by the said court.
A second objection to the 497 maintainability.
of the petition raised on behalf of the Bank in paragraph 3 of its counter affidavit was that since promotions had already been made they could not be disturbed "as the promoted officers have not been made parties".
It is common ground that 58 officers had been promoted w.e.f.
24th April, 89 but no steps were taken to implead these officers, who would be directly affected as a result of the prayer made in the writ petition.
To these objections, a rejoinder was filed on behalf of the petitioners, supported again by an affidavit of Umed Singh on the 23rd of October, 1989.
The two objections raised by the Bank were sought to be refuted in the follow ing manner: "1.
That the contents of para 1 are denied and it is reiter ated that the writ petition is maintainable as there is clear violation of fundamental rights guaranteed to the petitioners.
The writ petition filed in the Andhra Pradesh High Court has since been withdrawn as per the undertaking given to the Supreme Court during arguments on 24.4.89.
The deponent had no knowledge of the writ petition filed before the High Court of Andhra Pradesh, hence as soon as it came to his knowledge the same has been withdrawn.
Even otherwise the deponent understands that in the said writ petition the stay of interviews was prayed and the same was declined on representation made by the respondent bank.
It is indeed regrettable that even before Hon 'ble High Court the bank made incorrect statements.
A perusal of the order of High Court would show the same.
Regarding the question of making such employees who have been promoted as a party respondent, it is submitted that firstly it is the promotion policy which had been challenged being arbitrary, discriminatory and framed in gross violation of the prescribed procedure and provisions of law, secondly the petitioners even today do not know the names of all such 58 candidates who have been promoted favoured." (emphasis added) It may be mentioned here that Writ Petition No. 507 of 1989 came up for admission before a Bench of this Court on 26th April, 1989.
Apparently, the counsel for the State Bank of India was present and accepted notice on behalf of the bank.
The Bench passed the following order: 498 "Issue notice, Mr. S.S. Sharma, learned counsel accepts notice on behalf of the State Bank of India.
Counter affida vit shall be filed within four weeks from today.
Reply, if any, shall be filed within two weeks thereafter, the matter will be placed for final disposal on 24.10.1989 subject to overnight part heard.
The promotion if given in the meantime will be subject to the decision in the writ petition.
Mr. K.K. Venugopal, learned counsel states that the writ peti tion which has been filed before the High Court will be withdrawn." The Writ Petition came on for hearing before us on 5th April, 1990.
Sri G. Ramaswamy, counsel for the Bank, put the above objections in the forefront as preliminary objections.
After hearing him and the counsel for the petitioner, we directed the petitioner federation to file a better affida vit explaining the correct position.
In compliance with the direction given by us, another affidavit has been filed by Sri Umed Singh.
In this affidavit, again, although purport ing to "tender an unqualified apology" for the misstatement in the earlier affidavit, the deponent reiterated "that he did not know on the date of swearing of the affidavit on 21.4.89 that some other office bearer of the petitioner federation has filed such a petition".
He claims to have come to know of it only on the 23rd April, 1989 from a telephonic conversation with the Deputy Secretary and wishes to take credit for the fact that he at once informed his counsel about it who in turn brought it to the notice of the Court at the time of the preliminary hearing on 26th April, 1989.
The truth of these allegations is refuted on behalf of the Bank.
It is submitted that the counsel for the petition er did not, even at the time of hearing on 26.4.89, bring to the notice of this Court the fact that he had filed a peti tion in the Andhra Pradesh High Court.
On the other hand, it is claimed, it was the counsel for the Bank who was present and who took notice on behalf of the Bank, that brought to the notice of the Court that the petitioner had already moved the Andhra Pradesh High Court in regard to the same relief and it was only thereafter that the counsel for the petitioner made a statement that the petitioner would with drew the petition filed in the Andhra Pradesh High Court.
Even this, it is pointed out, they did not do immediately as stated in Umed Singh 's affidavit for the said petition was withdrawn only much later on 27th of July, 1989.
On behalf of the Bank it is also pointed out that the statement made in the rejoinder filed by Umed Singh, sup ported by his affidavit, 499 that the addresses of the 58 promotees was not known to the petitioner is again a total falsehood as is demonstrated by two circumstances.
In the first place, in the writ petition filed in the Karnataka High Court, the petitioner there has joined all the 58 officers as parties and an application was moved before the said High Court on 27th April, 89, seeking stay of promotion of the said respondents.
That apart, on 1st May, 89, a fortnightly bulletin issued by the State Bank of India Officers ' Association (Mumbai circle), which is admitted to be one of the associations affiliated to the petitioner Federation, carries a message of congratulations to all the 58 officers, who had been promoted w.e.f.
24th April, 89.
The names of all the 58 officers so promoted has been set out in this bulletin.
In this state of the record, learned counsel for the Bank strongly urges that we should dismiss the writ petition straightaway on the ground that the petitioner has not come to Court with clean hands.
We have heard learned counsel on both sides at length.
There is no doubt left in our minds that the petitioner has not only suppressed material facts in the petition but has also tried to abuse judicial process.
The explanation that the President of the Federation when he filed the writ in this Court on 21st April, 89, was not aware that a petition had been filed in the Andhra Pradesh High Court (repeated for a second time in the affidavit of 5th April ' 90) is, in our opinion, is totally unacceptable.
Admittedly the federa tion was considerably agitated by the new promotion policy.
The matter was considered to be very urgent and the federa tion was too keen to obtain a stay of implementation of the policy which, it feared.
the Bank might do any day.
In this situation, not even the most gullible of persons would be credulous enough to accept the explanation that the Deputy General Secretary of the Federation had not apprised the President of their failure to obtain the stay order from the Andhra Pradesh High Court.
It is totally unbelievable that between 13.4.89, when the interim application in the Andhra Pradesh High Court was rejected and 21.4.89 when the writ petition was filed, the President was not aware of what had happened in the High Court.
It is deplorable that such an explanation should have been not only put forward in the original rejoinder but should have been repeated again in the latest affidavit.
The petitioner had, in our opinion, deliberately suppressed from the petition this crucial and important fact.
As to the credit sought for having brought this fact to the notice of the Court on 25.4.89.
the circum stances suggest that perhaps they would not have brought it to the notice of the court at all had not counsel on behalf of the Bank been present.
to receive notice 500 when the matter was moved for admission on 26.4.89.
whether, as asserted by the counsel for the petitioner, the petition er considered it prudent, in view of the presence of the Bank 's counsel, to volunteer at the time of the said hearing the information that a petition had been filed in the Andhra Pradesh High Court and to offer an undertaking that it would be withdrawn or whether, as alleged in a "statement of facts" ' placed before us by Sri S.S Sharma, the learned counsel for the Bank who appeared at the hearing, even this information had to be supplied to the Court by the Bank, is a controversy into which we need not enter.
We shall proceed on the assumption that the statement made by the counsel for the petitioner is correct, but even that does not explain why a reference to the writ petition in the High Court was not made in the writ petition as it had to be made.
The statement in the affidavit of Umed Singh that no petition had been filed in any High Court was clearly and plainly false.
It is equally clear that the statement made in the rejoinder affidavit that "till today (i.e. 23rd October, 1989) the petitioner federation is not aware of the names of the promoted officers" is again an incorrect statement.
These officers had been impleaded in the interim application for the relief sought against them in the Karnataka High Court as early as 27.4.89.
That apart the federation could not have been unaware of the contents of the bulletin issued by the Mumbai circle of the SBI Officer 's Association issued on 1.5.89.
There is no doubt that the petitioner did not deliberately implead the 58 promoted officers.
Sri Sachhar, for the petitioner, sought to contend that these 58 officers may be proper parties but not necessary parties and he referred us to the judgments of this Court in The General Manager, South Central Railway, Secunderabad and Another vs A.V.R. Siddhantti and Ors., and Col. D.D. Joshi & Ors.
vs Union of India & Ors.
, [1983] 2 S.C.C. 235.
We are not here concerned with the question whether these officers were necessary or proper parties and, indeed, this issue is no longer alive as, subsequently, the peti tioner itself has undertaken to implead these 58 officers and notices have been issued to them in both the writ peti tions.
What we are concerned here with is the statement, in the rejoinder affidavit that the Federation was not aware of the names of the 58 officers till November 1989 which, in the circumstances is a clear misstatement.
Apart from misstatements in the affidavits filed before this Court, the petitioner Federation has clearly resorted to tactics which can only be described as abuse of the process of court.
The simultane 501 ous filing of writ petitions in various High Courts on the same issue though purportedly on behalf of different associ ations of the Officers of the Bank, is a practice which has to be discouraged.
Sri Sachhar and Sri Ramamurthy wished to pinpoint the necessity and importance of petitions being filed by different associations in order to discharge satis factorily their responsibilities towards their respective members.
We are not quite able to appreciate such necessity where there is no diversity but only a commonness of inter est.
All that they had to do was to join forces and demon strate their unity by filing a petition in a Single Court.
It seems the object here in filing different petitions in different Courts was a totally different and not very laud able one.
Again an attempt was made to obtain a stay in the Andhra Pradesh High Court and when that attempt failed the writ petition here was filed.
In this the petitioners were able to obtain only an order that any promotions made during the pendency of the petition would be subject to the deci sion in the writ petition.
But, having obtained this order on 26.4.89, it is curious and inexplicable that an affiliat ed association should have made an application on 27.4.89 in the Karnataka High Court praying for a stay of the promo tions.
These are only tactics that it will be indulged in by a chronic and compulsive litigant and not by a federation like the petitioner.
We have set out the facts in this case at some length and passed a detailed order because we are deeply grieved to come across such conduct on the part of an association, which claims to represent high placed officers of a premier bank of this country.
One expects such officers to fight their battles fairly and squarely and not to stoop low to gain, what can only be, temporary victories by keeping away material facts from the court.
It is common knowledge that, of late, statements are being made in petitions and affida vits recklessly and without proper verification not to speak of dishonest and deliberate misstatements.
We, therefore, take this opportunity to record our strong and emphatic disapproval of the conduct of the petitioners in this case and hope that this will be a lesson to the present petition er as well as to other litigants and that atleast in future people will act more truthfully and with a greater sense of responsibility.
The question that now remains to be considered is wheth er the petition is liable to be dismissed for this conduct of the President of the Federation.
Sri Rajendra Sachhar, appearing on behalf of the petitioners, sought to get over the Bank 's objections by addressing certain technical argu ments.
He submitted that even if Writ Petition No. 507/ 89 was liable to be dismissed for mis statement and suppression there 502 would be no reason to dismiss C.W.P. No. 1260 of 1989 which has been filed by another association of the same officers.
He also sought to contend that, since it had been brought to the notice of this Court on 26.4.89 that a petition had been filed in a High Court and that it was being withdrawn, the order passed by this Court on 26.4.89 should be taken as having condoned any mis statement or mis conduct or defects in the writ petition.
We are not inclined to accept these submissions.
However, it is not necessary to discuss this aspect further as we do not wish to penalise the various officers who may suffer as a consequence of the new policy, which they wish to challenge, for the misstatements or wrong steps taken by the Officers of the federation perhaps, in their over anxiety to get quick interim relief.
We do not wish to decline them an opportunity to put forward their grievances before the court by dismissing these writ peti tions on the preliminary objections raised by the Bank.
In fact, we should like to place on record our appreciation of the stand taken by Sri G. Ramaswamy, learned counsel for the Bank in this respect.
He fairly stated that, as he is ap pearing for a public sector undertaking, he is quite pre pared to contest the writ petitions on their merits and that his preliminary objections were primarily intended to bring to our notice the conduct of the petitioners in this case.
We are glad he did it as this was a matter which needed serious notice.
We should like to record our dis approval of the way in which the proceedings have been conducted on behalf of the Federation.
However, as mentioned above, we overrule the preliminary objections and will proceed to dispose of the writ petitions on their merits.
The Writ Petitions are adjourned, as per separate order, to 17.7.90 for further hearing.
[/INST]The All India State Bank Officers ' Federation filed a Writ Petition in this Court on the 24th April, 1989 seeking to impugn a new promotion policy initiated by the State Bank of India.
The petition was supported by an affidavit of the President of the Federation affirming the contents of the petition to be true to his personal knowledge, and submit ting in paragraph 9(mm) of the petition that the petitioners were approaching this Court in great haste as the Bank was moving with great speed to implement its new promotion policy and was likely to constitute a Departmental Promotion Committee, and declare the results.
In para 4 it was submit ted that the petitioners had not filed any other similar petition either in this Court or any other High Court.
When the writ petition came up for admission before a Bench of this Court on April 26, 1989, counsel for the State Bank of India was present and accepted notice on behalf of the Bank.
The Writ Petition was contested by the Bank which sub mitted in its counter affidavit that the statement in para 4 of the petition in support of the writ petition was false, and pointed out that the Federation through its Deputy General Secretary had filed a Writ Petition in the High Court of Andhra Pradesh along with an application seeking stay of the promotion policy, and that the High Court admit ted the Writ Petition on April 13, 1989 but rejected the application for interim stay, and further pointed out that another petition had been filed by the State Bank of India Officers ' Association (Karnataka) in the Karnataka High Court.
A second objection as regards the maintainability of the 494 petition was raised in para 3 that since the promotions had already been made they could not be disturbed and that no steps were taken to implead those officers, who would be directly affected as a result of the prayer made in the writ petition.
To the aforesaid objections raised by the Bank the petitioner filed a rejoinder supported by an affidavit of the President of the Federation, submitting that the depo nent did not have any knowledge of the writ petition filed in the High Court of Andhra Pradesh, and that as soon as it came to his knowledge it was withdrawn.
and that the peti tioners did not know the names of all the 58 candidates who had been promoted favoured.
When the Writ Petition was taken up for further hearing on April 5, 1990, counsel for the Bank objected to the maintainability of the writ petition on the grounds of suppression of material facts and abuse of the process of court.
The Court directed the petitioner to file a better affidavit, and the petitioner Federation filed a better affidavit explaining the correct position and tendering an unqualified apology for the mis statements in the earlier affidavit, but still reiterated that they came to know of the writ petition in the Andhra Pradesh High Court only on April 23, 1989 and that, at the time of the preliminary hearing, it was brought to the notice of the Court by the Respondent 's counsel.
The respondent pointed out that the statements made in the rejoinder filed by the petitioners that they were not aware of the names of the promoted officers till November, 1989 was a total falsehood because; (i) the writ petition filed in the Karnataka High Court made all of them parties to the writ petition, and (ii) the names of the promoted officers were listed in the fortnightly bulletin of the State Bank Officers ' Association dated 1st May, 1989 carry ing a message of congratulations to all of them.
Disposing of the preliminary objections and adjourning the writ petition for further hearing on merits, the Court, HELD: 1.
Apart from mis statements in the affidavits filed before this Court the petitioner federation has clear ly resorted to tactics which can only be described as abuse of the process of court.
The simultaneous filing of writ petitions in various High Courts on the same issue though purportedly on behalf of different associations of the Officers of the Bank, is a practice which has to be discour aged.
[500H; 501A] 495 2.
An attempt was made to obtain a stay in the Andhra Pradesh High Court and when that attempt failed the writ petition here was filed.
In this the petitioners were able to obtain only an order that any "promotions made during the pendency of the petition would be subject to the decision in the writ petition.
But having obtained this order on April 26, 1989, it is curious and inexplicable that an affiliated association should have made an application on April 27, 1989 in the Karnataka High Court praying for a stay of the promotions.
These are only tactics that will be indulged in by a chronic and compulsive litigant and not by a Federation like the petitioner.
[501C D] 3.
One expects that officers fight their battles fairly and squarely and not stoop low to gain what can only be temporary victories by keeping away material facts from the court.
[501E] 4.
It is common knowledge that, of late, statements are being made in petitions and affidavits recklessly without proper verifications not to speak of dishonest and deliber ate misstatements.
Strong and emphatic disapproval of the conduct of the petitioners in this case is recorded in the hope that this will be a lesson to the present petitioners as well as to other litigants and that atleast in future people will act more truthfully and with a greater sense of responsibility.
[501F G] 5.
The Court does not wish to penalise the various officers who may suffer as a consequences of the new policy, which they wish to challenge, and decline them an opportuni ty to put forward their grievances before the Court, for the mis statements or wrong steps taken by the officers of the Federation in their over anxiety to get quick interim re lief.
[502B C]
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<s>[INST] Summarize the judgementAppeal No. 205 of 1952.
Appeal from the Judgment and Order dated the 16th September, 1952, of the High Court of Judicature at Madras (Subba Rao J.) in Writ Petition No. 599 of 1952 filed under the Special Original Jurisdiction of the High Court under article 226 of the Constitution of India.
M.C. Setalvad, Attorney General.for India (G. N. Joshi, with him) for the appellant and Intervener.
Mohan Kumaramangalam, for the respondent.
February 27.
The judgment of the court was delivered by PATANJALI SASTRI C.J.
This is an appeal from an order of a Single Judge of the High Court of Judicature at Madras issuing a writ of prohibition restraining the 1146 Election Commission, a statutory authority constituted by the President and having its offices permanently located at New Delhi, from enquiring into the alleged disqualification of the respondent for membership of the Madras Legislative Assembly.
The respondent was convicted by the Sessions Judge of East Godavari and sentenced to a term of seven years ' rigorous imprisonment in 1942, and he was released on the occasion of the celebration of the ludependence Day on 15th August, 1947.
In June, 1952, there was to be a by election to a reserved seat in the Kakinada constituency of the Madras Legislative Assembly, and the respondent, desiring to offer himself as a candidate but finding himself disqualified under section 7 (b) of the Representation of the People Act, 1951, as five years had not elapsed from his release, applied to the Commission on 2nd April, 1952, for exemp tion so as to enable him to contest the election.
No reply to the application having been received till 5th May, 1952, the last day for filing nominations, the respondent filed his nomination on that day, but no exception was taken to it either by the Returning Officer or any other candidate at the scrutiny of the nomination papers.
The election was held on 14th June, 1952, and the respondent, who secured the largest number of votes, was declared elected on 16th June, 1952.
The result of the election was published in the Fort St. George Gazette (Extraordinary) on 19th June, 1952, and the respondent took his seat as a member of the Assembly on 27th June, 1952.
Meanwhile, the Commission rejected the respondent 's application for exemption and communicated such rejection to the respondent by its letter dated 13th May, 1952, which however was not received by him.
On 3rd July, 1952, the Speaker of the Assembly read out to the House a communication received from the Commission bringing to his notice "for such action as he may think fit to take", the fact that the respondent 's application for exemption had been rejected.
A question as to the respondent 's disqualification having thus been raised, the Speaker referred the question to the Governor of 1147 Madras who forwarded the case to the Commission for its "opinion" as required by article 192 of the Constitution.
The respondent having thereupon challenged the competency of the reference and the action taken thereon by the Governor, the Commission notified the respondent that his case would be heard on 21st August, 1952.
Accordingly, the Chief Election Commissioner (who wag the sole Member of the Commission for the time being) went down to Madras and heard the respondent 's counsel and the Advocate General of Madras on 21th August, 1952, when it was agreed that, in case the petitioner 's counsel desired to put forward any further representations or arguments, the same should be sent in writing so as to reach the Commission in Delhi by 28th August, 1952, and the Commission should take them into consideration before giving its opinion to the Governor.
On the same day (21st August, 1952) the respondent applied to the High Court under article 226 of the Constitution contending that article 192 thereof was applicable only where a member became subject to a disqualification after he was elected but not where, as here, the disqualification arose long before the election, in which case the only remedy was to challenge the validity of the election before an Election Tribunal.
He accordingly prayed for the issue of a writ of mandamus or of prohibition directing the Commission to forbear from proceeding with the reference made by the Governor of Madras who was not, however, made a party to the proceeding.
On receipt of the rule nisi issued by the High Court, the Commission demurred to the jurisdiction of the court to issue the writs asked for, on the ground that the Commission was not "with in the territory in relation to which the High Court exercised jurisdiction".
A further objection to the maintainability of the application was also raised to the effect that the action of the Governor in seeking the opinion of the Commission could not be challenged in view of the immunity provided under article 361 (1), and that the Commission itself, which had not to "decide" the question of disqualification, but had merely to give its 1148 "opinion", could not be proceeded against under article 226.
On the merits, the Commission contended that article 192 was, on its true construction, applicable to cases of disqualification arising both before and after the election and that both the reference of the question as to the respondent 's disqualification to the Governor of Madras and the latter 's reference of the same to the Commission for its opinion were competent and valid.
The application was heard by Subba Rao J. who overruled the preliminary objections and held that article 192 on its true construction applied only to cases of supervening disqualifications and that the Commission had, therefore, no jurisdiction to deal with the respondent 's disqualification which arose long before the election took place.
He accordingly issued a writ prohibiting the Commission from proceeding with the enquiry in regard to the question referred to it by the Governor under article 192.
The learned Judge, however, granted a certificate under article 132 that the case involved substantial questions of law as to the interpretation of the Constitution, and the Commission has accordingly preferred this appeal.
A preliminary objection was raised by Mr. Mohan Kumaramangalam, who argued the case for the respondent with marked ability, that the appeal brought from the judgment of a single Judge was barred under article 133(3) of the Constitution despite the certificate granted by the learned Judge overruling the same objection which was also raised before him.
It has been urged that, so far as civil matters are concerned, the more comprehensive provisions in article 133(1) (c) for the grant of a certificate of fitness for appeal to the Supreme Court completely overlap article 132(1) which relates only to one specific ground, namely, a substantial question of law being involved as to the interpretation of the Constitution, and that the court 's power, therefore, to grant a certificate of fitness on any ground including the ground referred to above, must be deem ed to arise under article 133(1) (c), with the result that the exercise of such power is excluded by the opening 1149 words of clause (3) of that article which bars an appeal from the judgment, decree or final order of one Judge of a High Court.
The argument was sought to be reinforced by reference to clause (2) of that article and the proviso to article 145(3) both of which contemplate appeals involving substantial questions of law as to the interpretation of the Constitution being brought without a certificate having been obtained under article 132.
The argument has no force.
While it is true that constitutional questions could be raised in appeals filed without a certificate under article 132, the terms of that article make it clear that an appeal is allowed from "any judgment, decree or final order of a High Court" provided, of course, the requisite certificate is given, and no restriction is placed on the right of appeal having reference to the number of Judges by whom such judgment, decree or final order was passed.
Had it been intended to exclude the right of appeal in the case of a judgment etc., by one Judge, it would have been easy to include a reference to article 132 also in the opening words of article 133(3), as in the immediately preceding clause.
If the respondent 's contention were accepted, not only would article 132 become redundant so far as it relates to civil proceedings, but the object of the Explanation to that article, which was designed to supersede the decision of the Federal Court in section Kuppuswami Rao vs The King (1) and thus to secure a speedy determination of constitutional issues going to the root of a case, would be defeated, as the Explanation is not made applicable to the same expression "final order" used in article 133(1).
The whole scheme of the appellate jurisdiction of the Supreme Court clearly indicates that questions relating to the interpretation of the Constitution are placed in a special category irrespec tive of the nature of the proceedings in which they may arise, and a right of appeal of the widest amplitude is allowed in cases involving such questions.
We accordingly overrule the preliminary objection and hold that the appeal is maintainable.
(1) 149 1150 Turning now to the question as to the powers of a High Court under article 226, it will be noticed that article 225 continues to the existing High Courts the same jurisdiction and powers as they possessed immediately before the commencement of the Constitution.
Though there had been some conflict of judicial opinion on the point it was authoritatively decided by the Privy Council in the Parlakimedi case(1) that the High Court of Madras the High Courts of Bombay and Calcutta were in the same position had no power to issue what were known as high prerogative writs beyond the local limits of its original civil jurisdiction, and the power to issue such writs within those limits was derived by the court as successor of the Supreme Court which had been exercising jurisdiction over the Presidency Town of Madras and was replaced by the High Court established in pursuance of the Charter Act of 1861.
The other, High Courts in India had no power to issue such writs at all.
In that situation, the makers of the Constitution, having decided to provide for certain basic safeguards for the people in the new set up, which they called fundamental rights, evidently thought it necessary to provide also a quick and inexpensive remedy for the enforcement of such rights and, finding that the prerogative writs which the Courts in England had developed and used whenever urgent necessity demanded immediate and decisive interposition, were peculiarly suited for the purpose, they conferred, in the States ' sphere, new and wide powers on the High Courts of issuing directions, orders, or writs primarily for the enforcement of fundamental rights, the power to issue such directions, etc., "for any other purpose" being also included with a view apparently to place all the High Courts in this country in somewhat the same position as the Court of King 's Bench in England.
But wide as were the powers thus conferred, a two fold limitation was placed upon their exercise.
In the first place, the power is to be exercised "throughout the territories in relation to which it exercises jurisdiction", that is to say, the writs issued (1) 70 I.A, 129 1151 by the court cannot run beyond the territories subject to its jurisdiction.
Secondly, the person or authority to whom the High Court is empowered to issue such writs must be "within those territories", which clearly implies that they must be amenable to its jurisdiction either by residence or location within those territories.
Such limitation is indeed a logical consequence of the origin and development of the power to issue prerogative writs as a special remedy in England.
Such power formed no part of the original or the appellate jurisdiction of the Court of King 's Bench.
As pointed out by Prof. Holdsworth (History of English Law, Vol. 1, p. 212 et seq.) these writs had their origin in the exercise of the King 's prerogative power of superintendence over the due observance of the law by his officials and tribunals, and were issued by the Court of King 's Bench habeas corpus, that the King may know whether his subjects were lawfully imprisoned or not; certiorari, that he may know whether any proceedings commenced against them are conformable to the law; mandamus, to ensure that his officials did such acts as they were bound to do under the law, and prohibition, to oblige the inferior tribunals in his realm to function within the limits of their respective jurisdiction.
See also the introductory remarks in the judgment in the Parlakimedi case(1).
These writs were thus specifically directed to the persons or authorities against whom redress was sought and were made returnable in the court issuing them and, in case of disobedience, were enforceable by attachment for contempt.
These characteristics of the special form of remedy rendered it necessary for its effective use that the persons or authorities to whom the court was asked to issue these writs should be within the limits of its territorial jurisdiction.
We are unable to agree with the learned Judge below that if a tribunal or authority permanently located and normally carrying on its activities elsewhere exercises jurisdiction within those territorial (1) 70 I.A. 129, 140.
1152 limits so as to affect the rights of parties therein, such tribunal or authority must be regarded as "function 'mg" within the territorial limits of the High Court and being therefore amenable to its jurisdiction under article 226.
It was, however, urged by the respondent 's counsel that the High Court had jurisdiction to issue a writ to the Commission at New Delhi because the question referred to it for decision related to the respondent 's right to sit and vote in the Legislative Assembly at Madras and the parties to the dispute also resided in the State of Madras.
The position, it was claimed, was analogous to the court exercising jurisdiction over persons outside the limits of its jurisdiction, provided the cause of action arose within those limits.
Reliance was placed upon the following observations of the Privy Council in the Parlakimedi case(1): "The question of jurisdiction must be regarded as one of substance and that it would not have been within the competence of the Supreme Court to claim juisdiction over such a matter as the present of issuing certiorari to the Board of Revenue on the strength of its location in the town.
Such a view would give jurisdiction to the Supreme Court in the matter of the settlement of rents of ryoti holdings in Ganges between parties not otherwise subject to its jurisdiction, which it would not have had over the Revenue Officer who dealt with the matter at first instance.
" We cannot accede to this argument.
, The rule that cause of action attracts jurisdiction in suits is based on statutory enactment and cannot apply to writs issuable under article 226 which makes no reference to any cause of action or where it arises but insists on the presence of the person or authority within the territories" in relation to which the High Court exercises jurisdiction.
Nor is much assistance to be derived from the observations quoted above.
That case arose out of proceedings before a special Revenue Officer for settlement of fair rent for certain holdings within the zemindary estate of Parlakimedi situated beyond the local limits of the original civil jurisdiction of the Madras High Court.
Dissatisfied (1) 70 I.A. 129.
1153 with the settlement made by the Revenue Officer, the ryots appealed to the Board of Revenue which had its offices at Madras.
The appeal was accepted by a single member of the Board who reduced the rent as desired by the ryots.
The zemindar appealed by way of revision to the Collective Board which sanctioned an enhancement.
Thereupon the ryots applied to the High Court for the issue of a writ of certiorari to bring up and quash the proceedings of the Collective Board which passed the order complained of in the town of Madras.
The Privy Council considered the question of jurisdiction from two separate standpoints: "(a) independently of the local civil jurisdiction which the High Court exercises over the Presidency town; or (b)solely by reason thereof, as an incident of the location of the Board of Revenue within the town.
" On question (a), they examined the powers of the Supreme Court at Madras to issue certiorari beyond the Presidency Town under clause 8 of the Charter of 1800, as it was suggested that the High Court succeeded to the jurisdiction and powers of the Supreme Court which had been granted the same powers of issuing prerogative writs as the Court of King 's Bench in England throughout the Province, and they recorded their conclusion thus: " Their Lordships are not of opinion that the Supreme Court would have had any jurisdiction to correct or control a country court of the company deciding a dispute between Indian inhabitants of Ganjam about the rent payable for land in that district.
" Then, dealing with question (b) and referring to their decision in Besants case(1) that the High Courts of Calcutta, Madras and Bombay had power to issue certiorari in the exercise of their local jurisdiction, they held that the principle could not be applied "to the settlement of rent for land in Ganjam merely on the basis of the location of the Board of Revenue as a body which is ordinarily resident or located within (1) 46 I.A. I 76.
1154 the town of Madras, or on the basis that the order complained of was made within the town.
if SO, it would seem to follow that the jurisdiction of the High Court would be avoided by the removal of the Board of Revenue beyond the outskirts of the town and that it would never attach but for the circumstance that an appeal is brought to, or proceedings in revision taken by, the Board of Revenue.
" Then followed the passage already quoted on which the respondent 's counsel laid special stress.
It will thus be seen that the decision is no authority for dispensing with the necessity of the presence or location, within the local limits of the court 's jurisdiction, of the person or authority to whom the writ is to be issued, as the basis of its power to issue it.
Their Lordships considered, in the peculiar situation they were dealing with, that the mere location of the appellate authority alone in the town of Madras was not a sufficient basis for the exercise of jurisdiction whereas both the subject matter, viz., the settlement of rent for lands in Ganjam, and the Revenue Officer authorized to make the settlement at first instance were outside the local limits of the jurisdiction of the High Court.
If the court in Madras were, recognised as having jurisdiction to issue the writ of certiorari to the appellate authority in Madras, it would practically be recognising the court 's jurisdiction over the Revenue Officer in Ganjam and the settlement of rents for lands there, which their Lordships held it never had.
That was the "substance" of the matter they were looking at, and their observations lend no support to the view that if the subject matter or the cause of action and the parties concerned were within the territorial limits of the jurisdiction, the High Court could issue prerogative writs to persons or authorities who are not within those limits.
In any case, the decision did not turn on the construction of a statutory provision similar in scope ' purpose or wording to article 226 of the Constitution, and is not of much assistance in the construction of that article.
1155 It was said that it could not have been contemplated that an inhabitant of the State of Madras, feeling aggrieved by a threatened interference with the exercise of his rights in that State by an authority located in Delhi and acting without jurisdiction, should seek his remedy under article 226 in the Punjab High Court.
It is a sufficient answer to this argument of inconvenience to say that, the language of the article being reasonably plain, it is idle to speculate as to what was or was not contemplated.
Our attention has been called to certain decisions of High Courts dealing with the situation where the authority claiming to exercise jurisdiction over a matter at first instance is located in one State and the appellate authority is located in another State.
It is not necessary for the purposes of this appeal to decide which High Court would have jurisdiction in such circumstances to issue prerogative writs under article 226.
In the view we have expressed above as to the applicability of article 226 to the present case, it is unnecessary to enter upon a discussion of the question whether article 192(1) applies only to members who, having been already elected, have become subject to a disqualification by reason of events happening after their election; but having heard the point fully argued before us, we think it right to express our opinion thereon, especially as both sides have invited us to do so in view of its general importance.
The relevant provisions of the Constitution on which the determination of the question turns are as follows: 190.
(3) If a member of a House of the Legislature of a State (a) becomes subject to any of the disqualifications mentioned in clause (1) of article 191 ; or (b) resigns his seat by writing under his hand addressed to the Speaker or the Chairman, as the case may be, his seat shall thereupon become vacant, 1156 191.
(1) A person shall be disqualified for being chosen as, and for being, a member of the Legislative Assembly or Legislative Council of a State (a) if he holds any office of profit under the Government of India or the Government of any State, specified in the First Schedule, other than an office declared by the Legislature of the State by law not to disqualify its holder; (b) if he is of unsound mind and stands so declared by a competent court; (c) if he is an undischarged insolvent; (d) if he is not a citizen of India, or has voluntarily acquired the citizenship of a foreign State, or is under any acknowledgment of allegiance or adherence to a foreign State; (e) if he is so disqualified by or under any law made by Parliament.
(1) If any question arises as to whether a member of a House of the Legislature of a State has become subject to any of the disqualifications mentioned in clause (1) of article 191, the question shall be referred for the decision of the Governor and his decision shall be final.
(2) Before giving any decision on any such question, the Governor shall obtain the opinion of the Election Commission and shall act according to such opinion.
If a person sits or votes as a member of the Legislative Assembly or the Legislative Council of a State. . when he knows that he is not qualified or that he is disqualified for membership thereof, or that he is prohibited from so doing by the provisions of any law made by Parliament or the Legislature of the State, he shall be liable in respect of each day on which he so sits or votes to a penalty of five hundred rupees to be recovered as a debt due to the State.
As has been stated already, the respondent 's conviction and sentence in 1942 disqualified him both for being chosen as, and for being, a member of the Legislative Assembly under article, 191 (1) (e) read with section 7 of the Representation of the People Act, 1951, 1157 passed by Parliament, the period of five years since his release on 15th August, 1947, not having elapsed before the date of the election.
The respondent having thus been under a disqualification since before his nomination on 15th March, 1952, could he be said to have "become" subject to that disqualification within the meaning of article 192 ? The rival contentions of the parties centred round the true interpretation to be placed on that word in the context of the provisions quoted above.
The Attorney General argued that the whole fasciculus of the provisions dealing with "disqualifications of members", viz., articles.190 to 193, should be read together, and as articles 191 and 193 clearly cover both preexisting and supervening disqualifications, articles 190 and 192 should also be similarly understood as relating to both kinds of disqualification.
According to him all these provisions together constitute an integral scheme whereby disqualifications are laid down and machinery for determining questions arising in regard to them is also provided.
The use of the word "become" in articles 190 (3) and 192 (1) is not inapt, in the context, to include within its scope preexisting disqualifications also, as becoming subject to a disqualification is predicated of "a member of a House of Legislature", and a person who, being already disqualified, gets elected, can, not inappropriately, be said to "become" subject to the disqualification as a member as soon as he is elected.
The argument is more ingenious than sound.
Article 191, which lays down the same set of disqualifications for election as well as for continuing as a member, and article 193 which prescribes the penalty for sitting and voting when disqualified, are naturally phrased in terms wide enough to cover both preexisting and supervening disqualifications; but it does not necessarily follow that articles 190 (3) and 192 (1) must also be taken to cover both.
Their meaning must de end on the language used which, we think, is reasonably plain.
In our opinion these two articles go together and 150 1158 provide a remedy when a member incurs a disqualification after he is elected as a member.
Not only do the words " becomes subject" in article 190(3) and "has become subject" in article 192(1) indicate a change in the position of the member after he was elected, but the provision that his seat is to become thereupon vacant, that is to say, the seat which the member was filling theretofore becomes vacant on his becoming disqualified, further reinforces the view that the article contemplates only a sitting member incurring the disability while so sitting.
The suggestion that the language used in article 190(3) can equally be applied to a pre existing disqualification as a member can be supposed to vacate his seat the moment he is elected is a strained and farfetched construction and cannot be accepted.
The Attorney General admitted that if the word " is " were substituted for "becomes" or " has become ", it would more appropriately convey the meaning contended for by him, but he was unable to say why it was not used.
It was said that on the view that articles 190(3) and 192(1) deal with disqualifications incurred after election as a member, there would be no way of unseating a member who became subject to a disqualification after his nomination and before his election, for, such a disqualification is no ground for challenging the election by an election petition under article 329 of the Constitution read with section 100 of the Representation of the People Act, 1951.
If this is an anomaly, it arises out of a lacuna in the latter enactment which could easily have provided for such a contingency, and it cannot be pressed as an argument against the respondent 's construction of the constitutional provisions.
On the other hand, the Attorney General 's contention might, if accepted, lead to conflicting decisions by the Governor dealing with a reference under article 192 and by the Election Tribunal inquiring into an election petition under section 100 of the Parliamentary statute referrred to above.
For the reasons indicated we agree with the learned Judge below in holding that articles 190(3) and 192(1) 1159 are applicable only to disqualifications to which a member becomes subject after he is elected as such, and that neither the Governor nor the Commission has jurisdiction to enquire into the respondent 's disqualification which arose long before his election.
As, however, we have held that the High Court was not competent under article 226 to issue any prerogative writ to the appellant Commission, the appeal is allowed and the writ of prohibition issued by the learned Judge is quashed.
We make no order as to costs.
Appeal allowed.
Agent for the appellant and the Intervener: G. H. Rajadhyaksha.
[/INST]The properties in suit had been sold by A to the appellants on May 31; 1956, but the respondents, as the owners of certain agricultural land in the patti claimed that they had a right of preemption under section 15 (c) (ii) and (iii) of the Punjab Preemption Act, 1913.
In the suit instituted by the respondents for this purpose the appellants resisted the claim on the ground that the vendees from A had transferred by exchanges some of the items out of the lands purchased by them and that as a result of the said exchanges the appellants themselves had become entitled to preempt the said sales under the same statutory provision.
The suit was, however, decreed by the trial court and the decision was confirmed by the High Court of Punjab.
The appellants obtained special leave to appeal to the Supreme Court and during the pendency of 885 the appeal the Act was amended by Punjab Act 10 of 1960, by which, inter alia, (1) cls.
(ii) and (iii) of section 15 (c) of the original Act were deleted, (2) cl.4 of section 15 (1)(c) provided that the right of preemption in respect of agricultural land and village immoveable property shall vest in the tenants who held under tenancy of the vendors or anyone of them the land or property sold or a part thereof, and (3) section 31 provided that no court shall pass a decree in a suit for preemption whether instituted before or after the commencement of the amending Act of 1960 which was inconsistent with the provisions of the said Act.
In view of the new provisions introduced by the amending act the respondents raised a new contention that they were tenants who held under tenancy of the vendor of the lands in question and, as such, they were entitled to the right of preemption under cl.4 of s.15 (1)(c) of the Act, as amended, even if it be held that the right to claim pre emption under cls.
(ii) and (iii) of s.15 (c) of the unmended Act was taken away retrospectively by the amending Act.
The appellants pleaded that even assuming that cl.4 of s.15 (1)(c) was applicable, the respondents could not get a decree on the bassis of the new right of pre emption inasmuch as they had no such right on the date on which the suit was filed or when the sales were effected.
Held, that (1 the provisions of s.31 of the Punjab Pre emption Act, 1913, as amended by Punjab Act 10 of 1960, are retrospective in operation and, therefore, the decree passed in favour of the respondents by the trial court and affirmed by the High Court under the unmended section could not be sustained.
Ram Sarup V.Munshi [1963] 3 S.C.R. 858 followed.
(2) The retrospective operation of s.31 necessarily involves effect being given to the substantive provisions of amended s.15 retrospectively, and hence the rights which the respondents now claim under the amended provisions must be deemed to have vested in them at the relevant time, with the result that they are entitled, on remand, to ask for a decree passed on the basis of the said rights,
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<s>[INST] Summarize the judgement1 of 1991.
IN Writ Petition No. 491 of 1991.
WITH Writ Petition Nos. 541 & 560 of 1991 etc.
(Under Article 32 of the Constitution of India).
G. Ramaswamy, Attorney General, Shanti Bhushan, Ashok Desai, Hardev Singh, Ms. Indira Jaisingh, P.S. Poti, Rajinder Sachhar, M.K. Ramamurty, R.K. Garg, S.K. Garg, S.K. Dholakia, Santosh Hedge, V.N. Ganpule, Tapas Ray, N.B. Shetye, P.P. Rao, Kapil Sibal, D.S. Tewatia, Hari Swarup, Jayant, Jayant Bhushan, Prashant Bhushan, Ms. Madhoo Moolchandani, Ms. Kamini Jaiswal, A.K. Srivastava, E.M.S. Anam, N.D. Garg, A.M. Khanwilkar and Ms. A. Subhashini for the Appearing Parties.
The following Order of the Court was delivered: This writ petition is by a body of advocates styled "Sub Committee on Judicial Accountability" and raises certain questions as to the validity and implementation of the action of the Speaker of the Lok Sabha admitting a notice of motion moved by 108 Members of Parliament under Article 124(5)read with the and constituting an Inquiry Committee consisting of a Judge of the Supreme Court, Chief Justice of a High Court and a jurist to investigate into the allegations of misconduct made against a sitting 743 Judge of the Supreme Court pertaining to his conduct as the erstwhile Chief Justice of the Punjab and Haryana High Court.
The main prayers in the writ petition are that the Union Government be directed to afford facilities to the Inquiry Committee to discharge its constitutional and statutory functions; and for directions to the Hon 'ble Chief Justice of India to abstain from allocating any judicial work to the concerned Judge during the pendency of the proceedings before the Committee.
In regard to the latter prayer that notice should go to the Hon 'ble Chief Justice of India, we think that aspect of the matter should be deferred for the present and considered at the appropriate stage of the final hearing.
In regard to the directions to the Union Government, the Union Government by means of an affidavit subscribed to by the Joint Secretary, Ministry of Law and Justice, has made manifest its stand that in its view the motion initiated by the 108 Members of Parliament on which the Speaker took the decision to constitute a Committee had lapsed with the dissolution of the Lok Sabha and that nothing further remains to be done in the matter.
It is in that view, as averred in the affidavit, that the Government of India did not advise the President to issue any notification as required by Para 9 read with Para 11(b)(i), of Second Schedule to the Constitution enabling the sitting Judge of this Court and the Chief Justice of High Court to reckon the time spent by them in functioning as members of the Committee as part of their `actual service '.
The contention of the petitioner is that having regard to the constitutional and statutory of the sitting Judges who function in the Committee, the time spent by them in performance of such function is to be reckoned as part of their `actual service ' as judges and no notification under the concerned provisions by the President is necessary.
It is relevant to mention here that some of the interveners who seek to oppose the writ petition have, in addition to their stand against the writ petition, also filed individual writ petitions of their own in which, more or less, they seek to endorse the stand taken by the Government raising the question as to whether the motion survives the dissolution of the Lok Sabha or not.
Shri Shanti Bhushan, learned counsel for the petitioner made an impassioned plea that having regard to the dire need of maintaining public confidence in the apex institution and its reputation it is necessary that the concerned Judge should abstain from discharging judicial functions during the pendency of the enquiry against him.
In the alternative, it is submitted that if a direction to that effect is not issued, 744 it should at the least necessarily be directed that pending disposal of the writ petition on merits, the Union of India shall afford to the Committee such facilities as may be necessary for its effective and prompt functioning.
Shri Shanti Bhushan submitted that even if ultimately the writ petition fails no loss or injury would be caused to anybody and what would have resulted would only be that the eminent body of Judges would have Occasion to look into the allegations against a sitting Judge and if they found the allegations to be baseless, the concerned Judge would be cleared of the imputations and cloud against his conduct.
He urged, if such a direction or interim mandamus is not issued it would seriously impair the image of the Court as the apex Court in the country and affect the confidence of the people in the quality of justice dispensed by it.
We have given our anxious consideration to the matter and having regard to the nature and importance of the issues involved it is appropriate that the main matter along with the connected writ petitions is heard as expeditiously as possible.
We, therefore, direct that his matter be listed on July 9, 1991 with a direction that hearing of the matters be proceeded with day to day until conclusion.
We also indicated that arguments on all sides should be completed within a period of ten working days and the learned counsel for all the parties and interveners should file their written arguments in advance latest by July 1, 1991.
The actual hearing time to each of the counsel will be appointed at the commencement of the hearing on July 9, 1991.
In this view of the matter, we think it appropriate not to embark upon an examination of the contentions in support of and the prayer for interlocutory relief.
We, however, make it clear that our disinclination to issue any interlocutory orders at this stage shall not be construed as an expression of opinion on the merits of the merits of the issues either way and shall not also be construed as an interdiction of the functioning of the Committee if the Committee otherwise considers appropriate to proceed with the matter.
We also make it clear that during the pendency of these matters before this Court no proceeding pending or filed hereafter in any other court shall be heard or any order passed therein relating to the issues involved in these matters.
NVP Petition dispose of.
[/INST]A Writ Petition filed by the Petitioner Committee, a body of Advocates, praying for directions to be issued to the Union government and the Chief Justice of India, in connection with the enquiry into allegation of misconduct made against a sitting Judge of the Supreme Court, pertaining to his conduct as Chief Justice of a High Court, raised certain questions as to the validity and implementation of the action of the Speaker of the Lok Sabha in admitting a notice of motion moved by the Members of Parliament under Article 124(5) of the Constitution of India, 1950 read with .
Some intervention applications, opposing the Writ Petition, and some other Writ Petitions more of less endorsing the Government 's stand raising the question as to whether the motion in question survived the dissolution of the Lok Sabha or not, were also filed.
Praying for interim direction, which was identical with the prayer in main Writ Petition, it was urged on behalf of the Petitioner Committee that having regard to the dire need of maintaining public confidence in the institution and its reputation as apex Court, it was necessary that the concerned Judge should abstain from discharging judicial functions during the pendnecy of the enquiry, and a direction should be issued accordingly, or pending disposal of the Writ Petition, the Union Government should be directed to afford all necessary facilities to the Committee for smooth and efficient functioning.
Directing expeditious hearing of the Writ Petition and connected matters, this Court, 742 HELD: 1.1 Having regard to the nature and importance of the issues involved, it is appropriate that the main matter along with the connected writ petitions is heard as expeditiously as possible.
Accordingly, this matter should be listed on July 9, 1991 and hearing of the matters proceeded with day to day until conclusion.
[744D] 1.2 In the circumstances, it is not appropriate to embark upon an examination of the prayer for interlocutory relief.
However, the Court 's disinclination to issue any interlocutory orders at this stage should not be construed as an expression of opinion on the merits of the issues either way and as an interdiction of the functioning of the Committee, if the Committee otherwise considers appropriate to proceed with the matter.
[744E F]
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<s>[INST] Summarize the judgementCivil Appeal No. 1951 of 1969.
Appeal by Special Leave from the Judgment and Order dated 7 1 69 of the Allahabad High Court in Civil Revision No. 506 510 and 548 552/65.
J. P. Goyal and section K. Jain for the Appellant.
R. K. Garg, V. J. Francis and D. K. Garg for Respondent No. 1.
The Judgment of the Court was delivered by UNTWALIA, J.
This is an appeal by special leave from the judgment of the Allahabad High Court disposing of ten connected civil revisions.
Noorul Hasan Khan and others were the Zamindars of the village in which certain lands were given in Theka to Bhagwati Singh, Ram Prasad Singh and others on the 6th of March, 1948.
The Zamindari vested under the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, hereinafter called the Act, on the 30th of June, 1952.
Disputes arose between the ex Zamindars and the ex Thekadars during the pendency of the proceedings under the U.P. Consolidation of Holding Act.
When entries in the list of tenancy holders were published under section 11 of the Consolidation of the Holdings Act relating to the lands in dispute consisting of several plots, objections were filed by both the parties.
Noorual Hasan Khan and others claimed that the plots in dispute being their exclusive Sir and Khudkasht would be deemed to have been settled with them by the State on the abolition of the Zamindari and their names should be recorded as bhumidars thereof.
On the other hand Bhagwati Singh and others claimed that they had become the Sirdars of the plots in dispute and they resisted the claim of the ex Zamindars.
The Consolidation Officer referred the matter to the Civil Judge of Azamgarh in accordance with section 12 of the Consolidation of Holdings Act.
The Civil Judge sent the matter for decision to an Arbitrator appointed under the Act as the dispute gave rise to the question of title.
Shri Kailash Chandra, an Assistant Collector, was appointed as an Arbitrator.
On consideration of the oral and documentary 979 evidence adduced before him he rejected the claim of ex Zamindars and decided the matter in favour of the ex Thekedars.
Bhagwati Singh and others were held to be the Sirdars of the plots in question.
Noorul Hasan and others filed objections to the Award before the Civil Judge.
He allowed the objections on the ground that the illegality of the Award was apparent on the face of it in as much as the Arbitrator did not apply the correct law in determining the rights of the parties.
He set aside the Award and remitted it back to the arbitrator for reconsideration in the light of his judgment.
Appeals were taken to the learned Additional District Judge who by order dated 8 12 1962 disagreed with the learned Civil Judge on the main question but affirmed his order of remand on the ground that in the Award many questions were left undetermined.
Both sides filed separate revisions before the High Court.
The High Court has allowed the revisions of the ex Thekedars and dismissed those of the ex Zamindars.
Hence this appeal.
The only point which was argued and agitated before us is whether Bhagwati Singh and others have been rightly held to be the Sirdars of the plots in question or whether the ex landlords had become the bhumidars.
The determination of this question depends upon a correct appreciation of the provisions of law contained in sections 12 and 13 of the Act.
We shall read the relevant portions of the two sections.
They are as follows : "12.
Thekedars to be hereditary tenants in certain circumstances. (1) Where any land was in the personal cultivation of a person on the Ist day of May, 1950, as a thekedar thereof and the theka was made with a view to the cultivation of the land by such thekedar personally, then notwithstanding anything in any law, document or order of court, he shall be deemed to be a hereditary tenant thereof entitled to hold, and when he has been ejected from the land after the said date, to regain possession as a hereditary tenant thereof liable to pay rent at hereditary rates.
Estate in possession of a thekedar. (1) Subject to the provisions of Section 12 and sub section (2) of this section a thekedar of an estate or share therein shall, with effect from the date of vesting, cease to have any right to or possess as such any land in such estate.
980 (2) Where any such land was in the personal cultivation of the thekedar on the date immediately preceding the date of vesting, the same shall (a) if it was sir or khudkasht of the lessor on the date of the grant of the theka, be deemed for purposes of Section 18, to be the sir or khudkasht of the lessor on the date immediately preceding the date of vesting and the thekedar shall, with effect from the date of vesting, become the asami thereof liable to pay rent at hereditary rates applicable on the date immediately preceding the date of vesting and entitled to hold the land as such for the unexpired period of the theka or for a period of five years from the date of vesting whichever is less; (b) if it was not sir or khudkasht of the lessor on the date of the grant of the theka and (i) its area does not exceed thirty acres, be deemed for purposes of Section 19 to have been held by the thekedar as a hereditary tenant liable to pay rent which shall be equal to the rent calculated at hereditary rates applicable on the date immediately preceding the date of vesting.
(ii) its area exceeds thirty acres, be deemed to the extent of thirty acres for purposes of Section 19 to have been held as a hereditary tenant as aforesaid and the remainder shall be deemed to be vacant land and the thekedar shall be liable to ejectment therefrom in accordance with the provisions of Section 209.
" It would be noticed from the provisions aforesaid that a Thekedar of an Estate ceases to have any right to hold or possess as such any land in such Estate with effect from the date of its vesting.
This is what has been provided in sub section (1) of section 13.
But it is subject to two exceptions viz.
, one the provision contained in section 12 and the other engrafted in sub section (2) of section 13.
There is no dispute between the parties that the land in possession of the Thekedars on the date of vesting was either covered by section 12(1) or section 13(2) (a).
We are not concerned in this case with section 13(2)(b) as the land admittedly was the Sir or Khudkasht of the lessor namely the Zamindars.
If such a land was in the personal 981 cultivation of a person on the 1st day of May, 1950 as a Thekedar thereof and if the Theka was made with a view to the cultivation of the land by such Thekedar personally then because of the non obstante clause occurring in sub section (1) of section 12 of the Act the Thekedar would be deemed to be a hereditary tenant of the land entitled to hold as such and liable to pay rent at hereditary rates.
If, however, the land was in personal cultivation of the Thekedar merely as a Thekedar appointed to collect rent from other tenants and incidentally allowed to cultivate the Sir or Khudkasht land of the lessor then he will be a mere asami in accordance with section 13(2)(a) of the Act.
The Arbitrator on a consideration of the Theka document found that the theka was made with a view to cultivation of the land by the Thekedar personally.
The interpretation of the Arbitrator was not such that it could enable the Civil Judge to take the view that there was an error of law apparent on the face of the record.
On the other hand it appears to us what the interpretation put by the Arbitrator was correct.
There is a subtle but clear dividing line between the two types of cases one falling under section 12(1) of the Act and the other coming within the ambit of section 13(2)(a).
In our opinion the High Court was right in its view that the Award of the Arbitrator was not fit to be interfered with.
For the reasons stated above, we dismiss this appeal but in the circumstances make no order as to costs.
N.K.A. Appeal dismissed.
[/INST]The appellant (plaintiff) the present Mahant, filed a suit for a declaration that the plaint schedule properties were his personal properties and that there was no trust of a religious or public nature so as to attract the provisions of the Bihar Hindu Religious Trust Act 1951.
It was contended in the suit that one G constructed a temple on his own land in the village, installed deities, performed puja and raj bhog till his death, that the public had no concern with the idols and that after his death he was succeeded by his son who became a bairagi.
Apart from the properties left by him, his son also acquired other properties.
On the son 's death he was succeeded by his Chela who became a Mahant.
Each succeeding Mahant was succeeded by his Chela.
Properties were acquired by the respective Mahants in their own name and treated as their personal properties.
One of the Mahants constructed a temple in a nearby village where he installed deities and performed puja and raj bhog.
It was claimed that the temple and the properties were the private properties of the Mahant and the public did not have any interest or right in them.
The suit was contested by respondent No. 1, contending that the temples and the properties were not the private properties of the Mahant and that they belonged to a Hindu Religious Trust to which the provisions of the Bihar Hindu Religious Trusts Act, 1951 were applicable.
The Trial Court dismissed the suit and its decree was confirmed by the High Court.
In the appeal to this Court, the question was whether the plaint schedule properties were properties in respect of which there was a trust of a public or religious nature so as to attract the provisions of the Bihar Hindu Religious Trusts Act, 1951.
^ HELD: 1.
The High Court was right in holding that there was a trust of a public nature.
[1130B] 2.
The fact that members of the public were permitted to go to the temple without any hinderance might not be a circumstance which by itself would conclusively establish that the temple was a public temple in the absence of an element of right in the user of the temple by the public.
Conversely the free use of the properties of the temple by the Mahant at a time when he was the sole manager of the temple and its properties would not necessarily lead to the inference that the temple was not a public temple.
[1129E] 3.
There can be no simple or conclusive factual test to determine the character of a trust.
The totality of the circumstances and their effect must be considered.
[1129F] In the instant case not only were the members of the public allowed free access to the temple, but they were evincing much greater interest in the insti 1126 tution as several villagers had made gifts of land to it, a circumstance which would ordinarily be consistent with the nature of the institution being public and not private.
[1129F] 4.
The situation of the temple would be an important circumstance in determining whether it was private or public.
[1129G] Deoki Nandan vs Murlidhar ; referred to.
In the instant case the High Court had pointed out that the temple was constructed outside the village on open land between two villages so as to be convenient to the villagers of both the villages.
It was constructed on a high platform and was open on all sides with plenty of space around it, so as to attract and accommodate large number of villagers from two villages.
This indicated that the trust was of a public nature.
[1129H 1130A] 5.
The donation of land by members of the public to the institution and location of the temple at a place freely accessible and convenient to the public were circumstances which indicated that the trust was of a public nature.
[1130B] Bihar State Board Religious Trust, Patna vs Mahant Sri Biseshwar Das,[1971] 3 S.C.R. 680, distinguished.
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<s>[INST] Summarize the judgementit Petition No. 1147 of 1988.
(Under Article 32 of the Constitution of India) WITH Civil Appeal No. 1782 of 1990.
330 From the Judgment and Order dated 5.6.1987 of the Punjab and Haryana High Court in C.W.P. No. 13 13 of 1986 R. Venkataramani, Mahabir Singh, M.S. Ganesh and C.M. Nayar for the Appearing Parties.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
The petitioners are law graduates.
They state that they belong to scheduled castes and sched uled tribes segments of the community.
They are seeking enforcement of the right to equality of opportunity in the matter of appointment to posts in the subordinate judiciary in the State of Haryana.
The State of Haryana has reserved 20% of the posts in the Haryana Civil Service (Judicial Branch) for the scheduled castes and scheduled tribes.
It is the case of petitioners that though 20% of the posts in the Haryana Civil Service (Judicial Branch) have been reserved for scheduled castes and scheduled tribes, the strength of the appointments made since 1969 onwards reveals that hardly 8% of the total posts i.e., 40 to 45% only of the cadre strength have been allotted to the scheduled castes and scheduled tribes.
The petitioners contend that in other States of India different percentages of marks have been prescribed for scheduled castes, scheduled tribes and gener al candidates for determining their suitability and/or eligibility for appointment.
But in Haryana, they contend, minimum marks have been prescribed as 55% for all categories of candidates, namely, scheduled castes, scheduled tribes and general candidates.
In this connection, it may be appropriate to refer to the fact that under the Punjab Civil Services (Judicial Branch) Rules framed in exercise of powers conferred by Article 234 read with proviso to Article 309 of the Consti tution of India, rules have been framed and are prevalent.
Part 'C ' of the rules deals with the rules and instructions for the examination of the candidates for admission to the judicial branch of the Haryana Civil Service.
Part 'C ' of the said rules was brought into force by the Haryana Adapta tion Laws (State and concurrent subjects) Order, 1968.
Rules 7 and 8 of the said rules, inter alia, provides as follows: "7.
No candidate shall be called for the viva voce test unless he obtains at least 45% of marks in the aggregate in all the written papers and 33% marks in the language paper, Hindi (in Devanagri script).
331 8.
No candidate shall be considered to have qualified in the examination unless he obtains at least 55 per cent marks in the aggregate of all papers including the viva voce test.
" It is the case of the petitioners that fixation of the ,standard of marks which the petitioners describe as high standard, has resulted in denial of opportunity to the scheduled castes and ' scheduled tribes thus amounting to denial of equality of opportunity in the jobs which, the petitioners contend, the State otherwise sought to achieve and ought to achieve in favour of scheduled castes and scheduled tribes.
We are of the opinion that equality of opportunity should be striven for and ensured in public employment.
Steps should be taken to see where unequals are competing, conditions must be created by relaxation or otherwise so that unequals compete in terms of equality with others in respect of jobs and employments of the State.
Our Constitu tion so enjoins it.
Article 38 of the Constitution read with Articles 14, 15 and 16 so mandates it.
In order, therefore, to give those who are unequals, and it is accepted that scheduled castes and scheduled tribes for reasons historical or otherwise, are unequal with the general members of the community in respect of ability and qualification for public employment.
Hence, in order to make the unequals compete on conditions of equality certain relaxations and other factors ensuring equality are imperative.
Those groups or segments of society which are by reasons of history or otherwise unable to compete in terms of absolute equality with the members of other communities or groups in the society, should be ensured and assured chances of competing in terms of equality.
They must be helped to compete equally but it is important to emphasise that equality of opportunity is sought to be achieved for the public services or employment.
The efficacy and efficiency of that service is of prime consideration. ' Equality must be there for all to compete for the public services.
Public services and public employ ment do not exist for providing jobs in terms of equality or otherwise to all.
Only public services and public employment must serve public purpose and nothing that hampers or im pairs the efficiency or efficacy of public services cannot and should not be permitted in ensuring conditions of con stitutional equality.
These should be done objectively, rationally and reasonably.
As is often said, it may be that need to ensure equality for scheduled castes and scheduled tribes should not be surrendered on the facile and value based perception of efficiency.
Yet efficiency must be ensured.
Real equality must be accorded.
332 As mentioned hereinbefore, the contention of the peti tioners is that 55% marks in aggregate in all papers includ ing viva voce test constitute rather a high standard for qualification and eligibility.
They contend that for most of the scheduled caste and scheduled tribe aspirants for the job it is difficult to achieve that standard.
It is said that in other parts of this vast land of ours the standard is not as high as that.
Sri Venkatramani, advocate for the petitioners, contended that in other States on an all India basis such a high standard of marks is not envisaged.
Sri Mahabir Singh, learned advocate appearing for the State of Haryana and Sri C.M. Nayar, learned advocate for the Public Service Commission contend that it must be presumed that the minimum percentage desirable for the purpose of efficiency has been prescribed.
It was further submitted by Sri Nayar that in respect of candidates other than scheduled castes and scheduled tribes, normally those obtaining far higher than 55% marks become eligible for consideration.
That may or may not be so but what is required is that we must ensure efficiency in administration.
We must, therefore, objective ly, rationally and by a conscious process conscious in the sense by application of mind to the relevant factors arrive at a percentage which should be considered to be a minimum one in order to ensure the efficiency of the administration.
We are conscious that high efficiency is required because the recruitment is in the judicial branch, that is to say, for prospective judicial officers who will be in charge of administration of justice in the country.
But at the same time, if possible, in order to ensure that there is equality of opportunity, a percentage should be fixed which without, in any way, compromising with the efficiency required for the job which will be attainable by backward communities, that is to say, scheduled castes and scheduled tribes.
Unless such a percentage is fixed on the aforesaid basis and a percentage is fixed for qualification which would normally be unattainable by the scheduled castes and scheduled tribes determined on an objective basis, it would not be possible to ensure equality of opportunity.
Both S/Sri Mahabir Singh and Nayar have urged that the minimum must be presumed to have been so fixed in the Haryana Service.
However, that fact is not apparent and there is nothing on record to indicate that this percentage was fixed deliberately on an analysis and careful examination and determination on the lines and the principles indicated above.
In that view of the matter, in our opinion, in the interest of justice and our constitutional mandates and in the light of the efficiency of the services and with a view to create a sense of justice, it is necessary for the Gov ernment concerned to consider this question as 333 to what should be the minimum percentage of marks necessary for the administration.
We direct that the Government will make a conscious decision objectively before the next selec tions for the post in Haryana Judicial Service take place, and determine a minimum percentage of marks consistent with efficiency and the need for ensuring equality of opportunity to scheduled castes and scheduled tribes.
It was also contended by Sri Venkataramani that some of the candidates belonging to the scheduled castes and sched uled tribes have become overaged, therefore, the Government should also consider whether further relaxation in age in favour of scheduled castes and scheduled tribes can be made; and if so, to what extent without hampering efficiency of the administration.
This should also be considered before the next selections for appointment to the post are made.
In the aforesaid light, special leave is granted in civil appeal No. 15,000/88 and the judgment and order of the High Court of Punjab & Haryana, dated 5th June, 1987 are modified to the extent indicated above.
The writ petition and the appeals are disposed of accordingly without any order as to costs.
P.S.S. Petition disposed of.
[/INST]Rule 8 of the Punjab Civil Services (Judicial Branch Rules, 1951, as adapted by the State of Haryana, lays down that no candidate shall be considered to have qualified in the examination unless he obtains at least 55% marks in the aggregate of all papers, including the viva voce test.
The petitioners assailed the said provision on the ground that fixation of 55% marks has resulted in denial of equality of opportunity to the scheduled castes and sched uled tribes segments of the community vis a vis general candidates for determining their suitability and/or eligi bility for appointment in the judicial branch of the Haryana Civil Services in the absence of lower percentage having been prescribed for them as in other States.
Disposing of the writ petition and the appeal, the Court, HELD: 1.
Public services and public employment do not exist for providing jobs in terms of equality or otherwise to all.
Only public services and public employment must serve public purpose and nothing that hampers or impairs the efficiency or efficacy of public services should be permit ted in ensuring conditions of constitutional equality.
These should be done objectively, rationally and reasonably.
329 2.
Scheduled castes and scheduled tribes for reasons historical or otherwise, are unequal with the general mem bers of the community in respect of ability and qualifica tion for public employment.
They are unable to compete in terms of absolute equality with the members of other commu nities or groups in the society.
Hence, in order to make them compete on conditions of equality with others in re spect of jobs and employments of the State certain relaxa tions and other factors ensuring equality are imperative.
Our Constitution so enjoins it.
Article 38 of the Constitu tion read with Article 14, 15 and 16 so mandates it.
[332D E; C] 3.
In the instant case, high efficiency is required because the recruitment is in the judicial branch, that is to say, for prospective judicial officers who will be in charge of administration of justice in the country.
But at the same time, if possible, in order to ensure that there is equality of opportunity, a percentage should be fixed which without, in any way, compromising with the efficiency re quired for the job which will be attainable by backward communities, that is to say, scheduled castes and scheduled tribes.
Unless such a percentage is fixed on the aforesaid basis and a percentage is fixed for qualification which would normally be unattainable by the scheduled castes and scheduled tribes determined on an objective basis, it would not be possible to ensure equality of opportunity.
[333D F] 4.1 The Government is directed to make a conscious decision objectively before the next selections take place, and determine a minimum percentage of marks consistent with efficiency and the need for ensuring equality of opportunity to scheduled castes and scheduled tribes.
[334B] 4.2 The Government should also consider whether further relaxation in age in favour of scheduled castes and sched uled tribes can be made; and if so, to what extent without hampering efficiency of the administration.
This should also be considered before the next selections for appointment to the post are made.
[334C]
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<s>[INST] Summarize the judgementCivil Appeal No. 918 of 1973 From the Judgment and Order dated 10.12.1986 of the Punjab and Haryana High Court in Civil Revision No. 895 of 1972.
S.K. Mehta, M.K. Dua and Aman Vachher for the Appellant.
S.N. Kacker and B.P. Maheshwari for the Re spondent; The Judgment.
of the Court was delivered by B.C. RAY, J.
This appeal by special leave is directed against the judgment and order passed on 27th February, 1973 in Civil Revi sion No. 895 of 1972 by the High Court of Punjab and Haryana whereby the revision case was allowed reversing the judgment and order of the appellate authority and allowing the application for ejectment.
The tenant appellant was granted three months ' time to vacate the shop and was also directed to deposit arrears of rent, if any within one month from the date of the order.
He was also directed to deposit advance rent for three months on the date of the order failing which he will be evicted on the expiry of one month.
511 The appellant is a tenant in respect of a room forming part of the property unit No. B VI 33(old) and B IX I48(New), Chaura Bazar, Ludhiana, which has been rented on a monthly rental of Rs. 23 by the landlady Smt.
Goran Devi on the basis of rent deed dated 7th July, 1967 for a period of three months.
After the expiry of the term of the tenancy, he contin ued in possession of the suit premises as a statutory tenant under Smt.
Guran Devi.
Guran Devi however, gifted away this property in favour of the Respondent on February 13, 1968 and from that date the appellant became a tenant under the respondent.
The ejectment was sought on the ground of default in payment of rent from 13.2.1968 till the date of filing of the application for ejectment in July, 1969 under Sec. 13 of East Punjab Urban Rent Re striction Act, 1949.
The summons of this application was served on the tenant appellant and the returnable date was fixed for 26.6.1969.
On that date, the appellant ap peared before the Rent Controller, Ludhiana with his counsel and prayed for adjournment for filing written statement.
The case was adjourned to 2.7.1969.
On that date the writ ten statement was filed and the tenant ten dered a sum of Rs. 336 on account of arrears of rent from 13.2.1968 to 12.6.1969 together with Rs. 15 as interest and Rs. 25 as costs as fixed by the Rent Controller.
The landlord accepted the amount under protest.
One of the issues framed in the said case was whether the tender was avalid tender within the meaning of proviso to Sec.
13(2) of East Punjab Urban Rent Restriction Act, 1949.
The Rent Controller after hearing the parties found that the tenant appellant having failed to tender the arrears of rent and interest at 6% per annum on such arrears together with the costs of the application, on 26.6.1969 which according to him was the first hearing of the application for ejectment, the tenant was not entitled to get the protection of Sec. 13(2)(i) proviso.
The Rent Controller repelled the contention made on behalf of the tenant that the said date was not the date of first hearing and that the cost of the appli cation having not been assessed on 26.6.1969, that day cannot be taken as the first day of heating of the application and the tenant having deposited all the arrears of rent together with interest and costs as assessed on the next date i.e. 2.7.1969 he could not be considered to be a defaulter.
In that view of the matter the Rent Controller allowed the application for ejectment and directed the tenant to vacate the premises and to deliver possession to 'the landlord petitioner in respect of the room in question within one month of the date of the order.
Against this judgment and order the tenant filed an appeal being M.C.A. No. 165/131 of 1970 before the appellate authority Ludhiana under the East Punjab Urban Rent Restriction Act.
The appellate authority reversed the order of the Rent Controller by holding that as the Rent Controller failed to discharge his duty in assessing the costs to be deposited by the tenant along with the arrears of rent and interest on 26.6.1969, the tenant cannot be 512 penalised for the mistake of the Court and the deposit that has been made by the tenant on the next date i.e. 2.7.1969 when the cost of the application was assessed by the Rent Controller, should be treated as deposit made in accordance with the provisions of Sec. 13 of the said Act.
It has been further held that for the mistake of the Court or its officers nobody could be made to suffer.
The appellate authority further held that the words 'first day of hearing ' presuppose the existence of an occasion enabling the parties to be heard and the court to hear them in respect of the cause.
The tender was accordingly held to be valid tender within the meaning of the provi sions of the said Act.
The appeal was allowed and the order of eviction made by the Rent Controller was set aside.
Against this judgment and order a Revi sion Application being Civil Revision No. 895 of 1972 was filed before the High Court of Punjab and Haryana.
The said Revision Case was allowed by holding that the day of first heating was 26.6.1969 when the tenant appeared before the Rent Controller with his counsel and sought time for filing written statement and the tender of the arrears of rent together with interest and costs of the application being not made on that date, the subsequent tender of the same on 2.7.1969 was not a valid tender within the meaning of proviso (i) to sub Sec. 2 of Section 13 of the said Act.
An order was made directing the tenant appellant to vacate the premises within three months.
The tenant was also directed to deposit the.
rent for three months within one month from the date of this order, in default he will suffer eviction after expiry of one month.
It is against this judgment and order the instant appeal on special leave has been preferred before this Court.
The only question that poses itself for consideration in this appeal is whether the date of appearance as mentioned in the summons i.e. 26.6.1969 is the date of first hearing of the application for ejectment and non payment or non tendering of arrears of rent together with interest and costs of the application on that very date will make the tenant liable for eviction from the rented premises on the ground of default.
In the instant case on the returnable day of the summons the tenant defendant appeared with his counsel i.e. on 26.6.1969 and prayed for an adjournment for filing written statement.
The case was accordingly a djourned to 2.7.1969.
It is also pertinent to note that on the re turnable day i.e. 26.6.1969 the Rent Controller did not make any order assessing the costs of the application which was required to be deposited along with arrears of rent and interest at 6% per annum on such arrears.
It is on 2.7.1969, the Rent Controller assessed the cost of the application and the tenant appellant deposited the arrears of rent up to date together with interest at the rate of 6% on such ar rears and the costs assessed by the Rent Controller on that date.
The said amount tendered in the Court was accepted by the landlord under protest.
513 The day mentioned in the summons i.e. 26.6.1969 in our considered opinion cannot be treated to be the day of first hearing of the ejectment application but it is the day for appearance of the defendent as on that day the Court does not take up the hearing or apply its mind to the hearing of the application.
It is only after written statement is filed, the issues are framed and hearing commences.
We draw inspiration and support from a decision of this Court ren dered in Ved Prakash vs Vishwa Mohan , wherein this Court was concerned with the same expression viz. 'first hearing ' employed in Sec.
20(4) of the U.P. Rent Act of 1972 (prior to the amendment of U.P. Act XXVIII of 1976) which is in pari materia with the corresponding provi sion in the Punjab Rent Act.
The analogous provisions in these two Rent Acts in so for as material are reproduced in juxtaposition hereunder.
20(4) of U.P. Urban Buildings Sec. 13 of the East (Regulation of Letting, Rent and Punjab Urban Rent Eviction) Act,1972 Restriction Act,1949 "In any suit for eviction on the "Eviction of tanants (1) ground mentioned in clause (a) of xxx(2)xxxx If the Contr Sub Sec.(2) if at the first heari oller,after giving the ng of the suit the tenant uncondi tenent a reasonable opp tionally pays or tenders to the ortunity of showing cau landlord the entire amount of rent se against the applicat and damages for use and occupation ion, is satisfied: of the building from him (such) (i) that the tenant has damages for use and occupation not paid or tendered the being calculated at the same rate rent due by him in resp as rent) together with interest ect of the building or thereon at the rate of nine per rented land. provided cent per annum and the landlord 's that if the tenant on costs of the suit in respect there the first hearing of the of. the court may,in lieu of pass application for ejectme ing a decree for eviction on that nt after due service,pay ground pass an order relieving the or tenders the arrears tenent against his liability for of rent and interest at eviction on that ground." (Emphasis six per cent per annum added).
on such arrears together with the cost of applicat ion assesed by the Contro ller, the tenent shall be deemed to have duly paid or tendered the rent with in the time aforesaid.
(ii) X X X (iii) X X X (iv) X X X (v) X X X the controller may make an order directing the tenant to put the landlord in po ssession of the building or granted land. " (Emphaise added) 514 This Court whilst interpreting the critical expression "first hearing" enunciated the law as under: "The question of law raised before us may perhaps be pronounced upon as it is of general importance.
Section 20(4) of the Act which we have excepted above fixes the crunical date for deposit of rent as "at the first hearing of the suit.
" What is "the first hearing of the suit"?.
Certain decisions have been cited before us of the Allahabad High Court which indicate that "the first hearing of the suit" is when, after framing of issues, the suit is posted for trial, that is, production of evidence .
We see none here and therefore, adopt as correct the decision of the High Court regarding the meaning of the expression "at the first hearing of the suit".
We may however add that the expression "at the first hearing of the suit" is also to be found in Order 10, Rule 1, Order 14 Rule 1(5) an Order 15, Rule 1 of the Code of Civil Procedure.
These provisions indicate that "the first hearing of the suit" can never be earlier than the date fixed for the preliminary examination of the parties (Order 10 Rule 1 ) and the settlement of issues (Order 14, Rule 1(5).
" The Punjab and Haryana High Court itself in Mangat Rai vs Ved Prakash ( 1969 Vol. 1 Rent control Reporter p. 96) has expressed the same view in paragraph 15 of the judgment: "15.
The principles that can be deduced from the plethora of case law on the point, including the authorities referred to above, are consistent with the literal meaning of word 'hearing ' which in its Dictionary sense means 'the listening of evidence and pleading in Court of law, the trial of a cause '.
It seems to be abundantly clear that in order to constitute, 'first hearing ' within the meaning of Sec. 13(2)(i) proviso, the following prerequisites must co exist: (i) There should be a 'hearing ' which presupposes the existence of an occasion enabling the parties to be heard and the court to hear them in respect of the cause.
(ii) Such hearing should be the first in point of time after due service of the summons/notice on the tenant.
Both these essentials are positive, and in the absence of either of them, there can be no "first hearing" It appears that there is consensus in regard to the interpretation of the expression 'first day ' in the context of the rent legislations of several other 515 states, for instance, the Gujarat High Court in Shah Ambalal Chhotalal and others.
vs Shah Babal Das Dayabhai and Ors., AIR [1964] (Gujarat) p. 9, dealing with the identical ques tion as to the meaning of the words "the first day of the hearing of the suit" as provided in sub Sec.
3(b) of Sec. 12 of Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 has observed after considering several decisions that "the words 'the first day of hearing ' as meaning not the day for the return of the summons or the returnable day, but the day on which the Court applies its mind to the case which ordinarily would be at the time when either the issues are determined or evidence taken.
" Similar view was also taken by the High Court of Bombay earlier in the case of Khanderao Malkarjun Dhotre vs
Anandrao Laxmanrao Mashalkar.
AIR [1959] (Bombay) p. 47| It has been observed in this case as follows: "I am of opinion that "the first day of hearing" in S.12(3)(b) means, not the day fixed for return of the sum mons or what is sometimes called the returnable day, but the day on which the learned Judge applies his mind to the case, which ordinarily he would do at the time when the issues are determined, is the day mentioned and that is the day before which the rent should have been paid.
" It was tried to be contended that these decisions being rendered in connection with the 'suit ' cannot be taken into consideration in the case of a 'proceeding ' before the Rent Controller.
We do not find 'any substance in this contention which seeks to draw a distinction without a difference in substance.
It is appropriate to point out in this connection that the object of the East Punjab Urban Rent Restriction Act as stated in the Preamble to the Act is to restrict the increase of rent of certain premises situated within the limits of urban areas and eviction of tenants therefrom.
From the objects of this Act it is abundantly clear that this Act was enacted with the object of affording protection to the tenants against arbitrary increase of rent of certain premises within the limits of urban areas as well as from eviction of the tenants from the rented premises.
In this context, it is imperative that the word "the first hearing of the application" have to be interpretted in a manner which promote the object of this beneficial legislation.
Viewed from this aspect we cannot but hold that the words "first hearing of the application" as used in provise (i) to sub section 2 of Section 13 of the said Act does not mean the day fixed for return of the summons or the returnable day but the day when the Court applies its mind to the case.
In the premises aforesaid, we allow the appeal and set aside the order of eviction passed by the High Court and confirm the judgment and order of the lower appellate court dismissing the application for eviction.
There will however be no order as to costs in the peculiar circumstances of the case.
S.R. Appeal allowed.
[/INST]Clause (1) of article 323 A, brought in by Constitution (42nd Amendment) Act, 1976, authorised Parliament to provide by law for the adjudication or trial by administrative tribunals of disputes and complaints with respect to re cruitment and conditions of service of persons appointed to public services.
Clause (2)(d) of that Article envisaged exclusion of the jurisdiction of all courts, except the jurisdiction of the Supreme Court under article 136 with re spect to the disputes or complaints referred to in cl.
Section 28 of the originally enacted within the ambit of article 323 A, provided for exclusion of jurisdiction of the Supreme Court under article 32.
The Act as amended by the Administrative Tribunals (Amendment) Ordinance, 1986, replaced by Act No. 19 of 1987 now saves the jurisdiction of Supreme Court both under article 32 in respect of original proceedings as also under article 136 for entertaining appeals.
Section 6(1)of the Act which lays down qualifications of Chairman, states that he should be or have been (a) a Judge of a High Court, or (b) has for at least two years held office of Vice Chairman, or (c) has for at least two years held the post of Secretary to the Govern ment of India.
Sub section (2) provides that a Vice Chairman should be or have been (a) a Judge of a High Court, or (b) for at least two years held the post of a Secretary to the Government of India, or (bb) for at least five years held the post of Additional Secretary to the Government of India, or (c) for a period of not less than three years held office as a Judicial Member of an Administrative Tribunal.
Sub section (3) states that the Judicial Member (a) should or should have been qualified to be a Judge of a High 436 Court, or (b) has been a member of the Indian Legal Service, Grade 1, for at least three years.
Sub section (3A) provides that a person to be appointed as Administrative Member (a) should have for at least two years held the post of Addi tional Secretary to the Government of India, or (b) has for at least three years held the post of a Joint Secretary to the Government of India.
The petitioners in these writ petitions and transfer petitions challenged the vires of the 1985 Act.
It was contended that the exclusion of the jurisdiction of the High Court under articles 226 and 227 in service matters specified in s.28 of the Act was unconstitutional and void, and that the composition of the Tribunal and mode of appointment of Chairman, Vice Chairman and Members was outside the scope of the power conferred on Parliament under article 323 A.
Allowing the petitions in part, the Court, By the Court HELD: It is the High Court which is being supplanted by Administrative Tribunal.
The office of Chairman of the Tribunal, therefore, for all practical purposes should be equated with the office of the Chief Justice of a High Court.
Judicial discipline generated by experience and training in an adequate dose is a necessary qualification for that post.
It is thus essential that he should have been a Judge of the High Court or he should have for at least two years held office as Vice Chairman.
A person who has merely held the post of Secretary to the Government of India and who has no legal and judicial experience if appointed Chair man would not only fail to inspire confidence in the public mind but would also render the Administrative Tribunal a much less effective and efficacious mechanism than the High Court.
Clause (c) of s.6(1) of the Act, therefore, must be struck down as invalid.
[445 C, 455 DE, 445 ABE] Per Bhagwati, CJ.
1.1 Judicial review is a basic and essential feature of the Constitution and no law passed by Parliament in exercise of its constituent power can abrogate it or take it away.
It is, however, within the competence of Parliament to amend the Constitution so as to substitute in place of the High Court another alternative institutional mechanism or ar rangement for judicial review without in any way violating the basic structure doctrine, provided it is no less effica cious than the High Court.
Then it would be another authori ty which would be exercising the power of judicial review with a view to enforcing the constitutional limitations and maintaining the rule of law.
[441 B, Minerva Mills Ltd. & Ors.
vs Union of India & Ors.
[1981]1 SCR 206, referred to.
1.2 Clause (2Xd) of article 323 A specifically authorises the exclusion of the jurisdiction of the High Court under articles 226 and 227 by any law made by Parliament under cl.(1).
If this constitutional amendment were to permit a law to exclude the jurisdiction of the High Court under article 226 and 227 without sating up an effective alternative institutional mechanism or arrangement for judicial review it would be violative of the basic structure doctrine and hence outside the constitutent power of Parliament.
It must, therefore, be read as implicit in the amendment that such a law to be coustitutionally valid must not leave a void but it must set up another equally effective alternative author ity and vest the power of judicial review in it.
[443 F, H, 44 A B] 2.1 What is needed in a judicial tribunal which is intended to supplant the High Court is legal training and experience.
Service matters which are removed from the jurisdiction of the High Court under articles 226 and 227 and entrusted to the Administrative Tribunal invariably involve questions of interpretation and applicability of articles 14, 15, 16 and 311 which require for their determination not only judicial approach but also knowledge and expertise in this particular branch of constitutional law.
[445 D, 444 D] 2.2 The Chairman of the Administrative Tribunal should be or should have been a Judge of a High Court or he should have for at least two years held office as Vice Chairman.
It is the High Court which is being supplanted by the Adminis trative Tribunal.
Substituting the Chief Justice of a High Court by a Chairman of the Administrative Tribunal who has merely held the post of a Secretary to the Government of India and who has no legal or judicial experience would not only fall to inspire confidence in the public mind but would also render the Administrative Tribunal a much less effec tive and efficacious mechanism than the High Court.
Clause (c) of s.6(1) of the Act, therefore, must be struck down as invalid.
[445 A, C, B, E] 3.
Since the Administrative Tribunal has been created in substitution of the High Court, its Vice Chairman would be in the position of a High Court Judge.
Therefore, a District Judge or an advocate who is qualified to be a Judge of the High Court should be regarded as digible for being Vice Chairman of the Administrative Tribunal.
The provisions of the Act in regard to the composition of the Administrative Tribunal are weighted in favour of members of the Services.
This value discounting of the judicial members does have the effect of making the Administrative Tribunal less effective and efficacious than the High Court.
Unless an amendment to that effect is carried out on or before 31st March, 1987 the Act would have to be declared to be invalid because the 438 provision in regard to the composition of the Administrative Tribunal cannot be severed from the other provisions con tained in the Act.
A, 445 G, 446 B] 4.1 Under the Act the sole and exclusive power to make appointment of Chairman, Vice Chairman and Administrative Members is conferred on the Government.
No obligation is cast on the Government to consult the Chief Justice of India or to follow any particular selection procedure in this behalf.
Total insulation of the judiciary from all forms of interference from the coordinate branches of Government is a basic essential feature of the Constitution.
In case of High Court Judges the President cannot make any appointment without consultation with the Chief Justice of the High Court and the Chief Justice of India.
This check or safe guard is totally absent in the case of appointment of the Chairman, Vice Chairman and Administrative Members of the Administrative Tribunal.
If the Tribunal is created in substitution of the High Court and the jurisdiction of the High Court under articles 226 and 227 is taken away and vested in it, it is but essential that the same independence from possibility of executive pressure or influence must also be ensured to the Chairman, Vice Chairman and Members of the Tribunal.
[446 D, 447 D, B, E] 4.2 The appointment o[ Chairman, Vice Chairman and Administrative Members, therefore, should be made by the concerned Government only after consultation with the Chief Justice of India and such consultation must be meaningful and effective.
Alternatively, a High Powered Selection Committee headed by the Chief Justice of India or a sitting Judge of the Supreme Court or concerned High Court nominated by the Chief Justice of India may be set up for making these appointments.
If either of these two modes of appointment is adopted, it would save the impunged Act from invalidation.
Otherwise, it will be outside the scope of the power con ferred on Parliament under article 323 A. [447 F, G, 448 B] 5.
The Government should set up a permanent bench and if that is not feasible having regard to the volume of work, then at least a circuit bench of the Administrative Tribunal wherever there is a seat of the High Court on or before 31st March 1987 so that the provisions of the Act could be sus tained.
[448 D] 6.
Judgment to operate only prospectively and not to invalidate appointments already made.
[448 B] Per Ranganath Misra, J. 1.
The Administrative Tribunal Act, 1985, as amended by Act No. 19 of 1986 saves jurisdiction of the Supreme Court both under Article 32 in respect of original proceedings as also under Article 136 for entertaining appeals.
There is thus a forum where matters of importance and grave injustice can be brought 439 for determination or rectification.
The exclusion of the jurisdiction of the High Court, therefore, does not totally bar judicial review.
[451 C, 453 A] 2.1 It is open to Parliament to make effective alterna tive institutional mechanisms or arrangements in place of the High Court for providing judicial review.
But such an authority or tribunal must be a worthy successor and real substitute of the High Court not only in form and de jure but in content and de facto so as to be effective and effi cient as also capable of upholding the constitutional limi tations enshrined in Articles 14, 15 and 16 of the Constitu tion.
[453 B, 454 C, 453 E] 2.2 The Tribunal under the scheme of the Act has been contemplated as a substitute and not as supplemental to the High Court.
It is not designed as an additional froum from where parties could go to the High Court.
Under sections 14 and 15 of the Act all the powers of the Courts, except those of the Supreme Court, in regard to matters specified therein vest in the Tribunal either Central or State.
Barring of the jurisdiction of the High Court under articles 226 and 227 cannot, therefore, be said to be ultra vires the Constitu tion.
[443 CD, FG, 449 A] Minerva Mills Ltd. & Ors.
vs Union of India & Ors.
, ; , 287 and K.K. Dutta vs Union of India, ; , referred to.
3.1 The Office of Chairman of the Tribunal should for all practical purposes be equated with the office of Chief Justice of a High Court.
Judicial discipline generated by experience and training in an adequate dose being a neces sary qualification for that post, ordinarily a retiring or retired Chief Justice of a High Court or when such a person is not available, a senior Judge of proved ability, either in office or retired should be appointed.
In order that the Tribunal may be acceptable to the litigants, who are them selves members of the various Services, therefore, s.6(1)(c) of the Act, which makes a Secretary to the Government of India also eligible for the post of Chairman, should be omitted.
[455 D F] 3.2 The selection of Vice Chairman and Members, when it is not of a sitting Judge or retired Judge of a High Court, should be done by a high powered committee with a sitting Judge of the Supreme Court, to be nominated by the Chief Justice of India, as its Chairman.
This will ensure selec tion of proper and competent people to man these high of fices of trust and help to build up reputation and accept ability.
The Central Government to bring the provisions of the Act in accord within a reasonable time not beyond March 31, 1987.
Or else, the constitution of Tribunal as a substi tute of the High Court would be open to challenge.
[455 G, 456 A, H] 3.3 The judgment to operate prospectively and not to affect the 440 appointments already made to the office of Vice Chairman and Members.
[456 B] 4.
The term of five years prescribed under s.8 of the Act for Chairman, Vice Chairman and Members of the Tribunal requiting them to retire at the end of it is too short, which is neither convenient to the person selected for the job nor expedient to the scheme.
When amendments to the Act are undertaken this aspect of the matter deserves to be considered.
[456 C, F, G]
</s>
|
<s>[INST] Summarize the judgemental Writ Petition No. 15 of 1962 Petition under article 32 of the Constitution of India for the enforcement of Fundamental Rights.
B. Sen and K. L. Hathi for the petitioner.
C. K. Daphtary, Solicitor General of India, B. B. L. Iyengar and B. H. Dhebar, for the respondents.
S.Choudhury, section C. Banerjee and P. K. Chatterjee for the Intervener.
May 3.
The judgment of Sinha, C. J., Gajendradagkar, Wanchoo and Shah, JJ., was delivered by Gajendragadkar, J., Subba Rao, J. delivered a separate Judgment.
GAJENDRAGADKAR, J.
The four petitioners who are in charge of the working of the mine owned by the colliery known as Salanpur ,A" Seam Colliery in the District of Buidwan, are being prosecuted for the alleged contravention of the provisions of Regulation 127(3) of the Coal Mines Regulations, 1957, framed under the (35 of 1952) (hereinafter called the Act).
By their petition filed under article 32 of the Constitution, the petitioners pray that an order or writ in the mature of prohibition should be issued quashing the said criminal proceedings on the ground that the said proceedings contravene article 20(1) of the Constitution and as such, are void.
To this petition have been impleaded as opponents 1 to 4, the Union of India, the Chief Inspector of mines, Dhanbad (W.B.), the Regional Inspector of Mines, Sitarampur and the Sub Divisional Magis trate, Asansol, respectively.
The prosecution of 907 the petitioners has commenced at the instance of opponents 2 and 3 and the case against them is being tried by opponent No. 4.
The petitioners ' contention is that Regulation No. 127(3)whose alleged contravention has given rise to thepresent proceedings against them is invalid, ultra vires and inoperative and so, the prosecution of the petitioners contravenes article 20(1) of the Constitution.
It is on this basis that they want the said proceedings to be quashed and ask for an order restraining opponents 2 and 3 from proceeding with the case and opponent No. 4 from trying it.
The case in question is C. 783 of 1961 pending in the court of opponent No. 4.
Regulation 127(3) is a part of the Coal Mines Regulations framed by opponent No. 1 in exercise of the powers conferred upon it by section 57 of the Act, the same having been previously published as required by sub section (1) of B. 59 of the said Act.
Regulation 127(3) provides that no working which has approached within a distance of 60 metres of any disused or abandoned workings (not being workings which have been examined and found to be free from accumulation of water or other liquid matter), whether in the same mine or in an adjoining mine, shall be extended further except with the prior permission in writing of the Chief Inspector and subject to such conditions as he may specify therein.
There is a proviso and explanation attached to this provision, but it is unnecessary to refer to them.
The case against the petitioners is that they have contravened the provisions of Regulation 127(3) in that they extended the working of the mine further than the permitted limits without the prior permission in writing of opponent No. 2.
The petitioners ' case is that this Regulation is invalid and inoperative and so, its contravention cannot validly be made 908 the basis of their prosecution having regard to the provisions of article 20(1) of the Constitution.
According to the petitioners opponent No, 1 is no doubt conferred with the power of making Regulations under section 57 of the Act,but O. as it stood at the relevant time, has imposed an obligation on opponent No. 1 that the draft of the said Regulations shall not be published unless the Mining Boards therein specified have had a reason.
able opportunity of reporting to it as to the expediency of making the Regulations in question and as to the suitability of its provisions.
The petitioners allege that at the relevant time, 'when the Regulations were made in 1957, no Mining Boards bad been established under section 12 of the Act.
Three Boards had been established under section 10 of the Indian of 1923, but as a result of the subsequent amendments made in the provisions of section 10, the composition of two of the 'said Boards became invalid with the result that two of them could not be treated as Boards validly constituted.
These invalid Boards were the Madhya Pradesh Mining Board and the West Bengal Mining Board.
A third Board existed at the relevant time and that is the Bihar Mining Board.
This Board had been constituted on the 22nd February, 1946 under section 10 of the earlier Act as it then stood.
The petitioner ' case is that it was obligatory for opponent No. 1 to consult all the three Boards and since to out of the three Boards were not properly constituted, the fact that reference was made to the individual members of the said two invalid Boards did not satisfy the requirement of section 59(3).
According to the petition, a reference was made to the Bihar Mining Board, but the Board did not, make a report to opponent No. 1 as a Board but its individual members communicated their opinions to opponent No. 1.
Therefore, on the whole, section 59(3) had not been complied with and that makes the whole body 909 of Regulations issued in 1957 invalid and inoperative.
That, in brief, is the basis on which the petitioners want the criminal proceedings pending against them to be quashed.
The respondents dispute the main contention of the petitioners that section 59(3) has not been complied with.
According to them, section 59(3) has been duly complied with and the Regulations made ire valid.
The respondents concede that two of the three existing Boards were invalid; but their case is that it is only the validly existing Board that had to be consulted and the Bihar Mining Board, which was the validly existing Board at the relevant time, had been duly consulted.
The respondents allege that the fact that individual members of the Bihar Mining Board communicated their opinions to opponent No. 1 does not introduce any infirmity in the Regulations which were subsequently published in the Gazette and which, under section 59(5) have, in consequence, the effect as if enacted in the Act.
On behalf of the petitioners, Mr. Sen contends that section 59(3) 'imposes 'an obligation on the Central Government to consult the Boards therein specified and he argues that reading section 12 of the Act in the light of section 59(3), it follows that the Central Government has to constitute Mining Boards for the areas or mines in respect of which the Regulations are intended to be made and since two of the Boards had not been validly constituted, section 12 had not been complied with and section 59(3) had been contravened.
Mr. Sen suggested that his contention about the mandatory character of the provisions contained in sections 12 and 59(3) is concluded by a recent decision of this Court.
On the other hand, the learned Solicitor General for the respondents contends that the said decision has no material or direct bearing on the question about the construction of section 12.
He concedes that 910 the said decision has concluded the point that the requirement of a. 59(3) is mandatory.
It is, therefore, necessary, in the first instance, to examine the effect of the said decision.
In "Banwari Lal Agarwalla vs State of Bihar" (1), this Court had occasion to consider the validity of the prosecution launched against the appellant on the ground of the contravention of one of the Regulations made in 1957.
It appears that in that case, the respondents stated before the Court that the Mining Boards constituted under s.10 of the Act of 1923 were continuing to operate at the time the relevant Regulations were framed and that there was full consultation with the said Mining Boards before the said Regulations were framed.
The respondents, no doubt, contended that s.59(3) was directory and not mandatory and according to them, no obligation had been imposed upon the Central Government to consult Mining Boards even if they were in existence.
Alternatively, it was suggested that the Mining Boards which had been constituted under the earlier Act were continued under the Act by virtue of s.24 of the General Clauses Act and that the said Boards bad been duly consulted.
On the other hand, the appellant urged that the Boards to which the respondents referred were not validly constituted under the Act and had not been properly consulted.
It was also argued on his behalf that both sections 12 and 59(3) were mandatory.
It is in the light of these facts that the effect of the decision of this Court in Banwari Lal 's case (1) has to be appreciated.
Das Gupta, J., who spoke for the Court set out in his judgment the argument of the appellant that both sections 12 and 59 were mandatory, but, as the judgment shows, the Court considered the question as to whether s.59 (3) was mandatory and came to (1) ; 911 the conclusion that it was.
The Court did not consider whether s.12 was mandatory and in the course of the judgment, there is no reference at all either to the question of construing s.12 or to its effect.
Having held that s.59 (3) was mandatory, the Court remanded the case to the learned Magistrate before whom the proceeding were pending with a direction that he should try the issue as to whether the Boards constituted under the earlier Act validly functioned under the Act and whether they had been duly consulted.
It would be noticed that if the Court had considered the question about the mandatory character of the provisions of s.12, it would have construed the said provisions and would have addressed itself to the question as to whether the failure of the Central Government to constitute valid Boards as suggested by the appellant in that case itself made the impugned Regulation invalid.
This course was not adopted obviously for the reason that the respondents pleaded that the requisite Boards were in existence and had been consulted and so, the controversy between the parties was narrowed down to the question as to whether section 59 (3) requires that the Central Governments must consult existing Boards or not.
Apparently, the respondents contended that even if Boards have been constituted under section 1 2, it is not obligatory on the Central Government to consult them under s.59(3).
The requirement about the said consultation is directory and not mandatory.
It is this contention which has been rejected by the Court and having held that s.59 (3) was mandatory and that existing Board must be consulted before Regulations are framed, the question of fact which then fell to be considered was remitted to the trial Magistrate for his decision.
Therefore, we are satisfied that the effect of the decision of this Court in Banwari Lal Agarwalla 's case is that if a Board is in existence at the relevant time, it is obligatory, on the Central Government to consult it before a draft 912 Regulation is published and in that sense s.59(3) is mandatory.
It would, we think, not be right to assume that the contention of appellant that s.12 like a.59(3) is mandatory was decided without discussing the question about its construction and its effect.
The facts pleaded by the respondents in that case made it unnecessary to decide the appellant 's contention based on the mandatory character of s.12.
Therefore we do not think Mr. Sen is justified in contending that the point which he seeks to raise in the present appeal about the effect of section 12 is concluded by the decision in Banwari Lal Agarwalla 's case.
That being so, we must proceed to examine Mr. Sens contention on the merits.
At this stage, it is necessary to read both sections 12 and 59.
Section 12 deals with the constitution of Mining Boards.
Section 12(1) provides that the Central Government may constitute for any part of the territories to which the Act extends, or for any group or class of mines, a Mining Board consisting of seven persons as specified in clauses (a) to(e).
The point which calls for our decision is whether the first part of section 12(.1) imposes an obligation on the Central Government to constitute Board when it is proposed to make Regulations to which s.59(3) applies.
Section 59 as it stood in the Act prior to its amendment in 1959 read thus: "59 (1) The power to make regulations and rules conferred by sections 57 and 58 is subject to the condition of the regulations and rules being made after previous publication.
(2) The date to be specified in accordance, with clause (3) of section 23 of the (10 of 1897), as that after which a draft of regulations or rules proposed to be 913 made will be taken under consideration, shall not be less than, three months from the date on which the draft of the proposed regulations or rules is published for general information.
(3) Before the draft of any regulation is published under this section, it shall be referred to every Mining Board which is, in the opinion of the Central Government, concerned with the subject dealt with by the regulation and the regulation shall not be so published until each such Board has had a , reasonable opportunity of reporting as to the expediency of making the same and as to the suitability of its provisions.
(4) No rule shall be made unless the draft thereof has been referred to every Mining Boar( constituted in that part of the territories to which this Act extends which is affected by the rule, and unless each such , Board has had a reasonable opportunity of reporting as to the expediency of making the same and as to the suitability of its provisions.
(5) Regulations and rules shall be published in the Official Gazette and, on such publication, shall have effect as if enacted in this Act.
(6) The provisions of sub sections (1), (2) and( 4) shall not apply to the first occasion on which rules referred to in clause (d) or clause (e) of section 58 are made.
914 (7) The regulations and rules made under sections 57 and 58 shall be laid down before Parliament, as soon as may be, after they are made.
" The petitioners ' contention is that in construing section 12, we must have regard to the provisions of s.59(3).
By an amendment made in 1959 by Act 62 of 1959, sub.
s(3) of section 59 has been deleted and combined provision is made both for regulations and rules by subsection (4) by making a suitable amendment in the said sub section so as to include both regulations and rules within its scope.
Sub section (4) thus amended reads thus: "59(4).
No regulation or rule shall be made unless the draft thereof has been referred to every Mining Board constituted in that part of the territories to which this Act extends which is affected by the regulation or rule and unless each such Board has had a reasonable opportunity of reporting as to the expediency of making the same and as to the suitability of its provisions.
" Before construing s.12, it may be useful to refer to the relevant provisions of the Act which confer power on or assign some duties or functions to the said Boards.
Section 14(1) provides inter alia that a Board constituted under section 12 may exercise such of the powers of an Inspector under this Act as it thinks necessary or expedient to exercise for the purpose of deciding or reporting upon any matter referred to it.
Section 14(2) confers upon the Board the powers of a Civil Court for the purposes therein specified.
It would thus be seen that the Boards constituted under section 12 may have occasion 915 either to make a report in respect of regulations or rules referred to them tinder section 59, or ' they may have to decide cases sent to them under section 81.
Section 59 which speaks of reference of the rules and regulations to the Boards has already been cited.
Section 81(1) provides that if the court trying any case instituted at the instance of the Chief Inspector or other officers therein specified is of opinion that the case is one which should, in lieu of a prosecution, be referred to a Mining Board, it may stay the criminal proceedings, and report the matter to the Central Government with a view to such reference being made.
Section 81(2) authorises the Central Government either to refer the case to the Mining Board or to direct the court to proceed with the trial.
Thus, if the Central Government decides to refer a pending criminal case to the Board, the Board has to decide it.
That is the two fold function which may be assigned to the Board under provisions of the Act.
Mr. Sen contends that if section 59(3) is mandatory, it follows that consultation with the relevant Board was treated as essential by the legislature before the Central Government finalised the regulations ; and from this obligation imposed by section 59(3), it must follow as a corollary that the relevant Boards must be constituted by the Central Government ' under section 12.
In other words, the argument is that a. 59(3) postulates the existence of the relevant Boards and makes it obligatory on the Central Government to consult them and this can be satisfied only if the Central Government is compelled to constitute Boards under section 12.
Prima facie.
, there is some force in this contention.
But, on the other hand, if section 59(3) is read as imposing an obligation on the Central Government to consult the Board if it is in existence, then no corollary would follow from the mandatory character of the said provision as 916 is suggested by Mr. Sen. Section 59(3) as it stood before the amendment of 1959, provides that every Mining Board which, in the opinion of the Central Government, is concerned with the subject dealt with by the regulation, shall be consulted ; and this means that there should be a Mining Board before it is consulted and that the said Mining Board should, in the opinion of the Central Government, be concerned with the subject dealt with by the regulation.
This provision does not mean that a Mining Board must be constituted, for that is the subject matter of the provisions contained in section 12.
If section 12 is not mandatory, then section 59(3) must be read in the light of the position that it is open to the Central Government to constitute the Board or not to constitute it, and that being so, section 59(3) would then mean only this and no more that if the Board is in existence and it is concerned with the subject, it must be consulted.
Similarly, a. 59(4) as it stands after the amendment of 1959, requires that the draft of the rule or regulation shall be referred to every.
Mining Board constituted in 'that part of the territories to which the Act extends which is affected by.
the regulation or rule.
That again means no more than this that if a Board is constituted in the part of the territories which is affected by the regulation, it shall be consulted.
It is not as if this construction adds any words in section 59(3) or section 59(4); it merely proceeds on the basis that s.12(1) is not mandatory.
Therefore.
in our opinion, in construing section 12 (1) it would not be logical to assume that section 59(3) or s.59(4) imposes an obligation on the Central Government to constitute a Board, because as we have just indicated the constitution of the Boards is not the subject matter of s.59 (3) or section 59 (4) ; that is the subject matter ' of 917 the Central Government to constitute a Board must be determined in the light of the construction of section 12.
Reverting then to the material words used in section 12 itself, if, it seems clear that the said words do not permit the construction for which Mr. Sen contends.
It is not disputed that the context may justify the view that the use of the word "may" means " 'shall"; but if we substitute the word "shall" for "may" in section 12(1), it would be apparent that the argument about the mandatory character of the provisions of section 12(1) would just not work.
To say that the Central Government shall constitute for any part of the territories to which the Act extends, or for any group or class of mines a Mining Board, would emphatically being out the contradiction between the obligation sought to be introduced by the use of the word "shall" and the obvious discretion left to the Central Government to constitute the Board for any part of the territories or any group or class of mines ' The discretion left to the Central Government in the matter of constitution of Boards which is so clearly writ large in the operative part of the said provision indicates that in the context, "may" cannot mean "shall".
Section 12(1) really leaves it to the discretion of the Central Government to constitute a Board for any part of the territories and that means, it may not constitute a Board for some parts of the territories.
Likewise, discretion is left to the Central Government to constitute.
a Board for a group or class of mines and that means that for some groups or classes of mines, no Board need be constituted.
Whether or not Boards should be constituted for parts of territories or for groups or classes of mines, has been left to be determined by the Central Government according, to the requirements of the territories or the exigencies of the groups or classes of mines.
Therefore, we are 918 unable to accept the argument that a. 12(1) imposes an obligation on the Central Government to constitute Boards in order that in making regulations, there should be appropriate Boards who have to be consulted under section 59(3).
The directory nat ner of the provisions of section 121(1) rather strengthen the construction placed upon section 59(3) by this Court in the case of Banwari Lal Agarwalla that if there are Boards in existence, they must be consulted before draft regulations are published under section 59.
But that is very different from saving that Boards must be constituted in all areas or in respect of all groups or classes of mines which are intended to be covered by the regulations ,proposed to be made by the Central Government.
Mr. Sen relied on section 5 for showing that the use of the word "may" in that section really means "shall".
The said section provides that the Central Government may appoint such a person as possesses the prescribed qualifications to be the Chief Inspector of Mines for all territories to which the Act extends; and it may be conceded that the implementation of the material provisions of the Act depends upon the appointment of the Chief Inspector of Mines and so, in the context, " 'may" in a. 5 would really mean , 'shall" so far as the appointment of the Chief Inspector is concerned.
But this section itself shows that "may" may not necessarily mean , 'shall" in regard to the appointment of Inspectors contemplated by the latter part "may" means "may" or it means ""shall".
would inevitably depend upon the context in which the said word occurs and as we have just indicated, the context of section 12(1) is not in favour of the construction for which Mr. Sen contends.
It cannot be said that like the appointment of the Chief Inspector of Mines, the constitution of the Boards 919 is essential for the working of the Act, for, without the constitution of the Boards, the working of the Act can smoothly proceed apace.
We have already pointed out that there are only two functions which can be assigned to the Boards; under section 81(2) it is; discretionary for the Central Government to refer a pending criminal case to the Board or not, and under a. 59(3) consultation with the Board is necessary only if the Board is in existence.
Therefore, the working of the Act is not necessarily dependent on the constitution of the Boards, and that distinguishes the context or section 12 from the context of section 5.
There is another provision of the Act to which reference may be made in this connection.
Section 61 deals with the making of the bye laws.
Section 61(1) provides that the owner, agent or manager of a mine may, and shall, if called upon to do so by the Chief Inspector, or Inspector, frame and submit to the Chief Inspector or Inspector a draft of bye law,% in the manner indicated in the said sub section.
Section 61(2), inter alia, authorises the Chief Inspector or the 'Inspector to propose amendments in the said draft.
Section 61(3) then lays down that if within a period of two months from the date on which ' any draft bye laws or draft amendments are sent by the Chief Inspector or Inspector to the owner, agent or manager under sub section (2), and the Chief Inspector or Inspector and the owner, agent or manager are unable to agree as to the terms of the bye laws to be made under sub section (1), the Chief Inspector or Inspector shall refer the draft bye laws for settlement to the Mining Board, or where there is no Mining Board, to such officer or authority as the Central Government may, by general or special order, appoint in this behalf It would be noticed that this sub section assumes that there may not be in exi stence a Mining Board in the area where the mine 920 in question is situated or for the group or class of mines to which the said mine belongs.
Now, if the petitioners ' construction of section 12 read with section 59(3) is accepted, it would follow that in order to make the regulations binding on all the mines situated in the whole of the country, there must be Mining .Board in respect of all the said mines either territory wise or group wise or class wise and that would not be consistent with the assumption made by section 61(3) that in certain areas or in respect of certain groups or classes of mines a Mining Board may not be in existence.
It is in this indirect way that s.61(3) supports the construction which we are disposed to place on section 12(1).
It is then urged that if the respondents ' construction of s.12 is upheld, section 59(3) or section 59(4) would be rendered nugatory and the whole purpose of consuiting the Boards would be defeated.
We are not impressed by this argument.
In testing the validity of this argument, it is necessary to recall the scheme of section 59.
Section 57 confers power on the Central Government to make regulations and section 58 confers power on the said Government to make, rules as therein specified respectively.
Section 59(1) requires that the power.
to make regulations is subject to the condition that the said regulations would be made after previous publication.
Section 59(2) then provides for the period which has to pass before the said draft can be taken into consideration.
Section 59(3) refer to the consultation with the Boards.
Logically, consultation with the Boards is the first step to be taken in making ,regulations; publication of the draft regulations is ' the second step; allowing the prescribed period to pass before the draft is considered is the third step and publishing the regulations after considering them is the last step.
After the regulations are thus published, they shall have effect as if enacted in the Act.
That is section 59,5).
The 921 'first publication is the publication of the draft under section 23(3) of the and it is significant that the object of this publication is to invite objections or, suggestions from persons or bodies affected by the draft regulations.
Section 23(4) of the provides that the authority having power to make the rules or, regulations shall consider any objection or suggestion which may be received with respect to the draft before the date specified therein, so that the whole object ,of publishing the draft is to give notice to the parties concerned with the regulations which are intended to be framed and the object of the requirement that the said draft will not be considered until the prescribed period has passed is to enable parties concerned to file their objections.
Therefore, the scheme of section 59 clearly shows that apart from consulting the Boards to which section 59(3) refers, all parties affected, by the draft would have an opportunity to make their suggestions or objections and they would be considered before the draft is settled and regulations are finally made.
Therefore, in our opinion, it would not be correct to say that the construction of section 59(3) for which the respondents contend would enable the Central Government to make regulations without consulting the opinion of persons affected by them.
The result then is that section 12(1) is directory and not .mandatory and section 59(3), or a. 59(4) after the amendment in 1959 is mandatory in the sense that before the draft regulation is published, it is obligatory for the Central Government to consult the Board which is constituted under section 12.
If no Board is constituted, there can be, and need be, no consultation.
It is in the light of this position that the grievance made by the petitioners against the validity of their prosecution has to be judged.
We have already noticed that it is common ground 922 between the parties that the Madhya Pradesh Minning Board and the West Bengal Mining Board which were constituted under a. 10 of the Act of 1923 have become invalid after the amendment of section 10 by the Amending Act 5 of 1935.
Under section 10 as it originally stood, the Board was constituted by the Provincial Government and it was composed of five members.
After the amendment, a Board had to be constituted by the Central Government and, it was to consist of seven members.
That is why the respondents concede that the Madhya Pradesh and West Bengal Mining Boards could not be said to be validly constituted for the purpose of section 12 even by the application of section 24 of the .
The position then is that at the time when the regulations were framed in 1947, there, was only one Board which properly constituted and that is the Bihar Mining Board.
It was constituted in 1946 and by virtue of a. 24 of the , it continued as a valid Board under s.12.
This Board has been consulted by the Central Government before the regulations were made.
It is not disputed that the draft regulations were sent by the Central Government to the Bihar Mining Board through the State Government.
It_ appears that after the Board received the said draft, it was circulated by the Chairman of the Board to all the members of the Board and the members communicated their opinions individually.
It is argued that the communication by individual members of the Board of their opinions to the Central Government cannot be said to amount to the consulation with the Board and so, it is urged that the requirement of s.59(3) has not been complied with.
We do not think there is any substance in this argument.
All that s.59(3) requires is that a reasonable opportunity should be 'given to the Board to make its report as to the expediency or the suitability of the proposed regulations.
How 923 the Board chooses to make its report is not a matter, which the Central Government can control.
The Central Government has discharged its obligation as ' soon as it is shown that a copy of the draft regulations was sent to the Board, and if the Board thereafter, instead of making a collective report, chose ' to.
sent individual opinions, that cannot be said to constitute the contravention of s.59(3).
Indeed, s.59(3) does not impose an obligation on the Board to make any report at all It is true that since under s.14, the Board is empowered to make a report, it is unlikely that any Board, when consulted, would refuse to make a report.
But, nevertheless, the position still remains that if the Board refused to make a report, that will not introduce any infirmity in the regulations which the Central Government may ultimately frame and publish under s.59(5).
We must accordingly hold that the regulations framed in 1957 have been duly framed and published under s.59(5) and as such, they shall have effect as if enacted in the Act.
The result is, the petition fails and is dismissed.
SUBBA RAO, J.
I regret my, inability to agree.
The facts relevant to the question raised lie in a small compass.
The petitioners are incharge of the working of a mine, known as Salanpur "A" Seam Colliery, in the District of Burdwan, West Bengal.
On the allegation that they contravened the provisions of Regulation 127(3) of the Coal Mines Regulations, 1957 (hereinafter called the Regulations), a criminal complaint was filed against them in the Court of Sub divisional Magistrate, Asansol, and the said Magistrate has taken cognizance of the said complaint under section 190(1) (c) of the Code of Criminal Procedure, read with section 73 of the .(hereinafter called the Act).
The petitioners challenge the validity of the maid Regulations on the ground that they were 924 made in contravention of the provisions of section 59(3) of the Act.
Section 59(3) of the Act imposes a condition on the Central Government to give a reasonable opportunity to a Mining Board before making regulations in exercise of the power conferred on it by the Act.
Under s.10 of the Indian Mines Act, 1923, the Central Government in the year 1946 constituted the Bihar Mining Board with jurisdiction over the area covered by the Province of Bihar.
The Central Government sent the draft Regulations to the said Board.
The Chairman of the Board circulated the said draft Regulations to all the members of the Board and the members communicated their opinions individually to the Central Government.
Thereafter the Central Government made the said Regulations governing the whole of India, except Jammu and Kashmir, and to every coal mine therein, in compliance with the other provisions of section 59 of the Act.
The question in this petition is whether the Regulations so made after consulting the Bihar, Board alone would be valid and in force in the West Bengal area so as to sustain a criminal prosecution on the basis of an infringement of the said Regulation in respect of a mine in that area.
This question may be divided into two parts, namely (1) where the Central Government has ' not constituted a Mining Board, can it ignore the condition laid down under section 59(3) of the Act and (2) if giving a reasonable opportunity within the meaning of section 59(3) of.
the Act is necessary condition for the validity of the Regulations made thereunder, can the Central Government validly make a regulation in respect of West Bengal after giving such a reasonable opportunity to a Mining Board constituted for Bihar ? In my view, the first question is directly 925 covered by the decision of this Court in Banwari Lal V. State of Bihar(,).
There, Das Gupta J., delivered the judgment of the Court.
As it is contended that the said decision should be confined only a case where a Mining Board has been validly constituted under the Act and should not be applied to a case where such a Board has not been constitu ted, it would be necessary to scrutinize the decision carefully to ascertain ' the exact scope of the said decision.
The facts of that case where there was an accident in the Central Bhowra Colliery in Dhanbad in Bihar, as a result of which 23 persons lost their lives the Regional Inspector of Mines, Dhanbad filed a complaint against the appellant for allegedly committing an offence under section 74 of the , i.e., for contravening regulations 107 and 127 of the Coal Mines Regulations, 1957 ; after the Sub Divisional Officer took Cognizance of the complaint, the appellant made an application to the Patna High Court under article 226 of the Constitution contesting the validity of the said proceedings on the ground, inter alia, that there was no Mining Board constituted under section 12 of the Act and therefore the Central Government had made the Regulations without, consulting Mining Board as it, should do under section 59(3) of the Act.
The second ground on which a prayer for quashing the proceedings was based, with which alone we are now concerned, was stated in the judgment thus : "the Coal Mines Regulations, 1957, are invalid having been framed in contravention of section 59(3) of the ." The contention of learned counsel, who elaborated this ground, was stated thus : " 'As regards the other contention that the regulations are invalid the appellant 's argument is that the provisions of section 12 and section 59 of the , are mandatory.
" Then the, learned Judge quoted in extenso section 59(3) of the Act and (1) ; 926 proceeded to state the relevant basic facts and posed the question raised in the case thus: "It was not disputed before us that when the Regulations were framed, No. Board , as required under section 12 had been constituted and so, necessarily there had been no reference to any Board as required under section 59. 'the question raised is whether the omission to make such a reference make the rules invalid.
" It is manifest from the question so posed that the question considered by the Court was whether the making of the Regulation without reference to a Mining Board, as it was not in existence, would be invalid.
Then the learned Judge considered the language of a. 59(3) of the Act and observed at P. 851 : ". . . it is legitimate to note that the language used in.
this case is emphatic and appears to be designed to express, an anxiety of the legislature that the publication of the, regulation, which it; condition precedent to the making of the regulations, should itself be subject to two conditions precedent first, a reference to the Mining Board concerned, and secondly, that sufficient opportunity to the Board to make & report as regards.
the expediency and suitability of the proposed regulations.
" The learned Judge then proceeded to considered the reasons for imposing such a condition and observed.
"Even a cursory examination of the purposes set in the 27 clauses of section 57 shows that that most of them impinge heavily on the actual working of the mines.
To mention only a few of these are sufficient to 927 show that the very purpose of the Act may will be defeated unless suitable and practical regulations are ' framed to help the achieve ment of this purpose.
" Then he pointed out that section 12 of the Act unabled the Government to appoint Boards providing representations for different interests which would be in a position to help the Central Government to make suitable and practical regulations.
In the words of the learned Judge, "The constitution is calculated to ensure that all aspects including on the one hand the need for securing the safety and welfare of labour and on the other hand the practicability of the provision proposed from the point of view of the likely expense and other considerations can be throughly examined.
It is certainly to the public benefit that Boards thus constituted should have an opportunity of examining regulations proposed in the first place,% by an administrative department of the government and of expressing their opinion.
" According to him, the constitution of the Board in the manner prescribed served a real purpose and, therefore the constitution by the Central Government with such 'a Board was made a condition of the making of the Regulations.
When it was contended that the insistence upon consultation might effect the public welfare under emergent circumstances he.
pointed out that under section 60 of the Act, which provided for such a contingency, the Central Government might make regulations without previous reference to Mining Boards and therefore no such 'consideration could prevent the Court from holding that ' the giving of an opportunity to the Board was a condition precedent to the exercise of the power of making regulations.
The learned Judge summarised his reasoning thus: 928 " 'An examination of all the relevant circumstances viz., the language used, the scheme of the legislation, the benefit to the public on insisting on strict compliance as well as the risks to public interest on insistence on such compliance leads us to the conclusion that the legislative intent was to insist on these provisions for consultation with the Mining Board as a prerequisite for the validity of the regulations.
This conclusion is strengthened by the fact that in section 60 which providing for the framing of regulations in certain cases without following the procedure enjoined in section 59, the legislature took care to add by a proviso that any regulation so made "shall not remain in force for more than two years from the making thereof ".
By an amendment made in 1959 the period has been changed to one year.
It is not unreasonable to read this proviso as expressing by implication the legislature 's intention that when the special circumstances mentioned in section 60 do not exist and there is no scope for the application of that section no regulation made in contravention of a. 59 will be valid for a single day.
" The learned Judge concluded his discussion thus, a ' p. 853 : "For all the reasons giving above, we are of opinion that the provisions of section 59(3( of the Mining Act, 1952, are mandatory.
" Pausing here for a moment, I find it very difficult to bold that this Court held, expressly or by necessary implication, that section 59(3) of the Act was mandatory only if the concerned Board was in existence.
The argument advanced, the question 929 posed, the reasons given and the conclusion arrived at were all against giving such a limited scope to the said judgment, It was contended that both section 12 and section 59 were mandatory.
III Posing the question to be decided, the learned Judge clearly referred to "the omission to make such a reference".
The word "such" clearly refers to the omission to make a reference, as no Board was constituted under section 12 of the Act.
So, as regards the posing of the question there was absolutely no ambiguity and the learned Judge had clearly in mind what the Court was asked to decide upon.
The reasons given by the learned Judge for holding that it was obligatory of the Central Government to consult the Board before the making the regulation would equally apply whether the Board existed or not.
The conclusion arrived at by the learned Judge that consultation with such a Board was a condition precedent for the exercise of the power would apply to both the cases.
If it was a condition precedent for the exercise of the power, how could it cease to be one if a Board was not in existence? The condition is not the existence of the Board, but the consultation with a Board.
In one case, the Government would not consult the Board though it existed, and in the other case it would not consult, as the Board did not exist.
In either case, the condition was broken.
But it is said that the last three, paragraphs of the judgment make it clear that the learned Judge was not considering the case where a Board had not been constituted.
There, the learned Judge was considering the question whether the Mining Boards constituted under section 10 of the Mines Act, 1923, were continuing to operate at the time the Regulation were made and there was full consultation with the ,Mining Boards before the, Regulations were framed.
put tile learned Judge was not able to decide that 930 question, as there was not sufficient material on the record.
Therefore, this Court directed the Magistrate to decide that question.
I fail to see how these paragraphs in any way help us to hold that this Court confined its decision only to a case where a Board has been constituted.
On the other hand, the observations in the first of these three paragraphs clearly indicate to the contrary.
The relevant observations are "As has been pointed out above, it was not disputed before us that at time when the regulations were framed to now Mining Board had been constituted under the and consequently no consultation with any Mining Board constituted under the 1952 Act took place.
" This shows that the entire judgment up to that point proceeded on the basis that there was no consultation with the Mining Board, as no such Board was constituted.
Thereafter the learned Judge was only considering the alternative contention advanced by the State, namely, that the pro existing Board was consulted and that that consultation was sufficient compliance with the provisions of section 59(3) of the Act.
If I might analyse the mind of the learned Judge, the process of reasoning may be summarized thus: On behalf of the appellant it was argued that there was no consultation with the Board as it was not constituted under section 12 of the Act and, therefore, the Regulations made under the Act without such consultation were void.
The learned Judge accepted the contention.
Then it was argued for the Government that though there was no consultation with the Board constituted under section 12 of the Act, consultation with a pre existing Board would be enough compliance with the section.
As there was no material on the record, the learned Judge could 931 not decide on that question and therefore directed it to be decided by the Magistrate.
On the other hand, as it was common case that no Board under section 12 of the Act had been constituted, if the contention of the Government, now pressed before us, was correct, no other question would have arisen for, according to the State, a. 59 (3) could not be invoked in a case where no Board had been in existence.
The plea that there was a consultation with the pre existing Board was taken not by the appellant but by the State and such a plea would be unnecessary if section 58 (3) of the Act did not lay down the condition of consultation with the Board when it did not exist.
To my mind, the judgment of the Court is clear and unambiguous on this point and it decided that, as there was no consultation with any Mining Board under section 59(3) of the Act, as the Board was not in existence, the Regulations were bad.
The present argument is an attempt to persuade us to go back on a clear pronouncement on the point by a Constitution Bench of the Court.
That apart, I am satisfied on a true construction of the provisions of section 12 and a. 59(3) of the Act that the Central Government has to exercise the power under section 12 if it intends to exercise the power under a. 59 of the Act.
Under section 12, ,the Central Government may constitute for any part of the territories to which this Act extends or for any group or class of mines, a Mining Board", consisting of persons with specific qualifications representing different interests in the mines.
Under ,R. 59, the power to make regulation conferred by a. 57 is subject to the condition of the regulations being made after previous publication, and under sub section
(3) thereof ""Before the draft of any regulations is published under this section,it shall be referred to every Mining Board which is, the opinion of the Central Government, con 932 cerned with the subject dealt with by the regulation, and the regulation shall not be so published until each such Board has had a reasonable opportunity of reporting as to the expediency of making the same and as to the suitability of its provisions".
As interpreted by this Court, the said condition is a condition precedent for the making of the Regulations under the said section.
If the contention of the learned Solicitor General be accepted, the condition may have to be disannexed from the power by a situation brought about the conscious withholding of the exercise of the connected power by the Central Government under section 12 of the Act.
Central Government by its own default can ignore the condition imposed in public interest.
The construction leading to this anomalous result can.
not be accepted unless the provisions compel us to do so.
It is a well settled principle of construction that when it is possible to do so, it is the duty of the Court to construe provisions which appear to conflict so that they harmonies.
To put it differently, of two possible constructions, one which gives a consistent meaning to different parts of an enactment should be preferred.
In the instant case, the two sections can be harmonized without doing violence to the language used.
Section 12 is an enabling provision under it a power it; given to the Central Government to appoint a Mining Board.
Section 57, read with section 59, confers another power on the Central Government to make regulation subject to, among others a condition that the draft of the regulations shall be referred to a Mining Board.
These two powers are connected: if they are read together, as we should do in an attempt to reconcile them, it could be reason '.
ably hold that the power conferred under a. 12 has to be exercised by the Central Government if it intends to make regulations under section 57 of the Act.
This construction carries out the full intention of Legislature in enacting s.59 as interpreted by this 933 Court.
Both the powers can be exercised without the one detracting from the other.
The construction suggested by the respondents enables the Central Government to defeat the public purpose underlying the imposition of the condition under s.59 of the Act and that suggested by the petitioners enables the exercise of the two powers without the one coming into conflict with the other.
I would on the principle of harmonious construction, prefer 'to accept the latter construction to the former.
Let us took at the provisions from a different perspective.
It is a well established doctrine that when the power is coupled with a duty of the person to whom it is given to exercise it, then the exercise of the power is imperative: see Maxwell on interpretation of Statutes, 11th Edn., p. 234.
It has also been bold that "if the object for which the power is conferred contemplates giving of a right, there would then be a duty cast on person to whom the power is given to exercise it for the benefit of the party to whom the right is given when required on his behalf.
" Dealing with section 51, Income tax Act, 1918 which provides that the Chief Revenue Authority may" state the case to High Court Lord Phillimore observed in Alcock Ashdown & Co. vs The Chief Revenue Authority Bombay(1). "No doubt that the section does not say that the authority "shall" state the case, it only says that it may and it is rightly urged that "may" does not mean "shall, only the capacity or power is given to the authority.
But when a capacity or power is given to a public authority there may be circumstances which couple with the power a duty to exercise it, and where there is a serious (1) A. 1.
R. 934 point of law to be considered there does lie a duty upon the Revenue authority to state a case for opinion of the Court and if he does not appreciate that there is such a serious point, it is in the power of the Court to con trol him and to order him to state the case.
" Under the Act, there are two connected powers a power to appoint a Mining Board and a power to make regulations subject to a condition.
The condition imposed on the power confers a right on a Mining Board to be consulted before a regulation is made.
A combined reading of section 12 and sections 57 and 59 shows that the power or powers conferred on the Central Government are coupled with a duty to consult the Board whenever the Central Government seeks to exercise the power under s.57.
I have no hesitation in holding that the power is coupled with a duty and that the power has to be exercised when the 'duty demands it.
The Central Government in making the Regulations has a duty to consult the Mining Board and the Mining Board has a right to be so consulted and to discharge its duty it is incumbent upon the Central Government to exercise the connected power by appointing the Board.
It is said that under section 59 of the Act, the Regulations and the Rules shall be referred to a Mining Board and that under section 58 the Central Government has the power to make a rule providing for the appointment of the Chairman and members of the Mining Board and that if section 59 is mandatory, the Government can never exercise the power under section 58(a).
No such difficulty could arise under the Act before its amendment in 1959.
Under a. 69(3), as it stood then, the condition of consultation with a Mining Board was imposed only on the power of the Government to make a. regulation and that s.57 of the Act which confers a 935 power on the Central Government to make regulations did not contain any.
clause corresponding to cl.
(a) of section 58 of the Act.
That apart, section 58(a) may legitimately be invoked by the Central ' Government only after a Board had been consti tuted in regard to the future appointments.
how this argument may have some bearing when this question of construction of the provisions of section 59 was raised before this Court on the last occasion and none at present, as the true construction of the said section was finally settled by this Court.
That apart, a comparative study of the other provisions of the Act would also lead to the same conclusion.
Under the Act, there are many enabling provisions empowering the Central Government to appoint specified authorities to discharge different duties and functions described in various sections.
Should it be held that the Central Government need not appoint the authorities under any circumstances, the Act would become a dead letter.
Even the appointment of 'the Chief Inspector and Inspectors is left to the discretion of the Central Government: see section 5 of the Act.
If the Government need not appoint the Chief Inspector or the Inspectors, the duties and functions allotted to them could not be discharged or performed.
A resonable construction would, therefore, be that if the said duties and functions have to be per.
formed, the Government hat; to appoint the officers.
So too, if the Central Government seeks to exercise the powers under section 57 of the Act, read with section 59 thereof, it has to appoint the Board.
I therefore , hold on a fair construction of sections 12 and 59 of the Act, that ' the Central Government has a duty to appoint the, Mining Board if it seeks to exercise its power under section 57 of the Act.
The next argument is that the Bihar Board has been consulted in the manner prescribed by 936 section 59(3) of the Act and, therefore.
the regulation made after such consultation are valid.
I cannot agree with this contention either.
The said Board was appointed under section 10(1) of the Indian Mines Act, 1923 and it is not disputed that the Board must be deemed to have been duly constituted under the present Act.
It is also not disputed that the said Board was only constituted to have jurisdiction over the area comprised in the present Bihar State, that is, it has no jurisdiction over West Bengal.
Under section 12 of the Act, the Central Government may constitute for any part of the territories to which this Act extends or for any group or class of a Mines., a Mining Board.
Under section 59, the Central Government shall refer the draft to every Mining Board which, in the opinion of the Central Government, is concerned with the subject dealt with by the regulation '.
Now, can it be said that the Board constituted for a part of the territories to which the Act extends, namely, to the State of Bihar, could be a Board concerned with the subject dealt with by the regulations, namely, the mines in West Bengal area ? The entire object of section 59 is to consult the persons intimately connected with the mining operations of a particular area so that suitable regulations may be made to govern the working of those mines.
It could never have been the intention of the Legislature to empower the Government to make regulations in regard to mines in one part of the country by consulting a Board constituted for another part of the country.
Such an intention could not be attributed to the Legislature.
Indeed, the Central Government, when it is constituted the Boards, expressly indicated its intention that all the Boards, including the Board functioning in West Bengal, should be consulted, but as the Board constituted there was not one constituted legally under the Act, the consultation with.
the said Board 937 had become futile.
I therefore, hold that the Regulations in so far as they purport to regulate the mines situate in West Bengal have not been validly made under the Act inasmuch as a condition precedent imposed by section 59 of the Act on the exercise of the Government 's power to make a regulation was not complied with.
In the result, I direct the issue of a writ of prohibition against respondents 1 to 4 restraining them from proceeding with the criminal case launched against the petitioners.
The petitioners will have their costs.
By COURT : In view of the majority opinion of the Court the Writ Petition fails and is dismissed.
[/INST]Section 12 of the , provides that the Central Government may constitute a Mining Board for any part of the territories to which the Act extended or for any group or class of mine .
In 1957 only one mining board i.e. the Bihar Mining Board was in existence and other mining boards were not constituted.
Section 57 empowers the Central Government to make Regulations.
Section 59(3), as it then stood, provided that before the draft of any regulation was published it should be referred to every Mining Board concerned and that it shall not be published until each such Mining Board had had a reasonable opportunity of reporting on it.
The Central Government referred the draft of the Coal Mines Regulations to the Bihar Mining Board which circulated the draft to all the members of the Board and the members communicated their opinions individually to the Central Government.
Thereafter, the Regulations were duly published and came into force.
The petitioner 's, who were being prosecuted in Bengal for violation of the Regulations, contended that the Regulations were invalid as : (i) it was incumbent upon the Central Government under 'section 12 of the Act to constitute all the Mining Boards and to refer the draft Regulations to all the Boards before they.
could be published under section 59.
and (ii) the communication of opinions by individual members 'of the Bihar Mining Board did not amount to consultation with the Board within the meaning of section 59(3).
Held (Per majority, Subba Rao, J., dissenting), that the 'Coal Mines Regulations, 1957, had been duly framed and published.
Section 59(3) merely provided that if a Mining Board was in existence at the relevant time it was obligatory on the Central Government to consult it before 905 the draft Regulation was published.
But section 12 was not mandatory and it was not obligatory on the Central Government to constitute any or all of the Mining Boards.
There was nothing in the Act or.
in the context which justified reading the word "may" in section 12 as "shall".
The Mining Board constituted under section 12 had to perform two functions, viz., to make a report in respect of regulations or rules referred to it and to decide cases which may be referred to it under section 81.
The working of the Act was not dependent on the constituting of Mining Boards.
This construction of section 12 did not render the provisions of section 59(3) nugatory.
Apart from consulting the Boards, all parties affected by the draft had an opportunity to make their suggestions or objections and these had to be considered before the draft was settled and the regulations were finally made.
Banwarilal Agarwalla vs state of Bihar, , explained.
Held, further, that the requirement of section 59(3) had been complied with in referring the draft Regulations to the Bihar Mining Board.
All that section 59(3) required was that a reasonable opportunity should be given to the Board to make its report.
How the Board chose to make its report, was not a matter which the Central Government could control.
Per Subba Rao, J. ,The Coal Mines Regulations were not validly made.
The Supreme Court had directly decided in Banwarilal vs State of Bihar that the Regulations were bad as there was no consultation with any Mining Board under section 59 (3) as the Boards were not in existence.
A fair construction of sections 12 and 59 (3) of the Act ' also showed that if the Central Government wanted to ' make regulations under section 57 it had to appoint Mining Boards and to refer the regulations to them before publication.
If the Central Government wanted to exercise the power under section 59 it had first to exercise the power under section 12.
The power to make regulations was coupled with a duty to consult the Mining Boards, and to discharge its duty it was incumbent upon the Central Government to appoint the Mining Boards.
Apart from this, the Regulations is so far as they purported to regulate mines in West Bengal had not been validly made as no Mining Board for the West Bengal area had been consulted before making the Regulations.
The Act did not empower the Central Government to make regulations in regard to mines in one part of the country by consulting a Board constituted for another part of the Country.
906 Banwarilal Agarwalla vs State of Bihar. , followed.
Alcock Ashdown & Co. vs The Chief Revenue Authority, Bombay, A. I. R. , referred to.
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<s>[INST] Summarize the judgementtion (Civil) No. 1695 of 1987 Etc.
(Under Article , ' 23 of the Consitution of India).
Govind Mukhotey, J.D. Jain and B.B. Sinha for the Petition ers.
Dr. Y.S. Chitale, Mahabir Singh, K.B. Rohtagi and Sha shank Shekhar for the Respondents.
The Judgment of the Court was delivered by OJHA, J.
The petitioners in these writ petitions are licenced dealers having factories and manufacturing units at Panipat in the State of Haryana and consume sheep hair for manufacturing woollen fabrics and blankets.
In order to carry on their trade they purchase sheep hair to get yarn manufactured out of it for being used in its turn for manu facturing woollen fabrics and blankets.
The only question urged in these writ petitions is as to whether sheep hair was an agricultural produce within the meaning of the said 295 term as defined under Section 2(a) of the Punjab Agricultur al Produce Markets Act, 1961 (hereinafter referred to as the Act) so as to attract the provisions of the said Act to it.
The term "agricultural produce" according to its definition contained under Section 2(a) of the Act means all produce, whether processed or not, of agriculture, horticulture, animal husbandry or forest as specified in the Schedule to the Act.
On its plain meaning, therefore, only such produce as is specified in the Schedule to the Act shall fall within the term "agricultural produce".
Section 38 of the Act confers power on the State Government, by notification, to add to the Schedule any other item of agricultural produce or amend or omit any item of such produce specified therein.
The relevant items in the Schedule on which reliance has been placed by learned counsel for the petitioners in sup port of the contention that sheep hair was not an agricul tural produce are items 41.
Wool (Oon), 75.
Goat hair and 76.
Camel hair.
It has been urged by learned counsel for the petitioners that even though Goat hair and Camel hair have been included in the Schedule, Sheep hair had not been so included and consequently sheep hair was not an agricultural produce within the meaning of the Act and the insistence of the authorities that the petitioners should obtain a licence and pay market fee with regard to their transaction in respect of sheephair was unjustified.
With regard to item No. 4 l namely Wool (Oon), it was urged firstly that wool is the manufactured item of sheep hair and not sheep hair itself and secondly the word 'wool ' according to its dictionary meaning is the soft undercoat of various animals including sheep.
Reference in this behalf has been made to the Dic tionary of Scientific and Technical Terms M.C. Graw Hill.
According to it wool is a textile fibre made from raw wool characterised by absorbency, resiliency and insulation.
It further states that wool is the soft undercoat of various animals such as sheep, angora, goat, camel, alpaca, llamma and vicuna.
Having heard learned counsel for the parties, we are not inclined to agree with the submission made by learned coun sel for the petitioners.
Before dealing with the matter further it would be useful to notice at this place that item No. 41 of the Schedule after the word 'wool ' uses the word '0on ' also within brackets which indicates as to what was really intended by the use of the word 'Wool '.
Indeed, in the Hindi version of the Act, item No. 41 of the Schedule uses the word '0on ' only and does not at all use the word 'wool '.
Now to the submissions made by learned counsel for the petitioners, the first submission made by him that the word 'wool ' contemplated manufactured item of 296 sheep hair and not sheep hair itself, it believed even by the dictionary meaning of the said word relied on by him.
Firstly, the raw material out of which a textile fibre is made is also described as raw wool.
Secondly, not only the textile fibre but also the soft undercoat of various animals including sheep has itself been described as wool.
It is, therefore, apparent that not only the textile fibre made out of raw wool but even the soft undercoat of the various animals including sheep, according to the dictionary afore said, would be wool.
Encyclopaedia Britannica, under the heading wool in vol.
23, states: "Animal fibres are usually spoken of as hair, with the exception of the coat of the sheep which is usually termed wool".
A perusal of what has been stated under the heading wool therein would indicate that wool has almost invariably been used in the context of sheep hair.
In Indian Aluminium Cables Ltd. vs Union of India, [1985] 3 SCC page 284 after referring to several earlier decisions of this Court it was held that in determining the meaning or connotation of words and expressions describing an article in a tariff schedule those words and expressions should be construed in the sense in which they are under stood in the trade by the dealer and the customer when goods are marketable.
The same rule of interpretation was reiter ated in Collector of Central Excise, Kanpur vs Krishna Carbon Paper Co., [1989] 1 SCC page 150.
It was held: "It is well settled, as mentioned before, that where no definition is provided in the statute itself, as in this case for ascertaining the correct meaning of a fiscal entry reference to a dictionary is not always safe.
The correct guide, it appears in such a case, is the context and the trade meaning XXXXX The trade meaning is one which is prevalent in that particular trade where the goods is known or traded.
If special type of goods is subject matter of a fiscal entry then that entry must be understood in the context of that particu lar trade, bearing in mind that particular word xxxxx It is a well settled principle of construc tion, as mentioned before, that where the word has a scientific or technical meaning and also an ordinary meaning according to common par lance, it is in the latter sense that in a taxing statute the word must be held to have been used, unless contrary intention is clear ly expressed by the legislature.
This princi 297 ple is well settled by a long line of deci sions of Canadian, American, Australian and Indian cases.
Pollock, J. pointed out in Grenfell vs I.R.C., 248 that if a statute contains language which is capable of being construed in a popular sense, such a statute is not to be construed accord ing to the strict or technical meaning of the language contained in it, but is to be con strud in its popular sense, meaning of course, by the words "popular sense" that which people conversant with the subject matter with which the statute is dealing would attribute to it.
The ordinary words in every day use are, therefore, to be construed according to their popular sense.
The same view was reiterated by Story, J. in 200 Chests of Tea (1824) 9 Whea ton US 435,438 where he observed that the legislature does not suppose our merchants to be naturalists, or geologists, or botanists.
" In our opinion, the aforesaid rule of interpretation would apply even to the interpretation of the items of the Schedule to the Act keeping in view the nature and purpose of the enactment.
Interpreting item No. 41 Wool(Oon) of the Schedule in this light there seems to be no mannner of doubt that the word 'wool ' has been used therein only in the sense in which the word '0on ' is understood in the trade by the dealer and the consumer in the popular sense namely that which people conversant with the word '0on ' would attribute to it.
If anyone goes to the market to purchase wool (0on) he would be offered only sheep hair and not goat hair or camel hair or for the matter of that the hair of any other animal.
Indeed, there is intrinsic evidence in the Schedule itself of the fact that in the English version the word 'Wool (0on) ' and in the Hindi version '0on ' only at item No. 41 has been used in the same popular sense namely that of sheep hair.
This intention is apparent from the circum stances that care has been taken to specifically include goat hair and camel hair at items 75 and 76 of the Schedule.
Had Wool (0on) been used at item No. 41 in the comprehensive sense as canvassed by the learned counsel for the petition ers it would have automatically included Goat hair and Camel hair also and the specific inclusion of Goat hair and Camel hair at items 75 and 76 would have been wholly unnec essary.
Consequently, their specific inclusion at items 75 and 76 is a clear indication of the awareness of the fact that the trade meaning of the word 'Wool (0on) ' which is prevalent in the popular sense would be sheep hair alone and as such unless goat hair and camel hair are included as specific items in the Schedule they will not be treated as agricultural produce.
The word 298 'Woo1 (0on) ' has obviously been used at item No. 41 of the Schedule in the aforesaid popular sense and not in the sense used in scientific and technical terminology which the traders and the consumers are not normally supposed to know.
In view of the foregoing discussion, we are clearly of the opinion that sheep hair falls under the item No. 41 of the Schedule namely "Wool (0on)" as contained in the English version and "0on" only as contained in the Hindi version of the Act.
Sheep hair is consequently an agricultural produce within the meaning of the Act so that the various provisions therein with regard to agricultural produce are applicable to sheep hair also.
In the result, we find no merit in these writ petitions.
They are accordingly dismissed but in the circumstances of the case there shall be no order as to costs.
G.N. Petitions dis missed.
[/INST]For selling an immovable property, respondent entered into an agreement with the appellant.
Appellant paid part of the consideration and he was put in possession of the property.
Since the respondent failed to execute the regis tered sale deed, the appellant filed a suit.
There was no specific averment in the suit that the appellant was and had always been ready and willing to perform his part of the agreement.
Respondent contended inter alia that the suit was not maintainable for non compliance with the provisions of Section 16(c) of the .
This issue was directed to be tried as a preliminary issue.
At that stage, the appellant applied for leave to amend the plaint by incorporating an averment that he was always and had been ready and willing to perform his part of the agreement.
The trial court rejected the application.
The revision petition filed in the High Court was dis missed.
The High Court took the view that the application for amendment was filed beyond the period of limitation and cannot be granted, as a vested interest of the respondent would be disturbed.
This appeal is against the judgment of the High Court.
Allowing the appeal, this Court, HELD: 1.1 Amendments should be refused only where the other party cannot be placed in the same position as if the pleading had been originally correct, but the amendment would cause him an injury which could not be compensated in costs.
It is merely a particular case of this general rule that.
where a plaintiff seeks to amend by setting up a fresh 475 claim in respect of a cause of action which, since the institution of the suit, had become barred by limitation, the amendment must be refused; to allow it would be to cause the defendant an injury which could not be compensated in costs by depriving him of a good defence to the claim.
Courts would as a rule, decline to allow amendments, if a fresh suit on the amended claim would be barred by limita tion on the date of the application.
But that is a factor to be taken into account in exercise of the discretion as to whether application for amendment should be granted and does not affect the power of the Court to order it, if that is required in the interest of justice.
[477A D] 1.2 In the present case, no fresh cause of action was sought to be introduced by the amendment applied for.
All that the appellant sought to do was to complete the cause of action for specific performance and add an averment which required to be added in view of the provisions of sub sec tion (c) of Section 16 of the .
There was no fresh cause of action sought to be introduced by the amendment and hence, no question of causing any injustice to the respondent on that account arose.
[477E F] Pirgonda Hongonda Patil vs Kalgonda Shidgonda Patil and Ors., ; and L.J. Leach & Co. and Anr.
vs Messrs Jardine Skinner & Co., ; , relied on.
Ouseph Varghese vs Joseph Aley & Ors., , distinguished.
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<s>[INST] Summarize the judgementos. 102,105 to 110 of 1956.
Petitions under Article 32 of the Constitution for writs in the nature of Habeas Corpus.
N. C. Chatterjee, Sadhan Chandra Gupta and janardhan Sharma; for petitioners in Petitions Nos. 102, 105 to 108 of 1956.
Sadhan Chandra Gupta and Janardhan Sharma, for petitioners in Petitions Nos. 109 and 110 of 1956.
C.K.Daphtary, SoliCitor General for India, Porus A. Mehta and R. H Dhebar, for respondents in Petitions Nos. 102 and 105 of 1956.
Porus A. Mehta and R. H. Dhebar, for respondents in Petitions Nos. 106 to 110 of 1956.
September 17.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
These are petitions filed under article 32 of the Constitution for the issue of writs in the nature of habeas corpus.
They arise on the same facts and raise the same questions.
On 13 1 1956 the Commissioner of Police, Bombay, passed orders under section 3(2) of the IV of 1950 (hereinafter referred to as the Act), directing the detention of the present petitioners, and pursuant thereto, they were actually arrested on 16 1 1956.
The grounds on which the orders were made were formulated on 19 1 1956, and communicated to the petitioners the next day.
On 21 1 1956 the Commissioner reported the fact of the order and the grounds therefor to the State Govern 655 ment, which approved of the same on 231 1956.
The contention of the petitioners before us is that when the Commissioner passed the orders for detention on 13 1 1956, it was his duty under section 3(3) to report that fact forthwith to the State Government and as be did not do so until 21 1 1956, he had acted in contravention of the statute, and that the detention was therefore illegal.
That raises the question as to what "forthwith" in section 3 (3) of the Act signifies, and whether on the facts the report was made "forthwith", within the meaning of that word in that sub section.
The word "forthwith", it has been observed, is of elastic import.
In its literal sense, it might be construed as meaning that the act to be performed forth;with in relation to another should follow it automatically without any interval of time, or, as held in some of the American.
authorities, should be performed at one and the same time as the other.
But even in America, the preponderance of judicial opinion does not favour this construction.
In Corpus Juris, Volume 26, page 998 the position is thus stated: "Although the term has received a strict conStruction, ordinarily it is not to be strictly construed, but should receive a liberal or reasonable construction .
Some regard must be had to the nature of the act or thing to be performed and the circumstances of the case".
In England, there is a long catena of decisions interpreting the word "forthwith" occurring in statutes, rules and contracts, and their trend has been to construe it liberally.
As early as 1767, discussing the meaning of the word 'immediately ' and the word "forthwith" his been held to have the same significance Lord Hardwicke observed in Rex vs Francis "But then the word immediately, is strongly insisted on, as, a word which excludes all mesne acts and time; and therefore, that this taking away the money must necessarily be 'in the presence of Cox.
(1) Cun. 165; ; , 1183.
656 But all the nine Judges held this word immediately, to be of so loose a signification, and not to imply necessarily, that the money was taken away in Cox 's presence.
For this word does neither in its use and application, nor in its grammatical construction, exclude all mesne acts or time But it is more necessary and proper in this case, to consider the signification of this word in the legal, way.
And it is plain, that in this acceptation, it is not understood to exclude mesne acts or time And on the Statute Hue and Cry, 27 Eliz. c. 13, section 11, where ' the words with as much convenient speed as may be, are made use of, all the precedents have expressed these words, by the word immediate, as may be seen in the books.
The last case which I shall mention on this point, is that of the writs of habeas corpus, issuing out of this Court, which are most frequently made returnable immediately; and in this case the word is never understood either to exclude mesne acts or time, but only means, with convenient speed In Beg.
vs The Justices of Worcester(1), where the question was as to the meaning of the word "forthwith" in section 50 of 6 Will.
IV, Coleridge, J. observed: "I agree that this word 'forthwith ' is not to receive a strict construction like the word 'immediately ',, so that whatever follows, must be done immediately after that which has been done before.
By referring to section 50, it seems that whatever is to be done under it, ought to be done without any unreasonable delay.
I think that the word 'forthwith ' there used, must be considered as having that meaning ' The meaning of the word "immediately" came up for consideration in Thompson vs Gibson(2).
Holding that it was not to be construed literally, Lord Abinger C. B. observed: "If they" (acts of Parliament) "could be construed literally, consistently with common sense and justice, undoubtedly they ought; and if I could see, (1) [1889] 7 Dowl.
789 791: 54 R.R. 902 (903).
(2) (1841] 8 M. & NV. 282 ; ,1047.
657 upon this act of, Parliament, that it was the intention of the legislature that not a single moment 's interval should take place before the granting of the certificate, I should think myself bound to defer to that declared intention.
But it is admitted that this cannot be its interpretation; we are therefore to see how, consistently with common sense and the principles of justice, the words 'immediately afterwards ' are to be construed.
If they do not mean that it is to be done the very instant afterwards,do they mean within ten minutes, or a quarter of an hour, afterwards? I think we should interpret them to mean, within such reason able time as will exclude the danger of intervening facts operating upon the mind of the Judge, so as to disturb the impression made upon it by the evidence in the cause".
In agreeing with this opinion, Alderson, B. expressly approved of the decision of Lord Hardwicke in Rex vs Francis(1).
This construction of the word 'immediately ' was adopted in Page vs Pearce(), Lord Abinger C. B. observing: "It has already been decided, and necessarily so, that the words 'immediately afterwards 'in the statute, cannot be construed literally; and if you abandon the literal construction of the words, what can you substitute but 'within a reasonable time? '. " In The Queen vs The Justice 3 of Berkshire(3), where the point was as to the meaning of "forthwith" in section 52 of 35 & 36 Vict., Chapter 94, Cockburn C. J. observed: "The question is substantially one of fact.
It is impossible to lay down any bard and fast rule as to what is the meaning of the word 'immediately ', in all cases.
The words 'forthwith ' and 'immediately ' have the same meaning.
They are stronger than the expression within a reasonable time ', and imply prompt, vigorous action, without any delay, and whether there has been such action is a question of fact, having regard to the circumstances of the particular case".
(1) dun.
165: ; , 1188.
(2) ; (678): (1212).
(3) (471).
658 The same construction. has been put on the word "forthwith " occurring in contracts.
In Hudson and others vs Hill and others(1) which was a case of charterparty, it was observed at page 280: " Forthwith ' means without unreasonable delay.
The difference between undertaking to do something 'forthwith ' and kithin a specified time is familiar to everyone conversant with law.
To do a thing 'forthwith ' is to do it as soon as is reasonably convenient".
In Reg.
vs Price(2), it was held by the Privy Council that the word "forthwith" in a bail bond meant within a reasonable time from the service of notice.
On these authorities, it may be taken, an act which is to be done forthwith must be held to have been so done, when it is done with all reasonable despatch and without avoidable delay.
But it is argued by Mr. N. C. Chatterjee that the view taken in the above decisions as to the meaning of the word "forthwith" has been abandoned in the later decisions, and that under the law as it stands, when an act has to be performed forthwith in relation to another, what has to be decided is not whether it was done within a reasonable time, but whether it was done so closely upon the other as to form together one continuous act.
He relied in support of this opinion on the decision in Be Muscovitch(3), affirming that in Re Muscovitch(1).
That was a decision on rule 132 of the Bankruptcy Rules which provided that "Upon entering an appeal, a copy of the notice of appeal shall forthwith be sent by the appellant to the registrar of the court appealed from".
The facts were that the appeal was lodged in time on 25 10 1938 but the notice was served on 28 10 1938, and it was found that there was "no satisfactory reason or no reason at all, why there was any delay in the matter" (Re Muscovitch(4)).
On that, it was held that the requisition that "the notice shall forthwith be sent" was not satisfied.
This is authority only for the position that when an Act is done after an interval of time and there is no explanation forthcoming for (1) (280).
(2) ; 8 Moore P.C. 208: (3) (4) , 659 the delay, it cannot be held to have been done "forthwith".
That is made clear by Sir Wilfrid Greene M. R. in the following passage in Re Muscovitch(1) at page 139: "Having regard to the construction which was put upon the word 'forthwith ' which is peremptory, and. admits of no interval of time between the entry of the appeal and the sending of the notice save such as may be imposed by circumstances, which cannot be avoided, I find it impossible in the present case to say that the notice was sent forthwith within the meaning of the rule".
Reliance is also placed for the petitioners on the decision in Ex parte Lamb: In re Southam(2), which was followed in Re Muscovitch(1).
There, construing the word "forthwith" in rule 144 of the Bankruptcy Rules, 1870, which corresponds to rule 132, which was the subject of interpretation in Re Muscovitch(1), Jessel M. R. observed at page 173: "Ithink that the word 'forthwith ' must be construed according to the circumstances in which it is used Where, as in Hyde vs Watt8(3), there is a covenant to insure a man 's life, there must of necessity be some delay, for the act could not be done in a moment.
But where an act which is required to be done 'forthwith ' can be done without delay, it ought to be so done".
In that case also, the learned Judges found that the delay was not explained.
And the observation of Lush L. J. in the same case was that "the word 'forthwith ' has not a fixed and an absolute meaning; it must be construed with reference to the objects of the rule and the circumstances of the case".
There is nothing in the decisions in Re Muscovitch(1) and Ex parte Lamb: In re Southam(2) which can be considered as marking a departure from the construction put on the word "forthwith" in the earlier authorities that it meant only that the act should be performed with reasonable speed and expedition, and that any delay in the matter should be satisfactorily explained.
(1) (2) (3) ; 660 It is argued for the petitioners that even if the con.
struction put on the word "forthwith" in the above decisions is accepted as correct, it must, in any event, yield to any contrary intention expressed in the statute, and that the provisions of the Act afforded clear indication of such an intention.
It is co intended that the legislature while providing in section 7 that the grounds should be communicated to the detenu "as soon as may be" has enacted that the report under section 3(3) should be sent "forth with", that the use of two different expressions in the two sections is a clear indication that they do not mean the same thing, that as the words "as soon as may be" import that the act might be performed in a reasonable time, the word "forthwith" which is more peremptory must be construed as excluding it.
The decisions in Emperor vs Phuchai(1) and in K. U. Kulkarni vs Ganpat Teli(2) were quoted in support of the position that when two different expressions are used in different parts of the same clause or section, they should be construed as used in different senses.
We agree that "forthwith" in section 3(3) cannot mean the same thing as "as soon as may be" in section 7, and that the former is more peremptory than the latter.
The difference between the two expressions lies, in our opinion, in this that while under section 7 the time that is allowed to the authority to send the communication to the detenu is what is reasonably convenient, under section 3(3) what is allowed is only the period during which he could not, without any fault of his own, send the report.
Under section 7 the question is whether the time taken for communicating the grounds is reasonably requisite.
Under section 3(3) it is whether the report has been sent at the earliest point of time possible, and when there is an inter val of time between the date of the order and the date of the report, what has to be con sidered is whether the delay in sending the report could have been avoided.
(1) I.L.R. 50 All.
909: A.I.R. 1929 All.
(2) I.L.R. [1942] Bom.
287: A.I.R. 1942 Bom.
661 It was contended that as section 7 required that the communication should be made not later than 5 days from the date of the order, and as section 3(3) was more peremptory than section 7 in that it required that the report should be made forthwith, the period allowable under section 3(3) could not exceed 5 days, and that as in these cases the reports were sent 8 days later, they could not be held to have been sent forthwith.
This argument mixes up two different matters contained in section 7.
The period of 5 days provided therein is an absolute one and is independent of the period which is permissible under the expression "as soon as may be", which must, by its very nature, be indefinite depending on the facts and circumstances of the case.
It will be as erroneous to read 5 days into the period allowable under the expression "as soon as may be" as to read the 12 days within which the State has to approve the order under section 3(3) into the period which is allowable under the expression "forthwith".
The result then is that the report sent by the Commissioner to the State on 21 1 1956 could be held to have been sent "forthwith" as required by section 3(3), only if the authority could satisfy us that, in spite of all diligence, it was not in a position to send the report during the period from 13th to 21st January 1956.
We must now examine the facts from the above standpoint.
The Commissioner of Police has filed an affidavit explaining why the reports were not sent till 21,st January 1956, though the orders themselves had been made as early as 13th January 1956.
Ever since the publication of the proposal to form a State of Maharashtra without the city of Bombay, there ,had been considerable agitation for the establishment of a Samyuktha Maharashtra with the city of Bombay included in it.
An action committee had been set up on 15 11 1955 for the purpose, and there had been hartal and morchas resulting in outbursts of lawlessness and violence and in the burning of a police chowki.
The final decision on the question was expected to be taken and announced in the middle of January 1956, and the atmosphere was highly sur charged.
It was in this situation that the Commis 662 sioner decided to take action under section 3(2) of the Act against the leading spirits of the movement, and passed the present orders for detention against the petitioners on 13 1 1956.
In his affidavit the Commissioner states that he decided first "to locate the persons against whom orders of detention were made by me on the 13th January 1956 and after having done so, to arrest all of them simultaneously so that none of them may go underground or abscond or evade execution of the detention orders".
Then the affidavit goes on to state: "It was not possible for me to send the report earlier as the situation in the City of Greater Bombay was tense, pregnant with danger on the 13th January 1956, and continued to be so till 16th January 1956, and actual rioting occurred during that night and those riots continued till 22nd January 1956.
I and my staff were kept extremely busy all throughout in maintaining law and order and simultaneously taking steps to round up miscreants.
In this unusual and tense situation, it was not possible to make a report earlier than the day on which it was made".
We see no reason for not accepting these statements.
What happened on the 16th and the following days are now matters of history.
The great city of bombay was convulsed in disorders, which are among the worst that this country has witnessed.
The Bombay police had a most difficult task to perform in securing life and property, and the authorities must have been working at high pressure in maintaining law and order.
It is obvious that the Commissioner was not sleeping over the orders which he had passed or lounging supinely over them.
The delay such as it is due, to causes not of his making, but to causes to which the activities of the petitioners very largely contributed.
We have no hesitation in accepting the affidavit, and we bold that the delay in sending the report could not have been avoided by the Commissioner and that when they were sent by him, they were sent "forthwith" within the meaning of section 3(3) of the Act.
663 Mr. section C. Gupta put forward some special contentions on behalf of the petitioners in C.M.Ps.
109 and 110 of 1956.
He contended that as the order originally made against the petitioner in C.M.P. No. 109 of 1956 was that he should be detained in Arthur Road Prison, Bombay the subsequent order of the Commissioner by which he was detained in Nasik Prison was without jurisdiction.
It is clear from the affidavit of the Commissioner that the petitioner was not ordered to be detained in Arthur Road Prison but in Nasik Road Central Prison, and that he was kept temporarily in Arthur Road Prison, pending arrangements to transport him to Nasik.
It was next contended that the materials on which the orders of detention were made and set out in the communications addressed to the petitioners all related to their past activities, and that they could not constitute grounds for detention in future.
This contention is clearly unsound.
What a person is likely to do in future can only be a matter of inference from various circumstances, and his past record will be valuable, and often the only, record on which it could be made.
It was finally contended that what was alleged against the petitioners was only that they advocated hartal, and that was not a ground for making an order of detention.
But the charge in these cases was that the petitioners instigated hartal bringing about a complete stoppage of work, business and transport with a view to promote lawlessness and disorder, and that is a ground on which an order could be made under section 3(2).
All the contentions urged by the petitioners therefore fail, and these petitions must be dismissed.
[/INST]The respondents were the successful bidders at an auction of forest coupes in the State of Bihar.
As they defaulted in making the security deposit in respect of three coupes, the agreements with them were determined by the Conservator of Forests.
The respondents thereupon filed a writ petition in the Calcutta High Court instead of in the Patna High Court and followed it up with several applications one after another both in the Calcutta and Patna High Courts towards the forest department from preventing unauthorised removal of forest produce by the respondents.
Vexed by the manner in which the respondent was filing repeated applications and procuring orders of a learned single judge of the High Court necessitating the filing of as many appeals to the Division Bench, the State of Bihar moved an application for committing the respondents for contempt of court, alleging that, by their conduct the respondents were obstructing the administration of justice and interfering with the due course of judicial proceedings.
The Patna High Court held that the respondent 's conduct was most unscrupulous and that there was gross abuse of the process of the Court, which could in certain circumstances amount to contempt of Court.
However, the High Court dismissed the application on the ground that it was barred by limitation as it was filed beyond the period of one year prescribed by section 20 of the Contempt of Courts Act.
The High Court held, on a reading of the contempt application that the material allegation in regard to the contempt committed by the respondents was that relating to the filing of the application dated April 7, 1971 before the single judge of the Calcutta High Court to circumvent and nullify the order dated March 29, 1971 of the Division Bench of the Patna High Court.
As the contempt application dated 18 7 73 in OCM 7/73 was filed more than a year later, it was timeshared.
In regard to the allegation relating to the filing of the petition dated December 14, 1972, the High Court observed that there was no specific allegation that any contempt of court was committed by the filing of this application.
Though the respondents tendered an unconditional apology, its acceptance was not considered as the application was found to be beyond time.
Hence the appeal under section 19 of the .
Allowing the State appeal, the Court ^ HELD: 1.
Every abuse of process of the court may not necessarily amount to contempt of Court.
Abuse of process of the Court calculated to hamper the due course of a judicial proceeding or the orderly administration of justice is a contempt of Court.
[1178A B] 2.
It may be that certain minor abuses of the process of the court may be suitably dealt with as between the parties by striking out pleadings under the 1173 provisions of order 6, Rule 16 C.P.C. or in some other manner.
But on the other hand, it may be necessary to punish as a contempt, a course of conduct which abuses and makes a mockery of the judicial process and which thus extends its pernicious influence beyond the parties to the action and affects the interest of the public in the administration of Justice.
[1178B C] 3.
The public have an interest, an abiding and a real interest and a vital stake, in the effective and orderly administration of justice, because, unless justice is so administered, there is the peril of all rights and liberties perishing.
The Court has the duty of protecting the interest of the public in the administration of justice and, so, it is entrusted with the power to commit for contempt of Court, not in order to protect the dignity of the Court against insult or injury as the expression "Contempt of Court" may seem to suggest, but to protect and to vindicate the right of the public that administration of justice shall not be prevented, prejudiced, obstructed or interfered with.
[1178C E] Offutt vs U.S.p.11, quoted with approval.
It is not necessary that every allegation made should be followed then and there by the statement that the allegation established a contempt of Court Paragraph 29 of the application to commit the respondents for Contempt expressly referred to the application dated December 14, 1972 and paragraph 31 state that all the facts and circumstances enumerated in the petition established that the respondents were obstructing and interfering with the due course of administration of justice.
[1180F H] In the instant case: (a) the respondents began the "game" by filing an application under article 226 of the Constitution of India in the Calcutta High Court, whereas in the normal course one would expect such an application to be filed in the Patna High Court within whose jurisdiction the subject matter of dispute was situate.
A justifiable prima facie inference from this circumstance may be that the application was not bonafide but intended to harass and oppress the opposite party.
[1179C E] (b) Thereafter application after application was filed before the learned single Judge, everyone of them designed to circumvent, defect or nullify the effect of the orders of the Division Benches of the Calcutta High Court and Patna High Court.
The order of the Division Bench of the Calcutta High Court directing the respondents to furnish security in a sum of Rs. 1,55,000/ was never complied with.
The order of the Division Bench of the Patna High Court directing the respondents to furnish security of immovable property in a sum of Rs. 75,000/ and to deposit in cash or furnish bank guarantee in a sum of Rs. 50,000/ was also never complied with.
Instead, an order was obtained from the single Judge of the Calcutta High Court restraining the State of Bihar from continuing the money suit in the Court of the Subordinate Judge, Palamau.
When this order was set aside by the Division Bench, an attempt was made to circumvent all earlier orders by obtaining an order of the single Judge that they may be allowed to deposit a sum of Rs. 60,000/ in cash and permitted to remove the stock from the forest Coupes.
When the State of Bihar moved the learned Subordinate Judge, Palamau for a direction to auction the attached stock, the respondents moved an application on December 14, 1972, and obtained an order from the Single Judge of the Calcutta High Court staying the proceedings in the 1174 money suit in the Court of the Subordinate Judge, Palamau.
In considering the question whether the filing of the application dated December 14, 1972, amounts to a Contempt of Court, the Court must take into account the whole course of the continuing contumacious conduct of the respondents from the beginning of the 'game '.
Clearly, not a single application made to the Single Judge was bonafide.
Every application was a daring 'raid ' on the Court and each was an abuse of the process of the Court.
The application dated December 14, 1972 praying that the proceedings in the money suit in the Court of the Subordinate Judge should be stayed was made despite the fact that earlier, on January 10, 1972 the Division Bench of the Calcutta High Court had expressly permitted the proceedings in the money suit to go on.
The application of the respondents clearly showed that they were intent upon obstructing the due course of the proceedings in the money suit in the Court of the Subordinate Judge, Palamau and to obstruct the administration of justice by abusing the process of the Court.
[1179GH, 1180A E] (c) The application dated December 14, 1972 was an abuse of process of the Court, calculated to obstruct the due course of a judicial proceeding and the administration of justice and was therefore, a criminal contempt of Court; [1180H, 1181A] (d) though the respondents had expressed an unconditional apology to the Patna High Court, the conduct of the respondents is so reprehensible as to warrant condemnation by the imposition of a sentence.
[1181A]
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<s>[INST] Summarize the judgementivil Appeal No. 1086 of 1971.
From the Judgment and Order dated 28.4.71 of the Gujarat High Court in S.C.A. No. 671 of 1970.
R.F. Nariman, A.K. Verma and D.N. Misra for the Appellant.
V.J. Francis, (N.P.), Krishan Kumar, Vimal Dave & Co., M.N. Shroff, (N.P.) and Girish Chandra for the Respondent.
The Judgment of,the Court was delivered by OZA, J.
This appeal on certificate by the High Court of Gujarat is filed against the judgment of the Gujarat High Court dated 28th April, 1971 holding Standing Order No. 3 framed under Section 466(1)(A)(f) read with Section 147 of The Bombay Provincial Corporations Act, 1949 ( 'Act ' for short) as illegal and without the authority of law.
This Act applies to the city of Baroda and the present appellant the Municipal Corporation, Baroda is governed by this Act.
It is not in dispute that octroi on the import of goods is chargeable under the scheme of the Act.
Before this Standing Order which is the subject matter of challenge before the High Court and before us, was framed, a trans porter who brought the goods within the limits of the Munic ipal Corporation in view of Section 147 of this Act was to pay the octroi duty chargeable on the goods on the assump tion that the goods have been imported for sale, consumption or use in the limits of the city of Baroda.
Under the scheme as it was in force if the goods were not consumed or sold within the limits of the Municipal Corporation and are taken out on the other end, and if the octroi post authority was satisfied that the goods which had entered are being taken out then the transporter had to get the tax which he had paid at the octroi post refunded.
According to the appellant corporation this procedure took time at both the ends and for those transporters who were carrying goods which only were in transit in the city of Baroda still had to suffer the inconvenience of paying the octroi duty when they en tered the city limits and then satisfy the authorities at the post from where they went out of town and also had to pay first the tax and then claim a refund, in order to avoid inconvenience and the burden on the transporter this Stand ing Order was provided so that when a transporter enters the corporation limits with goods which are only in transit and not to be 865 unloaded for sale or consumption within the corporation limits and if the transporter so chooses on payment of supervision fees the transporter can carry the goods through the corporation limits without payment of octroi under the supervision of the staff of the corporation and for this purpose under this Standing Order fee of Rs.2 per heavy vehicle was prescribed.
It is alleged that originally the fee suggested was Rs.5 but on a representation made by the respondent association itself this was reduced to Rs.2 per vehicle.
By the impugned judgment, the High Court of Gujarat came to the conclusion that under Section 466(1)(A)(f) of the Act no doubt the Commissioner had the authority to frame stand ing orders but he can only frame standing orders in respect of goods on which octroi was payable under Section 466(1)(A)(f) and as the goods admittedly for which this fee was prescribed were goods not to be imported for sale or consumption the octroi was not payable thereon and therefore no standing orders could be framed under Section 466(1)(A)(f) and therefore standing order providing for fees as discussed above was beyond the authority of the Commis sioner under this Act.
The High Court also accepted the second contention of the respondent that although the Corporation claim to charge the fee as a fee for the convenience of the transporter but after examining the scheme, the learned Judges of the High Court came to the conclusion that there is no quid pro quo established nor it is established that the charge and the collection made on the basis of this charge had any ration ale ratio with the services rendered by the corporation.
Aggrieved by this decision of the High Court the Municipal Corporation has come up in appeal.
The main contention advanced on behalf of the appellant was that imposition of this fee by the Corporation could not be said to be an imposition as it was optional, as when a transporter brings goods and enters into the Corporation limits it was open to him either to choose to take advantage of this Standing Order by paying supervision fees and taking the goods straight under the supervision of the Corporation authorities without ' the payment of octroi duty but if a transporter chooses not to take advantage of this Standing Order it was not compulsory and it was open to the trans porter to pay the octroi in accordance with the normal rule and follow the normal procedure by satisfying the checkpost authorities on the other end and claim refund and get it after following the due procedure.
It was therefore contend ed that in fact this was an option given to the transporter so that if they so 866 choose they may follow this Standing Order and save them selves from the hardship of paying the octroi and then claiming the refund and for that purpose stopping at the entry checkpost and again at the exit checkpost and also to satisfy the checkpost authorities that the goods which had entered the corporation limits are being taken out in the same state and it also involved handling of sum by the transporter so that it may be possible for him to pay the octroi on the entry checkpost itself.
It was therefore contended firstly that it being an option given to the transporter, it could not be said to be an imposition or a tax and the question of the authority of the Commissioner does not arise.
That in view of language of Section 466(1)(A)(f) it is clearly with the authority of the Commis sioner to frame Standing Orders, and the Standing Orders had the approval of the Standing Committee and also of the State Government and therefore it could not be said that the Standing Orders are not framed in accordance with Section 466.
It was also contended that the affidavit filed in the High Court by the appellant clearly shows that how this fee is collected and spent for the purpose of giving a facility to the transporter for carrying the goods in transit under the supervision of the corporation authorities so that they have not to suffer the inconvenience and it was contended that in substance therefore the requirement of quid pro quo is satisfied and in fact the fee is charged only to facili tate the transporter in carrying the goods in transit with out payment of octroi and without undue detention in the process of payment of octroi at the entry and claiming refund at the exit.
It is alleged that a notice was issued suggesting this procedure as prescribed in Standing Orders, a representation was made by the respondent association accepting the suggestion of the Corporation but suggested that Rs.5 per vehicle suggested by the Corporation would be too much and it should be reduced to Rs.2 and it was on this representation that in fact the Corporation, the present appellant, chose to reduce the supervision charges to Rs.2 per vehicle.
It was therefore contended that now this is not open to the respondent association to say that this is not in accordance with law.
Learned counsel for the respondent stated that although a representation about the supervision fee was made by the association but it could not be said that there was any agreement entered into by the association nor it could be said that the Association could enter into such an agreement with the corporation.
It was contended that the High Court was right in reaching the conclusion that the Commissioner had no authority under Section 466, and that in fact quid pro quo is not satisfied as no service is rendered to the transporter.
Learned counsel 867 for the parties referred to the decision of this Court on the question of fee and the principle of quidpro quo.
Section 466(1)(A)(f) reads: "466(1) The Commissioner may make standing orders consistent with the provisions of this Act and the rules and by laws in respect of the following matters namely: (A) (a) xxx xxx xxx xxx xxx xxx (f) determining the supervision under which, the routes by which and the time within which goods intended for immediate exportation shall be conveyed out of the City and the fees payable by persons so conveying the goods;" This contemplates the authority with the Commissioner to make Standing orders consistent with this Act, rules or by laws in respect of the Act.
Clause (f) talks of supervision under which and the routes by which and the time when goods introduced for immediate exportation shall be conveyed out of the city and the fee is payable by the person carrying the goods.
It is therefore clear that this clause (f) con templates that Commissioner may by Standing Order prescribe the procedure for the goods which are introduced in the city limits, for immediate exportation and also the fees which could be charged.
It is therefore clear that this provision which confers the authority on the Commissioner to frame Standing Orders do not talk of goods on which octroi is payable.
But Section 466 pertains t9 collection of octroi.
Sub section (2) of this Section provides: "(2) No order made by the Commissioner under clause (A) of sub section (1) shall be valid unless it is approved by the Standing Commit tee and confirmed by the State Government, and no order made by the Commissioner under clause (B) or paragraph (e) of clause (c) of sub section (1) shall be valid unless it is ap proved by the Standing Committee.
" It is not in dispute that these .Standing
Orders have been approved by the Standing Committee and confirmed by the State Government which is clear from the Notification which reads as under: 868 BARODA MUNICIPAL CORPORATION "The Standing Orders made by the Municipal Commissioner, Baroda Municipal Corporation, Baroda under Section 466(1)(A)(f) of the Bombay Provincial Municipal Corporation Act, 1949 vide his order No. 2441 dated 16.8.69 and approved by the Standing Committee under its Resolution No. 882 dated 28th Novem ber, 1969 and confirmed by Government under their Resolution P.H.D. No. BMC 4470 160 P. Dated the I2th March, 1970.
Section 147 of this Act reads: "Until the contrary is proved any goods im ported into the City shall be presumed to have been imported for the purpose of consumption, use or sale therein unless such goods are conveyed from the place of import to the place of export, by such routes, within such time, under such supervision and on payment of such fees therefore as shall be determined by the standing orders.
" It is clear from this Section that when any goods are brought within the corporation limits a presumption arises that they have been brought in for the purposes or sale or consumption and the burden lies on the person who imports the goods to prove that they are not for sale or consumption and it is on the basis of language of Section 147 that the normal procedure before this Standing Order was introduced, was that the goods when entered into the corporation limits, have to stop at the checkpost and pay octroi duty on the goods as provided by the rules.
For getting out of the local limits, the transporter has to satisfy the checkpost author ities that the goods on which he has paid octroi and import ed are being exported out of the city and it is only after satisfying the authorities about the goods on which octroi is paid being exported that the transporter can claim refund of the octroi duty already paid.
It is therefore clear that the language of Section 147 in the scheme of the Octroi clearly indicates a presumption which is a rebuttable pre sumption.
Burden however lay on the transporter to establish that the goods are not for consumption or sale.
So far as this scheme before the introduction of disputed Standing Order is concerned, there is no controversy.
The only con troversy is the Standing Order which has been introduced.
It is also clear that so far as this Standing Order No. 3 is concerned wherein the transporter is to pay a supervision fees it is not compulsory as it is the option of the trans por 869 ter to take advantage of this Standing Order if he so chooses otherwise follow the normal procedure of payment of octroi and claiming refund as is clear from the affidavit filed before the High Court by the appellant 's officer i.e. Octroi Superintendent.
Paragraph 14 of this affidavit reads: "Thus the system of clearing the through traffic on charging normal supervision fees is really in the larger interest of the import ers.
As I have pointed out hereinabove this is not obligatory but purely voluntary and op tional.
Those who do not want to avail of this facility need not avail it and allow the other procedure already indicated hereinabove.
" It is therefore clear that there is no compulsion on the transporter to pay a supervision fee.
It is only an option so that if the transporter wishes to take advantage of this scheme and save time he can choose to follow it.
It is thus clear that so far as the authority of the Commissioner under Section 466 of the Act is concerned and the manner in which the Standing Orders are framed, it is clear that the Commissioner had the authority and the Stand ing Orders have been framed in accordance with procedure prescribed under Section 466 and therefore on that count the judgment of the High Court could not be sustained.
The High Court took the view that the State Legislature could enact Section 466 only if it can be brought within the ambit of Entry 52 of this State list as, that is the only entry which authorises the State Legislature to impose a tax on entry of goods into a local area and the learned Judges felt that as under Section 466 and under the standing order in question a supervision fee is charged on goods which are not for sale or consumption in the local limits.
This could not be justified under Entry 52.
The learned Judges there fore took the view that Standing Orders which the Commis sioner could frame under Section 466 could be in respect of goods on which octroi is payable and not pertaining to the goods on which the octroi is not payable.
It appears that while taking this view the High Court was examining this fees prescribed as a tax and it is on the basis of this that the High Court took the view that no such tax could be levied on goods on which no octroi is payable.
So far as the question as to whether this fees could be said to be a tax is concerned, there is no difficulty as even the learned counsel appearing for the appellant do not contend that it can be said to be a tax and as it is not a tax the imposi tion could not be said to be 870 bad because the State Legislature had no authority to impose it.
It was contended by the learned counsel that in view of Section 147 quoted above any import within the local limits would draw a presumption that it is for consumption or sale and therefore octroi duty on the goods becomes payable.
By this Standing Order, the Corporation has attempted to make it convenient to the transporter not to involve in the payment of octroi duty at the entry and after satisfying the authorities at the exit end claim the refund of the octroi paid, thereby the Corporation intended to help the trans porter in saving time and also in payment of the octroi at one end and later on claiming a refund.
This in fact was the service rendered by the corporation to the benefit of the transporter and this fees which was charged was just to meet the approximate expenses that the Corporation may have to incur to provide this facility as has been clearly stated by the corporation officer in his affidavit before the High Court and in fact even the corporation accepted the sugges tion of the petitioner association when the association suggested to the appellant corporation to reduce this fees from Rs.5 to Rs.2 which is clear from the letter written by the Association to the Corporation dated 31st March, 1970.
As regards this aspect of the matter, the learned Judges of the High Court came to the conclusion that there was no quid pro quo established which could justify the levy of this fees as fees for the services rendered in the interest of the transporter.
In Southern Pharmaceuticals & Chemicals Trichur & Ors. etc.
vs State of Kerala & Ors. etc.
; , this Court after considering the various decision distinguished fees from tax in these words. " 'Fees ' are the amounts paid for a privilege, and are not an obligation, but the payment is voluntary.
Fees are distinguished from taxes in that the chief purpose of a tax is to raise funds,for the support of the Government or for a public purpose, while a fee may be charged for the privilege or benefit conferred, or service rendered or to meet the expenses connected therewith.
Thus, fees are nothing out payment for some special privilege granted or service rendered.
" As regards the principle of quid pro quo rule in the same judgment it was observed: "That is because the Constitution did not contemplate it to be an essential element of a fee that it should be credited to a separate fund and not to the consolidated fund.
It is also 871 increasingly realised that the element of quid pro quo stricto senso is not always a sine qua non of a fee.
It is needless to stress that the element of quid pro quo is not necessarily absent in every tax.
" In the light of these observations if the affidavit filed on behalf of the appellant Corporation explaining the amount expected to be collected and spent in the process of super vision is examined it could not be said as was stated by the High Court that it did not satisfy the quid pro quo princi ple.
It is in this background that the question that this Standing Order does not impose a compulsory levy but it only gives an option to the transporter to take advantage of this provision makes it further clear that it is not a levy or an imposition of tax but merely a fees charged for the privi lege or services rendered to the payer.
In Sreenivasa Gener al Traders & Ors. etc.
vs State of Andhra Pradesh & Ors. etc.
; , this Court considered series of decisions on the question and observed: "There is no generic difference between a tax and a fee.
Both are compulsory exactions of money by public authorities.
Compulsion lies in the fact that payment is enforceable by law against a person inspite of his unwillingness or want of consent.
A levy in the nature of a fee does not cease to be of that character merely because there is an element of compul sion or coerciveness present in it, nor is it a postulate of a fee that it must have direct relation to the actual service rendered by the authority to each individual who obtains the benefit of the service.
It is now increasingly realized that merely because the collections for the service rendered or grant of a privi lege or licence are taken to the consolidated fund of the State and not separately appropri ated towards the expenditure for rendering the service is not by itself decisive.
Presumably the attention of the Court in the Shirur Mutt case was not drawn to article 266 of the Consti tution.
The Constitution nowhere contemplates it to be an essential element of fee that it should be credited to a separate fund and not to the consolidated fund.
It is also increas ingly realized that the element of quid pro quo in the strict sense is not always a sine qua non for a fee.
It is needless to stress that the element of quid pro quo is not neces sarily absent in every tax: Constitutional Law of India by H.M. Seervail Vol. 2, 2nd Edn.
p. 1252, para 22.39.
" 872 It is therefore clear that in order to establish a quid pro quo concept it is not necessary to establish exactly that the amount collected is spent on the services rendered as it was further observed in this decision: "The traditional view that there must be actual quid pro quo for a fee has under gone a sea change in the subsequent decisions.
The distinction between a tax and a fee lies primarily in the fact that a tax is levied as part of a common burden, while a fee is for payment of a specific benefit or privilege although the special advantage is secondary to the primary motive of regulation in public in public interest.
If the element of revenue for general purpose of the State predominates, the levy becomes a tax.
In regard to fees there is, and must always be, correlation between the fee collected and the service intended to be rendered.
In determining whether a levy is a fee, the true test must be whether its primary and essential purpose is to render specific services to a specified area or class; it may be of no consequence that the State may ultimately and indirectly be bene fitted by it.
The power of any legislature to levy a fee is conditioned by the fact that it must be 'by and large ' a quid pro quo for the services rendered.
However, co relationship between the levy and the services rendered expected is lone of the general character and not of mathematical exactitude.
All that is necessary is that there should be a "reasona ble relationship" between the levy of the fee and the services rendered.
" It is therefore clear that so far as the charging of super vision fees is concerned it reasonably appears to be a charge for the services rendered from the affidavit filed by the Officers of the Appellant Corporation and therefore the High Court was not right in coming to the conclusion that this fees was not justified as it is not established that it reasonably satisfies that it is in consideration of the services or privilege conferred on the transporter on goods in transit.
In our opinion, therefore, the judgment of the High Court could not be sustained.
The appeal is therefore al lowed.
The judgment of the High Court is set aside and it is held that the Standing Order No. 3 passed by the appellant Municipal Corporation is valid and enforceable.
The appel lant shall also be entitled to costs of this appeal.
Costs quantified at Rs.5,000.
R.S.S. Appeal allowed.
[/INST]A Constable while returning home after performing his duties was knocked down by a tractor owned by appellant No. 1, and driven by appellant No. 2 who had no driving licence.
As a result of the accident, the Constable died and his widow and children claimed compensation, before the Tribu nal.
Awarding a compensation of Rs.96,000 the Tribunal held that at the time of the accident the vehicle belonged to appellant No. 1 and was driven by appellant No. 2, who had no driving licence, that the accident took place due to his rash and negligent driving, and appellant No. 1 alone was liable to pay the compensation.
The appellant has come in appeal, by special leave, contending that the insurer alone would be liable to pay the compensation amount, even though the tractor was not driven by a licensed driver.
Dismissing the appeal, HELD: 1.
Section 96 of the imposes a duty on the insurer to satisfy judgments against persons insured in respect of third party risks.
Sub section 2 thereof provides exception to the liability of the insur er.
Sub sec.
2(b) of sec.
96 provides that the insurer is not liable to satisfy the judgments against the persons insured if there has been a breach of a specified condition of the policy.
One of the conditions of the policy specified under clause (ii) is that the vehicle should not be driven by any person who is not duly licensed or by any person, who has been disqualified from holding or obtaining driving licence, during the period of disqualification.
It is not in dispute that the certificate of insurance concerned in this case contains this condition.
If, therefore, there is a breach of this condition, the insurer will not be liable to indemnify the owner.
[813C E] 812 2.
In the present case, the onus of the insurer has been discharged from the evidence of the insured himself.
The insured took a positive defence stating that he was not the owner of the vehicle since he had already sold the same to a third party.
This had not been proved.
Secondly, he took a defence stating that the vehicle at the relevant time was driven ' by a licensed driver.
This was proved to be false.
There is no other material even to indicate that the vehicle was entrusted to the licensed driver on the date of the fatal accident.
[814D F] Skandia Insurance Co. Ltd. vs Kokilaben Chandravadan and Ors., [1987] 2 SCC 654, distinguished.
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<s>[INST] Summarize the judgementAppeal No. 133 of 1951.
Appeal by special leave granted by the Supreme Court on the 1st December, 1950, from the Judgment dated the 24th April, 1950, of the Central Government Industrial Tribunal, Dhanbad, in Appeal No. 1 of 1950, arising out of Order dated the 2nd February, 1950, of the Regional Labour Commissioner (Central) Dhanbad.
N. C. Chatterjee (section L. Chhibber, with him) for the appellants.
section P. Sinha (section N. Mukherjee, with him) for the res pondent.
December 12.
The Judgment of the Court was delivered by DAS J.
This appeal by special leave is directed against the decision dated April 24, 1950, of the Central Government Industrial Tribunal at Dhanbad confirming the decision dated February 2, 1950, of 430 the Regional Labour Commissioner (Central), Dhanbad, which had declared the one day strike by the appellants that took place on November 7, 1949, to be an illegal strike.
The relevant facts are as follows: On October 13, 1949, the appellants through the Secretary of their Union gave a notice to the respondents, under section 22(1) of the , that they proposed to call a one day strike on the expiry of November 6, 1949, for the fulfilment of demands, 16 in number, noted therein.
This strike notice was, in accordance with rule 85 of the rules framed under the , sent to (1) the Conciliation Officer (Central), Dhanbad, (2) the Regional Labour Commissioner (Central), Dhanbad, (3) the Chief Labour Commissioner, Department of Labour, Government of India, New Delhi, (4) Secretary, Ministry of Labour, Government of India, New Delhi, and (5) A.D.C., Dhanbad.
This notice was received at the office of the Regional Labour Commissioner (Central), Dhanbad, on October 15, 1949. 'The Regional Labour Commissioner (Central) held conciliation proceedings at Dhanbad on October 22, 1949, but the appellants, by their letter of the same date , declined to participate in the proceedings alleging that they were convinced that nothing would come out of the same and that the proceedings should, therefore, be considered "to be ceased.
" On the same day the Regional Labour Commissioner (Central), Dhanbad, addressed letter No. RLC/CON 5 (Token) 7910 to the Chief Labour Commissioner, New Delhi, stating that after receipt of the notice of strike he had issued notice to the parties for conciliation, that the employers ' representatives were ready to discuss the demands but the Union 's representative filed a petition in writing saying that they did not want to participate in the proceedings and that no fresh material had been placed before him to change his view and that he was not in favour of recommending a reference of the demand to the Industrial Tribunal.
The letter ended with a request that the Government 431 may be informed of the situation.
It appears that this report was received in the office of the Chief Labour Commissioner, New Delhi, on October 25, 1949.
Although the Chief Labour Commissioner, in his letter ' of November 17, 1949, to the Regional Labour Commissioner ( Central), Dhanbad, states that the contents of the latter 's report had already been communicated to the Ministry of Labour, a copy of the report was actually sent to and received by the Ministry of Labour only on that day.
In the meantime on November 7, 1949, the appellants about 700 in number, went on one day strike as per their strike notice.
Apparently the respondents contended that the strike was illegal and they made an application, under section 8 (2) of the Coal Mines Provident Fund and Bonus Scheme Act, 1948, to the Regional Labour Commissioner (Central), Dhanbad, for a deci sion on the question whether the strike was legal or illegal.
By his order dated February 2, 1950, the Regional Labour Commissioner (Central), Dhanbad, declared that the strike was illegal.
Being aggrieved by the aforesaid decision the appellants, under section 8 (4) of the last mentioned Act, preferred an appeal to the Central Government Industrial Tribunal at Dhanbad which, however, also held that the strike was illegal and that the conclusions arrived at by the Regional Labour Commissioner (Central) were correct and accordingly dismissed the appear The appellants thereafter applied for and obtained special leave to appeal to this Court.
The only question raised on this appeal is whether the strike was illegal.
Section 24 (1) of the Act provides, inter alia, that a strike shall be illegal if it is commenced or declared in contravention of section 22 or section 23 of the Act.
Section 22 (1) provides as follows: " 22.
(1) No person employed in a public utility service shall go on strike in breach of 'contract(a) without giving to the employer notice of strike, as hereinafter provided, within six weeks before striking; or 56 432 (b) within fourteen days of giving such notice; or (c) before the expiry of the date of strike specified in any such notice as aforesaid; or (d) during the pendency of any conciliation proceedings before a conciliation officer and seven days, after the conclusion of such proceedings.
" Notice of strike having been given in terms of clause (a) and 14 days having elapsed after the giving of such notice as required by clause (b) and the actual strike having taken place after November 6, 1949, being the date specified in the strike notice, the only other question for consideration is whether the strike took place during the pendency of any conciliation proceedings before a Conciliation Officer, and seven days after the conclusion of such proceedings.
Under section 20(1) a conciliation proceeding shall be deemed to have commenced on the date on which a notice of strike under section 22 is received by the Conciliation Officer.
In this case the strike notice was received by the Regional Labour Commissioner (Central) who is the Conciliation Officer, 'on October 15, 1949, and the conciliation proceedings, therefore, commenced on that date under section 20(1).
The relevant portion of sub section (2) of that section runs as follows: A conciliation proceeding shall be deemed to have concluded (a). . . . . . . (b) where no settlement is arrived at, when the report of the Conciliation Officer is received by the appropriate Government or when the report of, the Board is published under section 17, as the case may be, or (c). . . . . . .
The Regional Labour Commissioner (Central), who is the Conciliation Officer in this dispute, is required by section 12 to hold conciliation proceedings in the prescribed manner and, without delay, investigate the dispute and to do all such things as 433 he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute.
In this case the Regional Labour Commissioner (Central), held conciliation proceedings on October 22, 1949, but no settlement could be arrived at as the appellants declined to take part in the proceedings on the ground that they were convinced that nothing would come out of it.
That being the position, under section 12 (4) it became the duty of the Regional Labour Commissioner (Central) to "as soon ' as practicable after the close of the investigation, send to the appropriate Government a full report setting forth the steps taken by him.for ascertaining the facts and circumstances relating to the dispute and for bringing about a settlement thereof together with a full statement of such facts and circumstances.
and the reasons on account of which,in this case, a settlement could not be arrived at ".
Subsection (6) of this section.
requires that the report shall be submitted within fourteen days of the commencement of the conciliation proceedings or within such shorter period as may be fixed by the appropriate Government.
As already stated, the conciliation proceedings commenced on October 15, 1949.
The report, therefore, was to be submitted within fourteen days from that date.
, In point of fact the report was sent by the Regional Labour Commissioner (Central) to the Chief Labour Commissioner New Delhi, on October 22, 1949 (which was well within 14 days from the commencement of the conciliation proceedings), with the request that the Government may ' be informed of the situation.
Under sub section (4) the report has to be sent to the " appropriate Government " which according to the definition under section 2 (a) means, in relation to an industrial dispute concerning a mine, the Central Government.
The Regional Labour Commissioner (Central) did not send the report direct to Central Government but sent it to the Chief Labour Commissioner, New Delhi, in accordance with what has been called the usual course and routine of 434 official business.
Therefore,however, was received by the Central Government on or about November 17, 1949, and it is only on such receipt that the conciliation proceedings are to be deemed to have concluded according to the provisions of section 20(2)(b).
Prima, facie, therefore, the strike which took place .on
November 7, 1949, was during the pendency of the conciliation proceedings as held by the authorities below.
Shri N. C. Chattanooga, however, argues that in point of fact the conciliation proceedings came to an end when the appellants had withdrawn from the proceedings and the Regional Labour Commissioner (Central) had Bent his report.
It is by a legal fiction, introduced by section 20 (2) (b), that the conciliation proceedings are prolonged until the actual receipt of the report by the appropriate Government.
According to Shri N. C. Chatterjee the conciliation pro ceedings should be held to ' terminate when the Regional Labour Commissioner (Central) sent his report within fourteen days of the commencement of the conciliation proceedings.
The difficulty in accepting this ' argument is that while the word "send is used in section 12 (4) and the word " submitted in section 12(6), the word used in section 20 (2), (b)is " received ".
That word obviously implies the actual receipt of the report.
To say that the conciliation proceedings shall be deemed to have concluded when the report should, in the ordinary course of business, have been received by the appropriate Government would introduce an element of uncertainty, for the provisions of section 22 (1) (d) clearly contemplate that the appropriate Government should have a clear seven days ' time after the conclusion of the conciliation proceedings to make ' up its mind as to the further steps it should take.
It is, therefore, necessary that the beginning of the seven days ' time should be fixed so that there would be certainty as to when the seven days ' time would expire.
It is, therefore, provided in section 20 (2) (b) that the proceedings shall be deemed to have 435 concluded, where no settlement is arrived at,when the report is actually received by the appropriate Government.
Shri N. C. Chatterjee on the other, hand strongly urges, and not without some force, that on that construction it may be possible for the Government or its officers to withhold the report ' designedly or the report may be lost in course of transit or may be actually received after the expiry of the date fixed for the strike in the notice under section 22 (I).
Shri N. C. Chatterjee also points out that it will not be possible for the workers to know when the report is actually received and their right to strike may thus be taken away from them ' Shri N. C. Chatterjee contends that the Government cannot take advantage of its own wrong.
While we feel considerable force in Shri N. C. Chatterjee 's argument based on hardship we are bound to assume that the.
public officers concerned would act fairly and properly.
Further, it is not a case of the Government taking advantage of its own wrong as suggested by Shri N. C. Chatterjee, for here we are concerned with a dispute between the employers and the employees and there is no material before us to justify our attributing the misdeeds, if any, of the Regional Labour Commissioner (Central) or of the Chief Labour Commissioner, to the respondents, the employers who are entitled to take their stand on the language of the law.
The Court can only construe the statute as it finds it and if there is any defect in the law it is for other authority than this Court to rectify the same.
Shri N. C. Chatterjee also urges that the Regional Labour Commissioner (Central) should have, under section 12, sent his report to the appropriate Government, which in this cage means the Central Government, and he should not have sent the report to the Chief Labour Commissioner.
Assuming that that is the position then.
the fact will still remain that the Central Government did not receive the report and, therefore, the conciliation proceedings did not come to an end when the strike took place.
Shri 436 N. C. Chatterjee also suggests that the Chief Labour Commissioner should have returned the report to the Regional Labour Commissioner (Central) because under the law the report should not have been made to him.
He, however, did not return the,same to the Regional Commissioner but took upon himself to.for ward the same to the Labour Ministry.
In the circumstances, Shri N. C. Chatterjee urges, on the authority of Chaturbhuj Ram Lal vs Secretary of State for India (1), that the Chief Labour Commissioner must be deemed to be the agent of the Central Government for the purpose of receiving the report.
We adjourned this case in order to enable Shri N. C. Chatterjee to ascertain whether there was any delegation of authority in this behalf by the Central Government to the Chief Labour Commissioner.
Shri N. C. Chatterjee has not been able to discover any such delegation of authority.
It seems obvious to us that the Chief Labour Commissioner cannot possibly be regarded for this purpose as the Central Government.
In point of fact by a notification in the Gazette of India dated April 5, 1947$ the Chief Labour Commissioner has been appointed as a Conciliation Officer.
and, therefore, in conciliation proceedings conducted by him he has to submit his report to the Central Government.
It follows, therefore, that the Chief Labour Commissioner must be an authority separate from the Central Government.
According to rule 85 to which reference has been made the strike notice has to be sent, amongst others, to the Chief Labour Commissioner as well as to the Department of Labour of the Government of India, which again.
indicates that the two are different entities.
The Chief Labour Commissioner is, therefore, only the channel or post office through which correspondence between the Regional Labour Commissioner (Central) and the Central Government is to pass and he cannot possibly be regarded as an agent of the 'Central Government for the purpose of receiving the report.
The Chief Labour Commissioner (1) A.I.R. 1927 All, 2i5.
437 being the official channel the ruling relied upon by Shri N. C. Chatterjee can have no application to the facts of this case.
For reasons stated above we are of opinion that the conclusions arrived at by the authorities below on this point are correct and that this appeal must be dismissed.
In the peculiar circumstances of the case, however, we think that there should be no order as to costs and the parties should bear their own costs.
Before concluding we must draw the attention of the authorities concerned to the slack and unbusinesslike manner in which the matter was dealt with in the office of the Chief Labour Commissioner.
The Act requires that the Conciliation Officer must submit his report within 14 days from the commencement of conciliation proceedings and then on receipt of the report by the appropriate Government the conciliation proceedings are to be deemed to have concluded.
Although factually the conciliation proceedings terminate when a settlement is arrived at before the Conciliation Officer or when it is found that no settlement can be arrived at, the Act, by a legal fiction, prolongs the conciliation proceedings until the actual receipt of the report by the appropriate Government and goes on to provide that the appropriate Government must have seven days ' time to consider what further steps it would take under the Act.
Up 'to the expiry of this period of 7 days the Act permits no strike but after that period is over the employees are left free to resort to collective action by way of a strike.
Indeed, it is on the basis of these provisions that the date of strike has to be carefully selected and specified in the notice of strike to be given by the employees under section 22 (1) of the Act.
Thus, even a cursory perusal of the Act makes it clear that time is of the essence of the Act and that the requirements of its relevant provisions must be punctually obeyed and carried out if the Act is to operate harmoniously at all.
In this case the conciliation officer submitted his report on October 438 22, 1949, i.e., well within 14 days from the commencement of the conciliation proceedings as required by section 12 (6) of the Act.
The report was sent through what has been called the routine official channel.
Admittedly, it was received in the office of the Chief Labour Commissioner at New Delhi on October 25, 1949, but surprisingly it was not passed on to the Ministry of Labour, which is also in New Delhi, until about November 17, 1949.
The employees had no means of knowing when the report was actually received by the Central Government which is the appropriate Government in this case or when the period of 7 days after such receipt expired.
But in the belief, entertained, we think, quite legitimately, that the official business had been conducted regularly and promptly the employees went on strike on November 7, 1949, as previously notified. ' It now transpires that the report had not been actually received by the Central Government and, therefore, on the letter of the law, the strike must be hold to be illegal and the employees must face and bear the consequences of an illegal strike and may even be deprived ' of benefits to which they would otherwise have been entitled.
This hardship has been thrown upon the employees for no fault of their own but simply because of the callous indifference or utter inefficiency and slackness apparently prevailing in the office of the Chief Labour Commissioner which cannot be too strongly deprecated.
It is to be hoped that public officers would, in the discharge of their official duties in future, show a greater sense of responsibility than, what they have done in the case before us.
Appeal dismissed.
[/INST]The accused was committed to trial in July 1963 and was convicted and sentenced to death on September 4, 1964.
The appeal to the High Court under section 411A, Cr.
P.C., was finally dismissed on February 6, 1970.
The High Court left it to the State Government whether it should reduce the sentence on account of inordinate delay.
In appeal to this Court on the question of sentence, HELD : Section 302, I.P.C., prescribes two alternate sentences, namely, death sentence or imprisonment for life.
When there has been inordinate delay in the disposal of the appeal by the High Court, it is a relevant factor for the High Court to take into consideration for imposing the lesser sentence.
[549 A B] In the present case, the appellant has been for 6 years under the fear of sentence of death, which must have caused him unimaginable mental agony.
In view of the excessive delay it is a fit case for awarding the lesser sentence instead of leaving it to the Government to decide the matter on a mercy petition.
[549 B D] Nawab Singh vs State of U.P., A.I.R. 1954 S.C. 278, referred to.
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<s>[INST] Summarize the judgementition No. 1337 of 1979.
(Under article 32 of the Constitution of India).
V.M. Tarkunde, P.H. Parekh and Hemant Sharma for the Petitioner.
Abdul Khader, Girish Chandra and Miss A. Subhashini for the Respondents.
The Order of the Court was delivered by KOSHAL, J. The short question which falls for determination in this petition under article 32 of the Constitution of India praying for the issuance of appropriate writs quashing the letter dated 16th of March, 1979, by which the representation made by the petitioner against the seniority assigned to him in the cadre of Income tax Officers, Class I was rejected and he was informed that the seniority list forming an appendix to Annexure 'l ' had been correctly framed in accordance with the rules then in force.
The answer to the question posed by the petition has to be answered with reference to Rules 4, 6 and 8 of the Released Emergency Commissioned Officers & Short Service Commissioned Officers (Reservation of Vacancies) Rules, 1971 (hereinafter called the Rules).
The relevant part of Rule 4(1) reads thus: 4(1) Twenty percent of the vacancies in the Indian Foreign Service, and 25 percent of the vacancies in all the Central Civil Services and posts, Class I, to which these rules apply. . . . 40 shall be reserved for being filled by the Emergency Commissioned Officers and the Short Service Commissioned Officers of the Armed Forces of the Union who were commissioned after the 1st November, 1962 but before the 10th January, 1968, and who (i) . . . . . . . . (ii) in the case of Short Service Commissioned Officers are released on the expiry of the tenure of their service; or (iii) . . . . . . . .
Rule 6 in so far as it is relevant for our purpose provides: 6(1) . . . . . . . . . (2) Seniority inter se of candidates who are appointed against the vacancies reserved under sub rule (1) of rule 4 and allotted to a particular year shall be determined according to the merit list prepared by the Commission on the basis of the results of their performance at the examination or test or interview.
(3) All candidates who have been appointed against the vacancies reserved under sub rule (1) of rule 4 shall rank below the candidates who were appointed against unreserved vacancies in the services of posts through the competitive examination or test or interview conducted by the Commission corresponding to the year to which the former candidates are allotted.
It is not disputed that the petitioner is an officer who is entitled to the benefit of reservation under the above abstracted portion of Rule 4(1) and to have his seniority accordance with sub rule (3) of Rule 6.
As we read the sub rule last mentioned we do not find it to be ambiguous in any manner whatsoever.
It lays down in clear terms that the officers appointed against vacancies reserved under sub rule (1) of Rule 4 shall rank below candidates who were appointed against unreserved vacancies in the services concerned through a competitive examination, etc.
Respondents Nos. 2 to 14 who have been placed in the impugned seniority list above the petitioner were appointed to the cadre of Income tax Officers, Class I through a competitive examination or test as envisaged by sub rule(3) of Rule 6.
Now if they were appointed against unreserved vacancies, they are entitled to rank above the petitioner but not otherwise.
41 It is conceded before us that respondents Nos. 2 to 14 have been appointed against vacancies reserved for Scheduled Castes and Scheduled Tribes.
Clearly, therefore, they must rank below the petitioner inasmuch as it cannot be said with any plausibility that they were appointed against unreserved vacancies.
Mr. Abdul Khader appearing for the Union of India has contested the interpretation just above placed by us on sub rule (3) of Rule 6.
According to him that interpretation makes the sub rule retrospective in operation, which it is not.
We agree that the sub rule is intended to be prospective only and that the above interpretation would be operative only after the date on which the sub rule was promulgated and not before that.
But then that means that every seniority list prepared after the date of the promulgation of the sub rule would be governed by it.
Similarly, every promotion made and every question relating to seniority cropping up after the date of the promulgation of the sub rule (which is 28th August, 1971) shall be determined according to that sub rule.
No question of retrospectivity of the sub rule is thus involved.
Of course, the inter se seniority of officers of the cadre prevailing upto 28th August, 1971 had to be determined under the rules as they existed before that date and any promotions made earlier to that date would continue to be good if made in accordance with those rules.
However, the position changed with the promulgation of the Rules and any promotion made thereafter has to conform to them.
Faced with the above situation Mr. Abdul Khader argued that the word, 'unreserved ' in sub rule (3) of Rule 6 would embrace the vacancies reserved for candidates belonging to the Scheduled Castes and Scheduled Tribes who had joined the cadre through open competition, etc., because the sub rule meant to take within its ambit all such persons who had been recruited in that manner.
The logic of the argument is not clear to us because it makes the whole sub rule meaningless.
If the argument were to be accepted, the use of the word 'unreserved ' would be wholly uncalled for and we just cannot hold that the word is redundant, forms part as it does of subordinate legislation.
The word 'unreserved ' can obviously not be equated with its antonym, that is, 'reserved ', and has to be applied only to vacancies which do not fall within the reserved categories.
Mr. Abdul Khader took another point and that was to the effect that the rules of the service in question had been amended 42 earlier to 1971 so as to place candidates covered by Rule 4(1) below those who had been appointed to reserved vacancies through a competitive examination.
That may well have been so but then that makes no difference to the interpretation which is given above to sub rule (3) of Rule 6.
Rule 8 of the Rules declares in no uncertain terms that all rules regulating the recruitment of persons to Central Civil Services and Posts, Class I, to which the Rules apply, shall be deemed to have been amended to the extent provided for in the Rules.
If the rules regulating the seniority of the petitioner and respondents Nos. 2 to 14 were so amended earlier to 1971 as to assign to the petitioner seniority below respondents Nos. 2 to 14, the situation would be wholly irrelevant to the present dispute because after the amendment brought about Rule 8 of the Rules, the members of the service to which the contested parties belong, have to be governed by the amendment of which sub rule (3) of Rule 6 forms a part.
This is the inescapable consequence flowing from Rule 8 of the Rules.
We may take note here of the only other argument raised by Mr. Abdul Khader and that is that Rule 8 regulates only the recruitment of persons to Central Civil Services and Posts, Class I, and not to their conditions of service.
We do not find any substance in this argument either.
The word 'recruitment ' is comprehensive enough to embrace the content of all the rules preceding Rule 8 including the fitment of candidates recruited to the service vis a vis each other.
In the result, we accept the petition, quash the seniority list abovementioned as well as the letter by which the representation there against made by the petitioner was rejected and direct respondent No. 1 to re frame the seniority list assigning the petitioner seniority in accordance with law as explained above.
There will be no order as to costs.
N. K. A. Petition allowed.
[/INST]Respondents Nos. 2 to 14 were appointed to the cadre of Income tax Officers, Class I, against vacancies reserved for Scheduled Caste and Schedules Tribes, as a result of a competitive examination or test as envisaged by sub rule (3) of Rule 6.
The Petitioner was similarly appointed to the same cadre but against a vacancy reserved under sub rule (1) of Rule 4 for certain officers of the Armed Forces of the Union.
He was placed in the impugned seniority list below respondents Nos. 2 to 14.
He made a representation against the seniority assigned to him on the ground that under sub rule (3) of Rule 6 he was entitled to rank immediately below candidates appointed against unreserved vacancies.
The representation was rejected by a letter dated 16th March, 1979.
The petitioner filed a petition under article 32 of the Constitution of India seeking the issuance of a writ quashing that letter.
At the hearing it was not disputed that the petitioner was entitled to the benefit of reservation sub rule (1) of Rule 4 and to have his seniority determined in accordance with sub rule (3) of Rule 6.
However, it was contended on behalf of the respondents Nos. 2 to 14, inter alia, that the rules of the service had been amended earlier to 1971, so as to place candidates covered by sub rule (1) of Rule 4 below those who had been appointed against reserved vacancies through a competitive examination.
Accepting the petition, it was ^ HELD: (1) Sub rule (3) of Rule 6 is not ambiguous in any manner whatsoever and lays down in clear terms that the officers appointed against vacancies reserved under sub rule (1) of Rule 4 shall rank below candidates who were appointed against unreserved vacancies in the Services concerned through a competitive examination, etc.
[40 F G] 2.
Respondents Nos. 2 to 14 have been appointed against vacancies reserved for Scheduled Castes and Schedule Tribes.
Clearly therefore, they must rank below the petitioner inasmuch as it cannot be said with any plausibility that they were appointed against unreserved vacancies.
[41 A B] 3.
The argument that the rules of the service in question had been amended to 1971, so as to place candidates governed by Rule 4(1) below those who had been appointed to reserved vacancies through a competitive examination has no substance and makes no difference to the interpretation which is given above to 39 sub rule (3) of Rule 6, Rule 8 of the Rules declares in no uncertain terms that all rules regulating the recruitment of persons to Central Civil Services and Posts, Class I, to which the Rules apply, shall be deemed to have been amended to the extent provided for in the Rules.
Although the rules regulating the seniority of the petitioners and respondents Nos. 2 to 14 were so amended earlier to 1971 as to assign to the petitioner seniority below respondents Nos 2 to 14, the situation is wholly irrelevant to the present dispute because after the amendment brought about by Rule 8 of the Rules, the members of the service to which the contenting parties belong, have to be governed by the later amendment, of which sub rule (3) of Rule 6 forms a part.
This is the inescapable consequence flowing from Rule 8 of the Rules.
[41 G H, 42 A D] 4.
The word 'recruitment ' is comprehensive enough to embrace the content of all the rules proceeding Rule 8 including the fitment of candidates recruited to the service vis a vis each other.
[42 D E]
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<s>[INST] Summarize the judgementCivil Appeals Nos. 262 (NT) of 1974 etc.
From the Judgment and Order dated 17.1.1973 of the Andhra Pradesh High Court in Case Referred No. 21 of 1971.
G.C. Sharma and A. Subba Rao for the Appellant.
C.M. Lodha and Miss A. Subhashini for the Respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
These three appeals relating to assessment years 1966 67, 1968 69 and 1969 70 respectively (the accounting period in respect whereof ended on 30.9.1965, 30.9.1967 and 30.9.1968 respectively) raise a common question of law for our determination namely: Whether on the facts and in the circumstances of the case and on a true interpretation of the collaboration agreements between the assessee and M/s Metrimpex Hungarian Trading Company, Budapest the payment of RS. 1,60,000 by the assessee to the foreign collaborator was attributable partly or wholly towards the acquisition of a depreciable asset? Briefly stated the facts giving rise to the question are these.
M/s Scientific Engineering House (P) Ltd. (hereinafter called the assessee) manufactures scientific instruments and apparatus like Dumpy levellers, levelling staves, prismatic compass, etc.
It entered into two separate collaboration agreements, one dated 15th March 1961 and the other dated 31st March 706 1961 with M/s Metrimpex Hungarian Trading Company, Budapest for undertaking the manufacture of microscopes and theodolites, under which the said foreign collaborator, in consideration of payment of Rs. 80,000 each (Rs. 1,60,000 under both the agreements together), agreed to supply to the assessee all the technical know how required for the manufacture of these instruments.
The object of both the agreements was to enable the assessee to manufacture the said instruments of certain specifications and the assessee thereunder acquired the right to manufacture in India under its own trade mark and name but under the licence MOM Hungary of the foreign supplier the said instruments and the right to sell the same in India.
To enable the assessee to manufacture these instruments in India in the manner just indicated the foreign collaborator, inter alia, agreed to render 'documentation service ' by supplying to the assessee an uptodate and correct complete set each of the five types of documents (such as manufacturing drawings, processing documents, designs, charts, plans and other literature more specifically detailed in clause 3 of the agreements).
There was also a provision enjoining the foreign collaborator to render training and imparting of knowledge of the know how technique of manufacturing these instruments.
Pursuant to the agreements the assessee made full payment of Rs. 1,60,000 (Rs. 80,000 under each of the agreements) to the foreign collaborator and the latter rendered 'documentation service ' by supplying complete sets of all the documents including designs, drawings, charts, plans and other literature as per clause 3.
The sum of Rs. 1,60,000 was debited by the assessee under the head 'Library '.
For the assessment year 1966 67 for which relevant accounting year ended on 30th September 1965 the assessee claimed a sum of Rs. 12,000 by way of depreciation on 'Library '.
Such depreciation was claimed on the ground that the payment of Rs. 1,60,000 had been made really for the outright purchase of designs drawings, charts and o her literature which were voluminous occupying almirah full of storage space and these collectively constituted the pages of a book and the assessee had claimed depreciation at the appropriate rate.
The Income Tax Officer held that the sum of Rs. 1,60,000 did not represent the value of books purchased by the assessee but represented the price paid for acquiring the technical know how which amounted to capital expenditure but since no tangible or depreciable asset was brought into existence no depreciation allowance could be claimed On appeal preferred by the assessee, however, the Appellate Assistant Commissioner held that what the assessee has done 707 was to make an outright purchase of certain specimen drawings, charts, plans, etc.
On special papers, that these documents when collected together constituted a book on which depreciation, as in the case of plant and machinery, would, at the appropriate rate be allowable and he directed the Income Tax Officer to allow the depreciation claimed.
In the further appeal preferred by the Department the Tribunal took the view that clauses 2,3,4,5 and 10 of the agreements did not lend support to the stand taken by the assessee that payments (Rs. 80,000 each) had been made mainly for the supply of designs, drawings, charts, etc., that the services to be rendered by the foreign collaborator covered a wide field and that the supply of designs drawings, charts, etc.
was incidental and only in furtherance of other services which the foreign collaborator was expected to render.
It further took the view that since the supply of designs, drawings, charts, etc. was only incidental and the payment of Rs. 1,60,000 could not entirely be held to represent the purchase price of those documents it was unnecessary for them to go into the question whether the said documents fell within the meaning of the expression 'books ' and whether depreciation was, therefore, admissible thereon.
The Tribunal, however, held that the agreements showed that some of the services which the foreign collaborator was required to render to the assessee were on revenue account (as, for example, the provision which required the foreign collaborator to depute their experts to correct any flaws or irregularities that might be encountered in the course of production) and that therefore the payment of Rs. 1,60,000 was partly on capital account and partly on revenue account.
As the appeal was by the Department and not by ' the assessee and the Department could not be in a worse position then what it was when it came up in appeal, the Tribunal held that even if it were to hold that the part of the payment was allowable as revenue expenditure the allowance could not exceed Rs. 12,000 being the deduction allowed by the Appellate Assistant Commissioner.
In other words the Tribunal confirmed the deduction of Rs. 12,000 not as depreciation allowance but as revenue expenditure and in this manner it confirmed the order of the Appellate Assistant Commissioner.
G Both the assessee and the revenue sought a reference to the High Court.
In the reference applications preferred by each before the Tribunal the assessee urged a two fold contentions : (a) that the assessee was entitled to claim depreciation at the rate applicable to library (books) on the entire sum of Rs. 1,60,000 paid to the foreign collaborator; and (b) that the Tribunal ought to have given a specific finding as to what would 708 be the amount representing the capital expenditure which was entitled to depreciation, and the assessee sought to raise appropriate questions covering these contentions.
On the other hand the revenue urged two contentions: (1) that having come to the conclusion that the payment of Rs. 1,60,000 did not bring into existence any depreciable asset the Tribunal ought to have allowed its appeals fully and no relief could be granted to the assessee; and (ll) that the Tribunal was not justified in allowing the sum of Rs. 12,000 as revenue expenditure while disposing of its appeal particularly when no point was urged before lt that the same was an item of revenue expenditure and sought to raise proper questions covering these contentions.
The Tribunal, however, referred the following question as appropriately arising from its order to the High Court: "Whether on the facts and in the circumstances of the case and on true interpretation of the collaboration agreements between the assessee and M/s Metrimpex Hungarian Trading Company, Budapest, the payment of Rs. 1,60,000 was attributable partly to the acquisition of depreciable asset and partly to revenue expenditure or wholly towards the acquisition of a depreciable asset?" On a consideration of the terms and conditions of the two collaboration agreements the High Court took the view that the payment of Rs. 1,60,000 did not mainly represent the purchase price of the designs, drawings, charts, etc.
a contended by the assessee, that the rendering of 'documentation service ' was incidental, that no part of the expenditure was on revenue account but the whole of it was of a capital nature bringing into existence an asset of enduring benefit to the assessee, but what was brought into existence was a non depreciable asset and, therefore, the assessee was not entitled to any relief in the case.
In other words by its judgement dated 7th January 1973 the High Court held that the assessee was not entitled to any relief either by way of depreciation allowance or on account of revenue expenditure.
Following the aforesaid decision rendered by the High Court in relation to the assessment year 1966 67 the assessee was denied similar relief claimed by it in the two subsequent assessment years, 1968 69 and 1969 70.
Instant appeals are preferred by the assessee challenging the High Courts view.
709 In support of the appeals counsel for the assessee accepted the High Court 's view that no part of the expenditure (Rs. 80,000 under each of the two agreements) was on revenue account and the whole of it was of a capital nature but contended that both the Tribunal and the High Court had, on a misreading of the terms of the two agreements, held that rendering of the documentation service was incidental and that the payment of Rs. 1,60,000 did not mainly represent the purchase price of drawings, designs, charts, plans and other literature, etc.
According to counsel on a fair reading of the relevant clauses in the two agreements it was clear that the 'documentation service ' was the principal or the main service to be rendered by the foreign collaborator to the assessee for which mainly the payment of Rs. 1,60,000 was made as a result whereof the assessee acquired all the technical know how requisite for the purpose of manufacturing the instruments in question and in this behalf reliance was placed on clause 6 of both the arguments.
Counsel further urged that the High Court erroneously concluded that what was brought into existence was a non depreciable asset, inasmuch as the acquisition of a capital asset like the technical know how in the shape of drawings, designs, charts, plans.
Processing data and other literature should have been regarded as constituting a book falling within the inclusive definition of 'plant ' given in Sec.
43 (3) of the Income Tax Act, 1961.
In this behalf counsel relied on Commissioner of Income Tax, Andhra Pradesh vs Taj Mahal Hotel, and Commissioner of Income Tax, Gujarat vs Elecon Engineering Company Ltd., 96 I.T.R. 672.
On the other hand, counsel for the revenue pressed for our acceptance the view taken by the High Court that though the entire expenditure was of a capital nature it had brought into existence a non depreciable asset .
Having regard to the rival contentions that were urged before us it is clear that two questions really arise for determination in the case.
The first is whether the 'documentation service ' (supply of 5 complete sets of documents) agreed to be and actually rendered by the foreign collaborator to the assessee under the two agreements was incidental to the other services contemplated therein or whether it was the principal service for which mainly the payment of Rs. 1,60,000 was made by the assessee as a result whereof the assessee acquired all the technical know how requisite for the purpose of manufacturing the instruments in question? And secondly whether the said expenditure, which was entirely of a capital nature, brought into existence a depreciable asset? The answer to the former question depends upon the proper interpretation of the terms and conditions of the two 710 agreements while the answer to the latter depends upon whether a capital asset like the technical know how acquired in the shape of drawings, designs, charts, plans, processing data and other literature which formed the basis for the business of manufacturing the instruments in question would fall within the wide and inclusive definition of 'plant ' given in section 43(3) of the Income Tax Act, 1961.
Turning to the first question, having regard to the relevant terms of the two agreements we find it very difficult to accept the view concurrently expressed by the Tribunal and the High Court that the 'documentation service ' undertaken to be rendered by the foreign collaborator to the assessee was incidental or that the payment of Rs. 1,60,000 could not be regarded as being mainly for and by way of purchase price of the drawings, designs, charts, plans and all the documents comprised in 'documentation service ' specified in clause 3 of the agreements.
Such a view as will be shown presently runs counter to the express language contained in clauses 3 and 6 of the agreements.
The agreement dated 15.3.1961 relates to theodolites while the other dated 31.3.1961 relates to microscopes and it was not disputed before us that the terms and conditions of both are almost identical.
Clauses l and 2 thereof clearly set out the object and intendment of the two agreements; the object was to enable the purchaser (assessee) to manufacture the instruments of certain specifications and in that behalf under clause 2 the foreign collaborator was to grand to the assessee and the assessee was to acquire from the foreign collaborator the right to manufacture in India under the purchaser 's (assessee 's) trade mark and name, yet with indication of the Hungarian collaboration name S.E.H. under licence MOM Hungary the instruments of certain specifications and design and subsequent changes and modifications to this design introduced during the validity of the agreement and the right to sell these in India.
Under Clause 3 the foreign collaborator had to render to the assessee 'documentation service ' by supplying complete set of documents specified therein.
Clause 4 enjoined the foreign collaborator to train and impart the knowledge of the know how technique of the manufacturing of the instruments and for that purpose to accept two employees of the assessee at any one time for such period as may be desired by the assessee at the MOM Works at Budapest and give them full instructions concerning the manufacturing processes of the instruments covered by the agreements, the expenses in respect whereof were to be borne by the assessee, as also to depute to the assessee 's works suitable expert technicians not exceeding two in number for such period as 711 may be desired by the assessee up to half a year, the expenses in respect whereof (inclusive their travelling cost, salaries, lodging, boarding, etc.) were to be borne by the assessee.
Clause 5 provided for imparting technical assistance to the assessee relating to all matters falling within the scope of the agreement and in sub clause (c) thereof it was provided that if the assessee designed any new model or type of the instrument to suit the circumstances in India the assessee was entitled to have the supply of components being manufactured in Hungary and suiting the purpose on such terms and conditions as may be mutually agreed upon.
Clause 6 dealt with payment to be made by the assessee and the manner thereof to which we will refer in detail later.
Clause 10 indicated a five year 's period commencing from a certain date during which the agreements were to remain in force.
The rest of the Clauses dealing with assignability and other topics are not material.
On the issue under consideration Clauses 3 and 6(a) are very material and they run thus : "3.
Supplies : Vendor shall supply to Purchaser in accordance with the terms laid down in Clause 6 hereunder : (a) One complete set of up to date, correct and legibly reproducible manufacturing drawings and full processing documents of all components of the instrument and lists of parts in metric system in English language, this full documentation will comprise of; one complete list of up to date, correct and legibly reproducible drawings in metric system and English language of all jigs, fixtures, special tools, special guage and special machine used and built by MOM for manufacture, assembly inspection and testing of the component parts of the theodolites.
(b) One complete and up to date list, including complete specifications of raw material, required for the component parts of the theodolites covered by this agreement.
(c) One complete set of up to date layouts of all manufacturing operations and inspection performed by MOM works in Budapest during the manufacture and assembly of all components parts of the above Theodolite and containing all operational timings, details and know how for the economic production of the components.
712 (d) One complete set of up to date, correct and legibly reproducible assembly drawings with one set of the assembly instruction of the theodolites giving all tolerance for the final adjustment during assembly.
(e) One complete set of up to date, correct and legibly reproducible castings drawings for all cast component parts for the theodolites covered by this agreement.
(f) Delivery term of the above documentation will be six months after the payment of Rs. 10,000 according to clause 6/a has been effected in favour of vendor.
Payment : In consideration of the grand of these manufacturing and sales rights and the training and imparting of thorough and up to date total know how techniques of manufacturing theodolites type 17 S purchaser shall make the following payments to vendor.
(a) Lumpsum of Rs. 80,000 (Rupees eighty thousand only) for giving services defined as documentation listed as per clause 3 In the following manner.
(Emphasis supplied).
(Here follow sub clauses indicating various instalments and the manner of their payment, etc.) Reading clauses 3 and 6(a) together lt will appear clear that the rendition of documentation services specified in Clause 3 was really the main service to be rendered by the foreign collaborator to the assessee and the Clause 6(a) categorically states that the lumpsum payment of Rs. 80,000 (Rs. 1,60,000 under the two agreements) was for rendition of such service.
There is also a reference to this aspect of the matter at the end of Clause 5(c) where it has been stated that the purchaser is to pay the value of the full documentation in question namely Rs. 80,000 according to the stipulation of the present agreement. ' In fact the other services mentioned in clauses 4 and 5 appear to be incidental as some of these were undertaken to be rendered as and when desired by the assessee and for which the assessee had agreed to bear and pay the expenses separately.
The tenor of the agreements clearly shows that the various documents such as 713 drawings, designs, charts, plans, processing data and other literature included in documentation service, the supply whereof was undertaken by the foreign collaborator, more or less formed the tools by using which the business of manufacturing the instruments was to be done by the assessee and for acquiring such technical know how through these documents lump sum payment was made.
In other words, the payment of Rs. 80,000 under each of the agreements was principally for rendition of 'documentation service '.
It is, therefore, clear that this expenditure was incurred by the assessee as and by way of purchase price of the drawings, designs, charts, plans, processing data and other literature, etc.
comprised in 'documentation service ' specified in Clause 3.
The expenditure, therefore, was undoubtedly of a capital nature as a result whereof a capital asset of technical know how in the shape of drawings, designs, charts, plans, processing data and other literature, etc.
was acquired by the assessee.
The next question is whether the acquisition of such a capital asset is depreciable asset or not? Under section 32 depreciation allowance is, subject to the provisions of section 34, permissible only in respect of certain assets specified therein, namely, buildings, machinery, plant and furniture owned by the assessee and used for the purpose of business while section 43(3) defines 'plant ' in very wide terms saying "plant includes ships, vehicles, books, scientific apparatus and surgical equipments used for the purpose of the business".
The question is whether technical know how in the shape of drawings, designs, charts, plans, processing data and other literature falls within the definition of 'plant '.
Counsel for the assessee urged that the expression 'plant ' should be given a very wide meaning and reference was made to a number of decisions for the purpose of showing how quite a variety of articles, objects or things have been held to be 'plant '.
But it is unnecessary to deal with all those cases and a reference to three or four decisions, in our view, would suffice.
The classic definition of 'plant ' was given by Lindley, L.J. in Yarmouth vs France, , a case in which it was decided that a cart horse was plant within the meaning of section 1(1) of Employers ' Liability Act, 1880.
The relevant passage occurring at page 658 of the Report runs thus : "There is no definition of plant in the Act: but, in Hits ordinary sense, it includes whatever apparatus is used by a business man for carrying on his business".
714 not his stock in trade which he buys or makes for sale; but all goods and chattels, fixed or movable, live or dead, which he keeps for permanent employment in his business .
In other words, plant would include any article or object fixed or movable, live or dead, used by businessman for carrying on his business and it is not necessarily confined to an apparatus which is used for mechanical operations or processes or is employed in mechanical or industrial business.
In order to qualify as plant the article must have some degree of durability, as for instance, in Hinton vs Maden & Ireland Ltd., , knives and lasts having an average life of three years used in manufacturing shoes were held to be plant.
In C.I.T. Andhra Pradesh vs Taj Mahal Hotel, , the respondent, which ran a hotel installed sanitary and pipeline fittings in one of its branches in respect whereof it claimed development rebate and the question was whether the sanitary and pipe line fittings installed fell within the definition of plant given in sec.
10(5) of the 1922 Act which was similar to the definition given in Sec.
43(3) of the 1961 Act and this Court after approving the definition of plant given by Lindley L.J. in Yarmouth vs France as expounded in Jarrold vs John Good and sons Limited, C.A. , held that sanitary and pipe line fittings fell within the definition of plant.
In Inland Revenue Commissioner vs Barly Curle & Co. Ltd., , the House of Lords held that a dry dock since it fulfilled the function of a plant must be held to be a plant.
Lord Reid considered the part which a dry dock played in the assessee company 's operations and observed : It seems to me that every part of this dry dock plays an essential part.
The whole of the dock is I think, the means by which, or plant with which, the operation is performed.
Lord Guest indicated a functional test in these words: In order to decide whether a particular subject is an 'apparatus ' it seems obvious that an enquiry has to be made as to what operation it performs.
The functional test is, therefore, essential at any rate as a preliminary 715 In other words the test would be: Does the article fulfil the function of a plant in the assessee 's trading activity Is it a tool of his trade with which he carries on his business? If the answer is in the affirmative it will be a plant.
If the aforesaid test is applied to the drawings, designs, charts, plans, processing data and other literature comprised in the 'documentation service ' as specified in Clause 3 of the agreement it will be difficult to resist the conclusion that these documents as constituting a book would fall within the definition of 'plant '.
It cannot be disputed that these documents regarded collectively will have to be treated as a 'book ', for, the dictionary meaning of that word is nothing but a a number of sheets of paper, parchment, etc.
with writing or printing on them, fastened together along one edge, usually between protective covers; literary or scientific work, anthology, etc., distinguished by length and form from a magazine, tract, etc.
(vide Webster 's New World Dictionary).
But apart from its physical form the question is whether these documents satisfy the functional test indicated above.
Obviously the purpose of rendering such documentation service by supplying these documents to the assessee was to enable it to undertake its trading activity of manufacturing the theodolites and microscopes and there can be no doubt that these documents had a vital function to perform in the manufacture of these instruments; in fact it is with the aid of these complete and upto date sets of documents that the assessee was able to commence its manufacturing activity and these documents really formed the basis of the business of manufacturing the instruments in question.
True, by themselves these documents did not perform any mechanical operations or processes but that cannot militate against their being a plant since they were in a sense the basic tools of the assessee 's trade having a fairly enduring utility, though owing to technological advances they might or would in course of time become obsolete.
We are, therefore, clearly of the view that the capital asset acquired by the assessee, namely, the technical know how in the shape of drawings, designs charts, plans, processing data and other literature falls within the definition of 'plant ' and therefore a depreciable asset.
Counsel invited our attention to the decision in Commissioner of Income Tax, Gujarat vs Elecon Engineering Co. Ltd., , where the Gujarat High Court has, after exhaustively reviewing the case law on the topic, held that drawings and patterns which constitute know how and are fundamental to the assessee 's manufacturing business are 'plant '.
We agree and approve the said view.
716 Having regard the aforesaid discussion the question framed A at the commencement of this judgment is answered in favour of the assessee to the effect that the payment of Rs. 1,60,000 made by the assessee to the foreign collaborator was attributable wholly towards the acquisition of a depreciable asset.
We allow the appeals but in the circumstances direct the parties to bear and pay their respective costs.
S.R. Appeal allowed.
[/INST]A conspiracy to commit criminal breach of trust in respect of the funds of a company by utilising the same to purchase the controlling block of shares of the company itself for the benefit of the appellants was alleged to have been entered into between December 1, 1948, and January 31, 1949.
It was the prosecution case that the modus operandi was to screen the utilisation of these funds by showing them as having been advanced for legitimate purposes and invested on proper security but in fact utilising the same for payment to the appellants.
One of the main issues was whether the loans by way of advance of the funds of the company on January 20, I949, were genuine transactions or bogus or makebelieve, and the question was whether the evidence relating to the further transactions entered into outside the period of the conspiracy in 1949 and I950 with a view to the screening of the original transactions, was admissible in law.
Held: (1) In relation to the main purpose of the prosecution viz., proof of the bogus character of the transactions of January, I949, the transactions of I949 and I95o entered into outside the period of conspiracy must, having regard to the ramifications, be taken to be integrally connected and relevant to make out their bogus character, though such evidence may necessitate reference to and narration of the acts of the conspirators beyond the period of conspiracy.
(2) The conduct of each individual co conspirator including his acts, writings and statements irrespective of the time to which it relates can be relied on by the prosecution to show the criminality of the intention of the individual accused with reference to his proved participation in the alleged conspiracy to rebut a probable defence that the participation, though proved, was innocent.
Such evidence is admissible under section 14 Of the Indian Evidence Act.
Makin vs The Attorney General for New South Wales, L. R. ; , relied on.
162 Per Jagannadhadas J.
Under section 10 of the Indian Evidence Act the evidence of acts, statements or writings of a co conspirator either under trial or not on trial but outside the period of conspiracy would not be admissible against the other conspirators in proof of the specific issue of the existence of the conspiracy on the authority of Mirza Akbar vs The King Emperor, (1940) L.R. 67 I.A. 336.
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<s>[INST] Summarize the judgementAppeal No. 2123 of 1968.
Appeal by special leave from the Award dated March 23, 1968 of the Labour Court, Bangalore in Reference No. 39 of 1967.
M. K. Ramamurthi, B. R. Dolia, section Pappu and Vineet Kumar, for the appellants.
H. R. Gokhale, C. Doraswamy and D. N. Gupta, for respon dent No. 1.
The dispute related to the dismissal by the management of three workmen, Sandhyavoo, G. Prabhakar and M. V. Vasudevan out of the five workmen against whom the management had held a domestic enquiry at which they were found guilty of acts; of misconduct charged against them.
The facts leading to the said dispute and the reference are as follows : On August 24, 1964 the said association handed over to the management a charter of demands.
Negotiations between the parties having failed, the demands were taken before the conciliation officer when the parties arrived at a settlement dated December 23, 1964.
On April 29, 1966, the management issued a notice suspending for a day, i.e., May 4, 1966, one B. G. Shenoy 307 as and by way of penalty.
In consequence of a protest by the association, the said suspension was postponed and on May 10, 1966, the management served a charge sheet on Shenoy and suspended him pending an enquiry.
On May 11, 1966 the association demanded withdrawal of the said suspension and the said charge sheet.
Discussions took place on that day from 9.45 A.M. to 12.30 P.M. between the association and the management and the parties thereafter adjourned at 1 P.M. for lunch having decided to resume the talks at 2.30 P.M.
At 2 P.M. the first shift ended and the workers of the second shift began to come, in.
The workmen of the first shift, however, stayed on and those of the second shift along with the workmen of the general shift joined them and all of them went on strike.
The discussions which were resumed at 2.30 P.M. ended in an agreement at 5 P.M. and the workmen returned to work.
On May 18, 1966 the assistant establishment officer submitted a complaint to the chief personnel officer alleging certain acts of misconduct by a crowd of workmen mentioning therein the names of five of them including the said three workmen.
On May 25, 1966 charge sheets alleging stoppage of work, abandoning the place of work, inciting clerks and officers of G. 2 department to join the said strike, disorderly behaviour including intimidation and assault on one, A. Lakshman Rao, were served upon those five workmen.
Correspondence thereafter ensued between the association and the management wherein the association protested against the management 's decision to adopt disciplinary action against the said five workmen despite the agreement arrived at on May 11, 1966.
Thereafter, a domestic enquiry was held on June 30, 1966 which was completed on July 27, 1966 when the enquiry officer made his report holding the said three workmen, Sandhyavoo, Prabhakar and Vasudevan, guilty of acts of misconduct under standing order 22(2), (3), (13) and (18).
He exonerated the other two workmen except on the charge of participating in the strike and loitering about under clauses (2) and (18) of the said standing order.
On August 12, 1966, the management, agreeing with the report, passed orders of dismissal against the said three workmen which gave rise to the said reference.
On March 23, 1968 the Labour Court gave its award holding that the said enquiry was validly held and that the management were justified in passing the said orders of dismissal.
Mr. Ramamurthi, appearing for the association, challenged the said award on the following grounds : (1) that the said association not having given a call for the said strike, the said charges were misconceived and the orders of dismissal were consequently not sustainable; (2) that the said strike, which was spontaneously staged by the workmen, was not illegal under section 24 of the , nor was it in contravention of any law as 308 required by standing order 22(2) and (3); (3) that the said disciplinary proceedings were in contravention of the agreement arrived at on May 11, 1966, and therefore, the dismissal following such disciplinary proceedings amounted to unfair labour practice; (4) that the orders of dismissal were passed on charges including that of intimidation though the misconduct of intimidation was not found proved by the enquiry officer and hence the said orders were illegal; (5) that to punish only three workmen when a large number of workmen had taken part in staging the strike and in inciting others to join it constituted victimisation; and (6) that the findings of the enquiry officer were based on no evidence or were perverse in that no reasonable body of persons could have arrived at them on the evidence before him.
The argument on which the first contention was based was that the settlement dated December 23, 1964 was arrived at between three parties, the management, the association and the men, and that the association being the union registered under the Trade Unions Act was an entity distinct from the workmen.
Under cl. 5 of the settlement it was the association which was obliged to give four days ' notice if it decided to resort to strike, go slow tactics or other coercive action.
The said clause did not impose any such obligation on the workmen.
The workmen thus having no such obligation and the said strike being a spontaneous one, without any call for it from the association, it could not be said to be in breach of the said settlement, and therefore, would not fall under the mischief of section 23 of the Act, the first condition of which is that to be illegal under section 24 read with section 23 it must be, in breach of a contract.
Standing order 22 requires that participating in a strike would be misconduct if it is in breach of some provision of law.
But as the strike was not in contravention of section 23, it would not constitute misconduct under that standing order.
Therefore, the charges against the said three workmen were misconceived and the orders of dismissal passed against them on the basis that they stood established were bad.
In our view this argument cannot be sustained.
The construction of cl. 5 of the settlement suggested by Mr. Ramamurthi is contrary to (a) the tenor of that settlement, (b) the provisions of the under which a settlement arrived at between an employer and a union representing the employees during conciliation proceedings is binding not only on such union but also the workmen whom it represents and (c) the principles of collective bargaining recognised by industrial law.
The settlement was a package settlement by which the management and the workmen, through their association, arrived at certain terms in the presence of the conciliation officer.
The settlement, besides settling the demands contained in the said charter of demands, sets out the necessity of harmonious relations and of cooperation between the 309 management and the workmen so as to promote higher and better production.
It was to achieve this object that direct action on the part of either of them such as a strike by the workmen and a lockout by the employer without notice was prohibited.
Evidently the provision for four days ' notice before any direct action was taken by either of them was provided for so that during that period if.
there was any grievance it could be ironed out by negotiations.
5 of the settlement falls in two parts : (I) the substantive part, and (2) the corollary thereof.
The first part inter alia provided that neither the association nor the management would resort to any direct action, such as strike, go slow tactics or lock out or any such coercive action without giving to the other a four days ' notice.
The second part provided an undertaking on the part of the association to cooperate with the management, if there was any strike by workmen without any call therefore from the association, if the management were to take disciplinary action against the workmen.
If the construction of cl. 5 suggested by Mr. Ramamurthi were to be accepted it would lead to a surprising result, namely, that though a strike at the instance of the association required four days notice, a strike by the workmen without any call from the association would not require any such notice and that the settlement left complete liberty to the workmen to launch a sudden strike.
Such a construction appears on the very face of it contrary to the object and purpose of the settlement and particularly cl. 5 which envisages a notice period of four days to enable the parties to resolve a dispute before direct action on its account is resorted to by either them.
The suggested construction is also untenable, for surely the association irrespective of the workmen cannot by itself resort.
to any direct action.
How can, for instance, the association resort to go slow tactics without giving a call for it to the workmen ? It is obvious, therefore, that cl. 5 does not contemplate any dichotomy between the association and the workmen as suggested by, Mr. Ramamurthi, besides being repugnant to the principle that a settlement arrived at by the association must be regarded as one made by it in its representative character, and therefore, binding, on the workmen.
Therefore, although the settlement mentions in, cl. 5 the management, workmen and the association, the expression 'workmen ' therein was unnecessary, for, without that expression also it would have been as efficaciously binding on the workmen as.
on the association.
This conclusion is strengthened by the fact that the settlement mentions the management and the association, on behalf of the workmen only as the parties thereto and the signatories thereto also are only the representatives of the two bodies.
None of the workmen, nor any one separately representing them affixed his signature to it.
If a lighting strike without notice is illegal under any provision of law (a question which we shall presently consider standing order 22 would come into operation and starting or joining such a strike and inciting others to L 13 Sup.
C.I,/69 6. 310 join it would amount to misconduct for which disciplinary action by the management would be possible.
The next question is whether the management could validly take disciplinary action against the workmen concerned in respect ,of the said strike.
The recitals of the said settlement show that as a result of the association presenting the said charter of demands negotiations between the management and the association took place on the said demands as also on certain proposals made by the management, that on their failure conciliation proceedings took place in the course of which the parties arrived at the said settlement which, as aforesaid, was signed by the representatives of the management and the association in the presence of the conciliation officer.
The settlement thus was one under section 12(3) of the and rule 59 of the Rules made thereunder by the Government of Mysore.
It was to come into force as from January 1, 1965 and was to remain in force for three years and was thereafter to continue to be in force until its termination by either side.
It is clear from thereof that the object with which it was made was to promote harmonious relations and cooperation between the company, the association and the workmen so that the company may on the one hand be able to achieve increased production and on the other be in a position to afford maximum opportunity for continued employment.
To accomplish these aims it was agreed that the company on its part should be managed on sound and progressive lines and the association and the workmen on their part should combat any wasteful practices adversely affecting workmanship and production and assist the management in apprehending persons responsible for acts such as theft, sabotage and other subversive activities.
As cl.
5 of the settlement itself states it was "in order to ensure continuation of smooth working" that the company and the association agreed that in no case would either of them resort to direct action such as lock outs, strikes, go slow and other coercive action without four days, notice and that should one or more workmen resort to any such direct action without the approval of the association, the association Would cooperate with the company in any disciplinary action which the company would take against such workmen.
Then follows the agreement on the said demands of the workmen, and the proposals made by the management in the details of which it is not necessary to go, and finally, the agreement that the parties would adhere to the code of discipline and the grievance procedure annexed as annexure IV to the settlement.
The said code also inter alia provided that there should be no strike or lock out without notice, that neither party should resort to coercion intimidation, victimisation or go slow tactics, that they would avoid litigation, sit down and stay in strikes and lock outs and would not permit demonstrations which are: not peaceful or rowdyism.
Read 311 in the context of the other provisions of of the settlement of which it is part, cl. 5 was intended, to prohibit (a) direct action without notice by or at the instance of the association, and (b) strikes by workmen themselves without the approval of the association.
The words "in no case" used in the clause emphasise that direct action by either the party without notice should not be re sorted to for any reason whatsoever.
There can be no doubt that the settlement was one as defined by section 2(p) of the and was binding on the workmen under section 18 (3) of the Act until it was validly terminated and was in force when the said strike took place.
The strike was a lightning one, was resorted to without notice and was not at the call of the association and was, therefore, in breach of cl. 5.
Could the management then take disciplinary action against the concerned workmen in respect of such a strike ? Standing order 22 enumerates various acts constituting misconduct.
2, 3, 13 and 18 provide that striking either singly or in combination with others in contravention of the provisions of any Act, inciting any other workmen to strike in contravention of any law, riotous or disorderly behaviour or any act subversive of discipline and ' loitering within the company 's premises while on duty or absence without permission from the appointed place of work constitute misconduct.
The point is whether participation in and incitement to join the said strike were in respect of a strike which was in contravention of any Act or law.
Section 23 provides that no workman employed in an industrial establishment shall go on strike in breach of contract and during the period in which a settlement is in operation, in respect of any of the matters covered by such a settlement.
The prohibition against a workman going on strike thus envisages two conditions; (a) that it is in breach of a contract and (b) that it is during the period in which a settlement is in operation and is in respect of any of the matters covered by such settlement.
The said settlement was a contract between the company and the association representing the workmen and it was in operation on May 11, 1966.
But was it in respect of a matter covered by the settlement ? Under section 24 a strike is illegal if it is commenced in contravention of section 23.
Section 26 inter alia provides that any workman who commences, continues or otherwise acts in furtherance of a strike which is illegal under the Act shall be punished with imprisonment for a term extending to one month or with fine which may extend to Rs. 50 or with both.
Section 27 provides punishment of a person who instigates or incites others to take part in or otherwise acts in furtherance of an illegal strike, The strike envisaged by these two sections is clearly the one which is illegal under section 24 read with section 23.
A strike in breach of a contract during the operation of a settlement and in respect of a matter covered by that settlement falls under section 23 (c).
But whereas section 26 312 punishes a workman for going on an illegal strike or for any act in furtherance of such a strike,, section 29 lays down the penalty for a person, not necessarily a workman, who commits breach of a term of a settlement which is binding under the Act.
It is, therefore, an offence for any person on whom a settlement is binding under the Act to commit a breach thereof and the legislature has viewed it to be a more serious offence, for, it has a higher punishment of imprisonment extending to six months than the punishment for commencing etc.
an illegal strike under section 26.
Thus, commencing, a strike or acting in furtherance of it in breach of a settlement binding on the person who so commences it or acts in its furtherance is an offence punishable under section 29.
It is clear that there is a distinction between a strike in visaged by section 23 (c) in respect of a matter covered by a settlement and a strike in breach of a settlement envisaged by section 29.
That position was conceded by Mr. Gokhale for the management.
But his argument was that the strike in question was, firstly, in respect of a matter covered by the said settlement, namely, its prohibition without notice while that settlement was in force and secondly that it was in breach of that settlement, and consequently, it was illegal both under section 24 and section 29.
This contention does not seem correct, firstly, because though an agreement not to resort to a strike without notice would be the subject matter of a settlement, a strike in contravention of such an agreement is not in respect of any of the matters covered by such settlement.
Secondly, such a construction would mean as if Parliament intended to provide two different penalties, one under section 26 and the other under section 29, for the very same offence, one higher than the other, an intention difficult to attribute.
The strike was in the matter of the suspension of the said Shenoy pending a domestic enquiry against him, a matter which obviously was not one of the matters covered by the said settlement.
It was, therefore, not a strike illegal under section read with section 23(c).
However, the strike was in contravention of cl. 5 of the said settlement and that settlement being binding on the workmen concerned and in operation at the time was punish able under section 29, and therefore, illegal under that section.
The question whether a strike in contravention of a similar clause in a settlement was illegal arose in The Tata Engineering and Locomotive Co. Ltd. vs C. B. Mitter & Anr.
(1) As in cl. 5 of the settlement before us, the settlement there also provided that "in no case" would the parties thereto resort to direct action such as lockouts, strikes, go slow and other direct action without four days ' notice.
The strike in question was commenced in respect of a demand by a workman for a pair of gum boots, a demand (1) C.A.No. 633 of 1963, dec. on April 2,1964.
313 not covered by the settlement.
It was common ground that the strike would not fall within the ambit of section 24 but the controversy was whether it was otherwise illegal, the workmen 's contention being that it was not, as the said clause against.
a strike without notice applied only to one declared for enforcing one or the other demands which formed the subject matter of the settlement and since the strike arose out of a matter not covered by the settlement, that clause was inapplicable.
This Court negatived the conten tion and held that the words "in no case" in that clause meant a strike for whatever reason and though it was conceded that it was not illegal under section 24, it was, nevertheless, held to be illegal not because it was in respect of a matter covered by the said settlement but because it was in contravention of the settlement which was binding on the concerned workmen, which meant that the Court held the strike to be illegal under section 29.
In our view the decision in the present case must be the same.
The strike was illegal not under section 24 but because it was in contravention of the settlement binding on the workmen concerned.
Consequently, standing order 22 would apply and participating in or inciting others to join such a strike would amount to misconduct for which ,the management were entitled to take disciplinary action.
But against that position, the argument was that the agreement dated May 11, 1966 under which the workmen called off the strike also provided that no disciplinary action would be taken against any workmen in respect of the strike on that day and that therefore the proceedings taken against the three workmen in violation of that agreement amounted to unfair labour practice.
The agreement was oral.
According to Bernard, Secretary of the association, the agreement *as that (a) the charges and the suspension order passed against the said Shenoy should be withdrawn (b) the company should pay the wages for the 31 hours period ,of the strike provided the workmen made good the loss of production during that period, and (c) the management would take no action against any one for going on strike.
The evidence of Martin, the company 's technical director, on the other hand, was that the company agreed only not to punish the said Shenoy and to consider paying wages for the hours of the strike.
The Labour Court on this evidence held that the association failed to prove that the management had agreed not to take action against any of the workmen in connection with the strike though it may be that they might have agreed not to victimise any workman for participating in the strike.
In fact, the management did not impose any penalty against any workman for joining the strike, not even against the three concerned workmen.
This finding being purely one of fact and the Labour Court having given cogent reasons for it we would not interfere with it without the utmost reluctance.
We have been taken through the evidence and the correspondence between the 314 parties but we fail to see any error on the part of the Labour Court in reaching that finding.
The next contention was that the orders of dismissal were bad as they took into account the charge of intimidation of the company 's officers although the enquiry officer had found that that charge was not proved.
The charge sheets, exs.
M/4A, M/5A and M/6A against the three workmen alleged in express terms disorderly behaviour and intimidation.
The report of the enquiry officer against the said Vasudevan clearly stated that the enquiry officer accepted the evidence of the management 's witnesses and that on that evidence all the charges against him stood proved.
While summarising those charges, he, no doubt, did not in so many words use the expression "intimidation".
But the evidence which he, as aforesaid, accepted, was that Vasudevan along with other workmen entered the G. 2 department at about 3 P.M. on that day and thumping his hand on the table of the said Lakshman Rao threatened that officer in the following words : "now I am in the forefront of the crowd].
You cannot do anything.
You ask your people to come out and you also come out.
Otherwise you can see what we can do for you now".
The said Lakshman Rao had also deposed that he was surrounded by the workers who started pushing and pulling him.
The evidence of other officers was that as the crowd which forced its way into this department got unruly they were also forced to leave their places of work.
The evidence against Prabhakar was that he too was in the fore front of that crowd which squeezed Lakshman Rao and some members thereof inflicted kicks on him.
Similarly, there was the evidence of one Raja, the assistant personnel officer, and others that Sandhyavoo was one of those in the forefront of that crowd.
According to Raja.
Sandhyavoo tried to lift him from his seat with a view to force him to leave his table and finding that the crowd had become restive he left his place.
Acceptance of this evidence by the enquiry officer must necessarily mean acceptance of the version of these officers that they were intimidated by the crowd which forced its way into their department led by these three workmen.
Though the enquiry officer has not, in so many words, used the expression 'intimidation ' his finding of disorderly behaviour must be held to include acts of intimidation.
Lastly, were the orders of dismissal against the three workmen acts of victimisation on the part of the management when admittedly a large number of workmen had staged the strike and also incited others to join that strike ? The orders against the three workmen being identical in terms we take the orders passed against Vasudevan as a specimen.
That order sets out four acts of misconduct by him; (1) striking or stopping work, (2) inciting, (3) riotous and disorderly behaviour and (4) loitering about in the 315 company 's premises.
Though each one of these acts, according to the order, was misconduct punishable with dismissal, the order states that so far as acts 1 and 4 were concerned, the management.
did not wish to take a serious view of them as a large number of "misguided" workmen had stopped work and left their places of work without permission.
The management, therefore, took action only in respect of acts failing under cls.
3 and 13 of standing.
order 22 evidently for the reason that they considered incitement, intimidation and riotous and disorderly behaviour as "very grave in nature".
We do not think that in taking this view the, management discriminated against the three workmen concerned as against.
the rest or that they dismissed them with the object of victimising.
The evidence in the enquiry clearly disclosed that when the crowd forced its way into the G. 2 department it was led by these three workmen, all of whom were in the forefront thereof and two of them had defiantly forced the officers to leave their tables.
of them had threatened as to what he and the others who were behind him in that crowd could do to him if he did not comply and the other had tried even to lift another officer from his chair to compel him to leave his place of work.
In these circumstances.
the management cannot be blamed if they took a serious view of these acts of the three workmen concerned, who had taken up their position in the forefront of that crowd, a position indicative of their having led, that crowd into that department and having, acted as its leaders.
An act of discrimination can only occur if amongst those equally situated an unequal treatment is meted out to one or more of them.
Having been found to be the leader& of the crowd, action taken against them cannot on any principle be regarded as discriminatory or unequal.
The decision in Burn & Co. Ltd. vs Workmen(1) relied on by Mr. Ramamurthi has no, bearing on the facts of this case and cannot assist him.
Once a misconduct graver than that of the rest was found proved against these three workmen and for which the punishment is dismissal, victimisation cannot legitimately be attributed to the management.
It is relevant in this connection to remember that so far as their participation in the strike and loitering about were concerned, no,, action was taken against these three workmen on the ground that those acts were common with those of the rest of the workmen.
In view of these facts it is not understandable how the impugned ' orders of dismissal could be characterised as acts of victimisation.
It is also not possible to say that the finding of incitement and disorderly behaviour of these three workmen was perverse or such, as no reasonable body of persons could come to on the evidence on record on the ground only that the others also were guilty of those acts.
For, there would be nothing wrong if those who misled or misguided other workmen were selected for disciplinary action (1) and not the victims of their persuasion, who in following their A precept did similar acts.
In our judgment the orders of dismissal, based on the findings in the domestic enquiry which did not suffer from any infirmity, could not be successfully impeached, and therefore, the Labour Court was right in upholding them.
The appeal fails and is dismissed.
There will be no order as to costs.
Appeal dismissed.
[/INST]The order under section 10(2) of the , given to a proper officer of the Court may be an oral order and need not be a written one.
The High Court can under section 10(2) refer a case on its own motion.
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<s>[INST] Summarize the judgementivil Appeal No. 4499 of 1986.
From the Judgment and Order dated 11.8.1986 of the Punjab and Haryana High Court in R.S.A. No. 974 of 1985 and Civil Misc.
No. 1034 C of 1985.
Harbans Lal, Dr. Meera Agarwal, (N.P.) and R.C. Mishra for the Appellant.
S.K. Mehta, Aman Vachher and Atul Nanda for the Respond ents.
The Judgment of the Court was delivered by R.M. SAHAI, J.
Disinherited daughter, under a Will alleged to have been executed by her father one day before his death bequea 815 thing all his property in favour of sons of her only sister, has assailed validity of orders of three courts below for failure to apply the rule that presumption of due execution of a pious and solemn document like Will stood rebutted due to existence of suspicious circumstances which the propound er could not rule out specially when he had taken active part in its execution.
Soft cornor for grand children or likeability for a son or daughter or their issues is not uncommon to our society.
Rather at times it becomes necessary either to provide for the lesser fortunate or to avoid the property from passing out of the family.
But when disputes arise between heirs of same degree, and the beneficiary even chooses to deny the blood ties, and that too unsuccessfully, then court 's re sponsibility of performing its duties carefully and pains takingly multiplies.
Unfortunately it was not properly comprehended by any of the courts, including the High Court which was swayed more by happy marriage of appellant, a consideration which may have been relevant for testator but wholly irrelevant for courts as their function is to judge not to speculate.
Although freedom to bequeath one 's own property amongst Hindus is absolute both in extent and person, including rank stranger, yet to have testamentary capacity or a disposing state of mind what is required of propounder to establish is that the testator at time of disposition knew and understood the property he was dispos ing and persons who were to be beneficiaries of his disposi tion.
Prudence, however, requires reason for denying benefit to those who too were entitled to bounty of testator as they had similar claims on him.
Absence of it may not invalidate a Will but it shrouds the disposition with suspicion as it does not give any inkling to the mind of testator to enable the Court to judge if the disposition was voluntary act.
Taking active interest by propounder in execution of Will raises another strong suspicion.
In H. Venkatachalliah vs
N. Themmajamma; , it was held to render the Will infirm unless the propounder cleared the suspicion with clear and satisfactory evidence.
Mere execution of Will, thus, by producing scribe or attesting witness or proving genuiness of testator 's thumb impressions by themselves was not sufficient to establish validity of Will unless suspi cious circumstances, usual or special, are ruled out and the courts ' conscience is satisfied not only on execution but about its authenticity.
See Kalyan Singh vs Smt.
Chhoti & Ors., [1989] Judgment Today page 439.
Coming now to facts it has been found by all the three courts below that testator was a migrant from West Pakistan who after migration resided in village Rupena, was ill for sometime and lived with his 816 daughter and her sons who are the beneficiaries six months prior to his death.
It was further found that appellant was also one of the daughters.
No finding was recorded that she or her sons had any sore or sour relations with testator.
But the most important finding was that even though the testator could sign yet he put his thumb mark on it.
It was found to be genuine.
The execution was thus held beyond doubt.
But it was sufficient to put the courts on alert specially when the professional scribe fetched by benefici ary 's father admitted that when he reached beneficiary 's residence where the Will was executed, he found testator covered with a quilt in the afternoon of August with whom he did not talk nor enquire about his health.
Unfortunately none of the Courts paid any attention to these probably because they were swayed with due execution even when this Court in Venkatachalliah 's case (supra) had held that, proof of signature raises a presumption about knowledge but the existence of suspicious circumstances rebuts it.
Importance of these aspects would have become apparent if they had examined the Will which speaks for itself but which was taken for granted.
Relevant part of it is extracted below: "They served me with money and the core of their heart.
I am happy with their service.
Therefore I make this Will without any pressure or influence that during my life time I shall be owner of all my property both moveable and immovable i.e. land, house etc.
After my death my entire property, land, houses, shops, factory, machinery, residential house, resi dential goods, deposit in Bank or Post office (i.e. whatever is in my name in Punjab or any part of India, it will be in the ownership of and in possession of my grand sons (daugh ters/sons) Harmesh Singh, Mohan Lal, Sohan Lal son of Gurdev Singh son of Raunaq Singh in equal shares.
No body else who may be my near relations or distantly related will have any right in my property".
What strikes immediately is professionalism of the recital.
Grave doubt arises if recital of each and every item which could be visualised, was as a result of professional exper tise or the old man was so unwell and died on the next day that he could not speak resulting in speculative narration of property depending on imagination what he must have been possessed of.
Mention of house, factory, machinery and bank deposit was meaningful.
House had already been sold.
No evidence was led that he was possessed of another house or that he had any factory or machinery or bank deposits.
Explanation of learned counsel that omission was as the respondent had challenged the very relation 817 ship of appellant could not remove the suspicion created by the recital that bequest was made not by an independent man after understanding or on his dictation, but was work of a scribe or beneficiary 's father who did not take any chance and attempted to rope in every possible property that could have been conceived of.
Happy marriage or financially well settlement of appellant could not add to genuineness of Will.
The High Court in recording this finding, completely misdirected itself.
More so, when no finding of dire circum stances of respondent to help out of which testator dis inherited the other daughter was recorded by any courts.
Ratio in Malkani vs Jamadar, AIR 1987 SC 767 was relied on to dissuade this Court from interfering, both, because the finding that Will was genuine, was a finding of fact and omission to mention reason for dis inheriting the daughter or taking prominent part by beneficiary by itself was not sufficient to create any doubt about the testamentary capac ity was because of misunderstanding of the correct import of the decision and the circumstances in which it was rendered.
Property in Malkani 's case (supra) was land.
Beneficiary was nephew as against marned daughter.
Anxiety in village to protect landed property or agricultural holdings from going out of family is well known.
Even though it cannot be said to be hard and fast rule yet when dis inheritance is amongst heirs of equal degree and no reason for exclusion is dis closed, then the standard of scrutiny is not the same and if the courts below failed to be alive to it as is clear from their orders then their orders cannot be said to be beyond review.
Although this Court does not normally interfere with findings of fact recorded by courts below, but if the find ing is recorded by erroneous application of principle of law, and is apt to result in miscarriage of justice then this Court will be justified in interfering under Article 136.
For the reasons stated above, the appeal succeeds and is allowed.
The order and judgment of all the three courts below, are set aside and the suit filed by the appellant for declaration that the Will executed by her father was in valid, shall stand decreed.
The appellant shall be entitled to its costs.
G.N. Appeal al lowed.
[/INST]The accused petitioners were charged under section 302 and 307 read with Sections 147, 148 and 149 of the Indian Penal Code and Section 37 of the Bombay Police Act, 1951.
Subsequently they were also charged under section 3 of the Terrorist and Disruptive Activities (Prevention) Act.
They moved the Designated Court for grant of bail contending that the provisions of the 1987 Act were wrongly and mali ciously invoked and the Designated Court held that section 3 of the Act was inapplicable.
The State of Maharashtra has preferred an appeal to this Court against the said order of the Designated Court.
Since the accused were directed to approach the regular court, they moved bail applications before the Sessions Judge, Ahmadnagar which were rejected.
Thereafter, they approached the High Court and during the pendency of their bail applications before the High Court, the prosecution submitted a charge sheet against them in the Designated Court under section 3 of the 1987 Act.
Conse quently the High Court rejected their bail applications and the accused again approached the Designated Court for bail.
The Designated Court again held that the material 634 placed before it and the statement recorded by the Investi gating Officer did not disclose the commission of an offence under section 3 of the Act.
Accordingly, it discharged the accused under section 227 of the Code of Criminal Procedure, 1973 and transferred the case to court of Sessions for trial of other offences under the Penal Code and the Bombay Police Act.
Against this order of the Designated Court, two appeals have been filed in this Court; one by the deceased 's father and the other by the State.
After transfer of their case to the regular court.
the accused persons approached the High Court for bail which was rejected.
The accused persons have filed a Special Leave Petition in this Court against the High Court 's order refusing the bail.
Dismissing the appeals and disposing of the petition, this Court.
HELD: 1.
A mere statement by the accused persons to the effect that the show of violence would create terror or fear in the minds of the people and none would dare to oppose them cannot constitute an offence under section 3(1) of the Act.
That may indeed be the fail out of the violent act but that cannot be said to be the intention of the perpetrators of the crime.
[646H; 647A] 1.1 While invoking a criminal statute, such as the Terrorist and Disruptive Activities (Prevention) Act,1987, the prosecution is duty bound to show from the record of the case and the documents collected in the course of investiga tion that facts emerging therefrom prima facie constitute an offence within the letter of the law.
[644F] 1.2 In the instant case it is clear from the statement of the accused persons that their intention was to liquidate rivals and thereby achieve the objective of gaining suprema cy in the underworld.
The consequence of such violence is bound to cause panic and fear but the intention of commit ting the crime cannot be said to be to strike terror in the people or any section of the people.
Therefore, the Desig nated Court was fully justified in taking the view that this was a case of inter gang rivalry only and that the material placed on record and the documents relied on did not prima facie disclose the commission of the offence punishable under section 3(1) of the Act.
[647D E] 2.
Section 12(1) of the Terrorist and Disruptive Activi ties (Prevention) Act, 1987 empowers the Designated Court to try any offence punishable under any other statute along with the offence punishable under the Act if the former is connected with the latter.
That, however, does not mean that even when the Designated Court comes to the con 635 clusion that there exists no sufficient ground for framing a charge against the accused under Section 3(1) of the Act it must proceed to try the accused for the commission of of fences under other statutes.
Thai would tantamount to usurp ing jurisdiction.
Section 18, therefore, in terms provides that where after taking cognizance of any offence the Desig nated Court is of the opinion that the offence is not tri able by it, it shall, notwithstanding that it has no juris diction to try such offence, transfer the case for the trial of such offence to any Court having jurisdiction under the Code, Therefore, when the Designated Court came to the conclusion that there was no prima facie evidence to frame a charge under section 3(1) of the Act, it was justified in transferring the case to the Court of Sessions, which alone had jurisdiction under the Code.
The course adopted by the Designated Court in transferring the case to the Sessions Court for trial of offences under other statutes is clearly in keeping with section 18 of the Act.
[647F H; 648A C] 3.
Statutes which impose a term of imprisonment for what is a criminal offence under the law must be strictly con strued.
[644C] Usmanbhai Dawoodbhai Memon & Ors., vs State of Gujrat, ; referred to.
3.1 When a statute provides special or enhanced punish ments as compared to the punishments prescribed for similar offences under the ordinary penal laws of the country, a higher responsibility and duty is cast on the Judge to make sure there exists prima facie evidence for supporting the charge levelled by the prosecution.
Therefore.
when a law visits a person with serious penal consequences extra care must be taken to ensure that those whom the legislature did not intend cover by the express language of the statute are not roped in by stretching the language of the law.
But that does not mean that the judicial officer called upon to decide whether or not a case for flaming a charge under the Act is made out should adopt a negative attitude.
He should frame a charge if the prosecution shows that the material placed on record and the documents relied on give rise to a strong suspicion of the accused having committed the crime alleged against him.
[644G H; 645A] 4.
The Court while considering whether to discharge the accused or to frame a charge against him i.e. at the stage of sections 227 228 of the Code of Criminal Procedure, 1973 is required to evaluate the material and documents on record with a view to finding out if the facts emerging therefrom taken at their face.
value disclose the existence of all the ingredients constituting the alleged offence.
Since the Trial Court is 636 at the stage of deciding whether or not there exists suffi cient grounds for framing the charge, its enquiry must necessarily be limited to deciding if the facts emerging from the record and documents constitute the offence with which the accused is charged.
At that stage it may sift the evidence for that limited purpose but it is not required to marshal the evidence with a view to separating the grain from the chaff.
All that it is called upon to consider is whether there is sufficient ground to frame the charge and for this limited purpose it must weigh the material on record as well as the documents relied on by tile prosecu tion.
[643E; 641F G] State of Bihar vs Ramesh Singh, ; ; Union of India vs Prafulla Kumar Samal & Anr., ; and Supdt. & Remembrancer of Legal Affairs, West Bengal vs Anil Kumar Bhunja & Ors., ; , referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 853 of 1981.
Appeal by special leave from the judgment and order dated 4.11.1980 of the Madhya Pradesh High Court in Case Misc.
Petition No. 167 of 1980.
Shiv Dayal, P.S. Das Gupta and J.B. Dadachanji for the Appellant.
Gopal Subramaniam and S.A. Shroff for the Respondents.
The Judgment of the Court was delivered by VARADARAJAN, J.
This appeal by special leave is directed against the judgment of K.K. Dube, J. of the Madhya Pradesh High Court in Writ Petition No. 167 of 1980, with whom the learned Chief Justice of that High Court had agreed on a difference of opinion between the learned Judge and A. R. Navkar, J.
The petition filed under Article 226 of the Constitution was for the issue of a writ, order or direction for the writ petitioner 's admission into one of the medical colleges in Madhya Pradesh for the M.B.B.S. course, commencing in the academic year 1979 80.
After hearing the learned counsel for the parties we allowed the appeal by a brief order on 14.1.1982 without any order as to costs, on account of the urgency of the matter, reserving our reasons to be given later, and directed the respondents to admit the appellant to the M.B.B.S course for the academic year 1981 82 for which admissions are admittedly going on even now.
We are presently giving reasons.
The Government of Madhya Pradesh, Public Health and Family Welfare Department, have framed Rules on 17.4.1979 for 188 admission into the Medical, Dentistry and Ayurvedic Colleges in the State.
In this appeal we are not concerned with the Dentistry and Ayurvedic Colleges.
There are six Medical Colleges in the State of Madhya Pradesh affiliated to different universities.
There are 720 seats for admission into the first year course in those six colleges.
Rule 5(1) of the aforesaid Rules, hereinafter refer to as the Rules, lays down that no candidate shall be admitted to the M.B.B.S. course unless he has passed the B.Sc.
Part I (three years degree course Medical Group) examination of the recognised universities of the State with Physics, Chemistry, Biology (Zoology and Botany) or any examination of any other university or board recognised as equivalent thereto with practical tests in each subject provided the candidate has passed in each of those subjects in theory and practical separately.
Under rule 6 of the Rules no candidate shall be admitted to the medical college unless he completes the age of 17 years on the 31st December of the year of admission to the college.
Rule 1(3) provides for the pre medical examination being held every year for selection of candidates for admission to the medical colleges in the State and says that all admissions to those colleges have to be made only from the merit list prepared on the basis of the result of that examination except in the case of seats placed at the disposal of the Government of India or other States.
Under Rule 7 certain number of seats have to be reserved for specific categories of candidates passing the pre medical examination as below : 1.
Fifteen percent shall be reserved for women candidates; 2.
Fifteen percent shall be reserved for each of the categories of Scheduled Caste and Scheduled Tribes candidates; 3.
Seats not exceeding 3 percent may be reserved for children of military personnel who have to produce the necessary certificates.
Apart from those reservations, under Rule 8 seats not exceeding 3 per cent are reserved for nominees of the Government of India and three seats are reserved for candidates nominated by the Government of Jammu and Kashmir in consideration of three seats reserved in the medical colleges in that State for candidates of the State of Madhya Pradesh.
189 Under Rule 20, selection of candidates from amongst those who had appeared and qualified in the written examination shall be made strictly on merit as disclosed by the total number of marks obtained by a candidate in the pre medical examination.
The qualifying marks for admission shall be 50 per cent in the aggregate and 33 percent in each of the subjects.
For Scheduled Castes and Scheduled Tribes candidates the minimum qualifying marks shall be 45 per cent in aggregate and 30 per cent in each of the subject.
In case the required number of candidate for admission are not available according to the above percentage of qualifying marks the Board conducting the pre medical examination under Rule 2 shall have power to lower the marks up to S per cent in the aggregate for all categories of candidates.
If even with the relaxation granted by the Board, as above, required number of candidates in the categories of Scheduled Castes and Scheduled Tribes are not available for admission the Government has power to grant special relaxation in the maximum qualifying marks to the extent considered necessary.
Under Rule 9, in case sufficient number of candidates do not qualify for admission under any reserved category and any seats remain vacant, such vacant seals shall be fined by preparing a combined merit list of all the remaining categories of candidates on the waiting list and the candidates shall be admitted according to merit in the list so prepared.
It is not necessary to refer to any of the other rules for the purpose of this appeal.
Indisputably, the appellant belongs to the third category of seats reserved under Rule 7 as he is a son of a military personnel settled in Madhya Pradesh.
Sons and daughters of military personnel of Madhya Pradesh are entitled to 21 seats in all out of 720 seats available in the six medical colleges in the State.
As per the minimum number of qualifying marks prescribed in Rule 20, namely, 50 per cent in the aggregate and 33 per cent in each of the subjects, children of military personnel secured only 8 seats, and 13 seats in that category remained vacant and all other categories secured only 361 seats and 338 seats of those categories remained vacant.
The appellant did not qualify for admission on the basis of the marks specified in Rule 20 for the academic year 1979 80.
Then the Board applied Note (1) to Rule 20 which provides for lowering the minimum qualifying marks upto 5 per cent in the aggregate for all categories of candidates.
After that was done 6 more candidates 190 belonging to the category of sons and daughters of military personnel and 274 more candidates belonging to all other categories secured admission and 7 seats belonging to the category of children of military personnel and 64 seats of all other categories remained vacant.
Even then the appellant could not secure admission as he had secured only 43.6 per cent of marks in the aggregate and 33 per cent in each of the subjects in the pre medical examination and in the merit list prepared according to rule 9 he ranked 74 and only 71 candidates in that list could be admitted on the basis of merit.
Then the Madhya Pradesh Government issued an executive notification dated 10 March, 1980 regarding relaxation of qualifying marks for the purpose of admission to the medical colleges.
That notification is to the effect that for the year 1979 80 candidates who have obtained at least 43 per cent of marks in the aggregate in the pre medical examination shall be admitted to the medical colleges in the unfilled seats on the basis of merit according to the rules.
ordinarily, the appellant who had secured 43.6 per cent of marks in the aggregate in the pre medical examination and another candidate in the category of children of military personnel should have got admission after the lowering of the minimum qualifying marks to 43 per cent in the aggregate, leaving 5 seats in that category still vacant.
But Rule 9 was applied and a combined list of all the remaining categories on the waiting list was prepared and the candidates were admitted according to merit in the list so prepared and consequently the appellant who belongs to the category of children of military personnel and had secured 43.6 percent of marks in the aggregate in the pre medical examination could not secure admission.
These facts are not in dispute.
The appellant filed a writ petition for the aforesaid relief contending that as minimum qualifying marks have been reduced by the Notification dated 10 3.1980 to 43 percent in the aggregate and as he had secured 43.6 percent marks he should have been given admission in the category to which he belongs.
The writ petition was at first heard by K. K. Dube and A.R. Navkar, JJ.
A.R. Navkar, J, who decided in favour of the appellant, had observed in his judgment thus: "The reduction of percentage of marks for admission by the Government on 10.3.1980 (Annexure II) clearly shows that the candidates who got 43 per cent of marks 191 will be eligible for admission.
There is no dispute that the petitioner got 43.6 per cent of marks in the pre medical examination.
Therefore, applying this order of reduction of qualifying marks (Annexure II), I am of the opinion that the right of the petitioner for admission in the medical college cannot be defeated by resorting to Rule 9 of the Rules.
As mentioned above, Rule 9 of the Rules, in my opinion, is a mandatory one.
It says, if any seats remain vacant, such vacant seats shall be filled in by preparing a combined merit list of all the remaining categories of candidates on waiting list.
This was not done when the percentage of marks for admission was reduced from 50 per cent to 45 per cent for all categories.
Therefore, in my opinion, it cannot be done to defeat the right of the petitioner. `I am of the opinion that the present petitioner cannot be denied his right of admission to the medical college if he is otherwise eligible to get admission.
Denial of admission to him by purporting to act on the strength of Rule 9 of the Rules, in my opinion, will not be justified and will amount to denial to him the protection given to him by Article 14 of the Constitution.
The result, therefore, is that the petition deserves to be allowed. " But K.K. Dube, J. who took the opposite view has, after extracting notification dated 10.3.1980, observed in his judgment thus : "The reduced qualifying marks limit is only for filling up the vacant seats and the notification does not seek to amend Rule 20 or substitute 43 per cent for 50 per cent marks in the aggregate as minimum qualifying marks limit laid down under Rule 20.
Indeed, the notification does not state that the reduced qualifying marks limit is in substitution of the one provided in Rule 20.
That being the position, Rule 9 would necessarily operate, and it is for selecting from amongst the candidates for the number of seats remaining vacant by operation of Rule 9.
The petitioner 's contention would have some substance if Rule 9 was not there.
The effect of Rule 9 is to wipe out the reservation for admission to any of the reserved categories.
The main idea is that the best candidates be given admission to the medical colleges.
The reservation is for the purpose of securing a concession and must operate in a like manner 192 as provided in the Rules.
The reservation is not absolute, and, therefore, when the minimum qualifying marks were reduced to 43 per cent it was only for filling up the vacant seats as obtained by operation of Rule 9 of the Rules, according to the merit in the combined merit list.
We are unable to agree with the contention that the reduction in the eligibility to 43 per cent in the Government notification dated March 10, 1980 could be availed of by the petitioner and other similar candidates for filling up the 7 vacant seats in the reserved quota of the children of military personnel".
The learned Chief Justice before whom the matter came up on account of the difference of opinion between the two learned Judges who originally heard the writ petition, as mentioned above, while agreeing with K.K. Dube, J, has observed in his judgment thus : "When even on reduction of qualifying marks under Note (i) the required number of candidates do not qualify for admission under any reserved category and seats remain vacant, Rule 9 begins to apply and as directed by that Rule "such vacant seats shall be filled in by preparing a combined merit list of all the remaining categories of candidates in the waiting list and the candidates shall be admitted according to the merit in the list so prepared".
At this stage there is no further scope for reservation.
In other words, the reservation comes to an end after the required number of candidates in a reserved category do not become available on reduction of qualifying marks in the aggregate by the Board in exercise of its power under Note (i) to Rule 20.
It is generally expected that there would be a long waiting list of qualified candidates in the general category who would be available for filling in the seats transferred from a reserve category to general category.
In 1979, however, it so happened that there were vacancies in the general category, that is, there were not sufficient number of qualified candidates who could have exhausted the general category under Rule 9.
It is at this stage that the Government issued the order dated 10th March, 1980.
It is in the interpretation and application of this order that difference of opinion has arisen.
The 193 Order has not been issued under the Rules.
It is an independent order.
The order does not expressly refer to any reservation.
The order directs selection of candidates for vacant seats on the basis of merit from those who had secured aggregate marks up to 43 per cent.
The order was passed at a stage when the reserved categories had come to an end under Rule 20 read with Rule 9 as sufficient number of candidates were not available.
In my opinion, therefore, Dube, J. was right in holding that the order dated 10th March, 1980 did not bring back the reservation and selection had to be made on the basis of a combined merit list for all the vacant seats irrespective of whether they originally belong to any reserved category. .
There is yet another important factor to be taken notice of.
Not only the vacancies in the reserved category of children of military personnel but there were also vacancies in the category of women to be filled in on the basis of a combined merit list and no reservation was at all allowed in working out the order of 10th March, 1980.
The way in which this order was applied by the Board had apparently the approval of the Government and no other candidate excepting the petitioner has come forward to challenge its application.
As already pointed out, the order is not a statutory order.
It is an order passed by the State Government in the exercise of its executive power.
The Government 's approval of the manner in which the Board has applied the order goes to show that that was the intention of the Government in passing the order.
Although the approval of the Government of a particular mode of application of an order is not decisive of its meaning and it is for the Court to decide the correct meaning, still when the meaning of an order which is purely executive is in doubt the way in which it has been applied by all concerned is a relevant factor to be taken into account in deciding its true meaning.
The uniform application of the order by the Board with apparent approval of the Government for filling in all the vacant seats, goes a long way to show that the Government intended that the order should be applied by preparing a common merit list without continuing the reservations.
In these circumstances, even if the interpretation put forward by the learned counsel for 194 the petitioner and accepted by Navkar, J. can be accepted as a possible interpretation of the order, it would not be right for me to hold that it conveys the true meaning" We are inclined to agree with the conclusion reached by A.R. Navkar, J., though for different reasons.
The matter is simple.
Under Rule 20, the minimum number of marks prescribed for admission into the Medical Colleges in the State is 50 per cent in the aggregate and 33 per cent in each of the subjects.
On that basis, out of the total of 720 seats available in all the six medical colleges in the State only 8 out of 21 of the category of sons and daughters of military personnel, and only 361 out of 699 available for all other categories could be and were admitted in the academic year 1979 80.
Rule 9, which has been relied upon by the respondents as well as by K. K. Dube, J. and the Chief Justice says that in case sufficient number of candidates do not qualify for admission under any reserved category, barring, of course, the category of Scheduled Castes and Scheduled Tribes candidates, and any seats remain vacant, such vacant seats shall be filled by preparing a combined merit list of all the remaining categories of candidates on the waiting list and the candidates shall be admitted according to merit in the list so prepared.
But that Rule was not applied by the respondents and could not be applied under the circumstances of the case when 338 seats in all other categories and 13 seats of the category of sons and daughters of military personnel could not be filled in 1979 80 on the basis of the said minimum number of qualifying marks, namely, 50 per cent in the aggregate and 33 per cent in each of the subjects.
Then Note (1) to Rule 20 providing for lowering of the qualifying marks upto 5 per cent in the aggregate for all categories was applied.
Even then 64 seats of all other categories and 7 seats of the category of sons and daughters of military personnel could not be filled and remained vacant.
Then the Government by an executive order issued the notification dated 10th March, 1980 reducing the minimum qualifying marks to 43 per cent in the aggregate, and it is only at this stage Rule 9 was applied with the result that in the category of sons and daughters of military personnel only 2 more candidates could secure admission and 7 seats of that category had to be filled by other categories.
We are of the opinion that since the minimum qualifying marks were reduced to 43 per cent by an executive order without any provision therefor in the statutory rules, Rule 9 of the statutory rules could not be applied at that stage, and that the appellant who had secured 195 43.6 per cent of marks in the aggregate should have been admitted in the category to which he belongs.
We think that the difference between 45 per cent in the aggregate, to which the minimum qualifying marks were reduced under Note (1) to Rule 20 and 43.6 per cent of marks in the aggregate secured by the appellant is so little that it could not be a valid or sufficient reason for giving a go bye, on the ground of merit, to the reservation provided for in Rule 7 of the Rules.
The appellant deserves to be admitted even for this reason.
In these circumstances we are unable to agree with the view taken by K.K. Dube, J. and the Chief Justice, and we agree with the conclusion reached by A.R. Navkar, J.
The appeal is accordingly allowed without any order as to costs.
As already directed the appellant shall be admitted to the M.B.B.S. course for the academic year 1981 82 in the category mentioned in Rule 7 (3) (c) of the Rules.
S.R. Appeal allowed.
[/INST]The prosecution case against the appellant was that on the night of occurrence between 11 and 11.30 the informer and two of his friends were standing on a road when suddenly the three accused emerged out of the car and the appellant assaulted and stabbed the injured person with a dagger.
The prosecution alleged that there was enemity between the assailants and the injured person; that the informer lodged a F.I.R. at 00.50 hrs.
and that the injured man was picked up by a Police Wireless Van and admitted in the hospital.
The trial court convicted the accused under section 326/34 I.P.C. and sentenced them variously.
The High Court acquitted two of the three accused.
In regard to the appellant, disbelieving the evidence of the doctor on the ground that the name of the assailant was first written by her as "Tony" but later changed to read as "Tiny" and that secondly there was no particular column in the register where the name of the assailant could be written, the High Court altered the conviction to one under section 326 I.P.C. and sentenced him to rigorous imprisonment for three years.
On appeal to this Court it was contended on behalf of the appellant that (1) the F.I.R. was not lodged at 00.50 hrs.
as claimed by the prosecution; (2) the injured did not know the appellant before the occurrence; (3) the version of the injured that the name of the assailant was disclosed to him by a friend of the informer should not be accepted and (4) the discrepancy in the name of the assailant recorded by the doctor was not such as to completely discredit her evidence.
Allowing the appeal, ^ HELD: (a) The change of name "Tony" into "Tiny" in the hospital register might be due to mis hearing of the name in the first instance and correcting it later.
Much could not be made of this circumstance.
The doctor had initialled the alteration.
The prosecution has not made any attempt to declare 278 the doctor a hostile witness and to cross examine her.
Therefore the change in the name could be a bona fide mistake.
That apart, the injured was fully conscious at the time he made the statement to the doctor.
[282 A C] (b) The High Court was in error in stating that there was no particular column in the hospital register in which the name of the assailant could be mentioned.
The entire part of the register where the statement had been recorded by the doctor is described as the "Registrar 's note" which comprehends everything including the nature of injuries to the injured, any statement made by him or similar other matters.
[281 E F] (c) There is no evidence on record to show that the doctor was in any way friendly with the appellant or inimical towards the injured man; she was an absolutely disinterested and independent witness.
[281 G] 2 (a) The High Court had erred in holding that the doctor 's evidence was inadmissible in that the provisions of section 145 of the Evidence Act had not been complied with.
[282 F] (b) Section 145 applies only to cases where the same person makes two contradictory statements either in different proceedings or in two different stages of a proceeding.
If the maker of a statement is sought to be contradicted, his attention should be drawn to his previous statements under section 145, that is to say, where the statements made by a person or a witness is contradicted not by his own statement but by the statement of another prosecution witness the question of application of section 145 does not arise.
[283 A C] (c) The doctor 's statement was an admission of a prosecution witness.
If it was inconsistent with the statement made by another prosecution witness there was no question of application of section 145 of the Evidence Act.
[283 C] In the instant case the statement of the injured to the doctor being first in point of time it must be preferred to any subsequent statement made by the injured.
There is much evidence to show that the injured did not know the appellant before the date of the incident.
No test identification parade had been held.
The appellant was shown by the police before he identified him.
If the accused was not known to the injured and his friends before the incident and was identified for the first time in the court, this evidence has no value and cannot be relied upon in the absence of a test identification parade.
[285 E,C,F] V.C. Shukla vs State (Delhi Administration), ; and Sahdeo Gosain & Anr.
vs The King Emperor , referred to.
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<s>[INST] Summarize the judgementminal Appeals Nos.
25 to 27 of 1958.
356 Appeals from the judgment and order dated June 25, 1957, of the Punjab High Court, in Criminal Revisions Nos.
184 D, 185 D and 186 D of 1956, arising out of the judgment and order dated October 23, 1956, of the Sessions Judge, Delhi, in Criminal Revision Applications Nos.
249, 250 and 251 of 1956.
Bipin Behari Lal and R. H. Dhebar, for the appellant.
G. C. Mathur and I. N. Shroff, for the respondent in Cr.
A. No.25 of 1958.
A. G. Ratnaparkhi, for the respondent in Cr. A. No. 26 of 1958.
Respondent in Cr. A. No. 27 of 1959 did not appear.
November 30.
The Judgment of the Court was delivered by WANCHOO J.
These three appeals arise out of three certificates granted by the Punjab High Court in a criminal matter.
They will be dealt with together as the point raised in them is common.
The brief facts necessary for the purpose are these: There is a Government Printing Press at Rashtrapati Bhavan known as Rashtrapati Bhavan Printing Press which is located in the President 's estate in New Delhi.
Jacobs was the General Foreman of this Press.
Every year the budget proposals are printed at this Press under the supervision of Jacobs.
As usual, Jacobs supervised the printing of budget proposals in his official capacity in February 1955 also.
It appears that Jacobs entered into a conspiracy to divulge the budget proposals on receiving valuable consideration for the same.
Consequently the proposals were divulged to D. P. Chadda and were passed on to certain businessmen of Bombay, including Nandlal More and Hiralal G. Kothari through one A. L. Mehra.
All this was done against the provisions of the Official Secrets Act, No. XIX of 1923.
Further an offence was committed under the Prevention of Corruption Act, No. 11 of 1947, also inasmuch as money was paid to Jacobs for divulging the budget proposals.
The same thing happened in February 1956, with 'respect to the 357 budget proposals for 1956 57.
This was discovered on March 9, 1956, and a case was registered under section 165 A of the Indian Penal Code, section 5(2) of the Prevention of Corruption Act, ' section 5 of the Official Secrets Act and section 120 B of the Indian Penal Code and investigation started on March 10, 1956.
Thereafter, pardon was tendered to A.L. Mehra by the Additional District Magistrate on March 23, 1956, under section 337 of the Code of Criminal Procedure.
The four offences mentioned above were specified in the order of the Additional District Magistrate tendering pardon to Mehra.
Thereafter owing to technical legal difficulties a complaint under section 5 of the Official Secrets Act read with section 120 B of the Indian Penal Code was filed against the persons involved and it was, stated in that complaint that proceedings with the respect to the charge under section 5(2) of the Prevention of Corruption Act would be taken separately.
Proceedings then began before a magistrate on this complaint.
It may be mentioned that no proceedings have yet started insofar as the offences under section 5(2) of the Prevention of Corruption Act and section 165 A of the Indian Penal Code are concerned.
In the course of these proceedings before the magistrate, the prosecution wanted to examine Mehra as an approver.
Thereupon the accused persons objected that as the proceedings before the magistrate were only under section 5 of the Official Secrets Act and section 120 B of the Indian Penal Code, Mehra could not be examined as an approver and in consequence the case could not be committed to the Court of Session but should be disposed of by the magistrate himself.
The magistrate held that Mehra could be treated as an approver and proceedings before him were therefore in the nature of commitment proceedings.
Thereupon there was a revision to the Sessions Judge who took the view that as the proceedings before the magistrate were under section 5 of the Official Secrets Act read with section 120 B of the Indian Penal Code and as no pardon could be tendered under section 337 of the Code of Criminal Procedure for these offences, Mehra could not be treated as an approver and had to be examined as an 46 358 ordinary witness and the proceedings must be held to be trial proceedings before the magistrate and not commitment proceedings.
He therefore recommended to the High Court that the order of the magistrate be set aside.
The High court upheld the view of the Sessions Judge and ordered accordingly.
It granted certificates under article 134(1)(c) of the Constitution; and that is how these three appeals have been filed by the State before us.
The only question that has been urged before us is that the view of the magistrate is correct and Mehra could be treated as an approver and examined as such for the purposes of the proceedings before him.
The question whether the case should be committed to the Court of Session does not survive now as we are told that one of the accused has asked for trial by the Court of Session as provided under section 13(2) of the Official Secrets Act.
The High Court examined section 337 of the Code of Criminal Procedure and came to the conclusion that a pardon under that section could only be tendered with respect to certain offences mentioned therein.
It was further of the view that as section 5 of the Official Secrets Act read with section 120 B of the Indian Penal Code was not covered by the words of section 337(1) and as the proceedings before the magistrate were only with respect to these offences, Mehra could not be treated as an approver, to whom pardon had been tendered, for the purpose of these proceedings.
A mere perusal of section 337 of the Code of Criminal Procedure shows that the view of the High Court is correct.
Section 337(1) provides for tender of a pardon in respect of the following offences, namely (i) Any offence triable exclusively by the High Court or Court of Session ; (ii) Any offence punishable with imprisonment which may extend to seven years; (iii) Any offence under any of the following sections of the Indian Penal Code: 161, 165, 165 A, 216 A, 369, 401, 435 and 477 A. 359 Thus pardon can only be tendered with respect to an offence which falls in one of these categories.
It is not disputed that an offence under section 5 of the Official Secrets Act read with section 120 B of the Indian Penal Code does not fall within any of these categories.
So if the proceedings were with respect only to an offence under section 5 of the Official Secrets Act read with section 120 B of the Indian Penal Code, section 337 of the Code of Criminal Procedure would not apply and no pardon could be tendered to any person.
It is urged, however, that section 337(1) contemplates tender of a pardon on condition of the person pardoned making a full and true disclosure of the whole of the circumstances within his knowledge relative to the offence and to every other person concerned, whether as principal or abettor in the commission thereof; and this means that the person to whom pardon is tendered is expected to tell the whole truth including details of any other subsidiary offence which might have been committed in the course of the commission of the offence for which pardon is tendered and therefore the pardon so tendered must be held to include the subsidiary offence, even though, if the subsidiary offence alone were committed and were not of the nature mentioned in section 337(i), no pardon could have been tendered for the same.
Reliance in this connection is placed also on section 339 of the Code of Criminal Procedure, which provides that where any person who has accepted pardon either by wilfully concealing anything essential or by giving false evidence, does not comply with the Condition on which the tender was made, he may be tried for the offence in respect of which the pardon was tendered or for any other offence of which he appears to have been guilty in connection with the same matter.
It is said that the specific provision for trial for any other offence which might have been committed in connection with the same matter in section 339 shows that the pardon would cover the other offence also even though it may not be an offence for which the pardon was and could be tendered.
We are of opinion that no such inference could be drawn from the use of these words in section 339, for that 360 section deals with a different contingency altogether, namely, whether the conditions of the pardon had been complied with.
It is to be remembered that a pardon tendered under section 337 is a protection from prosecution.
Failure to comply with the conditions on which the pardon is tendered removes that protection.
All that section 339 says, provided the requisite certificate under that section is given by the Public Prosecutor, is that the person to whom the pardon is tendered can be prosecuted for the offence for which the pardon was tendered as also any other offence of which he appears to be guilty in connection with the same matter.
This would be just the same as if section 339 merely stated that on failure to comply with the conditions of the pardon such pardon would be for feited.
, The words of section 339 therefore are of no help in construing section 337 and we must look to the words of 337 in deciding whether a pardon could be tendered for an offence under section 5 of the Official Secrets Act read with section 120 B of the Indian Penal Code.
The fact that in the application in which the police requested the Additional District Magistrate for tender of pardon or in the order of the Additional District Magistrate tendering pardon, section 5 of the Official Secrets Act was mentioned along with other offences for which pardon could be tendered would not mean that a pardon could be tendered for an offence under that Act if under the law as provided in section 337(1) no pardon could be tendered for an offence under section 5 of the Official Secrets Act.
As we read section 337(1), it is to our mind perfectly clear that pardon can only be tendered under that provision with respect to the three categories of offences mentioned therein and already indicated above and none other.
As section 5 of the Official Secrets Act read with section 120 B of the Indian Penal Code does not fall within any of these categories no pardon can be tendered with respect to that offence.
Therefore, Mehra to whom pardon has been tendered, could not be examined as an approver in the proceedings which are concerned ,only with an offence under section 5 of the Official Secrets Act read with section 120 B of the Indian Penal Code.
361 Learned counsel for the appellant drew our attention to three cases in support of the view that a pardon under section 337(1) could be tendered not only for the offences of the kind enumerated therein but also other offences which might be committed in the course of the commission of the offences enumerated therein but which might not be within the terms of section 337(1).
These cases are: Queen Empress vs Ganga Charan (1) ; Harumal Parmanand vs Emperor (2); and Shiam Sunder vs Emperor (3).
These cases however refer to different circumstances altogether and were not concerned with 'the interpretation of section 337(1) of the Code of Criminal Procedure.
In all these cases the question that arose before the courts was whether an approver who was prosecuted under section 339 for certain offences could be or should be so prosecuted.
They also turned on the terms of the pardon granted in those particular cases.
It was there held that where a question arose how far a pardon would protect an approver, it.
should not be treated in a narrow spirit, bearinG in mind that in countenaiicing tender of pardons to accomplices the law does not invite a cramped and constrained statement by ' the approver but requires a thorough and complete disclosure of all the facts within his knowledge bearing upon the offence or offences as to which he gave evidence.
The considerations which apply when a trial is taking place tinder section 339 of the Code of Criminal Procedure are entirely different.
The proviso to section 339 shows that at his trial, an approver is entitled to plead that he has complied with the condition upon which tender of pardon was made and if he succeeds in proving that he has complied with the conditions upon which the tender was made he is protected from prosecution with respect to all offences which appear to have been committed in connection with the matter giving rise to the offence for which pardon was tendered.
These three cases really turn on the question whether the accused had complied with the conditions upon which the pardon was tendered to him and it was held that be had so complied.
(1) I.L.R. 11 All.
(2) A.I.R. 1915 Sind 43, (3) A.I.R. 1921 All.
234, 362 In those circumstances, the trial under section 339 was held to be bad.
We are not concerned in the present case with section 339.
What we have to decide is whether a pardon under section 337(1) of the Code of Criminal Procedure can be granted in the case of an offence under section 5 of the Official Secrets Act read with section 120 B of the Indian Penal Code.
To that there can be only one answer on the terms of section 337(1), namely, that no pardon can be granted for an offence of this nature.
Therefore, as the present proceedings before the magistrate are only for an offence under section 5 of the Official Secrets Act read with section 120 B of the Indian Penal Code, Mehra cannot be examined as an approver in that court.
There is no force in these appeals and they are hereby dismissed.
Appeals dismissed.
[/INST]On March 9, 1956, a conspiracy to divulge the budget proposals on receiving valuable consideration was discovered and a case was registered under section 165A of the Indian Penal Code, section 5(2) of the Prevention of Corruption Act, 1947, section 5 of the Official Secrets Act, 1923, and section 120B of the Indian Penal Code.
Investigation started on March 10, 1956, and thereafter pardon was tendered to M by the Additional District Magistrate under section 337 of the Code of Criminal Procedure.
Owing to technical legal difficulties a complaint under section 5 of the Official Secrets Act read with section 120B of the Indian Penal Code was filed against the persons involved and proceedings began before a magistrate on this complaint.
In the course of these proceedings the prosecution wanted to examine M as an approver, but the accused persons objected that as the proceedings before the magistrate were only under section 5 of the Official Secrets Act read with section 12 OB of the Indian Penal Code and as no pardon could be tendered under section 337 of the Code of Criminal Procedure for these offences, M could not be treated as an approver but could be examined only as an ordinary witness.
It was contended for the prosecution that as the person to whom pardon was tendered was expected to tell the whole truth including details of other subsidiary offences committed in the course of the commission of the offence for which pardon was tendered, such pardon must be held to include the subsidiary offences though not of the nature mentioned in section 377(1), and therefore M could be considered as an approver in the present proceedings.
Held, that a pardon under section 377(1) of the Code of Criminal Procedure could be tendered only with respect to the offences mentioned therein and that as section 5 of the Official Secrets Act read with section 120B of the Indian Penal Code was not covered by the words of section 337(1) no pardon could be granted for an offence of this nature.
Consequently, as the proceedings before the magistrate were only with respect to these offences, M could not be treated as an approver for the purpose of these proceedings.
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<s>[INST] Summarize the judgementAppeal No. 2315 of 1966.
Appeal from the judgment and order, dated August 25, 1965 of the Madras High Court in Tax Case No. 216 of 1962 (Reference No. 121 of 1962).
Sukumar Mitra and R. N. Sachthey, for the appellant.
T. A. Ramachandran, for the respondent.
The Judgment of the Court was delivered by Shah, J.
Arunachallam Chettiar whom will hereinafter be called "A Senior" had three wives Valami Achi, Lakshmi Achi and Nachiar Achi.
By Valami Achi he had a son who was also called Arunachallam We will call him "A. Junior".
A Junior married Umayal Achi.
A Senior, A. Junior and the wives of the two members formed a joint Hindu family, possessing a large estate in Ceylon.
A. Junior died on July, 9, 1934.
A Senior died on February 1 23, 1.938, leaving heirs running his two wives Lakshmi Achi and Nachiar Achi and his son 's widow Umayal Achi.
The Revenue authorities in Ceylon levied Rs. 221.743 as estate duty in respect of the estate of A. Junior and Rs. 6,33,601.76 in respect of the estate of A. Senior.
The levy was challenged by the three widows and the dispute was carried to the Judicial Committee of the Privy Council.
The Board set aside the entire levy.
In 1957 the Government of Ceylon deposited in Court the duty which was levied together with Rs. 7,97,072 as interest due from the date on which the estate duty was collected.
After the death of A. Senior, there were disputes between the three widows Lakshman Achi, Nachiar Achi and Uniayal Achi, and each widow adopted a son to her deceased husband.
A suit for, partition of the joint family property was then filed in the Civil Court at Deokotai.
Under a settlement reached on February 17, 1949 between the three widows and the adopted son of A. Junior (whom we will hereinafter call the assessee) was held entitled, to 5/24th share in the estate.
This appeal relates to the liability to income tax on the share of the assessee in the amount of interest paid on the estate duty which was refunded by the Ceylon Government after the Judicial, Committee set aside the order levying the estate duty.
The Income Tax officer, karaikudi brought to tax the, 'assessees share of the amount interest received from the Ceylon Government on the estate duty.
The Income tax Officer rejected the, contention of the assessee that the receipt was of a capital nature,: and that in any case it was a casual receipt and on that account 309 exempt from tax under section 4(3) (vii) of the Income tax Act, 1922The order was confirmed by the Appellate Assistant Commissioner.
The Income tax Appellate Tribunal, however, reversed the order holding that the amount of interest received by the assessee was of a capital nature and was on that account not liable to tax.
The Tribunal referred the following question to the High Court of Madras under section 66(1) of the Income tax Act, 1922 "Whether the sum of Rs. 1,20,830 or Any part thereof is assessable to tax ?" The High Court was of the opinion that the assessee 's share in the interest attributable to the period ending February 17, 1947 was not taxable, but the 'share attributable to the period between that date and the date of payment by the Ceylon Government was taxable.
Against that decision, with certificate granted by the High Court the Commissioner of Income tax has appealed to this Court.
The assessee has not appealed against the opinion insofar as it was held that the receipt to the extent to which it related to a period subsequent to February 17, 1947 is taxable.
In the view of.
the High Court the amounts paid as estate duty must be deemed in law to have come from the joint family, estate and on severance of the joint family status,in February, 1947, each adopted son received his share in the estate then existing as capital.
Counsel for the Revenue countended that the High Court erred in holding that the assessee 's share in the amount of interest received from the Ceylon Government Was of the nature of capital.
Counsel submitted that the character of the receipt which was revenue when received by the joint family, could not be altered when it was divided between the members of the family.
Counsel also contended that this Court has held that the share in the amount of interest on estate duty received by the son adopted by Nachiar Achi was liable to be taxed as income: RM.
Ramanathan Chettiar vs Commissioner of Income tax Madras( ') .
But that case has no relevance here.
for the only argument advanced before the Tribunal and the High Court in that case was.
that the receipt was of a casual,and non recurring nature and was on that account exempt from tax under section 4(3) (vii) of the Income tax Act.
This Court negatived the contention.
The Court declined to consider the argument advanced at the Bar that the share allotted to the adopted son of Nachiar Achi being a share in the estate of A. Senior was of the nature of capital, because the question did not arise out of the order made by the Income tax Appellate Tribunal and was not made the subject matter of 'lie reference.
In RM.
Ramanathan (1) L7Sup.
CI.(NP)70 5 310 Chettiar 's case(1) the question argued before the High Court in this case was not raised before the income tax Appellate Tribunal and was not decided.
After the death of A. Senior the property was held by the three widows as members of the Hindu Undevided family.
Under the Hindu Law it is not predicted of a Hindu Joint family that there must be a male member in existence.
Even after the death of the sole male member, so long as the property which was originally of the Joint Hindu family remains in the hands of the widows of the members of the family and is not divided among them, the joint family continues.
Payment of the estate duty was doubtless made out of the joint family fund and the interest which accrued due, also acquired the character of joint family property when received.
The joint family status came to an end only on February 17, 1947.
On the severance of the joint status the assessee became entitled to a share in the family estate.
The amount of interest on the estate duty accrued as income to the joint family but it was income of the joint family and not of the individual members.
But when a share out of the estate which included the interest on estate duty was received by the assessee it had not the character of income.
Once the.
income was received by the joint family, the amount lost its character of income: it became merged in the joint family assets and became the capital 'Of the family.
The share received by the assessee was therefore a share in the capital of the family.
The share in the joint family property which included interest on the estate duty which accrued prior to February 17, 1947 was rightly held by the High Court to be not of the nature of revenue and accordingly not taxable.
We express no opinion on the correctness of the finding of the High Court that the interest accrued due after February 17, 1947, must be regarded as income to the extent of the share of each of the members of the family.
The appeal fails and is dismissed with costs.
R.K.P.S. Appeal dismissed.
[/INST]The respondent appeared in the Intermediate examination and passed, but the appellant, instead of declaring her result, addressed a letter on May 24, 1961, to the Principal of the college in which the Respondent was studying, making enquiries regarding the respondent 's attendance.
According to the regulations, a candidate must attend 75% of the lectures given in each subject.
The Principal, by her letter dated June 14, 1961, replied that the respondent was at one time short of attendance, that she made good the 'shortage in all subjects except one, but the shortage in that subject was due to the fact that lectures Were not given in that subject the lecturer having been on leave.
By its letter dated July 6, 1961, the appellant cancelled the respondent 's result and no reference was made to the Principal 's letter in the appellant 's letter.
The respondent thereupon filed a writ petition challenging the appellant 's order cancelling the result, and the High Court allowed the petition.
In appeal to this Court, HELD : The appellant should have given an opportunity to the respondent to present her case and pursuade the appellant not to cancel her result.
[269 C] Whether a duty arises in a particular case to issue a show cause notice before inflicting a penalty does not depend on the authority 's satisfaction that the person to be penalised has no defence but On the nature of the order proposed to be passed.
In the present case, the impugned order imposed a penalty on the respondent as she was denied the fruits of her labour, and when passing it, the appellant was exercising quasi judicial functions.
[269 D F]
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<s>[INST] Summarize the judgementAppeal No.396 of 1957.
Appeal from the Judgment and Order dated the 21st February, 1956, of the Bombay High Court in Income tax Reference No. 32 of 1954.
, R. J. Kolah, J. B. Dadachanji and section N. Andley, for the appellants.
K. N. Rajagopal Sastri and D. Gupta, for the respondent.
May 5.
The Judgment of the Court was delivered by DAS, C. J.
This is an appeal brought on a certificate granted on September 19, 1956, by the High Court of Bombay under section 66(A)(2) of the Indian Income Tax Act (hereinafter referred to as " the said Act ") against its order dated February 21, 1956, in Income tax Reference No. 32 of 1954 answering in the negative two questions of law referred to it under section 66(1) of the said Act at the instance of the appellants.
The appellants are the trustees of a charity fund known as " The Charity Fund Founded by Sir Sassoon David, Baronet of Bombay ".
The said Sir Sassoon David, Bart.
and four other persons, who were holding certain securities of the value of Rs. 24,25,000 for the purpose of charity and had been applying the same for and towards charitable purposes, executed, on June 8, 1922, a Deed of Declaration of Trust declaring that the said trust fund would be held by them on trusts more specifically therein mentioned.
Clause 13 of the said deed, on the true construction of which depends the answer to the referred questions, runs as follows: " 13.
The Trust Fund shall be held by the Trustees upon the Trusts to apply the net income thereof 926 after providing for all necessary expenses in relation to the management of the Trust Funds for all or any of the following purposes, that is to say, (a) the relief and benefit of the poor and indigent members of Jewish or any other community of Bombay or other parts of India or of the world either by making payments to them in cash or providing them with food and clothes and/or lodging or residential quarters or in giving education including scholarships to or setting them up in life or in such other manner as to the said Trustees may seem proper or. . (b) the institution maintenance and support of hospitals and schools, colleges or other educational institutions or. . . (c) the relief of any distress caused by the elements of nature such as famine, pestilence, fire, tempest, flood, earthquake or any other such calamity or. . . . . (d) the care and protection of animals useful to mankind or. . . (e) the advancement of religion or. . . . (f) other purposes beneficial to the community not falling under any of the foregoing purposes. . . . Provided always that in applying the income as aforesaid the Trustees shall give preference to the poor and indigent relations or members of the family of the said Sir Sassoon David, Bart., including therein distant and collateral relations; provided further that in the application of the income of the said Charitable Trust Fund the said Trustees for the time being shall observe the following proportions, viz.: that not less than half the income of the said funds shall at all times be applied for the benefit of the members of the Jewish Community of Bombay only (including the relations of Sir Sassoon David, Bart.
as aforesaid) and Jewish objects and particularly in giving donations to the members of the Jewish Community of Bombay on the anniversary of the death of the said Sir Sassoon David, Bart.
and his wife Lady Hannah David which falls on the Twenty second day of June and the remaining income for the benefit of all persons and objects including Jewish persons and objects and in 927 such proportions as the said Trustees may think proper.
Provided further that if the income of the Trust Funds for any year shall not be wholly applied during that year on the Trusts aforesaid such surplus income may be carried forward to the subsequent year or years and be applied as the income arising during that year or years.
Provided also that during the life time of Sir Sassoon David, Bart., in the application of the said income the Trustees shall have regard to the wishes of the said Sir Sassoon David, Bart., who shall also be entitled to direct if he so desires that the income of the time being of the Trust Funds or any part thereof may be applied to such charitable object or objects as the said Sir Sassoon David, Bart., shall direct and in such case the Trustees shall so apply the income ".
This Deed of Declaration of Trust was, on June 4, 1953, registered under the Bombay Public Trusts Act, 1950.
The Trust fund had been invested by the trustees in inter alia 3 1/2% Government Securities.
In the year 1930 a certificate was issued by the Income tax Officer, A Ward, Bombay, whereby the Reserve Bank of India was authorised not to deduct at source the tax on the interest on the said securities so held by the trustees.
It was mentioned in the said certificate that it was to enure till its cancellation.
In 1946 the 3 1/2% Government Securities were redeemed by the Government of India and were converted into 3% Con version Loan, 1946.
Accordingly in February, 1948, the said certificate of exemption was cancelled, as the securities covered thereby had been redeemed by the Government.
The trustees thereupon asked for a fresh certificate of exemption from the Income tax Officer, Bombay Refund Circle in respect of the 3% Conversion Loan, 1946.
But the said Income tax Officer refused to issue such certificate on the ground that the income from the trust fund in question was not exempt from taxation under section 4(3)(i) of the said Act which, at the material time, was as follows: "4(1). . . . . . . . . . 928 (2) . . . . . . (3) Any income, profits or gains falling with in the following classes shall not be included in total income of the person receiving them: (i) Any income, derived from property held under trust or other legal obligation wholly for religious or charitable purposes, and in the case of property so held in part only for such purposes, the income applied, or finally set apart for application, thereto: Upon the fact of the withholding of the certificate by the Income tax Officer, Refund Circle, being intimated to the Income tax Officer, A V Ward, Bombay, the latter Officer started proceedings against the appellants under section 34 of the said Act in respect of the assessment years 1944 45 to 1947 48.
He also started regular proceedings for the assessment year 1948 49 and the succeeding years up to 1952 53.
In the assessment proceedings for those nine years the Income tax Officer took the view that the income from the trust fund was not exempt from taxation under section 4(3)(i) and accordingly he assessed the appellants for the first four assessment years (1944 45 to 1947 48) on the ground that the income for those years had escaped assessment.
He also assessed the appellants to tax for the subsequent five years (194849 to 1952 53).
On appeal the Appellate Assistant Commissioner confirmed the said assessments.
On further appeal by the appellants, the Income tax Appellate Tribunal set aside the assessments for the first four years (1944 45 to 1947 48) holding that section 34 had been wrongly invoked, for it was only a case of difference of opinion of one Income tax Officer from his predecessor on the same set of facts.
The department did not take any further steps in the matter and accepted that view of the Tribunal as regards the assessments of those years and we are not in this appeal concerned with them.
As regards the assessments for the five years (1948 49 to 1952 53) the Tribunal upheld the decision of the Appellate Assistant 929 Commissioner who had confirmed the assessments made by the Income tax Officer.
On application being made by the appellants, under section 66(1) of the said Act, the Tribunal drew up a statement of case and referred two questions of law arising out of its order to the High Court for its opinion.
The said questions are as follows : (1) Whether the Trust property is held wholly for religious or charitable purposes within the meaning of section 4(3)(i) of the Indian Income tax Act ? (2) If the answer to question (1) is in the negative, whether the trust property is held in part only for religious or charitable purposes ? The said reference came up for hearing before the said High Court and both the referred questions were answered in the negative.
The High Court, however, gave the appellants a certificate of fitness for appeal to this Court and the present appeal has been filed on the strength of such certificate.
A perusal of cl. 13 of the deed shows that the trust fund is declared to be held by the trustees upon trusts to apply the net income thereof for all or any of the six purposes enumerated therein.
It was conceded before the High Court and it has not been disputed before us that if there was nothing else in this clause, then each of these six purposes would have to be upheld as a charitable purpose involving an element of public utility and consequently within the protection of section 4(3)(i).
The fact that the trustees could expend the net income on any of the six purposes to the exclusion of the other five purposes would not, it is also conceded, have made the slightest difference in the matter of such exemption from income tax.
For instance, if the trustees spent the net income solely and wholly for the purposes mentioned under sub cl.
(a) to the exclusion of those mentioned in sub cls.
(b) to (f)such income would still be exempt from taxation under section 4(3)(i).
The High Court, however, took the view that cl. 13 should be read as a whole along with the provisos and that so read the trust is primarily for the benefit of the relations or members of the family 117 930 of Sir Sassoon David, Bart.
It is pointed out that in applying the net income for the purposes mentioned in sub cl.
(a), the trustees are bound, under the first proviso, to give preference to the poor and indigent relations or members of the family of the said Sir Sassoon David, Bart.
including therein distant and collateral relations.
The second proviso, it is urged, makes it further clear that in the application of the income for the said purpose, the trustees are enjoined to apply not less than half the income for the benefit of the members of the Jewish community of Bombay only " including the relations of Sir Sassoon David, Bart.
, as aforesaid " and the Jewish objects.
Emphasis is laid on the words not less than half " as indicating that it is permissible for the trustees to spend more than half and indeed the whole of the net income for the benefit of the said relations or members of the family of the said Sassoon David, Bart.
It is also pointed out that, although the remaining income, if any, has to be spent for the benefit of all persons and objects including Jewish persons and objects, the trustees could, if they so wished, spend the same also for the relations or members of the family of Sir Sassoon David, Bart.
as Jewish persons.
The argument, which found favour with the High Court, is that the provisos impose a mandatory obligation on the trustees (i) to give preference to the poor and indigent relations or members of the family of Sir Sassoon David, Bart.
and (ii) to spend not less than half the income, which may extend to the entire income, for the benefit of the relations or members of the family of Sir Sassoon David, Bart.
The High Court points out that in view of the language of el. 13 of the deed read as a whole, it is open to the trustees, without being guilty of any breach of trust, to spend the entire net income of the trust fund for the purpose of giving relief to the poor and indigent relations or members of the family of the said Sir Sassoon David, Bart., including therein the distant and collateral relations and such being the position, the High Court came to the conclusion that it could not be said that the property was held wholly or partly for religious or 931 charitable purposes involving an element of public utility.
The High Court accordingly held that the income from the trust fund was not exempt from taxation under section 4(3)(i) and answered both the questions in the negative.
The problem before us is whether the High Court was right in so answering the questions.
In coming to the decision that it did, the High Court relied on its own earlier decision in the case of Trustees of Gordhandas Govindram Family Charitable Trust vs Commissioner of Income tax (Central), Bombay (1).
The facts in that case, however, were somewhat different from the facts now before us.
In that case the trust was significantly enough described as " Gordhandas Govindram Family Charitable Trust ".
Clause 2 of that trust deed provided for the application of tile net income in giving help or relief to such poor Vaishyas and other Hindoos as the trustees might consider deserving of help in the manner and to the extent specified in the said trust deed and subject to the conditions and directions stated in the next following clauses.
Sub clause (a) of cl. 3 provided that Vaishya Hindoos who were members of Seksaria family should be preferred to poor Vaishyas not belonging to the said family.
Maintenance had to be provided under sub cl.
(b) for the poor male descendants of the settlor and under sub cl.
(c) for the poor female descendants of the settlor.
Marriage expenses were provided under sub el.
(d) for the poor male descendants and under sub cl.
(e) for the poor female descendants of the settlers There were other subclauses providing for payment of money to the poor male or female descendants of the other members of the Seksaria family.
In the present judgment now under appeal, the High Court recognises that the particular trust they were dealing with in the earlier case " was a fairly blatant illustration of a settlor trying to benefit his own family and his own relations " and states that in the earlier case it had pointed out " that the benefit to the public was too remote and too illusory and accordingly held that was (1) 932 not a trust which had for its object a general public utility ".
Such, however, cannot be said of the provisions of the present Deed of Declaration of Trust.
Under el. 13 the trustees are at liberty to hold the trust fund and to apply the net income thereof for all or any of the six purposes mentioned therein.
The relations or members of the family of the said Sir Sassoon David, Bart., including therein distant and collateral relations do not figure as direct recipients of any benefit under sub cls.
(b) to (f) and, therefore, in so far as those purposes are concerned the trust certainly involves an element of public utility.
We are not unminaful of the fact that it is open to the trustees to spend the net income entirely for the purpose referred to in sub cl.
(a) to the exclusion of the other clauses.
But the very fact that the relations or members of the family do not come in directly under any of those latter sub clauses cannot be ignored, for they certainly have some bearing on the question as to who or what were the primary objects of the trust as a whole.
In the next place, the purpose of sub cl.
(a) is the "relief and benefit of the poor and indigent members of Jewish or any other community of Bombay or other parts of India or of the world ".
It is conceded by learned counsel that this sub clause clearly expresses a general charitable intention involving an element of public utility.
It follows, therefore, that sub cl.(a) constitutes a valid public charitable trust having as its beneficiaries the several classes of persons referred to therein.
This is the first position.
We then pass on to the provisos.
The first proviso opens with the words " in applying the income as aforesaid ".
This takes us back to sub cl.
The meaning of the proviso obviously is that in applying the income for the purpose of sub el.
(a), the trustees shall give preference to the poor and indigent relations or members of the family of Sir Sassoon David, Bart.
The proviso does not operate independently but comes into play only " in applying the income as aforesaid".
The provision for giving preference involves the idea of selection of some persons out of a bigger class envisaged in subel.
The poor and indigent relations or members of 933 the family can claim to participate in the benefits under the trust only if they come within one of the several classes enumerated in sub el.
To take an extreme example: If a poor and indigent relation of Sir Sassoon David, Bart.
abjures the faith held by the Jewish community and does not adopt any other faith and thus ceases to be a member of the Jewish community but does not become a member of any other community, he will certainly not be entitled to the benefits of sub el.
(a) although he is a poor and indigent relation or member of the family of Sir Sassoon David, Bart.
within the meaning of the first proviso.
In other words, sub cl.
(a) prescribes the primary class of beneficiaries out of which the actual beneficiaries are to be selected by the application of the provisions of the provisos, that is to say, by giving preference to the relations or members of the family of the said Sir Sassoon David, Bart.
The case of In re Koettgan 's Will Trusts (1) appears to us, on the facts, to be more in point than the case of Gordhandas Govindram Family Charity Trust case (2) relied on by the High Court.
In the last mentioned English case the testatrix bequeathed her residuary estate upon trust for the promotion and furtherance of commercial educa tion.
The persons eligible as beneficiaries under the fund were stated to be ,persons of either sex who are British born subjects and who are desirous of educating themselves or obtaining tuition for a higher commercial career but whose means are insufficient or will not allow of their obtaining such education or tuition at their own expense. " The testatrix further directed that in selecting the beneficiaries " it is my wish that the . trustees shall give preference to any employees of John Batt & Co. (London) Ltd. or any members of the families of such employees; failing a sufficient number of beneficiaries under such description then the persons eligible shall be any persons of British birth as the trustees may select provided that the total income to be available for benefiting the pre ferred beneficiaries shall not in anyone year be more than 75% of the total available income for that (1) , 257.
(2) 934 year".
It was held, on a construction of the will, that the gift to the primary class from which the trustees could select the beneficiaries contained the necessary element of benefit to the public and that it was when that class was ascertained that the validity of the trust had to be determined, so that the subsequent direction to prefer, as to the 75% of the income, a limited class did not affect the validity of the trust which was accordingly a valid and effective charitable trust.
Referring to the first part of the will Upjohn, J., at p. 257 said: " If the will concluded there, the trust would clearly be a valid charitable trust, having regard to the admission that a gift for commercial education is for the advancement of education.
" Then after stating that the next task was to make a selection from that primary class of eligible persons, the learned Judge continued: " It is only when one comes to make a selection from that primary class that the employees of John Batt & Co. and the members of their families come into consideration, and the question is, does that direction as to selection invalidate the primary trust ? In my judgment it does not do so.
" Further down he said: "In my judgment it is at the stage when the primary class of eligible persons is ascertained that the question of the public nature of the trust arises and falls to be decided, and it seems to me that the will satisfies that requirement and that the trust is of a sufficiently public nature.
" The learned Judge then concluded: " If, when selecting from that primary class the trustees are directed to give a preference to the employees of the company and members of their families, that cannot affect the validity of the primary trust, it being quite uncertain whether such persons will exhaust in any year 75%.
On the true construction of this will, that is not (as to 75%) primarily a trust for persons connected with John Batt & Co., and the class of persons to benefit is not " confined " to them, and in my judgment the trust contained in clauses 7 935 and 8 of the will of the testatrix is a valid charitable trust.
" It is true that this is a judgment of a Single Judge but it does not appear to have been departed from or over ruled in any subsequent case and appears to us to be based on sound principle.
Applying this test, there can be no question indeed it has been conceded that the earlier part of el. 13, omitting the provisos, constitutes a valid public charitable trust.
The circumstance that in selecting the beneficiaries under subel.
(a) preference has to be given, under the provisos, to the relations or members of the family of Sir Sasoon David, Bart., cannot affect that public charitable trust.
In our judgment, the facts of this case come nearer to the facts of the English case referred to above than to the facts of the earlier decision of the Bombay High Court in Gordhandas Govindram Family Charity Trust case (1).
As we have already stated the relations of members of the family are clearly not the primary object contemplated by sub cls.
(b) to (f).
The first part of sub cl.
(a), omitting the provisos, is not said to be too wide or vague and unenforceable.
The provision for giving preference to the poor and indigent relations or the members of the family of Sir Sassoon David, Bart., cannot affect the public charitable trust constituted under sub cl.
In our opinion the income from the trust properties comes within the scope of section 4(3)(i) and is, therefore, entitled to exemption.
Therefore the negative answer given by the High Court to question No. I cannot be supported and that question should be answered in the affirmative.
In this view of the matter, question No. 2 does not arise and needs no answer.
The result is that this appeal must be allowed and the question No. I must be answered in the affirmative.
The appellants will have the costs of the reference in the High Court and of this appeal in this Court.
Appeal allowed.
[/INST]Clause 16 of the General Order No. 6,5 made by the Governor on March I5, 195,, under the Uttar Pradesh , 947, provided that the decision of the Tribunal or 972 Adjudicator shall be pronounced within 4o days from the date of reference.
By orders dated August 19, 1952, and January 20, 1953, the Governor referred two industrial disputes for adjudication.
The references did not specify the time within which the awards were to be submitted but stated that the disputes were to be adjudicated in accordance with the provisions of Order No. 615.
In the first reference the period for making the award was extendad from time to time up to March 10, 1953, but in the second reference the time was not extended.
On February 18, 1953, before the awards were made, cl. 16 of Order No. 615 was amended and the time Of 4o days was altered to 18o days.
The award in the first case was made on April 17, 1953, beyond 180 days of the reference, and in the second case on June 26, 953, beyond 40 ,lays of the reference but within 180 days thereof.
On May 22, 1953, the Uttar Pradesh Industrial Disputes (Amendment) Ordinance, 1951, came into force which conferred, with retrospective effect, power on the State Government to enlarge, from time to time, the period for making an award and which also validated certain awards not made within the time originally fixed for making them.
The Labour Appellate Tribunal held that the two awards were not valid in law as they had not been made within time.
It was contended by the appellant that as cl. 16 of the Order No. 6I5 had been amended the orders of reference must be construed as specifying 180 days within which the awards were to be submitted, and that, in any case, the awards were validated by section 3 of the Ordinance.
Held, that the award in the first case was submitted beyond time and was invalid and could not be validated by section 3 Of the Ordinance but that the award in the second case, though submitted beyond time, was validated by section 3(2) of the Ordinance.
The Act required the awards to be submitted within a speci fied time and although the orders of reference specified no time it was stated therein that the references were to be decided in accordance with the provisions of Order No. 615, and as such the orders must be read as specifying 4o days as the time within which the awards had to be submitted.
The subsequent amendment of cl. 16 whereby 180 days were substituted for 4o days could not affect an order of reference previously made as cl. 16, as amended, could not be held to have retrospective operation.
On a true construction Of section 3 Of the Ordinance cl.
(1) must be held to validate all orders of extension of time for submission of awards made prior to the commencement of the Ordinance, cl.
(3) applies to proceedings pending at the commencement of the Ordinance and makes section 6 A of the Act, introduced by the Ordinance, applicable to such proceedings and cl.
(2) validatesawards against which no judicial proceedings were pending at the commencement of the Ordinance and not only awards which had become final.
Consequently, the award in the first case against which an appeal had been filed before the commencement of the 973 Ordinance and to which cl.
(3) Of section 3 of the Ordinance applied was bad as it was made beyond the last date of the enlargement of time.
But the award in the second case against which the appeal was filed after the commencement of the Ordinance was validated by el.
(2) Of section 3 of the Ordinance.
</s>
|
<s>[INST] Summarize the judgementivil Appeal No. 4457 of 1989.
Appeal under Section 35 L(b) of the Central Excise and Salt Act, 1944 from the Order No. 285/89 C dated the 29th June, 1989 of the Customs, Excise and Gold (Control), Appel late Tribunal, New Delhi in Appeal No. E/2489/87 C. K.K. Venugopal, D. Shroff, Ravinder Narain, Raj Darak, P.K. Ram and D.N. Mishra for the Appellant.
Kapil Sibal, Additional Solicitor General, P. Parmeshwa ran and Ms, Indu Malhotra for the Respondent.
The Judgment of the Court was delivered by S.C. AGRAWAL, J.
This appeal involves the question whether the products, Bifuran Supplement, Neftin 50 and Neftin 200, manufactured by the appellant, are chargeable to excise duty as 'patent or proprietary medicines ' under Item 14 E of the First Schedule to the Central Excise and Salt Act, 1944, (hereinafter referred to as the 'Excise Tariff ') or the said products are exempted from excise duty under notification No. 6/84 dated February 15, 1984, as animal feed supplement.
At the relevant time Item 14 E of the Excise Tariff was as under. "14 E Patent or proprietary medicines not containing alco hol, opium, Indian Hemp or other narcotic drugs or 446 other narcotics other than those medicines which are exclu sively Ayurvedic, Unani, Sidha or Homeopathic.
Explanation I 'Patent or Proprietary Medicines ' means any drug or medicinal preparation, in whatever form, for use in the internal or external treatment of, or for the prevention of ailments in human beings or animals which bears either or itself or on its container or both, a name which is not specified in a monograph in a pharmacopoeia, formulacy or other publications notified in this behalf by the Central Government in the Official Gazette, or which is a brand name, that is, a name or a registered trade mark under the (43 of 1958), or any other mark such as a symbol, monogram, label, signature or invented words or any writing which is used in relation to that medicine for the purpose of indicating or so as to indicate a connection in the course of trade between the medicine and some person, having the right either as a proprietor or otherwise to use the name or mark with or without any indication of the identity of that person.
Explanation II 'Alcohol ', 'Opium ', 'Indian Hemp ', 'Narcotic Drugs ' and 'Narcotics ' have the meanings respec tively assigned to them in Section 2 of the .
" Item 68 of the Excise Tariff was in the nature of a residuary provision and it read as under: "All other goods, not elsewhere specified but excluding: (a) alcohol, all sorts, including alcoholic liquors for human consumption; (b) opium, Indian Hemp and other narcotic drugs and narcot ics; and (c) dutiable goods as defined in Section 2(c) of the Medici nal and Toilet Preparations (Excise Duties) Act, 1955 (16 of 1955).
Explanation For the purpose of this Item, goods which 447 are referred to in any preceding Item in this Schedule for the purpose of excluding such goods from the description of goods in that Item (whether such exclusion is by means of an Explanation to such Item or by words of exclusion in the description itself or in any other manner) shall be deemed to be goods not specified in that Item." In exercise of the powers conferred by sub rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Gov ernment issued notification dated February 28, 1982 whereby the goods of the descriptions specified in the Schedule annexed to the said notification and falling under Item 68 of the Excise Tariff were exempted from the levy of central excise duty.
Entry at section No. 10 in the Schedule annexed to the said notification was: "Animal feed including compound live stock feed." The said notification dated February 28, 1982 was super seded by notification dated November 1, 1982, which also exempted from levy of central excise duty goods of the description specified in the Schedule annexed to the said notification falling under Item 68 of the Excise Tariff.
Entry at section No. 10 in the Schedule annexed to the said notification was in the same terms as in the previous noti fication dated February 28, 1982.
The notification dated November 1, 1982 was amended by notification dated February 15, 1984 whereby entry at section No. 10 in the Schedule annexed to the notification dated November 1982 was substituted by the following entry: "Animal feed including compound live stock feed, animal feed supplements and animal feed concentrates.
" By the aforesaid notification dated February 15, 1984, the following explanation was also inserted: "Explanation II For the purposes of this notification.
the expression (i) "animal feed supplements" means an ingredient or combi nation of ingredients, added to the basic feed mix or parts thereof.
to fulfil a specific need, usually used in micro quantities and requiring careful handling and mixing; (ii) "animal feed concentrates" means a feed intended to 448 be diluted with other feed ingredients to produce complete food of optimum nutrient balance.
" The appellant carries on business as manufacturer of pharmaceuticals.
Among the products manufactured by it are Bifuran Supplement, Neftin 50 and Neftin 200.
Prior to the notification dated February 15, 1984 the appellant was classifying the products mentioned above under Item 14E and was paying central excise duty on that basis.
After the notification dated February 15, 1984 the appellant filed a classification list effective from March 1, 1984 whereby the above mentioned products were classified as 'animal feed supplements ' under Item 68 and exemption was claimed under notification dated February 15, 1984.
The said classifica tion list submitted by the appellant was approved by the Assistant Collector of Central Excise on June 4, 1984.
Subsequently the Assistant Collector realised that the said classification had been wrongly approved and he gave a show cause notice dated January 31, 1985 to the appellant wherein it was stated that the above mentioned products classified by the appellant to be "animal feed supplement" do not appear to fulfil the conditions enumerated in the notifica tion dated February 15, 1984 and the appellant was required to show cause why the exemption granted to the said products should not be withdrawn.
The appellant submitted a reply dated March 29, 1985 to the said show cause notice.
After considering the said reply Assistant Collector passed an order dated August 21, 1985 whereby it was held that the exemption granted to the above mentioned products of the appellant has to be withdrawn with effect from March 1, 1984 as the conditions set out in the Notification No. 6/84 dated February 15, 1984 had not been fulfilled and the duty involved on the clearance of the said formulations had to be paid and further clearance could be effected under the revised classification list by including these items in Tariff Item 14E. The ' said order was set aside, on appeal, by the Collector of Central Excise (Appeals) by his order dated December 12, 1985 and the matter was remanded to the Assistant Collector to decide the classification in de novo proceedings after recording evidence to establish that the product has definite therapeutic or preventive value for disease in animals.
Thereafter the Assistant Collector initiated de novo proceedings.
The appellant submitted written submissions and filed documents.
After giving a personal hearing to the representation of the appellant the Assistant Collector passed an order dated November 17/21, 1986 holding that products Neftin 50, Neftin 200 and Bifuran Supplement manufactured by the appellant are correctly classifiable under erstwhile Tariff Item 14E and that effec tive from February 8, 1986 the said products are 449 classifiable under sub heading 3003.9.
The said order was set aside by the Collector of Central Excise (Appeals) by his order dated May 28. 1987.
who held that the said products are animal feed supplements and these products merit classification only under the erstwhile Tariff Item 68 and not under Tariff Item 14E. Aggrieved by the said order of the Collector (Appeals) the Department filed an appeal before the Customs, Excise & Gold Control Appellate Tribu nal, which was allowed by order dated June 29, 1989.
The tribunal held that the aforesaid three products manufactured by the appellant are patent and proprietary medicines as defined in Tariff Item 14E inasmuch as they have therapeutic and preventive use in respect of the specific ailments in animals.
The tribunal was also of the view that if the products satisfy the requirements of Tariff Item 14E there was no question of considering their classification under Tariff Item 68, which is a residuary item.
Aggrieved by the said order of the tribunal the appellant has filed this appeal under Section 35L of the Central Excise and SaIL Act, 1944.
During the course of arguments Shri K.K. Venugopal, the learned counsel for the appellant fairly stated that accord ing to the printed pamphlet issued by the appellant the use of Bifuran Supplement is to promote growth rate, weight gains and feed conversion efficiency in growers and broilers by keeping coccidiosis away during growing period, and that the said product can be regarded as preventive medicine failing under Tariff Item 14E and he has confined his sub missions in respect of the other two products, namely, Neftin 50 and Neftin 200.
Shri Venugopal has urged that Neftin 50 and Neftin 200 are manufactured by the appellant for use as animal feed supplement and not for use as medicine and therefore they should have been classified as animal feed supplement under Tariff Item 68 and were exempted from payment of central excise duty under notification dated February 15. 1984.
Shri Venugopal has invited our attention to the printed litera ture issued by the appellant for the sale of these products as well as certain certificate issued with regard to the use of these products as additive to poultry feed and their usefulness for that purpose.
Shri Venugopal has pointed out that in the printed literature it has been specifically mentioned: "For use in poultry feed only.
Not for medicinal use.
" Shri Venugopal also pointed out that as regards uses of Neftin 50 and Neftin 200 it is stated in the said printed literature: 450 "To improve egg production, feed/egg ratio and hatchability in layers; to increase weight gains and growth rate in broilers and growers." The learned Additional Solicitor General, on the other hand, has urged that both these products are patent and proprietary medicines chargeable to central excise duty under Tariff Item 14E.
In this connection the learned Addi tional Solicitor General has pointed out that Neftin 50 contains Furazolidone 5% W/W and Neftin 200 contains Furazo lidone 20% W/W.
The submission of the learned Additional Solicitor General is that Furazolidone is used as an aid in the prevention of coccidiosis as well as for treatment of coccidiosis and that Furazolidone is a patent drug and in England it is sold to the public on the prescription of a registered practitioner only.
The learned Additional Solici tor General also urged that the finding that aforesaid two products are patent and proprietary medicines falling under Tariff Item 14E is essentially a finding of fact based on the materials placed before the excise authorities and the said finding is not normally open to challenge in appeal before this Court.
The submission of the learned Additional Solicitor General is further that in the present case it cannot be said that the aforesaid products manufactured by the appellants can be regarded as animal feed supplement as defined in Explanation II, inserted by notification dated February 15,1984 in the notification dated November 1, 1982.
In the instant case we are not required to consider the scope of two competing entries of the Excise Tariff because Item 68 was a residuary entry which dealt with all other goods not elsewhere specified.
A product which is found to be covered by the other items of the Schedule of the Excise Tariff would be outside the ambit of Item 68.
Therefore, the primary question to be considered is whether the products in question, namely, Neftin~50 and Neftin 200, are patent and proprietary medicines falling within Item 14E.
In this context we may refer to the decision of this Court in Dunlop India Ltd. vs Union of India and Others, ; where the question was whether V.P. Latex manufactured by the appellant in that case was raw rubber and classifiable under Item 39 or it was classifiable under the residuary entry contained in Item 87.
It was found that V.P. Latex fell within Item 39 and in view of the said finding it was held that it could not fall within the resid uary entry of Item 87.
It was observed: 451 "When an article has, by all standards, a reasonable claim to be classified under an enumerated item in the Tariff Schedule, it will be against the very principle of classifi cation to deny it the parentage and consign it to an orphan age of the residuary clause.
The question of competition between two rival classification will, however, stand on a different footing." (P. 113).
Similarly in Collector of Central Excise, Kanpur vs Krishna Carbon Paper Co.; , the question was whether carbon paper was taxable under Item 17 or under the residuary entry at Item 68.
It was found that carbon paper was taxable as paper under Item 17(2) and, therefore, it would not fall in the residuary entry at Item 68.
As noticed earlier, Item 14E refers to patent or pro prietary medicines.
The expression 'patent or proprietary medicines ' has been defined in Explanation I in Item 14E to mean any drug or medicinal preparation, in whatever form, for use in the internal or external treatment of, or for the prevention of ailment in human beings or animals.
What is, therefore, required is that the product must be a prepara tion for use in the treatment or prevention of ailments in human beings or animals.
Neftin 50 contains Furazolidone 5% W/W and Neftin 200 contains Furazolidone 20% W. The Assist ant Collector in his order dated 17/21 November, 1986 has referred to the following authorities on the subject.
(a) British Pharmacopoeia 1980, Vol.
I, wherein with refer ence to Furazolidone it has been stated: "A yellow crystalline powder, odourless, to be protected from light.
An antibacterial, antifungal and antiprotozol." (P. 205) (b) British Pharmacopoeia Codex 1979 wherein it has been stated: "A bacteriacide which is observed only slightly from the intestinal mucosa and has therefore been used in the treat ment of bacterial diarrhoea and gestro enteritis.
It is also active against, "Giardia lamblia." "Furazolidone is used in animals as an antibacterial agent 452 and for the promotion and treatment of histomoniasis." "For histomoniasis in poultry, the usual prophylectic dosage is 100 ppm in the feed and the usual therapeutic dosage is 400 ppm in the feed for 10 days." (P. 376) (c) Scientific Foundations of Veterinary Medicine, 1980 Edn.
: "Bloody or cecal coccidiosis is an acute hemorrhagic disease and is the most severe form of coccidiosis in chickens." "Furazolidone is fed continuously at 0.0055% in the feed as an aid in the prevention of coccidiosis caused by E. tenel la, E. necatrix, and E. acervulina.
Furazolidone can also be used for the treatment of these same coccidia species when fed at 0.011% for 5 to 7 days." (P. 193) (d) Medicines and Poisons Guide, 2nd Edn. 1980, prepared by the Law Department of Pharmaceutical Society of Great Brit ain: "Furazolidone is a prescription only veterinary drug and by virtue of an entry in the medicines order (prescription only) may be sold or supplied to the public only on a prac titioner 's prescription." (P. 59) These observations indicate that Furazolidone is an antibacterial, antifungal and antiprotozol compound and it is used for prevention and treatment of coccidiosis as well as histomoniasis in poultry.
From this material it also appears that in England Furazolidone is a prescription only veterinary drug and it can be sold or supplied to the public on a practitioner 's prescription only.
Furazolidone is thus a drug or medicinal preparation used for treatment and prevention of ailments in poultry and since Neftin 50 and Neftin 200 contain only Furazolidone, the said products are also drugs or medicinal preparations for use in the treat ment and prevention of ailments in poultry.
In this context it would be relevant to mention that apart from Neftin 50 and Neftin 200 the appellant also manufactures Neftin Tab lets.
The appellant has not disputed that Neftin Tablets manufactured by it are drugs or medicines falling within the ambit of Item 14E and it pays central excise duty on the same.
Shri Venugopal has laid stress on the word "used" in Explanation I in Item 14 ,red has submitted that Neftin Tablets are manufactured 453 for use as medicine whereas Neftin 50 and Neftin 200 are manufactured for use as animal feed supplement and are not manufactured for use as medicine.
Shri Venugopal has invited our attention to the decision of this Court in Annapurna Carbon Industries Co. vs State of Andhra Pradesh, ; In that case the question for consideration was whether Cinema Arc Carbons were taxable to sales tax under the entry relating to cinematographic equipment and parts and accessories 'required for use therewith '.
This Court held that the main use of the arc carbon was proved to be that of production of powerful light used in projectors in cinemas and the fact that they can also be used for search lights, signalling, stage lighting or where powerful light ing for photography or other purposes may be required, could not detract from the classification to which the carbon arc belong, which is determined by their ordinary or commonly known purpose or user and hence their sale was subject to sales tax under the said entry.
Here we find that Neftin 50 and Neftin 200 contain Furazolidone which is administered for prevention and treatment of ailments viz., Coccidiosis and Histomoniasis in poultry.
Merely because Neftin 50 and Neftin 200 can also be used for improving egg production and increase in growth rate of broilers would not in any way detract from the fact that the said products are medicines for use in the treatment and prevention of ailments in poultry.
Once it is found that Neftin 50 and Neftin 200 are medicines for use for treatment and prevention of ailments in poultry they have to be regarded as patent and proprie tary medicines chargeable to excise duty under Item No. 14E and the question whether the said products fail in the residuary, entry at Item 68 does not arise.
The exemption from payment of central excise duty which has been granted under notification dated November 1, 1982 as amended by notification dated February 15, 1984, is confined in its application to goods specified in the Sched ule annexed to the said notification which fall under Item 68.
The said notification does not grant exemption in re spect of a product falling in any other entry of the excise tariff.
It cannot be construed as transferring a product from an entry other than Item 68 to Item 68.
The insertion of animal feed supplement in the Schedule to the Notifica tion dated November 1, 1982 by the Notification dated Febru ary 15, 1984, would not mean that a product which was liable to payment of central excise duly under Item 14E prior to such insertion would cease to be so liable and would become exempt from such payment of duty by virtue of this notifica tion.
It is not disputed that prior to the notification dated February 15, 1984.
the appellant was paying central excise duty on Neftin 50 and Neftin 200 454 patent and proprietary medicines falling under Item 14E.
In the absence of any notification granting exemption in respect of products falling under Item 14E, Neftin 50 and Neftin 200, which are patent and proprietary medicines falling under Tariff Item 14E and which do not fall under the residuary entry at Item 68, cannot be claimed to be exempt from central excise duty as animal feed supplement under notification dated November 1, 1982, as amended by notification dated February 15. 1984.
Shri Venugopal has contended that the appellant has been subjected to arbitrary and hostile discrimination inasmuch as similar products of other manufacturers which contain the same percentage of Furazolidone as Neftin 50 and Neftin 200 are being exempted from payment of central excise duty under notification dated November 1, 1982.
as amended by notifica tion dated February 15, 1984.
In support of this submis sion Shri Venugopal has invited our attention to the pam phlets issued by other manufacturers about their products and the contents of those products.
Shri Venugopal has placed reliance on the decisions of the U.S. Supreme Court in Cumberland Coal Co. vs Board of Revision, 76 Law Edn. 147 and Iowa Des Moines National Bank vs E.R. Bennett, 76 Law Edn. 265 as well as the decision of this Court in Vishnudas Hindumal Etc.
vs State of Madhya Pradesh and Ors.
, ; The learned Additional Solicitor General has submitted that the other manufacturers referred to by Shri Venugopal are located at different places and are assessable to excise duty by different authorities and that merely because the relevant notifications have been wrongly applied to those manufacturers by the concerned authorities and the said manufacturers are enjoying exemption from duty in respect of their products would not mean that the impugned order passed against the appellant is liable to be quashed on the ground on violation of the right to equality under Article 14 of the Constitution.
The learned Additional Solicitor General has also stated that proceedings would be initiated against those manufacturers in the light of the decision of this Court in this case.
It is not the case of the appellant that the same au thority has passed orders discriminating between the appel lant and other producers of similar products.
The grievance of the appellant is that on account of difference in the interpretation of notification dated February 15, 1984, amending notification dated November 1, 1982, by the excise authorities in other regions while the appellant is being required to pay excise duty on Neftin 50 and Neftin 200 manufactured by it, other manufacturers of similar products in other regions are 455 enjoying exemption from payment of such duty.
The appellant, in substance, wants that because other producers have been granted exemption, though wrongly, the same exemption should be extended to it.
In our opinion this is impermissible.
The appellant cannot obtain such an exemption in disregard of the law by invoking the right to equality before the law and equal protection of the laws guaranteed under Article 14 of the Constitution.
A similar question arose before this Court in Narain Dass vs The Improvement Trust, Amritsar & Another, AIR 1972 S.C. 865.
In that case it was contended that while administering Section 56 of the Punjab Town Improvement Act, 1922, there had been hostile discrimination against the appellants because lands under orchards belonging to persons similarly placed had been exempted whereas the appellants had been refused exemption.
Rejecting this contention this Court has observed: "In any event if the appellants had failed to bring their case within Section 56 of the Act, then merely because some other party had erroneously succeeded in getting his lands exempted ostensibly under that Section that by itself would not clothe the present appellants with a right to secure exemption for their lands.
The rule of equality before the law or of the equal protection of the laws under Article 14 could not be invoked in such a case.
" In Cumberland Coal Co. (Supra) and Iowa Des Moines National Bank (supra) it was found that there was intention al and systematic discrimination in favour of certain per sons by the officials administering the law.
In the instant case it is not said that there has been intentional and systematic discrimination in favour of the producers other than the appellant.
The said decisions have, therefore no application to the present case.
Vishnudas Hindureal vs State of Madhya Pradesh (Supra) was in respect of a scheme for nationalisation of motor transport whereunder the permits of the appellants before this Court had been curtailed and they were prohibited from operating their stage carriages on that portion of the route for which they had permits which was overlapping with the notified route while others similarly situate were permitted to ply their stage carriages over the routes for which they had permits passing over a portion of the notified route without any let or hindrance and their permits were neither curtailed nor cancelled.
This Court found that this was due to an error or omission on the part of the Regional Trans port Authority in not supplying full information to the 456 Special Secretary about all the valid permits in force at the relevant date, After referring to the decision of this Court in Ramnath Verma vs State of Rajasthan, ; wherein it was held that discrimination under Article 14 is conscious discrimination and not accidental discrimination that arises from oversight which the State is ready to rectify, this Court observed: " We did not find any willingness on the part of the State authorities to rectify the error in the High Court or before this Court." In these circumstances.
this Court, instead of rejecting the whole scheme, considered it appropriate to rectify the same by removing the discrimination by putting the appel lants before it in the same class as those who had enjoyed favourable treatment by inadvertance on the part of the Regional Transport Authority.
The present case stands on a different footing.
Here the discrimination complained of arises on account of orders passed by different excise authorities acting quasi judicially.
Moreover it cannot be said that there is no willingness on the part of the author ities to recover excise duty on similar products manufac tured by other producers because the learned Additional Solicitor General, during the course of his arguments, has indicated that proceedings would be initiated against those manufacturers in the light of the decision of this Court in this case.
The decision in Vishnudas 's case (supra) has, therefore, no application to the present case.
For the reasons aforesaid we find no substance in this appeal and it is accordingly dismissed.
There will be no order as to costs.
P.S.S. Appeal dismissed.
[/INST]The Water (Prevention & Control of Pollution) Act, 1974 was enacted inter alia to provide for the prevention and control of water pollution, the maintaining or restoring of wholesomeness of water, etc.
Section 25 of the said Act provides that no person shall without the consent of the State Board, bring into use any new or altered outlet for the discharge of sewage or trade effluent into a stream or well, or begin to make any new discharge of sewage or trade effluent into a stream or well.
Section 26 lays down that persons discharging sewage or trade effluent into a stream or well before the commencement of the Act shall apply for consent within a period of three months of the Constitution of State Board.
Thereafter the was enacted to provide for the levy and collection of cess on water consumed by persons carrying on certain industries, Power (Thermal & Diesel) Generating Industry was one such industry included at item No. 14 in Schedule I to the Act.
Section 3 of the 1977 Act provides that there shall be levied and collected a cess for the purposes of the 1974 Act and utilisation thereunder.
The cess under the Act is made payable by every person carrying on any specified industry and the same has to be calculated on the basis of the water actually consumed at rates speci fied in the Schedule.
Section 7 of the Act provides for rebate.
The appellant has established a Thermal Power Station on the bank of River Chambal for generating energy.
It consumes water from the river for condensor cooling.
After the water is used for cooling, it is treated as a trade effluent in the neutralisation plant before it is discharged into the river.
According to the appellant, the temperature, 121 after following the prescribed procedure, is brought down to below 40 C, when it is discharged into the river.
The appel lant had also installed a 0.4 MGD plant for treatment of sewage.
According to the appellant both these plants are working satisfactorily.
The appellant, as required by the rules, submitted monthly returns of the water consumed from the river for its Thermal Station for the period from July 1983 to January 1984 and February 1984 to June 1984.
The respondent authority.
assessed the cess at Rs.13,13,710 for the first period and Rs.9,42,013 for the subsequent period.
No rebate was allowed under Section 7 of the 1977 Act on the ground that the so called neutralisation plant was not a plant for the treatment of sewage or trade effluent within the meaning of the said provision.
The appellant filed an appeal under section 13, in respect of the cess claimed for the period July 1983 to January 1984, but the appellate authority dismissed the same holding that the cess was correctly assessed and that the appellant was not entitled to rebate.
As regards the period from February 1984 to June 1984.
the appellant submitted a review petition which was rejected by respondent No. 2.
Thereupon, the appellant filed separate writ petitions before the High Court challenging the assessment orders.
Both the writ petitions were dismissed by the High Court.
The High Court opined that there was nothing on record to show that the appellant had applied for consent of the State Board to install a plant either under section 25 or section 26 of the 1974 Act nor was there any evidence to show that such consent was given.
It accordingly held that the author ities under the Act had rightly disallowed the claim of rebate to the appellant under section 7.
Against the orders of the High Court as also against various assessment orders which were passed subsequent to the orders of the High Court the appellant has filed these appeals, after obtaining special leave.
Allowing the appeals, and remanding the cases to the Assessing Authority for fresh disposal, this Court HELD: A plant has undoubtedly been installed for the treatment of sewage and no dispute in that behalf was raised.
However, as the bulk consumption of water from the river is used at the condensor cooling plant the question is whether the appellant can be said to have installed a plant for the treatment of a trade effluent.
[130G] The Appellate Authority took the view that a 150 fl.
long channel meant for carrying the trade effluent cannot be described as treatment plant.
The appellant contended that the treatment plant installed 122 by it comprised of an arrangement to lift the water to a height of 2211.
and then drop it from that height into an open channel so that it cools down on coming in contact with the atmosphere and then flows towards and into the river.
[130H; 131A] Section 7 as well as Rule 6 do not envisage the Board 's consent under Section 25(1) of the 1974 Act as a sine clua non.
Under Section 7 the consumer has only to show that he has installed a plant for the treatment of sewage or trade effluent and that it functioned successfully during the relevant period to earn rebate.
Section 25(1) operates in a different field and has nothing to do with a plant installed for the treatment of a trade effluent although the grant of consent to a new outlet can be conditional on the existence of a plant for the satisfactory.
treatment of effluents to safeguard against pollution of the water in the stream.
[131C E] Since the Board 's consent under Section 25(1) was not imperative that part of the High Court 's order cannot be sustained.
[131E]
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<s>[INST] Summarize the judgementAppeal No. 4088 of 1991.
From the Judgment and Order dated 24.5.1990 of the Karnataka Administrative Tribunal, Bangalore in Application No. 887 of 1989 C/W. A. No. 2101/1989.
495 Naresh Kaushik, Mrs. Lalita Kaushik and Shankar Divate for the Appellants.
M. Veerappa, S.R. Bhatt and Naveen R. Nath for the Respond ents.
The Judgment of the Court was delivered by KASLIWAL, J.
Special leave granted.
Sri Ashok alias Somanna Gowda appellant No. 1 is a Bachelor of Engineering (Civil) having secured. first class with distinction getting 69.96% marks from Karnataka Univer sity.
Shri Rajendra appellant No. 2 is a Bachelor of Engi neering (Mech.) from Karnataka University and secured 66.40 marks in the qualifying examination.
The Govt.
of Karnataka by notification dated 4th April, 1985 invited applications for recruitment of Asstt.
Engineers (Civil) and (Mech.) for the Public Works Deptt.
The selections were to be made on the basis of marks obtained in the qualifying examination and marks secured in the interview, in accordance with the K.S.C.S. (Direct Recruitment By Selection) Rules, 1973 (hereinafter referred to as 'the Rules ').
According to these Rules total marks for qualifying examination were kept at 100 and 50 for interview.
Thus the marks allotted for inter view amounted to 33.3% of the total marks.
Applications were invited for 300 posts of Civil Engineers and 100 Mechanical Engineers initially and subsequently added additional posts of 150 Civil Engineers and 10 Mechanical Engineers thus in all 450 Civil Engineers and 110 Mechanical Engineers.
Both the appellants applied for the posts of their choices in the Public Works Department, Government of Karnataka.
Appellant No. 1 secured 29.50 marks out of 50 marks in the interview and 69.96 marks in the qualifying examination thus in all 99.46 marks out of 150.
The 2nd appellant obtained 24.83 marks in the interview and 66.40 marks in the qualifying examination thus in all 91.23 marks out of 150.
Both the appellants were not selected in merit as the last candidate selected for the above posts secured higher marks than the appellants.
The appellants filed a petition before the Karnataka Administrative.
Tribunal challenging the Rules on the ground that the percentage of marks for viva voce as 33.3 were excessive and in violation of the decisions of this Court.
The Tribunal by its order dated 24th May, 1990 dismissed the petitions and the appellants aggrieved against the aforesaid decision have approached this Court by grant of special leave.
It is not necessary to examine ' the matter in detail inasmuch as 50 marks for interview out of 150 are clearly in violation of the judgment of this Court in Ashok Kumar Yadav & Ors.
vs State of Haryana & Ors.
, [1988] Sup.
S.C.R., 657 and Mohinder Sain Garg vs State of Punjab & Ors., J .T.
On a direction given by this Court on 4th September, 1991 the record of the 496 Selection Committee was produced before this Court at the time of hearing.
From a perusal of the marks awarded to the selected candidates it is clear that a large number of candidates have been selected though they had secured much lesser marks than the appellants in the qualifying examina tion but had secured very high marks in the viva voce out of 50 marks kept for this purpose.
Thus it is an admitted position that if the marks for interview were kept even at 15% of the total marks and merit list is prepared according ly then both the appellants were bound to be selected and a large number of selected candidates would have gone much lower in the merit list than the appellants.
In view of the fact that the result of the impugned selections was declared in 1987 and the selected candidates have already joined the posts, we do not consider it just and proper to quash the selections on the above ground.
Further the selections were made according to the Rules of 1973 and this practice is being consistently followed for the last 17 years and there is no allegation of any malafides in the matter of the impugned selections.
However, the Rules are clearly in violation of the dictum laid down by this Court in the above referred cases and in case the marks for viva voce would have been kept say at 15% of the total marks, the appellants before us were bound to be selected on the basis of marks secured by them in interview, calculated on the basis of converting the same to 15% of the total marks.
We, therefore, allow the appeal and direct the respond ents to give appointment to the appellant Ashok alias Soman na Gowda on the post of Asstt.
Engineer (Civil) and appel lant Rajendra on the post of Asstt.
Engineer (Mech.) in Public Works Department within a period of two months of the communication of this order in case the appellants are found suitable in all other respects according to the Rules.
Learned counsel appearing on behalf of the State of Karnata ka pointed out that there are many other candidates who had secured much higher marks than the appellants in case the above criteria is applied for selection.
In view of the fact that appointments under the impugned Rules were made as back as in 1987 and only the present appellants had approached the Tribunal for relief, the case of other candidates cannot be considered as they never approached for redress within reasonable time.
We are thus inclined to grant relief only to the present appellants who were vigilant in making griev ance and approaching the Tribunal in time.
Learned counsel for the State also submitted that the State Government has already framed new rules, and as such we do not find it necessary to quash the Rules under which the present selec tions were made as they are no longer in existence.
No order as to costs.
G.N. Appeal allowed.
[/INST]The Respondent State invited applications for recruit ment of Assistant Engineers (Civil) and (Mech.) for the Public Works Department.
According to the rules governing the recruitment, viz. Karnataka State Civil Services (Direct Recruitment by Selection) Rules, 1973 the marks obtained In the qualifying examination and the marks secured in the interview would be the basis for selection.
The total marks for qualifying examination was kept at 100 and 50 marks were kept for interview.
Thus the marks allotted for interview was 333% of the total marks.
Appellant No. 1 who applied for the post of Assistant Engineer (Civil) secured 29.50 marks out of 50 marks in the interview, his marks in the qualifying examination were 69.96, totalling in all 99.46 marks out of 150.
The second appellant, a candidate for the post of Assistant Engineer (Mech.) secured 24.83 marks in the interview and his marks in the qualifying examination being 66.40, he got 91.23 marks out of the total of 150 marks.
Both the appellants were not selected as they got less marks titan the last candidate selected, and they filed a petition before the State Administrative Tribunal challenging the rides on the ground that the percentage of marks for viva voce fixed at 333 was excessive.
The Tribunal having dismissed the peti tions, the appellants have preferred the present appeal, by special leave.
Allowing the appeal, this Court, HELD: 1. 50 marks for interview out of 150 are clearly in violation of the settled law on this point.
Some candi dates have been selected though 494 they had secured much lesser marks than the appellants in the qualifying examination but had secured very high marks in the viva voce out of 50 marks kept for this purpose.
If the marks for interview were kept even at 15% of the total marks and merit list was prepared accordingly then both the appellants would have been selected and a large number of selected candidates would have gone much lower in the merit list than the appellants.
[495 G, 496 A B] Ashok Kumar Yadav & Ors.
vs State of Haryana & Ors.
, [1988] Supp.
S.C.R. 657; Mohinder Sain Garg vs State of Punjab & Ors., J.T. , relied on.
Though the Karnataka State Civil Services (Direct Recruitment by Selection) Rules are clearly in violation of the dictum laid down by this Court, since the result of the selections was declared in 1987 and the selected candidates have already joined the posts, it would not be just and proper to quash the selections on the above ground.
Further the selections were made according to the Rules of 1973 and this practice is being consistently followed for the last 17 years and there Is no allegation of any malafides in the matter of selections.
[496 C D] 3.
The respondents are directed to give appointment to the two appellants on the post of Assistant Engineer (Civil) and Assistant Engineer (Mech.), respectively in Public Works Department within a period of two months in case the appel lants are found suitable In all other respects according to the Rules.
[496 E] 4.
Since the appointments under the Rules were made way back in 1987, the case of other candidates cannot be considered as they never approached for redress within reasonable time.
The relief is thus restricted only to the present appellants who were vigilant in making grievance and approaching the Tribunal in time.
[496 F G]
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<s>[INST] Summarize the judgementCriminal Appeal No. 415 of 1986.
From the Judgment and Order dated 16.5.
1984 of the Allahabad High Court in Crl.
Rev. No. 2330 of 1983.
R.N. Trivedi, Additional Advocate General (U.P.) Mrs. section Dikshit and C.B. Singh for the Appellant.
Ram Jethmalani, Rajinder Sachhar, and D.N. Mishra for the Respondents.
The Judgment of the Court was delivered by SEN, J.
This appeal by special leave is directed against the judgment and order of the High Court of Allahabad dated May 16, 1984 setting aside in its revisional jurisdiction an order of the Chief Judicial Magistrate, Gaziabad dated November 3, 1983 directing the issue of process against the respondents on a complaint filed by the appellant under section 44 of the Water (Prevention and Control of Pollu tion) Act, 1974.
The issue involved is whether the Chair man, ViceChairman, Managing Director and members of the Board of Directors of Messrs Modi Industries Limited, the Company owning the industrial unit called Messrs Modi Dis tillery could be proceeded against on a complaint against the said industrial unit.
A learned Single Judge (K.C. Agarwal, J.) following the decision of this Court in State (Delhi 801 Admn.) vs LK.
Nangia & Anr., ; interpreting a similar provision contained in sub section
(4) of section 17 of the had held that there was no sufficient ground against the respondents inasmuch as the allegations made in the complaint do not constitute an offence punishable under section 44 for the admitted contravention of sections 25(1) and 26 read with section 47 of the Act.
The question essentially turns upon the rule of construction to be adopted in section 47.
The facts of the case are these.
Messrs Modi Industries Limited is an existing company under the .
It is a large business organisation having diversified business activities.
Prior to the commencement of the Act it had established an industrial unit called Messrs Modi Dis tillery at Modi Nagar, Gaziabad engaged in the business of manufacture and sale of industrial alcohol.
During the process of manufacture of such industrial alcohol, the said industrial unit discharges its highly noxious and polluted trade effluents into the Kali River through the Kadrabad Drain which is a stream within the meaning of section 2(j) of the Act and thereby causes continuous pollution of the said stream without the consent of the Board and therefore it falls within the purview of section 26.
Under the provisions of section 26, as amended, it has been made mandatory for every existing industry to obtain the consent of the Board for discharging its trade effluent into a stream or well or sewer or on land.
The last date for submission of such application seeking the consent of the Board by an existing industry had been extended upto December 31, 1981.
In ac cordance with the procedure laid down under sections 25(1) and 26 of the Act, the Company was required to submit an applica tion for consent of the Board in the prescribed form along with the prescribed consent fee and the particulars.
Instead of the Company its industrial unit, namely, Messrs Modi Distillery on March 27, 1981 applied to the Board for grant of consent to discharge its trade effluents into the stream.
The aforesaid application was scrutinised by the Board and found incomplete in many respects.
The Board accordingly by its letter dated April 29, 1981 informed the said industrial unit with regard to the discrepancies and the particulars wanting.
There was no response from the respondents nor did they rectify the discrepancies pointed out or furnish the particulars required.
The Board accordingly by its letter dated July 30, 1981 refused to grant the consent prayed for in the public interest since the application was found incomplete in many respects and also because the said indus trial unit did not have proper arrangements for treatment of its highly polluted trade effluents.
Thereafter, the Board by its letter dated June 30, 1982 issued a notice under section 20 of the Act 802 directing the Company to furnish certain information regard ing the particulars and names of the Managing Director, Directors and other persons responsible for the conduct of the Company, but the respondents did not furnish the infor mation called for.
This was followed by two subsequent letters of the Board dated February 21, 1983 and June 9, 1983 drawing the attention of the respondents that they were deliberately violating the provisions of the Act and thereby rendering themselves liable to be punished under section 44 for contravention of the provisions of sections 25(1) and 26.
On October 21, 1983 the Board lodged a complaint against the respondents under section 44 of the Act in the Court of the Chief Judicial Magistrate, Gaziabad.
Unfortunately, the complaint was inartistically drafted.
It was averred in paragraph 2 that Messrs Modi Distillery i.e. the industrial unit was a company within the meaning of section 47 of the Act, that it had been knowingly and wilfully discharging its highly noxious and polluted trade effluents into the Kali River which is a stream within the meaning of section 2(j) of the Act through the Kadrabad Drain and thereby causing continuous pollution of the said stream.
There were eleven persons arrayed as ac cused.
Instead of launching a prosecution against Messrs Modi Industries Limited, the Board impleaded its industrial unit Messrs Modi Distillery as respondent No. 1 while re spondents nos. ' 2 11 were the Chairman, Vice Chairman, Managing Director and members of the Board of Directors of Messrs Modi Industries Limited i.e. the Company owning the industrial unit.
It appears that the respondents did not appear before the learned Chief Judicial Magistrate in response to the notice issued to them.
The learned Magistrate after record ing the statement of S.M. Pandey, Legal Assistant of the Board directed the issue of process to the respondents.
Aggrieved, respondents nos.
2, 3 and 4, namely, K.M. Modi, K.K. Modi and M.L. Modi, the Chairman, Vice Chairman and Managing Director respectively of Messrs Modi Industries Limited preferred a revision before the High Court under section 397 of the Code of Criminal Procedure, 1973.
Two of the other accused, namely, S.C. Trikha and Raghunath Rai, the nominated members of the Board of Directors of the Company also filed an application before the High Court under section 482 of the Code for quashing the proceedings.
As already stated, a learned Single Judge invoking the revisional jurisdiction of the High Court has quashed the proceedings on the ground that there could be no vicarious liability saddled on the Chairman, Vice Chairman, Managing Director and other members of the Board of Directors of the Company under section 47 of the Act unless there was a prosecution of the Company i.e. Messrs Modi Industries Limited.
He 803 held that the complaint suffers from the serious legal infirmity and in the circumstances, to allow the proceedings to continue would amount to an abuse of the process of the Court.
The question that arises in the appeal is whether the Chairman, Vice Chairman, Managing Director and members of the Board of Directors are liable to be proceeded against under section 47 of the Act in the absence of a prosecution of the Company owning the said industrial unit.
section 47 insofar as material reads as follows: "47.
Offences by companies (1) Where an offence under this Act has been committed by a company every person who at the time the offence was committed was in charge of, and was responsible to the company for the con duct, 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 provided in this Act 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 con tained in subsection (1), where an offence under this Act 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 neglet on the part of, any director.
manager, secretary or other officer of the company, such director, manag er, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
" On a plain reading of sub section
(1) of section 47 of the Act, where an offence has been committed by a company, every person who at the time of the commission of the offence was in charge of and 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.
Proviso to sub section
(1) however engrafts an exception in the case of any such person if he were to prove that the offence was committed without his knowledge or that he exercised all due diligence to prevent the 804 commission of such offence.
It would be noticed that sub section
(1) of section 47 is much wider than sub s.(4) of section 17 of the which fell for consideration in I.K. Nangia 's case.
Furthermore, proviso to sub section
(1) shifts the burden on the delinquent officer or servant of the company responsible for the commission of the offence.
The burden is on him to prove that he did not know of the offence or connived in it or that he had exercised all due diligence to prevent the commission of such offence.
The non obstante clause in sub section
(2) expressly provides that notwithstanding anything contained in sub section
(1), where an offence under the Act 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, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence, and shall be liale to be proceeded against and punished accordingly.
On a combined reading of the provisions contained in sub sections
(1) and (2), we have no doubt whatever that the Chairman, Vice Chairman, Managing Director and members of the Board of Directors of Messrs Modi Industries Limited, the Company owning the industrial unit Messrs Modi Distill ery could be prosecuted as having been in charge of and responsible to the company, for the business of the indus trial unit Messrs Modi Distillery owned by it and could be deemed to be guilty of the offence with which they are charged.
The learned Single Judge has failed to bear in mind that this situation has been brought about by the industrial unit viz. Messrs Modi Distillery of Messrs Modi Industries Limited because in spite of more than one notice being issued by the Board, the unit of Messrs Modi Distillery deliberately failed to furnish the information called for regarding the particulars and names of the Managing Direc tor, Directors and other persons responsible for the conduct of the Company.
Having wilfully failed to furnish the requi site information to the Board, it is now not open to the Chairman, Vice Chairman, Managing Director and other members of the Board of Directors to seek the Court 's assistance to derive advantage from the lapse committed by their own industrial unit.
The learned Single Judge has focussed his attention only on the technical flaw in the complaint and has failed to comprehend that the flaw had occurred due to the recalcitrant attitude of Messrs Modi Distillery and furthermore the infirmity is one which could be easily removed by having the matter remitted to the Chief Judicial Magistrate with a direction to call upon the appellant to make the formal amendments to the averments contained in paragraph 2 of the comp 805 laint so as to make the controlling company of the industri al unit figure as the concerned accused in the complaint.
All that has to be done is the making of a formal applica tion for amendment by the appellant for leave to amend by substituting the name of Messrs Modi Industries Limited, the Company owning the industrial unit, in place of Messrs Modi Distillery.
Although as a pure proposition of law in the abstract the learned Single Judge 's view that there can be no vicarious liability of the Chairman, Vice Chairman, Managing Director and members of the Board of Directors under sub section
(1) or (2) of section 47 of the Act unless there was a prosecution against Messrs Modi Industries Limited, the Company owning the industrial trait, can be termed as cor rect, the objection raised by the petitioners before the High Court ought to have been viewed not in isolation but in the conspectus of facts and events and not in vacuum.
We have already pointed out that the technical flaw in the complaint is attributable to the failure of the industrial unit to furnish the requisite information called for by the Board.
Furthermore, the legal infirmity is of such a nature which could be easily cured.
Another circumstance which brings out the narrow perspective of the learned Single Judge is his failure to appreciate the fact that the aver ment in paragraph 2 has to be construed in the light of the averments contained in paragraphs 17, 18 and 19 which are to the effect that the Chairman, Vice Chairman, Managing Direc tor and members of the Board of Directors were also liable for the alleged offence committed by the Company.
It is regrettable that although Parliament enacted the to meet the urgent need for introducing a comprehensive legis lation with its established unitary agencies in the Centre and the States to provide for the prevention.
abatement and control of pollution of rivers and streams, for maintaining or restoring wholesomeness of water courses and for control ling the existing and new discharges of domestic and indus trial wastes, which is a matter of grave national concern, the manner in which some of the Boards are functioning leaves much to be desired.
This is an instance where due to the sheer negligence on the part of the legal advisors in drafting the complaint a large business house is allowed to escape the consequences of the breaches committed by it of the provisions of the Act with impunity, It was expected that the Board and its legal advisors should have drafted the complaint with greater circumspection not to leave any technical flaw which would invalidate the initiation of the prosecution allowing the respondents to escape the conse quences of the breaches committed by them of the provisions of the Act with impunity.
As already stated, prior to the commencement 806 of the Act the Company owned an industrial unit styled as Messrs Modi Distillery which was discharging its trade effluents into the Kali River through the Kadrabad Drain and therefore the matter fell within the ambit of section 26 of the Act.
section 26 provides that where immediately before the com mencement of the Act any person was discharging any sewage or trade effluent into a stream, the provisions of section 25 shall, so far as may be, apply to such person as they apply in relation to a person referred to in that section.
section 25(1) creates an absolute prohibition against bringing into use any new or altered outlet for the discharge of sewage or trade ' effluent into a stream without the consent of the Board.
On a combined reading of sections 25(1) and 26 it was mandatory for the Company viz.
Messrs Modi Industries Limit ed to make an application to the Board under sub section
(2) of section 25 read with section Z6 in the prescribed form containing the prescribed particulars for grant of consent for the dis charge of its trade effluents into the said stream, subject to such conditions as it may impose.
Along with the com plaint the appellant has placed on record several documents showing that the rejection of the application was in the public interest as it was incomplete in many respects.
These documents also reveal that the Company did not have proper arrangements for treatment of the highly polluted trade effluents discharged by it and although the appellant re peatedly by its letter required the Company to obtain the consent of the Board, the Company was intentionally and deliberately avoiding compliance of the requirements of sections 25(1) and 26 of the Act.
The contravention of these provi sions is an offence punishable under section 44.
The other ten persons arrayed by name as accused in the complaint are respondents nos.
2 11, the Chairman, Vice Chairman, Managing Director and members of the Board of Directors of Messrs Modi Industries Limited.
It cannot be doubted that in such capacity they were in charge of and responsible for the conduct of the business of the Company and were therefore deemed to be guilty of the said offence and liable to be proceeded against and punished under section 47 of the Act.
It would be a travesty of justice if the big business house of Messrs Modi Industries Limited is allowed to defeat the prosecution launched and avoid facing the trial on a techni cal flaw which is not incurable for their alleged deliberate and wilful breach of the provisions contained in sections 25(1) and 26 made punishable under section 44 read with section 47 of the Act.
Faced with the difficulty of refuting the gravamen of the offence set out in the complaint, Shri Ram Jethmalani, learned counsel appearing for the respondents drew our attention to the counteraffidavit of Virendra Prasad, Manag er (Personnel & Administration), Modi Distillery dated January 13, 1986 and the two supplementary 807 affidavits dated August 25, 1986 and November 17, 1986 tending to show that Messrs Modi Industries Limited, the company owning the industrial unit, have taken effective steps to set up an effluents treatment plant by entering into an agreement dated December 23, 1985 with Messrs Chemi cal Consultants & Engineers, Ahmadnagar who would set it up in collaboration with Sulzer Bros. Limited, Switzerland by employment of the technical knowhow which would be able to recover methane gas upto 70% and also bring down BOD reduc tion upto 90%.
Further, it is averred that the company sought and obtained the approval of the Board subject to a time schedule for erection and installation of the plant by the end of June 1987.
It is also averred that since the Government of India has turned down the application of the respondents for subsidy for installation of the said plant insofar as the year 1985 86 was concerned, they are trying other sources of finance and that in the meanwhile pending the installation and commissioning of the plant based on the Sulzer 's process are treating the effluents by alternative methods in order to reduce the extent of BOD discharge.
They are diluting the effluents by mixing fresh water to the extent of 13 to 15 times the amount of effluent discharged in order to reduce the extent of pollution.
In view of the subsequent events the learned counsel submits that this was a fit case for dropping the proceedings.
The averments made by the respondents in the various affidavits have been controverted by the affidavit in rejoinder sworn by Chandra Bhal Singh, Law Officer of the appellant Board showing that there is little or no progress in the matter of establish ment of the effluents treatment plant.
We need not enter into this controversy.
These are all matters to be dealt with by the learned Chief Judicial Magistrate.
The result therefore is that the appeal succeeds and is allowed.
The judgment and order passed by the High Court are set aside and that of the learned Chief Judicial Magistrate directing issue of process to the respondents are restored.
The learned Magistrate shall proceed with the trial as expeditiously as possible in accordance with law.
P.S.S. Appeal allowed.
[/INST]The respondent distillery, an industrial unit of M/s. Modi Industries Ltd., at Modi Nagar manufacturing industrial alcohol has been discharging its highly noxious and polluted trade effluents into the river through a local drain.
It applied to the Pollution Control Board under sections 25(1) and 26 of the Act on March 27, 1981 for consent of the Board to discharge its trade effluents into the stream.
The Board found the application incomplete in many respects, and called upon the respondents to rectify the discrepancies.
As there was no response from the respondents, the appellant Board refused to grant the consent prayed for in the public interest and thereafter issued notice under section 20 of the Act directing the Company to furnish certain information regard ing the particulars and names of the Managing Director, Directors and other persons responsible for the conduct of the Company.
This was followed by various reminders.
Finding no response from the respondents, the Board on October 21, 1983 lodged a complaint against the respondents under section 44 of the Act in the Court of the Chief Judicial Magistrate, Gaziabad.
Instead of launching a prosecution against M/s. Modi Industries Ltd., the Board impleaded the industrial unit as respondent No. 1 and the Chairman.
Vice Chairman, Managing Director and members of the Board of Directors of the Company as respondent Nos. 2 to 11.
The Judicial Magistrate directed the issue of process.
799 The respondents preferred a revision under section 397 of the Code of Criminal Procedure, 1973 before the High Court in which an application was filed under section 482 of the Code for quashing the proceedings.
The Single Judge of the High Court quashed the proceedings on the ground that there could be no vicarious liability saddled on the Chairman, Vice Chairman, Managing Director and other members of the Board of Direc tors of the Company under section 47 of the Act unless there was a prosecution of the Company.
Allowing the appeal, HELD: A combined reading of the provisions contained in subss.
(1) and (2) of section 47 of the makes it apparent that the officials of the Company owning the respondent industrial unit could be prosecuted as having been in charge of and responsible to the Company for the business of that unit and could be deemed to be guilty of the offence with which they were charged.
[804DE] The industrial unit owned by the Company was discharging its trade effluents into the river prior to the commencement of the Act.
It was, therefore, mandatory for the Company to make an application to the Board under section 25(2) read with section 26 of the Act for grant of consent for the discharge of its trade effluents into the stream.
The application made by the industrial unit having been found incomplete in many re spects was rejected by the Board in public interest.
There after the Company which did not have proper arrangements for treatment of the highly polluted trade effluents discharged by it, had been in spite of repeated letters from the Board intentionally and deliberately avoiding compliance with the requirements of sections 25(1) and 26 rendering themselves pun ishable under section 44 of the Act.
The Chairman.
ViceChairman, Managing Director and members of the Board of Directors of the Company in such capacity were incharge of and responsi ble for the conduct of the business of the Company and were, therefore, deemed to be guilty of the said offence and liable to be proceeded against and punished under section 47 of the Act.
[805H 806F] The vicarious liability of these officials of the Compa ny is to be viewed not in isolation but in the conspectus of facts and events and not in vacuum.
The technical flaw in the complaint lodged by the appellant Board had occurred due to the recalcitrant attitude of the industrial unit, which in spite of more than one notice being issued had deliber ately failed to furnish information called for regarding the particulars and 800 names of the Managing Director, Directors and other persons responsible for the conduct of the Company.
Having wilfully failed to furnish the requisite information to the Board, it is not open to the respondents 2 to 11 to seek the Court 's assistance to derive advantage from the lapse committed by their own industrial unit.
Furthermore, the legal infirmity is of such a nature which could be easily cured by having the matter remitted to the trial court with a direction to call upon the appellant to make the formal amendments to the averments in the complaint so as to make the controlling company of the industrial unit figure as the concerned accused.
[805BC, 804G, EF, H 805A] The Board and its legal advisors should have drafted the complaint with greater circumspection not to leave any technical flaw which would invalidate the initiation of the prosecution allowing a large business house to escape the consequences of the breaches committed by it of the provi sions of the Act with impunity.
[805GH]
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<s>[INST] Summarize the judgementNo. 328 of 1968.
Petition under article 32 of the Constitution of India for a writ in the nature of habeas corpus.
R. K. Garg, for the petitioners.
Debabrata Mukherjee, P. K. Chakravarti and G. section Chatterjee, for the respondents.
The Judgment of the Court was delivered by Grover, J.
This is a petition under article 32 of the Constitu tion by Sushanta Goswami and 46 others for a writ in the nature of Habeas Corpus challenging the detention of the petitioners under the provisions of the , hereinafter called the "Act".
Petitioner No. 4 Krishna Mondal and Petitioner No. 21 Madhu Kanjilal are stated to have been released.
No orders need he 139 made with regard to them.
As regards petitioners Nos. 2, 8, 9, 15, 22, 24, 32, 41 and 47 their matters will be taken up for consideration later as the State has been directed to file further affidavits.
We now proceed to dispose of the cases of the other petitioners.
Petitioner No. 1 (Sushanta Goswami) This petitioner was detained by an order of the District Magistrate 24 Parganas dated July 30, 1968.
His detention was directed under section 3(2) of the Act on the ground that it was necessary with a view to preventing him from acting in any manner prejudicial to the maintenance of public order.
The grounds were supplied to him and he made a representation to the Advisory Board which, after hearing the petitioner and considering his representation, expressed its opinion that there was sufficient cause for his detention.
Consequently the detention order dated July 30, 1968 was confirmed on September 20, 1968 by the Government of West Bengal.
The grounds for detention have been perused by us.
According to the first ground the petitioner had been committing offences of forming unlawful assembly, assaulting the police and peaceful inhabitants, snatching away cash and valuables, teasing school girls and criminal intimidation.
The instances which were given are seven out of which it is necessary to mention only the following which are typical " (ii) That on 14 11 66 at 21.15 hrs.
, you with your associates formed an unlawful assembly on Dum Dum Road in front of the Fire Brigade Office and assaulted Shri Pranab Bose of P 18 Matijheel Avenue and you snatched away a fountain pen worth Rs. 10 from his pocket.
(vi) That on 18 3 68 at 19.30 hrs.
, you with your associates closely followed Sm.
Sipra Kundu (18) from Satgachi crossing on Jessore Road and uttered indecent language towards her, as a result of which she got terrified and ran away to save her modesty.
" Ground No. 11 is to the effect that as a result of the petitioner 's nefarious activities prejudicial to the maintenance of public order he has become a nuisance to the society and there have been disturbances and confusion in the lives of peaceful citizens of Dum Dum police station and the inhabitants thereof are in constant dread of disturbance of public order.
We do not consider that the above grounds are relevant to public order and if some of the grounds which are given are irrelevant the order of detention cannot be upheld because the court cannot predicate what the subjective satisfaction of the authority would have been on the exclusion of those reasons; vide Dwarka 140 Das Bhatia vs The State of Jammu & Kashmir(1), and the recent decision of this Court in Pushkar Mukherjee vs State of West Bengal (2) .
There the order of detention is hereby set aside.
Petitioner No. 3 Panchu (Gopal Mondal).
This petitioner was detained by an order of the District Magistrate 24 Parganas dated March 23, 1968 made in exercise of the power conferred by section 3 (2) of the Act on the ground that the detention was necessary with a view to preventing him from acting in any manner prejudicial to the maintenance of supplies essential to the community.
He was supplied with the grounds and he made a representation.
It was sent to the Advisory Board which,, after hearing him and considering all the material placed before it, expressed, ' its opinion that there was sufficient cause for his detention.
The Government of West Bengal confirmed the detention order on July 17, 1968.
We have perused the grounds of detention and we find that most of them relate to matters for which penal or other action could be taken under the relevant statutes.
For instance ground No. 1(ii) is as follows : "That on 12 1 68 at 11.30 hrs.
you were found operating your husking machine at puraton Bongaon and on demand by S.I.S. Chatterjee of S.E.B. (7) you could not produce the requisite license or permit.
That though you were prosecuted for operating your husking machine on 12 1 68, you carried on further operation with it as it was left on your bond of production, violating again the provisions of West Bengal Husking Machine (Control of Operation) Amendment Order 1967.
" The fact that the petitioner could not produce the requisite licence or permit can hardly be regarded as relevant for detention on the ground of activities prejudicial to the maintenance of supplies essential to the community.
For the aforesaid reasons this petitioner is also entitled to be released.
Petitioner No. 5 (Debendra Nath Das) This petitioner was detained by an order dated May 9, 1968 made by the District Magistrate 24 Parganas under section 3(2) of the Act.
His detention was considered necessary for preventing him from acting in any manner prejudicial to the maintenance of public order His representation was sent to the Advisory Board which, after hearing him personally and, considering all the materials, expressed an opinion that there was sufficient cause for the petitioner 's detention.
His detention was confirmed by the Government of West (1) [1956] S.C.R.945.
(2) ; 141 Bengal by an order dated July 17, 1968.
The grounds of detention have been considered by us and we are of the opinion that they relate mainly to the question of law and order and are not relevant to public order.
Moreover there are allegations of offences under the Indian Penal Code for which prosecution could be launched.
As has been observed in Pushkar Mukherjee & I Ors.
vs State of West Bengal(1) the contravention of any law always affects order but before it can be said to affect public order it must affect the community or the public at large.
A mere disturbance of law and order leading to disorder is not necessarily sufficient for action under the Act but a disturbance which will affect public order can alone justify detention under that head.
Ground No. 1 (viii) which is typical may be specifically mentioned: "That on 26 2 68 at about 09.00 hrs.
you and your associates stabbed Constable Bhupendra Nath Chakraborty of Gouripur T.O.P. under Dum Dum P.S. near Birati Railway Level Crossing gate and stole away his wrist watch.
" We are satisfied that the petitioner could not have been detained on the grounds which are before us.
He is, therefore, entitled to be released.
Petitioner No. 7 (Abdul Waheb).
He was detained by an order dated May 27, 1968 of the District Magistrate 24 Parganas under section 3(2) on the ground that his detention was necessary for preventing him from acting in a manner prejudicial to the maintenance of public order.
He was supplied the grounds on which he made a representation to the Advisory Board which heard him personally and after considering all the material an opinion was expressed that there was sufficient cause for his detention.
The Government of West Bengal confirmed the detention order on August 21, 1968.
We have perused the grounds for the petitioners ' detention.
They relate mostly to the question of law and order and are not relevant to public order.
Consequently the petitioner is entitled to be released.
Petitioner No. 6 (Anil Das).
This petitioner was detained by an order of the District Magistrate, Howrah dated May 18, 1968 made under section 3(2) of the Act, the detention being considered necessary in order to prevent him from acting in any manner prejudicial to the maintenance of public order.
The representation made by the petitioner was forwarded to the Advisory Board which considered all the material before it and was of the opinion (1) [1969]2 S.C.R. 635. 142 that sufficient cause for his detention existed.
On July 29, 1968 the Government confirmed the order of detention.
Most of the grounds are not at all relevant to maintenance of public order.
Ground No. 1 (a) is that on August 12, 1966 at about 10.00 hrs.
"you being drunk demanded Rs. 2 from Shri Santi Das. . near the betel shop of Shalta Lal. and threatened him with murder when he refused to pay you the said money" We are satisfied that the petitioner 's detention cannot be upheld and it is hereby set aside.
Petitioner No. 10 (Dilip Kr.
Chakraborty @ Konkan) This petitioner was detained by an order dated June 13, 1968 made by the District Magistrate 24 Parganas under section 3(2) of the Act on the ground that his detention was necessary in order to prevent him from acting in any manner prejudicial to the maintenance of public order.
One of the grounds, namely, 1 (ii) is .
"That on 13 3 67 you with your associate Debu Biswas assaulted one Paresh Nath Koley of Ghosepara with fists and blows".
Such a ground cannot possibly relate or be relevant to public order.
In view of our previous decisions mentioned before we are of the opinion that the petitioner is entitled to be released.
It may be mentioned that this petitioner had also filed a petition under article 226 in the Calcutta High Court but his counsel has undertaken to withdraw that petition.
Petitioner No. 12 (Ashoka Kumar Mukherjee).
This petitioner was detained by the order of the District Magistrate, 24 Parganas, dated May 25, 1968 made under section 3(2) of the Act; the reason for his detention being the prevention of activities prejudicial to the maintenance of public order.
The grounds were supplied to him and he made a representation which was considered by the Advisory Board which, after giving a personal hearing, expressed an opinion that his detention was justified.
The Government confirmed the 'original order of detention on August 8, 1968.
We have examined the grounds and they suffer from the same infirmity as in the case of petitioner No. 7 (Abdul Waheb).
Ground No. 1 (i) may be reproduced : "That on 3 6 67, you assaulted one Nabalchandra Saha a hawker, with knife." This petitioner is also entitled to be released.
Petitioner No. 13 (Ram Kamal Dhar @ Leda) This petitioner was detained by an order dated July 30, 1968 passed by the District Magistrate, 24 Parganas, under section 3 (2) of the Act on the ground that his detention was necessary with a view 143 to preventing him from acting.
in any manner prejudicial to the maintenance of public order.
The grounds of detention.
disclose the same infirmities which are to be found in the case of petitioner No. 7 (Abdul Waheb) and Petitioner No. 10 (Dilip Chakraborty @ (Konkan).
For instance one of the grounds, No. 3 is in these terms : "On 1 5 68 at about 12.35 hrs.
you along with your two associates being armed with daggers, snatched away a wrist watch worth Rs. 130 from the person of the Kulak Chandra Sarkar S/o Late Sahadeb Sarkar of Madhab Nibas Colony, P. section Titagarh, Dist.
24 Parganas near Dum Dum South home signal at the point of dagger causing bleeding injury.
You were arrested with property red handed.
" Therefore the petitioner is entitled to be released.
Petitioner No. 14 (Gopal Show).
This petitioner was detained by an order dated July 11; 1968 made by the District Magistrate Howrah on the ground that his detention was necessary with a view to prevent him from acting in any manner prejudicial to the maintenance of public order.
The grounds were supplied to him, on which he made a representation which was considered by the Advisory Board by which he was also personally heard.
On the report of the Advisory Board that there was sufficient cause for his detention the original order was confirmed by the Government of West Bengal on October 7, 1968.
This case falls very much in the same group as that of the petitioners Nos. 7, 10 and 12 above mentioned.
According to one of the grounds the petitioner had, on Octo ber 12, 1967 along with his associates committed a daring burglary in Howrah Tobacco Store by breaking open 6/7 padlocks and removed Cigarette cases worth Rs. 10,000.
He is thus entitled to be released.
Petitioner No. 16 (Makhan Lal Saha).
This petitioner was., detained by an order dated March 23, 1968 made by the District Magistrate 24, Parganas, under section 3 (2) of the Act on the ground that his detention was necessary with a view to preventing him from acting in any manner prejudicial to the maintenance of public order.
The grounds were supplied to him on which he made a representation which was sent to the Advisory Board.
After hearing him personally and considering all the materials, the Advisory Board reported that there was sufficient cause for his detention.
Thereupon the Government confirmed the original order of detention on July 29, 1968.
An examination of the " grounds shows that they relate mostly and are relevant to the head " maintenance of supplies and services essential to the community".
144 For instance ground No. 1 (i) is that on March 28, 1968 the petitioner together with his associate committed theft of over head traction wires including contact wire disrupting the train services in Bongaon Section for more than 7 hours.
The grounds may have been relevant to the other head but none of them appears to be relevant to "maintenance of public order".
It is somewhat surprising and altogether incomprehensible how any District Magistrate or even the Government could have missed seeing that the ,detention of this petitioner might have been justified under the head "maintenance of supplies and services essential to the com munity" but not the "maintenance of public order".
Therefore the detention order cannot be sustained and must be set aside.
Petitioner No. 17 (Sk.
Yunus Ali).
This petitioner was detained by an order made by the District Magistrate, Howrah, on March 7, 1968 under section 3(2) of the Act on the ground that his detention was necessary with a view to preventing him from acting in any manner prejudicial to the maintenance of public order.
He was supplied the grounds and he made a representation which was considered by the Advisory Board.
The Board heard him personally and made a report that there was sufficient cause for his detention.
Thereupon the Government confirmed the order of detention on July 3, 1968.
The grounds suffer from the same infirmity as in the cases of petitioners Nos. 7 and 10.
For instance ground No. 1 (b) is : "That on 12 3 67 at about 06 00 hrs.
, you and your associates showed ugly gesture and posture to some women vendors of vegetables in platform No. 6 of Uluberia Rly.
Station and started whistling in mouth on seeing those women.
RPF head Rakshak K. C. Chandra of Santragachi Crime Branch objected to such indecent behaviour towards women by you all when Shri Chandra was physically assaulted with slaps by you and was threatened with dire consequences by you and your associates.
" The detention of this petitioner cannot be upheld and is hereby set aside.
Petitioner No. 18 (Gaddu Ghosh).
This petitioner was detained by an order of the District Magistrate, Malda, dated June 3, 1968 made under section 3 (2) of the Act with a view to preventing him from acting in any manner prejudicial to the maintenance of public order.
The grounds were supplied to him and he made a representation which was considered by the Advisory Board.
The Board after hearing him personally and considering all the materials before it, expressed an opinion that there was sufficient cause for his detention.
Thereupon the Government of West Bengal ,confirmed the order of his detention.
Practically all the grounds 145 do not appear to be relevant to public order.
Ground No. 2 (a) is typical and may be reproduced : "That on the midnight of 21 7 67 you grazed your 17 heads of cattle on maize plants in the land of Amal Roy of Kbasbari P. section English Bazar.
You threatened Amal Roy with further mischief for impounding your cattle." His detention cannot be upheld and is hereby set aside.
Petitioner No. 19 (Ratanlal Kairi).
This petitioner was de tained by an order of the District Magistrate, 24 Parganas, dated April 19, 1968; his detention being considered necessary in order to preventing him from acting in any manner prejudicial to the maintenance of public order.
His representation was referred to the Advisory Board which considered it along with the other material and expressed an opinion that there was sufficient cause for his detention.
The Government made an order on July 10, 1968 confirming the order of detention.
The grounds have been perused by us and they appear to be relevant.
The activities which are mentioned therein show that they are of such a nature that they relate to public order.
We would therefore decline the prayer for setting aside the order of detention.
Petitioner No. 20 (Farid Ali Naskar).
This petitioner was detained by the order of the District Magistrate, 24, Parganas, dated July 30, 1968 Made under section 3 (2) of the Act on the ground that it was necessary to detain him in order to prevent him from acting in any manner prejudicial to the maintenance of public order.
His representation was sent to the Advisory Board which considered it along with the other materials but made a report against him.
The Government thereupon confirmed the order of detention on September 19, 1968.
We have seen the grounds of detention and they appear to relate mostly to removal of rice bags in a clandestine manner.
These activities might have some relevance to the head "maintenance of supplies and services essential to the community but by no stretch of reasoning can they be regarded as relevant to public order.
The detention of the petitioner therefore is set aside.
Petitioner No. 23 (Sk. Makbul).
The petitioner was detained by the order dated March 8, 1968 made by the District Magistrate, Howrah, under section 3 (2) of the Act on the ground that his detention was necessary with a view to preventing him from acting in a manner prejudicial to the maintenance of public order.
On receiving the grounds of his detention, he made a representation to the Advisory Board which, after considering the same and giving 146 him a personal hearing, reported that there was sufficient cause for his detention.
Thereupon the Government of West Bengal confirmed the detention order.
The grounds disclose the same infirmity as in other cases e.g. Petitioner Nos. 7 and 10.
Ground No. 1 (a) is typical and may be reproduced : "That on 10 2 67 at about 21.50 hrs.
you and your associates threatened R.P.F. Head Rakshak Prakash Chandra Mitra of CID Kharagpur at Andul Railway Station with stabbing when Shri Mitra objected to your passing of indecent remarks at a lady passenger." Consequently the detention order is set aside.
Petitioner No. 25 (Uday Chand Namadas).
This petitioner was detained by an order of the District Magistrate Jalpaiguri, dated the 11 th July 1968 made under section 3 (2) of the Act on the ground that his detention was necessary in order to prevent him from acting in any manner prejudicial to the maintenance of public order.
On receiving the grounds he made a representation which was considered by the Advisory Board.
The Board gave a personal hearing and after considering all the materials reported that there was sufficient cause for his detention.
Thereupon the Government of West Bengal confirmed the detention order.
Ground No. 1 is altogether vague and may be reproduced : "That you have been for a long time engaged in anti social, illegal and high handed criminal activities and in the course of such activities you have on different occasions held out threats to different persons and that you have associated yourself with anti social elements.
Whenever the peace loving citizens questioned your bona fide and protested against your activities and whenever they offered themselves as witnesses to your activities you threatened to burn down their houses.
" The detention of this petitioner cannot be sustained because of the existence, of the above ground which is so vague that the petitioner could not possibly have made any representation with regard to it.
In view of our previous decisions referred to his detention is set aside.
Petitioner No. 26.
(Abdul Bari Karikar).
This petitioner was detained by the order made by the District Magistrate, Murshidabad, on July 6, 1968 under section 3 (2) of the Act on the ground that the detention was necessary in order to prevent the petitioner from acting in any manner prejudicial to the maintenance of public order.
On receiving the grounds he made a representation to the Advisory Board which was considered by it.
The Board, after giving a personal hearing and considering all the materials expressed an opinion that there was sufficient cause for detention.
147 The Government of West Bengal confirmed the order of detention on September 12, 1968.
We have read the grounds and we consider that some of them are so irrelevant that it is incomprehensible how any order of detention could have been made on those grounds.
For instance ground No. 1 is "On 26 8 65 you were committed to trial before the court under section 406 of the Indian Penal Code on a charge of deceitfully misappropriating the cycle belonging to Bishu Khan of village Chonya Pathan Para." Ground No. 4 is equally irrelevant.
It has been stated that "On 19 5 67 at about 7.30 a.m. you threatened Karim Sheikh of village Chonya Pathan Para with assault as he had instituted a case against you.
" If such grounds can be considered to be relevant to public order it would be open to the authorities to detain citizens without a trial for such petty matters as have been mentioned in these grounds.
Moreover the first ground is also not reasonably proximate in time.
It relates to some incident which happened in the year 1965 whereas the detention order was made on July 6, 1968.
The detention of the petitioner cannot possibly be upheld and is hereby set aside.
Petitioner No. 27 (Nagendra Nath Saha).
This petitioner was detained by an order dated April 19, 1968 made by the District Magistrate, 24 Parganas, under section 3 (2) of the Act; the grounds of detention being the prevention of activities prejudicial to the maintenance of public order.
On receiving the grounds he made a representation to the Advisory Board which reported that there was sufficient cause for his detention.
On July 10, 1968 the Government of West Bengal confirmed the detention order.
Two of the grounds may be reproduced : "2 (c) That your complicity transpired during investigation of Sealdah GRPS Case No. 181 dt.
26 3 65 u/s 379 I.P.C. and you were reasonably suspended in the case.
(d) That your complicity transpired during investigation of Sealdah GRPS Case No. 180 dt.
26 3 65 u/s 379 I.P.C. and you were reasonably suspected in the case.
" These cannot possibly have any relevance to "maintenance of public order", the proper implications of which expression have been fully discussed in the decisions of this Court including the recent decision in Pushkar Mookherjee & Ors.
vs The State of 148 West Bengal(1).
The petitioner 's detention cannot therefore be upheld and it is hereby set aside : Petitioner No. 28 (Habibullah Khan).
This petitioner was :detained by an order dated February 17, 1968 made by the District Magistrate, 24 Parganas, under section 3(2) of the Act in order to prevent him from acting in any manner prejudicial to the maintenance of public order.
On receiving the grounds he made a representation to the Advisory Board which expressed an opinion in favour of his detention.
The Government of West Bengal confirmed the detention on April 17, 1968.
We have perused the grounds of detention which do not relate to public order; for instance one of the grounds If iv) is to the following effect : "that on 27 12 67 at about 03.30 hrs ' you and your associates committed theft of signalling and telecommunication materials from location box No. L 60 worth about Rs. 3,000." His detention is consequently set aside.
Petitioner No. 29.
(Naba Kumar Ghosh).
This petitioner was detained by an order of the District Magistrate, 24 Parganas, dated July 13, 1968 made under section 3(2) of the Act on the ground that it was necessary to detain the petitioner in order to prevent him from acting in any manner prejudicial to the maintenance of public order.
Ms representation was considered by the Advisory Board which made a representation that there was sufficient cause for his detention.
On September 19, 1968 the detention order ,was confirmed by the Government.
Some of the grounds are not at all relevant to maintenance of public order; for instance ground No. 1 (ii) is "That on 1 3 68 at about 02.00 hrs.
, you and your associate Ram Nehore Kouri were seen to conceal your presence by the side of a wagon standing at Chitpur yard with a view to commit theft from standing wagons.
Being chased, you and your associate,,,, were arrested by the (1) on duty RPF staff and prosecuted.
" The detention of the petitioner cannot be upheld and is set aside.
Petitioner No. 30 (Abdul Main Mirza).
This petitioner was detained by the order of the District Magistrate, Howrah, dated March 7, 1968 on the ground that his detention was necessary in order to prevent him from acting in any manner prejudicial to the maintenance of public order.
His representation was considered by the Advisory Board which reported that there was sufficient ,cause for his detention.
On June 12, 1968 the Government confirmed the detention order.
Most of the grounds are not relevant (1) ; 149 to the maintenance of public order.
For instance ground No. 1 (a), is : "That on 24 2 67 at about 21.26 hrs.
you and your associates abused C.I.B. Head Rakshak 3646 Hara Kumar Mukherjee of Shalimar and also threatened him with dire consequences at Andul Rly.
Station when Shri Mukherjee objected to the passing of indecent remarks at a lady passenger of 358 Dn.
(Midnapur Howrah Passenger) train.
" The detention of this petitioner cannot be upheld and is hereby set aside.
Petitioner No. 31 (Nripen Chakraborty).
This petitioner was detained by an order made by the District Magistrate, 24 Parganas on April 4, 1968 on the ground that his detention was necessary in order to prevent him from acting in a manner prejudicial to public order.
His representation was sent to the Advisory Board which on considering the same with other material reported that there was sufficient cause for the detention.
The detention order was consequently confirmed by the Government on June 12, 1968.
Most of the grounds do not appear to be relevant to maintenance, of public, order.
Ground No. (ii) may be reproduced : "That on 7 10 66 you pulled the alarm chain of the train at Bongaon Ranaghat Section while you were bringing rice for sale from Ranaghat to Bongaon, without having booked them and without having any ticket." His detention cannot therefore be upheld and it is hereby set aside.
Petitioner No. 33 (Nanda Kishore Rabi Das).
This petitioner was detained by an order dated April 25, 1968 made by the District Magistrate 24, Parganas under section 3(2) of the Act on the ground that his detention was necessary for preventing him from acting in any manner prejudicial to the maintenance of public order.
He made a representation to the Advisory Board which after considering all the materials reported that there was sufficient cause for his detention.
The detention order was consequently confirmed by the Government of West Bengal on July 2, 1968.
The grounds for detention in the case of this petitioner appear to be relevant to maintenance of public order.
He has apparently been acting with a large number of associates and committing acts which could have led to disturbance of public order.
His detention is therefore upheld.
Petitioner No. 34 (Samiron Sarkar).
This petitioner was de tained by an order dated August 2, 1968 made by the District Magistrate 24, Parganas under section 3(2) of the Act on the ground that his detention was necessary to prevent him from acting in any 150 manner prejudicial to the maintenance of public order.
His representation was forwarded to the Advisory Board which reported that there was sufficient cause for his detention.
Thereupon the Government confirmed the order of detention on October 9, 1968.
His case is similar to that of many others inasmuch as most of the grounds are not relevant to the maintenance of public order.
By way of example ground No. 1 (ii) is reproduced "That on 30 9 67 at about 21.00 hrs.
you with your associates Amal Karali, Bapu, Tripti and others forced Shri Dulal Chandra Kundu, Abdul Jabbar and Gobinda Das Roy Choudhury of Barisha to go to the shop of Nilan Maity inside Sakher Bazar and you forcibly took away Rs. 65 from the pocket of Gobinda Das Roy Choudhury, one wrist watch, a gold ring and cash Rs. 18 from Abdul Jabbar and Rs. 70 and 20 packets of cigarettes from Dulal Chandra Kundu.
" His detention cannot be upheld and is set aside.
Petitioner No. 35 (Ashwini Kumar Karmakar).
This petitioner was detained by an order dated July 30, 1968 of the District Magistrate 24 Parganas made under section 3(2) of the Act, the detention being considered necessary with a view to prevent the petitioner from acting in a manner prejudicial to the maintenance of public order.
His representation was sent to the Advisory Board which, after considering all the materials, reported that there was sufficient cause for his detention.
Thereupon the Government confirmed the order of detention on September 19, 1968.
The activities which have been alleged in the grounds are again of at type, which cannot be relevant to public order.
For instance ground No. 1 (c) which is in these terms : "That on 6 10 67 at about 06.30 hrs.
you and your associates were seen to remove sugar bags from a sealed wagon of a goods train and to despatch the same by hand pulling car while the train stopped at Bagmari Rly.
Bridge for red signal.
" His detention cannot be upheld and is set aside.
Petitioner No. 36 (Sri Panchanan Das).
The District Magis trate, 24 Parganas, made an order dated June 13, 1968 directing under section 3(2) of the Act petitioner 's detention with a view to preventing him from acting in any manner prejudicial to the maintenance of public order.
His representation was sent to the Advisory Board which, after considering all the materials, reported that there was sufficient cause for his detention.
Thereupon the Gov ernment confirmed the detention order on August 29, 1968.
Most of the grounds are not at all relevant to the maintenance of public ,order; see for instance ground No. 1 (c) which is in these terms : 151 "That on 18 2 68 at about 11.30 a.m. you and your associates were found to remove rice from a running Railway wagon by breaking seal of the wagon door at Bagmari Rly.
pool and overhead Chitpur Bridge.
" His detention cannot be upheld.
Petitioner No. 37 (Indrajit Debnath).
This petitioner was detained by an order of the District Magistrate 24 Parganas dated May 23, 1968 made under section 3 (2) of the Act on the ground that his detention was necessary with a view to preventing him from acting in any manner prejudicial to the maintenance of public order.
His representation was considered by the Advisory Board along with the other materials.
The Board reported that there was sufficient cause for his detention.
Thereupon the Government confirmed the order of detention on August 1, 1968.
Most of the grounds contain allegations of theft of overhead traction wire.
They cannot possibly be relevant to maintenance of public order.
The detention order cannot be upheld and is hereby set aside.
Petitioner No. 38.
(Surjit Singh).
This petitioner was detained by the order of the District Magistrate, 24 Parganas under section 3 (2) of the Act on April 4, 1968; the detention being considerd necessary to prevent him from acting in any manner prejudicial to the maintenance of public order.
His representation was considered by the Advisory Board along with the other materials and the Board reported that there was sufficient cause for his detention.
Thereupon the Government confirmed the detention order on June 29, 1968.
Some of the grounds cannot possibly relate to maintenance of public order.
Ground No. 1 (viii) is in these terms : "That on 16 2 68 you fled away from the R. G. Kar Hospital while you were undergoing treatment under police guard." His detention consequently cannot be upheld and is hereby set aside.
Petitioner No. 39 (Badal Pal).
This petitioner was detained by an order, dated July 30, 1968 made by the District Magistrate 24 Parganas under section 3(2) of the Act, his detention being considered necessary to prevent him from acting in any manner prejudicial to the maintenance of public order.
His representation was considered by the Advisory Board with other materials which reported that there was sufficient cause for his detention.
Thereupon the Government confirmed the order of detention.
Some of the grounds have absolutely no relevance to the maintenance of public order.
See for instance grounds Nos. 1 (d), (e) and (f).
His detention cannot, therefore, be upheld and is set aside.
152 Petitioner No. 40 (Sona Karmakar) .
This petitioner was de tained by an order of the District Magistrate dated July 30, 1968 made under section 3 (2) of the Act on the ground that his detention was necessary for preventing him from acting in any manner prejudicial to the maintenance of public order.
His representation was considered by the Advisory Board with the other materials but the Board reported that there was sufficient cause for his detention.
On September 18, 1968 the Government confirmed the order of detention.
Some of the grounds cannot possibly be regarded as relevant to maintenance of public order.
See grounds Nos. 1 (b) and (c).
His detention cannot be upheld and is hereby set aside.
Petitioner No. 42 (Jaganath Goila).
This petitioner was de tained by an order of the District Magistrate,, 24 Parganas made under section 3 (2) of the Act on the ground that it was necessary to detain him in order to prevent him from acting in any manner prejudicial to the maintenance of public order.
His representation was considered by the Advisory Board together with the other materials.
The Board reported that there was sufficient cause for his detention.
On October 7, 1968 the detention order was confirmed.
A perusal of the grounds shows that most of the grounds are not relevant to maintenance of public order and in this connection reference may be made to ground Nos. 1 (ii) and (iii).
The detention of this petitioner cannot, therefore, be upheld and is hereby set aside.
Petitioner No. 43 (Shyamal Pal).
This petitioner was detained by an order of the District Magistrate, 24 Parganas made unders.
3 (2) of the Act on the ground that it was necessary to detain him in order to prevent him from acting in any manner prejudicial to the maintenance of public order.
On receiving the grounds of detention the petitioner made a representation which was considered by the Advisory Board together with the other materials.
The Board reported that there was sufficient cause for his detention.
On May 17, 1968 the Government confirmed the order of detention.
We have examined the grounds of detention.
Most of them do not relate to or are relevant to maintenance of public order.
The activities mentioned cover acts of theft, robbery etc.
but they cannot be considered relevant for the purpose of public order, in view of our previous decisions.
The detention is consequently set aside.
Petitioner No. 44 (Suvranghshu Mitra).
This petitioner was detained by an order dated April 20, 1968 of the District Magis 153 trate, 24 Parganas, made under section 3 (2) of the Act on the ground that it was necessary to detain him with a view to preventing him from acting in any manner prejudicial to the maintenance of public order.
His representation was forwarded to the Advisory Board which gave an opinion that there was sufficient cause for his detention.
Thereupon the Government of West Bengal confirmed the order of detention on June 28, 1968.
Some of the ,grounds are wholly irrelevant to maintenance of public order.
For instance ground No. 1 (i) is "That on 11 10 67 at about 11.45 hrs.
you assaulted Shri Narayanchandra Das of 6A, Baikuntha Ghose Road, Calcutta 42 with fists and blows.
" He is therefore entitled to be released.
Petitioner No. 45.
(Madan Mohan Mandal).
This petitioner was detained by an order of the District Magistrate, 24 Parganas, dated January 16, 1968 on the ground that it was necessary to detain him in order to prevent him from acting in any manner prejudicial to the maintenance of public order.
His representation was considered by the Advisory Board which gave an opinion that there was sufficient cause for his detention.
Thereupon the Government of West Bengal confirmed the order of detention on May 1, 1968.
Some of the grounds of detention do not appear to be relevant to maintenance of public order.
See for instance ground No. 1 (iv).
Consequently he is entitled to be released.
Petitioner No. 46.
(Rangalal Debnath).
This petitioner was detained by an order dated March 16, 1968 passed by the District Magistrate, 24 Parganas, under section 3 (2) of the Act on the ground that it was necessary to detain him in order to prevent him from acting in any manner prejudicial to the maintenance of public order.
On receiving the grounds he made a representation to the Advisory Board which gave an opinion that there was sufficient cause for his detention.
The Government of West Bengal confirmed the order of detention on June 10 1968.
His case is similar to others inasmuch as most of the grounds are not relevant to the maintenance of public order.
See for instance ground No, 1 (iv).
The detention of the petitioner, therefore, cannot be upheld and is hereby set aside.
G.C. Petitions allowed.
[/INST]The appellant and respondents were contestants for a reserved seat from 'a scheduled caste constituency for election to the State Legislative Assembly, and the first respondent was elected.
The election was challenged by the appellant on the ground that the respondent was not a member of scheduled caste because, he embraced Christianity and professed the Christian religion, and therefore, was not eligible to stand for election for the reserved seat.
During the trial, the High Court summoned a Register, containing the names of all converted Christians of the locality, which was maintained by the local church.
There was no entry showing that the first respondent was converted to Christianity.
On the issue whether the first respondent was converted to Christianity, the High Court, on a consideration of the entire evidence held that there were no proof of such conversion and dismissed the petition.
In appeal to this Court, a petition was flied alleging that the Register contained entries showing that the parents of the first respondent were converted to Christianity and it was prayed that the case should proceed on the plea of conversion to Christianity of the parents of the first respondent, in place of the original plea that the first respondent himself was so converted.
HELD: The prayer in the petition could not be granted because: (a) The plea changed the entire nature of t e case and required fresh evidence, (b) it was belated and beyond the period of limitation prescribed for filing of election petitions; and (c) the application should have been filed in the High Court itself, for, the Register was produced in the High Court and it was inspected by the parties who had thus ample opportunity to discover the basis for the new plea.
[995 D F] Under cl.
(3) of the Constitution (Scheduled Castes) Order, 1950, it would have been sufficient if the appellant pleaded and proved that the first respondent was a Christian that therefore he was not a Hindu and was not competent to stand for the reserved seat; but he chose to establish that the first respondent was himself converted to Christianity and failed to do so.
[996 B C]
</s>
|
<s>[INST] Summarize the judgementivil Appeal No. 2912 of 1986.
From the Judgment and Order dated 1.4.85 of the Bombay High Court in Appeal No. 262 of 1985.
J.P. Cama and Mukul Mudgal for the Appellant.
V.N. Ganpule for the Respondents; The Judgment of the Court was delivered by, VENKATARAMIAH, J.
The appellant is M/s. Isha Steel Treatment, Bombay A firm carrying on the business of metal processing, i.e., heat treatment of metals.
In the year 1963 it established a factory (hereinafter referred to as the 'I Unit ') for the purpose of carrying on the business of metal processing with about 32 workmen.
Nearly 12 years after the establishment of the I Unit it established a second factory (hereinafter referred to as the "II Unit ') for carrying on the same kind of business employing about 75 workmen about 200 yards 418 away from the I Unit.
Both the units had independent loca tion, separate factory licences and separate municipal licences.
The said two units also had separate stores and maintained separate accounts and balance sheets.
The workmen of both the units were also employed independently and there was a separate muster roll in respect of each of the two units.
There was no rule or condition regarding the inter transferability of the workmen.
On finding that the workmen of the I Unit were wilfully slacking their work and that there was growing indiscipline among them, the appellant decided in the year 1981 82 to reduce the three shifts working previously to two shifts.
The indiscipline and the lack of production continued and on it becoming impossible for the appellant to carry on with even the aforesaid two shifts as reduced, the appellant came to the unhappy conclu sion that it had no alternative but to close down the I Unit altogether.
The aforesaid closure of the I Unit (set up in 1963) took effect on 15.12.1982 and closure compensation was offered to the entire staff of the 32 workmen.
The workmen of the I Unit raised through their Union, namely, Associa tion of Engineering Workers, Bombay, an industrial dispute before the Deputy Commissioner of Labour (Conciliation), Bombay District Office, Bombay, who in exercise of the powers delegated to him, under clause (d) of sub section (1) of section 10 read with section 12(5) of the (hereinafter referred to as 'the Act ') referred to Shri B.L. Borude, Industrial Tribunal, Maharash tra, Bombay the dispute between the appellant and the work men employed in the I Unit over the demand for reinstatement with full back wages and continuity of service with effect from 15.2. 1982.
The said reference was registered as Refer ence (IT) No. 218 of 1982 before the Tribunal.
In the statement of claim filed by the workmen it was urged that the two units which were being run by the appel lant had functional integrality and were for all purposes parts of the establishment and that the workmen were mutual ly transferable from one unit to the other.
It was further stated that the workmen were originally members of Mazdoor Congress which, according to them, could not improve their service conditions.
Therefore, they decided to join another union, namely, the Association of Engineering Workers and were canvassing amongst themselves for organising under the banner of the Association of Engineering Workers.
They further pleaded that on the management coming to know about it, it tried to persuade the workers not to join the said Association.
On the workmen not agreeing to the suggestion made by the management, the management in an attempt to retaliate against the move of the workmen, removed 22 work men on 419 15.2.
1982 alleging that the I Unit was making a loss, that the workmen had resorted to giving less production, that there was indiscipline in the 1 Unit and, therefore, the management was closing down the said unit.
The workmen pleaded that the action of the management was arbitrary and was a colourable exercise of the management 's power of closure.
It was alleged that the impugned action was by way of victimisation for the trade union activities of the said workmen.
They claimed that the principle of 'last come, first go ' while terminating the services of the workmen having not been followed as required by section 25 G of the Act, the termination was illegal.
The appellant resisted the claim made by the workmen.
It pleaded inter alia that the closure of the I Unit was due to the non co operation and indiscipline on the part of the workmen, that the two units were independent of each other and there was no functional integrality between them.
The management denied that there was any rule or service condition permitting transfer of workmen from one factory to another.
The management stated that it was always willing to pay the compensation payable on closure to the workmen concerned and that section 25 G of the Act was inapplicable to the case.
After recording the evidence tendered by the parties and hearing the arguments urged on their behalf, the Tribunal held that the two units were independent of each other, there was no common seniori ty list of the workmen of the two units and there was no rule or practice of transferring workmen from one factory to the other.
The Tribunal rejected the case of the workmen that the closure was in retaliation to the trade union activities of workmen.
It also found that there was no victimisation of the workmen and the workmen concerned were not entitled to be reinstated as the closure of the I Unit had become legally effective from 15.2.
Accordingly, it rejected the demand made by the workmen by its Award dated September 6, 1983.
Aggrieved by the Award passed by the Tribunal, the workmen filed a petition under Article 226 of the Constitution of India before the High Court of Bombay challenging the legality of the Award.
The learned Single Judge, before whom the writ petition came up for considera tion, reversed the Award of the Tribunal and remanded the proceedings back to the Tribunal for afresh disposal.
By the time the decision was rendered, there were only 14 workmen, who were interested in the dispute.
The learned Single Judge, therefore, directed the Tribunal to consider whether the termination of services of any of the 14 workmen, whose claim for reinstatement still subsisted, was done in viola tion of the principles laid down under section 25 G of the Act.
The learned Single Judge also directed the Tribunal to determine whether the workmen were entitled to reinstatement and if the Tribunal found that they were entitled to such reinstatement the 420 question as to the grant of back wages should also be con sidered by it.
It should be stated here that the learned Single Judge made it clear that the finding of the Tribunal that the Association of workmen had 'failed to establish that the services of the workmen were terminated because of their joining the petitioner union ' was not disturbed.
The learned Single Judge, however, found that there was func tional integrality between the two units and in that connec tion observed thus: "In my judgment the fact that the two units are situate within a distance of 200 meters, the fact that both the units are controlled by the same employer and the fact that the busi ness of heat treatment process carried on in the two units was identical, it leaves no manner of doubt that the two units were really integral and were known separately only be cause the business in the two units commenced on different dates.
In my judgment, the find ing recorded by the Tribunal that the two units were separate and independent is clearly erroneous and cannot be sustained.
" With these observations, the learned Single Judge set aside the finding recorded by the Tribunal to the effect that the two units were independent and separate and held that they were one and the same.
In view of his finding the learned Single Judge held that section 25 G of the Act was applicable.
He accordingly set aside the Award and remanded the case to the Tribunal with the directions already set out above.
Aggrieved by the judgment of the learned Single Judge, the appellant preferred an appeal before the Division Bench of the High Court.
That appeal was dismissed with the obser vation that the finding of the learned Single Judge that the two units had functional integrality was correct and the remitting of the matter to the Tribunal was in order.
This appeal by special leave is filed against the decision of the Division Bench of the High Court.
It is not disputed before us that after 15.2.
1982 when the work in the I Unit was completely stopped no work is being carried on in the premises where the I Unit had been established.
It is also not disputed that the II Unit has been working as usual and the stoppage of the work in the I Unit had no effect on the work of the II Unit.
The finding recorded by the Tribunal that the management had not closed down the I Unit by way of retaliation to the alleged trade union activities of the workmen of the I Unit has not been shown to be untenable.
It is 421 also seen that the findings of the Tribunal that the two units had been established in two different places although at a distance of about 200 yards from each other; that the muster rolls of the two units were separate; that the two units had separate factory licences and municipal licences; that the balance sheets of the two units were separate; and that there was no rule or condition of service that the workmen were transferable from one unit to the other are not set aside by the learned Single Judge.
It is true that in the course of the evidence of one of the witnesses for the management it had been brought out, that the name of workman Kishore Ram of the 1 Unit had been by mistake entered in the Muster Roll of the II Unit in October, 1980 and it had been scored out.
This was a stray case.
There was no evidence in the case showing that Kishore Ram had actually worked in the II Unit.
Neither Kishore Ram nor anybody else had been examined to give evidence in support of the said fact.
On a consideration of the entire evidence including the fact that there was no common seniority list of workmen of the two units and the fact that the name of Kishore Ram had been entered in the Muster Roll of the II Unit in October, 1980 and that it had been scored out, the Tribunal came to the conclusion that the workmen of the two units were not trans ferable from one unit to the other.
The first question which arises for consideration in this case is whether the two units should be treated as having functional integrality.
In the Workmen of the Straw Board Manufacturing Company Limited vs M/s. Straw Board Manufacturing Company Limited, this Court had occasion to consider a similar question.
At page 507 this Court considered the above question as follows: "20.
After giving due consideration to all the aspects pointed out by the learned counsel for the appellants, we are unable to hold that the R. Mill is not an independently functioning unit and that there is any func tional integrality as such between the R. Mill and the section Mill.
The fact of the unity of ownership, supervision and control and some other common features, which we have noticed above, do not justify a contrary conclusion on this aspect in the present case.
There is considerable force in the submission of Mr. Chitaley that the R. Mill is a different line of business and the closure of the section Mill has nothing to do with the functioning of the R. Mill.
The matter may be absolutely different when in an otherwise going concern or a func tioning unit some workmen 's services are 422 terminated as being redundant or surplus to requirements.
That most of the conditions of service of the two mills were substantially identical can be easily explained by the fact that, being owned by the same employer and the two units being situated in close proximity, it will not be in the interest of the manage ment and peace and wellbeing of the company to treat the employees different creating heart burning and discrimination.
For the same reason, there is no particular significance in this case even in the application of the standing orders of the company to the employ ees of the R. Mill which, because of the non requisite number of employees employed in the latter, is not even required under the law to have separate standing orders.
It is, in our opinion, a clear case of closure of an inde pendent unit of a company and not a closure of a part of an establishment.
" In the above decision this Court has held that the unity of ownership, supervision and control that existed in re spect of the two mills involved in that case and the fact that the conditions of the service of the workmen of the two mills were substantially indentical were not by themselves sufficient in the eye of law to hold that there was func tional integrality between the two mills.
It held that it was a clear case of closure of an independent unit and not of a part of an establishment.
The decision of the learned Single Judge of the High Court that the fact that the two units were situate in a distance of 200 meters, the fact that both the units were controlled by the same employer and that the business of heat treatment processing carried on in the two units was identical had left no room for doubt that the two units were really integral cannot be sustained.
The decision in S.G. Chemicals and Dyes Trading Employees ' Union vs S.G. Chemicals and Dyes Trading Limited and Another, ; is not of much assistance to the work men.
The management in that case was running its business in pharmaceuticals at three places.
The Pharmaceutical Division was at Worli, the Laboratory and Dyes Division was at Trom bay and the Marketing and Sales Division was at Churchgate.
In 1984 the company which was managing the said three divi sions of business was sold out.
As the buyers proposed to handle the future sales of the Company through their own distribution channels, they found that the services of the staff working at the Churchgate office were no longer re quired.
Therefore, the management closed down the office at Churchgate.
The question was whether there was functional integrality between the office at the Churchgate and the factory at Trombay.
This Court on a 423 consideration of the material before it in that case, held that the functions of the Churchgate division and the Trom bay factory were neither separate nor independent but were so integrally connected as to constitute the Churchgate and the Trombay factory into one establishment, because the Churchgate division used to purchase the raw material re quired by the Trombay factory for producing or processing the goods.
it used to market and sell the goods so manufac tured or processed by that factory and it also used to disburse the salary and other employment benefits and main tain accounts etc.
of the workmen.
These were considered to be integral parts of the manufacturing activities of the factory at Trombay, because the factory could never have functioned independently without the Churchgate division being there.
It is not the case of the workmen in the present case that the II Unit could not continue to function after the closure of the I Unit.
As already mentioned, the II Unit is continuing to function as usual even now notwith standing the stoppage of the activities at the I Unit.
The question of application of section 25 G of the Act arises only when the services of the workmen are retrenched.
In Santosh Gupta vs State Bank of Patiala, ; it is laid down that if the termination of service of a workman in a given case falls either under section 25 FF or under section 25 FFF of the Act it would not be a termina tion falling under section 25 F of the Act.
This Court has observed in that case that after the enactment of section 25 FF and section 25 FFF retrenchment included every kind of termination of service except those not expressly included in section 25 F or not expressly provided for by other provisions of the Act such as sections 25 FF and 25 FFF.
Hence if the case is one of genuine closure then the ques tion of applying section 25 G of the Act which is applicable to a case of retrenchment would not arise.
It is not necessary that in order to effect closure of business the management should close down all the branches of its business.
In Management of Hindustan Steel Ltd. vs The Workmen & Others, ; this Court has held that the word 'undertaking ' used in section 25 FFF seems to have been used in its ordinary sense connoting thereby any work, enterprise, project or business undertak ing.
It is not intended to cover the entire industry or business of he employer.
Even the closure or stoppage of a part of the business or activities of the employer would seem in law to be covered by the said provision.
In deciding the above case this Court relied upon its earlier decision in Workmen of the Indian Leaf 'Tobacco Development Company Limited, Guntur vs Management of the Indian Leaf Tobacco Development Co. Ltd., Guntur, ; In that case the Court 424 observed that a genuine closure of depots or branches, even though it did not amount to closure of the business could not be interfered with by an Industrial Tribunal.
It further held that the closure was stoppage of part of the activity or business of the management and such stoppage is an act of management which is entirely in the discretion of the man agement.
The Court further observed that no Industrial Tribunal could interfere with the discretion exercised in such a matter.
It was, however, argued in this case on behalf of the workmen that since the Provident Fund accounts of the em ployees and the Employees ' State Insurance accounts of the two units had common numbers with the authorities concerned and settlements containing similar terms (copies which are not produced before us) had been entered into in 1974 be tween the management and the workmen of the two units, it should be held that the two units had functional integrality between them.
We are of the view that even these factors are not sufficient to hold that the two units were one and the same notwithstanding the fact that the nature of the busi ness carried on in them was the same.
In Indian Cable Co. Ltd. vs Its Workmen, this Court has held that the fact that the balance sheet was prepared incorpo rating the trading results of all the branches or that the employees of the various branches were treated alike for the purpose of provident fund, gratuity, bonus and for condi tions of service in general, could not lead to the conclu sion that all the branches should be treated as one unit for purposes of section 25 G of the Act.
On a consideration of the entire material before it, the Tribunal had reached the conclusion that the closure of the I Unit was bona fide, that it did not have any functional integrality with the II Unit and that there was no victimi sation of workmen for their trade union activities.
On going through the Award passed by the Tribunal we feel that it had not committed any error in recording the said findings which called for interference at the hands of the High Court under Article 226 of the Constitution of India.
We are satisfied that this case is one of bona fide closure of an independent unit of business.
The learned Single Judge and the Division Bench 'of the High Court were, therefore, in error in hold ing that the termination of service of the workmen in this case amounted to retrenchment and not closure and the case of the workmen had to be considered on remand by the Tribu nal in the light of section 25 G of the Act.
They overlooked that it would result in a wholly unjust situation in which a corresponding number of workmen in the II Unit would be prejudicially affected even though they had nothing to do with the I Unit.
425 We, therefore, set aside the judgments of the Division Bench and of the learned Single Judge and restore the Award passed by the Tribunal.
Before concluding we should record that the learned counsel for the management submitted that the management was willing to pay ex gratia a sum of Rs.10,000 to each of the workmen who had not received till now any compensation payable to them under section 25 FFF of the Act for closure of the I Unit.
He submitted that as on date 11 workmen had not received the compensation payable to them on closure and that each of them would be paid the compensation payable to them on closure and Rs. 10,000.
The names of those 11 work men are as under: S/Shri 1.
Madanlal Surajbali Jaiswal 2.
Sukhdev 3.
Dulsinger Rasharak Jaiswal 4.
Motilal Pawar Kurmi 5.
Mohanram Katwaro Jaiswal 6.
Udaychand Keshavasingh 7.
Zagaro Palveer Singh 8.
Murlidhar Govind Javane 9.
Wandev Prasad 10.
Radhashyam Rajpati Yadav 11.
Karmraj Lakshman Yadav We, therefore, direct the management to pay each of the above workmen compensation payable to them on closure and a sum of Rs. 10,000.
The management is given two months ' time to pay the amount due to each of the above eleven workmen.
The appeal is accordingly allowed.
There shall, however, be no order as to costs.
S.R. Appeal al lowed.
[/INST]The appellant carries on the business of metal process ing i.e. beat treatment of metals.
In 1963 it established a factory with about 32 workmen called "No. I Unit".
In the year 1975 another factory called "No. II unit" was estab lished for carrying on the same kind of business employing about 75 workmen about 200 yards away from the No. 1 Unit.
Both the Units had independent location, separate factory licences and separate municipal licences.
The two Units had separate stores and maintained separate accounts and balance sheets.
The workmen of both the units were also employed independently and there was a separate muster roll in re spect of each of the two units.
There was no rule or condi tion regarding the inter transferability of the workmen.
However, there was by mistake the name of one workman by name Kishore Ram of Unit 1 entered in the muster roll of the II Unit in October 1980 and it had been scored out later.
On finding that the workmen of No. 1 Unit were wilfully slacking their work and that there was growing indiscipline among them, the appellant decided in the year 1981 82 to reduce the three shifts working previously to two shifts.
The indiscipline and the lack of production continued and on it becoming impossible for the appellant to carry on 415 with even the two shifts as reduced, the appellant came to the unhappy conclusion that it had no alternative left but to close down the No. 1 Unit altogether with effect from 15.2.82 and closure compensation was offered to the entire staff of 32 workmen.
The workmen of the I Unit raised through their Union, namely, Association of Engineering Workers, Bombay an indus trial dispute reference (IT) No. 218 of 1982.
In the state ment of claim filed by the workmen it was urged; (i) that the two units which were being run by the appellant had functional integrality and were for all purposes parts of one establishment and that the workmen were mutually trans ferable from one unit to the other; (ii) that the reasons given by the management for closing down Unit No. 1 is false, the action of the management was arbitrary and was colourable exercise of the management 's power of closure; (iii) the impugned action was by way of victimisation for the trade union activities of the said workmen in Unit No 1 and the principle of "last come, first go" while terminating the services of the workmen having not been followed as required by section 25 G of the Act, the termination was illegal.
The Tribunal rejected the case of the workmen that the closure was in retaliation to the trade union activities of workmen and found that there was no victimisation of the workmen and the workmen concerned were not entitled to be reinstated as the closure of the 1 Unit had become legally effective from 15.12.1982 and passed its award to that effect on September 6, 1983.
Aggrieved by the Award passed by the Tribunal, the workmen filed a petition under Article 226 of the Constitution of India before the High Court of Bombay challenging the legality of the Award.
The learned Single Judge, before whom the writ petition came up for consideration, reversed the Award of the Tribunal and re manded the proceedings back to the Tribunal for afresh disposal.
By the time, the decision was rendered, there were only 14 workmen, who were interested in the dispute, and therefore, the learned Single Judge directed the Tribunal to consider whether the termination of services of any of the 14 workmen, whose claim for reinstatement still subsisted, was done in violation of the principles laid down under section 25 G of the Act.
Aggrieved by the judgment of the learned Single Judge, the appellant preferred an appeal before the Division Bench of the High Court.
That appeal having been dismissed the appellant has come by way of special leave to the Supreme Court.
Allowing the appeal, the Court, HELD: 1.
The existence of the unity of ownership, supervi sion 416 and control in respect of the two units, the fact that the conditions of the service of the workmen of the two Units were substantially indentical, the fact that both the units are situate at a distance of 200 meters and that the busi ness of heat treatment processing in the two Units are the same are not by themselves sufficient in the eye of law for holding that there was functional integrality between the two Units.
This is a clear case of closure of an independent unit and not of a part of an establishment.
[422D E] Workmen of the Straw Board Manufacturing Co. Ltd. vs M/s Straw Board Manufacturing Company Ltd., followed.
S.G. Chemicals and Dyes Trading Employees ' Union vs S.G. Chemicals and Dyes Trading Ltd. & Anr., ; distinguished.
The question of application of section 25 G of the Act arises only when the services of the workmen are re trenched within the meaning of section 25F and not when sections 25FF, and 25FFF are applicable.
If the case is one of genuine closure then the question of applying section 25 G of the Act which is applicable to a case of retrench ment would not arise.
It is not the case of the workmen in the present case that the II Unit could not continue to function after the closure of the I Unit.
In fact the II Unit is continuing to function as usual even now notwith standing the stoppage of the activities at the I Unit.
[423C E] Santosh Gupta vs State Bank of Patiala, ; , relied on.
It is not necessary that in the order to effect closure of business the management should close down all the branches of its business.
A genuine closure of a Unit even though it did not amount to closure of the business could not be interfered with by an industrial Tribunal.
The clo sure was stoppage of part of the activity or business of the management and such stoppage is an act of management which is entirely in the discretion of the management.
No Indus trial Tribunal could interfere with the discretion exercised in such a matter.
[423F H; 424A B] Management of Hindustan Steel Ltd. vs The Workmen & Ors., ; ; Workmen of the Indian Leaf Tobacco Development Co. Ltd. Guntur vs Management of the Indian Leaf Tobacco Development Co. Ltd., Guntur ; fol lowed.
417 4.
The two factors; namely: (i) the provident fund accounts of the employees and the Employees ' State Insurance accounts of the two units had common numbers with the au thorities concerned and (ii) settlements containing similar terms had been entered into in 1974 between the management and the workmen of the two units are not sufficient for holding that the two units were one and the same notwith standing the fact that the nature of the business carried on in them was the same.
[424B D] 5.
On a consideration of the entire material it is clear that (i) the Tribunal had not committed any error in record ing the findings which called for interference at the hands of the High Court under Article 226 of the Constitution; (ii) this case is one of bona fide closure of an independent unit of business and not a case of termination of services of workmen requiring consideration on remand, by the Tribu nal in the light of s.25 G of the Act; (iii) it was a case where the judgment of the High Court if maintained would result in a wholly unjust situation in which a corresponding number of workmen in the II Unit would be prejudicially affected even though they had nothing to do with the 1st Unit.
[424E H] Indian Cable Co. Ltd. vs Its Workmen, , followed.
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<s>[INST] Summarize the judgementition No. 96 of 1972.
Under Article 32 of the Constitution of India.
I. N. Shroff for the appellant/petitioner.
B. B. Ahuja and section P. Nayar for respondents.
The Judgment of the Court was delivered by SHINGHAL J.
This is a petition under article 32 of the Constitution.
Bhupendra Ratilal Thakkar, petitioner No. 1, is the managing partner of the other petitioner M/s Rajnikant Nareshchandra Shroff, which is a partnership firm carrying on the business of "shroffs and bankers".
Its principal place of business is said to be at Mehmadabad, with branches at Surat and Bombay.
The petitioners applied for registration of the firm on April 7, 1971, and had time to file their return of income upto June 30, 1972.
It has been claimed that the firm had large sums of money in cash as well as 'hundis ' and other bills of exchange which formed its stock in trade and that there was no justification for thinking that it would not do what was required to be done under the law relating to income tax.
The firm had a sum of Rs. 12,00,000/ as cash on January 10, 1972, which is said to have been duly entered in its books of account in the Bombay branch office.
The grievance of the petitioners is that some of the 892 respondents entered these premises on January 10, 1972, "in purported exercise of the powers conferred by section 132", and seized the sum of Rs. 12,00,000/ along with the books of account and other documents.
Searches are also said to have been carried out in Mehmedabad office and the branch office at Surat, and some more books of account, papers and documents are said to have been seized there.
The petitioners have stated that as the sum of Rs. 12,00,000/ was the stock in trade of the firm, and it had not been secreted, there was no justification for the seizure of the money or the books and the other documents.
They have accordingly stated that the seizure was an abuse of the authority conferred by sections 132 and 132 A of the Income tax Act, 1961, hereinafter referred to as the Act, and rules 112, 112 A, 112 B, 112 C and 112 D of the Income tax Rules, 1962, hereinafter referred to as the Rules.
The petitioners have contended that sections 132 and 132 A of the Act are unconstitutional because they are violative of articles 14, 19(1)(f) and (g) and 31(1) of the Constitution.
It has also been urged that the aforesaid rules are illegal as they are not backed by any legal authority.
The aforesaid provisions have also been challenged on the ground that they are violative of article 14.
In regard to sections 132 and 132 A of the Act, the petitioners have further stated that they should be struck down as they confer naked, arbitrary, unguided, discriminatory and uncanalised power on the executive authority.
The petitioners have also prayed for the restoration of the property which has been seized by the income tax authorities.
It has been pointed out in the petition that three similar writ petitions were pending in this Court, including writ petition No. 446 of 1971.
Pooran Mal vs Director of Inspection Investigation.
The respondents have admitted the search and the seizure of the property, but have stated that this was done because the Commissioner of Income tax, Gujarat I, respondent No. 1, had reasons to believe that the petitioners would not produce their books of account etc.
even though they would be useful to the department for taking proceedings under the Act.
It has also been stated that there was enough material before the Commissioner for exercising the power under section 132(1) of the Act.
The respondents have made specific averments in this connection including the averment that books of account were unreliable, and that the claim that the sum of Rs. 12,00,000/ was shown as balance in the books of account was incorrect.
They have also denied the allegation that any search was carried on in the Mehmedabad head office of the petitioner firm or that the sum of Rs. 12,00,000/ was kept as the firm 's stock in trade or that the firm was left with no other money whatsoever.
The petitioners ' contention against the legality of sections 132 and 132 A of the Act and the Rules has also been controverted.
It will be recalled that in their writ petition the petitioners have made a specific reference to Pooran Mal 's writ petition No. 446 of 1971.
That case has been heard and decided by this Court on December 14, 1973 and the decision has been reported in Pooran Mal 893 etc.
vs Director of Inspection (Investigation) of Income Tax, New A Delhi and others Mr. Shroff has frankly conceded that the points which have been raised in this petition have been considered in that case, and that he has nothing to say in regard to the validity of sections 132 and 132 A of the Act and rules 112 and 112 A of the Rules or the averments in the petition in that connection.
In fact it has been held by this Court in Pooran Mal 's case that "it was impossible to hold that the impugned provisions were violative of articles 14, 19 or 31.
" All that Mr. Shroff has argued is that the validity of rules 112 B and 112 C of the Rules was not the subject matter of examination in Pooran Mal 's case and that it would be necessary for this Court to examine that part of the controversy, as and when it is permissible to do so, with reference to the provisions of article 14 of the Constitution.
We have gone through rules 112 B and 112 C of the Rules.
Rule 112 B relates to the release of the articles seized under section 132(5) of the Act, and merely provides that where, in pursuance of that section, any assets or part thereof have to be released, the Income tax officer shall forthwith deliver the same to the person from whom custody they were seized.
Rule 112 C provides for the release of the remaining assets, and it is to the effect that they shall be made out or paid to the person from whose custody they were seized, after the discharge of the liabilities referred to in cl (i) of sub section (1) of section 132 A of the Act.
Both these are therefore beneficial rules, and there can be no satisfactory reason for challenging their validity with reference to article 14 of the Constitution.
So when the present case is not different from Pooran Mal 's case, there is no merit in this writ petition.
It is hereby dismissed.
There will however be no order as to costs.
P.H.P. Petition dismissed.
[/INST]Section 60 of the empowers the State Transport Authority to cancel or suspend a permit granted by it under certain circumstances.
The proviso to the section states that no permit shall be cancelled unless an opportunity has been given to the holder of the permit to furnish his explanation.
On receipt of reports and complaints regarding the appellant, the State Transport Commissioner issued a show cause notice to it without specifying therein the nature of complaints.
Action was taken for cancellation of the permits.
The High Court summarily dismissed the writ petition of the appellant filed under article 226 of the Constitution against the order of the State Transport Appellate Tribunal.
Allowing the appeal to this Court, ^ HELD: (1) The High Court was not right in not interfering with the order of the authority cancelling the permits.
A manifestly wrong procedure in a departmental action of this nature is obvious on the face of the notice resulting in violation of the principles of natural justice.
[221D; 220A] (2) The proposed penal action has to be particularised with reference to each permit detailing the particular conditions for breach of which action is sought to be taken.
Proviso to section 60(1) which requires mandatory compliance is nothing short of a reasonable opportunity to the permit holder to furnish his explanation.
Unless the breaches of conditions or other allegations are particularised with reference to each permit in the show cause notice such notice is clearly invalid and no action can be taken under such a notice.
[220G: 221D]
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<s>[INST] Summarize the judgementivil Appeal Nos.
1694 1709 of 1991.
From the Judgment and Order ' dated 23.1.1990 of the A.P. Administrative Tribunal, Andhra Pradesh in R.P. Nos.
13986/89, 24045 50/89, 25091/89, 1027 & 2111/.89, 28925 26/89, 28929 to 31/89 and O.A. No. 1918 of 1990.
K. Madhava Reddy and G. Prabhakar for the Appellants.
M.K. Ramamurthi, section Markandeya and Ms. C. Markandeya for the Respondents.
The following Order of the Court was delivered: This is an appeal by the State Government of Andhra Pradesh by special leave: Challenge is to the order of the State Administrative Tribunal directing the benefit of the Government Order of 18.11.1981 to be extended to selection of the Sub Inspectors of Police which is done through the State level Recruitment Board.
The Government Order which has been extracted in the Order of the Tribunal reads thus: "Notwithstanding anything in the Andhra Pra desh State and Subordinate Service Rules or the Special Rules, candidates seeking appoint ment of all the non gazetted posts of all services, and seeking eligibility in general educational test who have obtained the basic educational qualifications prescribed for direct recruitment eligibility for promotion in the special rules governing such posts, through Telugu medium, shall be given weight age in the matter of selection to such posts by awarding them 5% of the total aggregate maximum marks of the relevant competitive examination held by the Andhra Pradesh Public Service Commission for recruitment acquiring eligibility to such posts.
566 "Having regard to the avowed policy of the Government to introduce Telugu progressively in the State in the coming years and as Telugu has been 'introduced as official language at Directorage level and also in the lower courts in certain Districts of the State and so as to give preference to candidates who have ob tained the basic educational qualification through the medium of Telugu, Government have after careful examination decided in consulta tion with the Andhra Pradesh Public Service Commission that such candidates to give weightage of 5% of the total aggregate maximum marks of all the competitive examinations of the Andhra Pradesh Public Service Commission for recruitment to all the non gazetted poStS of all services.
There is no dispute that the Order in its own terms applies to selection carried on through the State Public Service Commission; nor is there any dispute that the selection of Sub Inspectors, for the relevant period was being carried on by a body other than the State Public Service Commission.
The Tribunal observed as follows: "We cannot the rule too literally and defeat the object and purpose with which it has been made.
If the object and purpose are kept in view, then ' we have no hesitation m holding that it applies to all selections irrespective of the body that makes selections in the State.
We see no merit in the literal con struction suggested by Sri Sagar.
" We are told that the validity of the Government Notifi cation under challenge on the ground that the Government have no authority to make such a direction and that chal lenge is in an independent petition pending disposal before this Court.
Since this petition is not one challenging the Notification but seeking its extension to areas not covered by the Notification in terms, disposal of this petition has no bearing on the petition which challenges the Notifica tion.
The State Government is the authority to take a policy decision.
Whether the decision is tenable or not in law, as we have just pointed out, is not to be decided here.
But since Government in their wisdom have specifically confined the application of the Notification to recruitment through the State Public Service Commission, we have not been 567 able to appreciate the decision of the Tribunal that it was also available to be extended to selection through bodies other than the State Public Service Commission.
Mr. Ramamurti appearing in.
support of the respondents ' cause has pointed out that if the Government Notification is confined to selection through the State Public Service CommissiOn, the Government Notification would be hit by Article 14 of the Constitution.
Therefore, according to Mr. Ramamurti, it was open to the Tribunal to read down the requirement by saying that the benefit of the Notification would be applicable to all categories of selection.
We have not been able to agree with Mr. Ramamurti that when the Notification is specific and is intended to apply to a specified group of cases for selection, it would be open to the Tribunal to extend its application beyond what has been clearly.
Specified.
It is one matter to say that the Notification applied in a limited way may be hit by law; it is another to say that contrary to the restriction im posed, the Tribunal would allow the Notification to have general application.
We are inclined to agree with Mr. Madhava Reddy for the State that the Tribunal exceeded its jurisdiction in lifting the restriction imposed.
by the, Government in the matter of benefit of 5% of total aggregate marks to those candidates who wrote their papers in Telugu language.
The appeal is allowed and the order of the Tribu nal stands vacated.
No costs. ' T.N.A. Appeal al lowed.
[/INST]In the petition filed under Article 32 of the Constitution of India, the petitioners teachers, employed in the schools run by the respondents, controlled by the Defence Department of the Government of India, contended that the action of the respondents in retiring them at the age of 58 years, whereas retaining similarly situated teachers working in other departments upto the age of 60 years was discriminatory and violative of Articles 14 and 16 of the Constitution.
The respondents filed the Office Memorandum dated 10.3.1989 issued by the Ministry of Personnel, wherein it was stated that the age of retirement of the teachers working in all the Departments and Organisations was uniformly fixed at 58 years.
Dismissing the petition, this Court, HELD: With effect from April 1, 1989 the age of superannuation of all teachers working in Central Government Departments and Organisations including Union Territories has been uniformly fixed at 58 years.
[838F]
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<s>[INST] Summarize the judgementN: Criminal Appeal No. 605 of 1981.
Appeal by special leave from the Judgment and Order dated the 8th April, 1980 of the Ahmedabad High Court in Criminal Appeal No. 218 of 1978 with Crl.
Appeal No. 603 of 1978.
M.C. Bhandare, T. Sridharan, Mrs. section Bhandare and Miss C.K. Sauhantia for the Appellant.
Miss Maya Rao for Respondent No. 1.
J.L. Jain and R.N. Poddar for Respondent No. 2.
The Judgment of the Court was delivered by MISRA, J.
In this appeal by special leave the narrow question that this Court proposes to examine is whether the High Court was right in holding that churning of the curd of which a sample was taken, if done with hand, was done in a proper manner so as to make the sample homogeneous and representative.
The few relevant facts are that Shri G.A. Parikh Food Inspector attached to Baroda Municipal Corporation visited the shop of the respondent No.1 accused Madanlal Ramlal Sharma on September 4, 1976 around 7.20 a.m.
He purchased curd from a container having 2 1/2 Kg of curd for the purpose of analysis.
There was a board hanging on the outer side of the container that 11 the curd is prepared from cow 's milk.
The Food Inspector purchased 600 grams of curd and after churning the curd, he divided it in three equal parts and prepared three separate samples, each kept in a separate bottle.
After various formalities including obtaining the sanction for prosecuting the respondent accused.
a complaint was filed in the Court of the learned Judicial Magistrate, First Class (Municipality) at Baroda.
In the course of trial at the request of the accused the third sample was sent to the Central Food Laboratory for analysis and report.
It may also be mentioned that the Food Inspector himself had sent one sample to the public analyst attached to the laboratory set up by the Municipal Corporation, for analysis of article of food.
The report of the public analyst shows that the sample of curd contained 3% milk fat and 11.7% milk solid non fat.
On the other hand, the report of the Central Food Laboratory, Calcutta (exhibit 15) shows that milk fat was 2.95% and milk solid non fat 10.8%.
It was opined that the sample of curd was adulterated.
The learned Magistrate held that the curd in question was prepared out of cow 's milk, that it did not conform to the prescribed standard and reached the conclusion that the prosecution case was established beyond a shadow of reasonable doubt.
Consequently, the learned Magistrate convicted the first respondent accused for an offence under section 7 (1) read with section 16 (1)(a)(1) of the and sentenced him to suffer rigorous imprisonment for four months and to pay fine of Rs. 500 in default to suffer further rigorous imprisonment for two months.
The first respondent accused preferred Criminal Appeal No.46 of 1977 in the Court of Sessions at Baroda.
The learned Additional Sessions Judge who heard the appeal, inter alia, held that proper churning of the sample having not been done, the sample cannot be said to be homogeneous and representative of the curd in question so as to arrive at a proper conclusion on analysis of the sample and on the short ground acquitted the accused.
Two appeals were preferred against the judgment of the learned Sessions Judge.
Criminal Appeal No. 218 of 1978 was preferred by the State of Gujarat and Criminal Appeal No. 603 of 1978 was preferred by the complainant Food Inspector.
A division Bench of the Gujarat High Court disposed of both the appeals by a common judgment.
The High Court affirmed the 12 acquittal observing that 'the conclusion is inescapable that the prosecution has failed to prove that the churning was done in a proper manner so as to make the entire curd one and all the samples would be identical in themselves. ' Hence this appeal by special leave by the complainant Food Inspector.
The sample of curd was taken on September 4, 1976.
Six years have passed and two courts have concurred in acquitting the accused, namely, the Sessions Judge and the High Court.
We are, therefore, reluctant to interfere with the order of acquittal.
But the learned counsel Mr. M. C. Bhandare for the appellant, Food Inspector and the learned counsel Mr. Nain appearing for the State of Gujarat second respondent supporting the appellant, urged that irregularity in churning the curd before sampling the same in bottles, as found by the High Court, if allowed to remain unquestioned, it would have an adverse effect on a large number of pending cases.
We are, therefore, only inclined to examine the legal submission and we may make it absolutely clear that we are disinclined to interfere after six years in what is found to be marginal adulteration by the learned Magistrate so as to send the respondent to jail, though we must make it abundantly clear that we do not look upon with equanimity on offences under the because these offences have the deleterious effect playing havoc with the health and well being of a large segment of the Society.
But the acquittal by two courts and delay of six years and coupled with the finding that there was marginal adulteration would certainly be a disincentive to interfere with the Order.
It is indisputable that curd is an article of food.
Rule 22 of the Prevention of Food Adulteration Rules, 1955 (Rules for short) provides that in the case of curd, a quantity of 200 grams has to be sent to the public analyst/Director of Central Food Laboratory for analysis.
The Standard for cow 's milk for Gujarat as prescribed under the Rules is that it must contain 3.5% milk fat and 8.5% milk solids non fat.
Further provision is that the curd obtained from any kind of milk shall have the same content as the milk fat and milk solids non fat as the milk from which it is prepared.
Section 13 (3) of the Act, provides that the certificate issued by the Director of Central Food Laboratory under section 2 B shall supersede the report given by the public analyst under 13 sub section (1).
The report of Central Food Laboratory shows that the sample contained 2.9% of milk fat.
Therefore, the conclusion that the sample of curd was adulterated is unquestionable.
The learned Sessions Judge found that after purchasing the curd in order to make the sample homogeneous and representative, churning was not done as required and therefore the sample was not both homogeneous and representative and therefore the accused could not be said to have sold or stored for sale adulterated curd.
While affirming this conclusion the High Court has observed that the evidence of exhibit 49 Devsibhai Ramjibhai, a defence witness and the statement of the accused recorded under section 248 (2) Cr.
P.C. would show that the churning was not done by an instrument but the complainant had done it with his hand and thereafter curd was divided into three parts and three sample bottles were filled.
The High Court then observed that on this point Devsibhai Ramjibhai had not been cross examined.
The High Court while proceeding to appreciable the evidence of Devsibhai Ramjibhai accepted it in preference to the other evidence of the complainant who had stated that the churning was done with a spoon.
Then comes the observation of the High Court which clinches the matter.
It reads as under: "But fortunately for the prosecution when the spoon aspect becomes doubtful, and when the defence version clearly found by us on record is that the allegation is that the churning was done by means of hand alone, it was quite necessary for the prosecution to challenge this version of the defence which has been given by the defence witness on oath.
In the absence of that, unfortunately, we have come to the conclusion that the prosecution has failed to prove that the churning was done in a proper manner so as to make the entire curd one and all the samples would be identical in themselves.
" The High Court held that on this short ground alone the acquittal must be affirmed.
With respect, we find it very difficult to subscribe to the view taken by the High Court.
Rule 14 provides that sample of food for the purpose of analysis shall be taken in clean dry bottles or jars or in other suitable containers which shall 14 be closed sufficiently, tight to prevent leakage, evaporation, or in the case of dry substance, entrance of moisture and shall be carefully sealed.
Rule 15 provides for labelling and addressing the bottles.
Rule 16 provides for packing and sealing the samples.
Rule 20 enables the Food Inspector to add prescribed preservative to the sample.
Rule 22 prescribes quantity necessary for analysis.
It may be recalled that section 11 prescribes procedure to be followed by Food Inspector, Our attention was not drawn to any provision in the Act or the Rules making it obligatory that churning should be done with some machine so as to make a sample homogeneous and representative sample.
We are conscious of the fact that in milk and milk preparations including curd, it is distinctly possible that the fat settles on the top and in order to find out whether the milk or its preparation such as curd has prescribed content, the sample must be homogeneous and representative so that the analysis can furnish reliable proof of nature and content of the article of food under analysis.
For this purpose churning is one of the methods of making the sample homogeneous and representative.
But having said this, there is nothing in the Act or the Rules which prescribes that churning must be done by some instrument, and that churning done by hand would not provide a homogeneous and representative sample.
Commonsense dictates that articles of food like milk and curd when churned with hand would properly mix up from top to bottom.
More so when the quantity is either 600 grams which was the quantity purchased or 2 1/2 kgs.
which was the quantity in the container.
There was evidence that the churning was done by spoon.
But even if the High Court found that evidence unreliable and evidence of defence witness Devsibhai Ramjibhai so much, reliable that it was prepared to act upon it disagreeing with the other evidence, the evidence of Devsibhai Ramjibhal was that churning was done with hand, and he did not say that the churning was not effective.
We therefore find it difficult to subscribe to the view of the High Court that the churning is required to be done by some instrument or that the churning done by hand would not meet with the requirements of making a sample homogeneous and representative.
There has to be a finding that the churning done with hand was not adequate.
There is no such finding.
We are, therefore, of the 15 opinion that the High Court was not justified in confirming the acquittal on this ground.
Having made the position in law clear, as we understand it, we decline to set aside the acquittal.
Subject to above observation the appeal is dismissed.
H.L.C. Appeal dismissed.
[/INST]The appellant, a Factory Inspector, visited the complainant 's factory and demanded an illegal gratification of Rs. 150/ on the threat of entangling him in some legal proceedings.
The complainant, who was not inclined to give the bribe, made a written complaint to the Deputy Superintendent of Police, Anti Corruption Department (Dy SP) requesting for suitable action.
A trap was arranged by smearing 15 currency notes of the denomination of Rs. 10/ each with phenolphthalein powder and, on the direction of the Dy SP, two motbirs were requested to accompany the raiding party and to watch what happens.
The motbirs went along with the complainant to the residence of the appellant and witnessed the acceptance of the money given to him by the complainant, the subsequent search for the recovery of the currency notes from the appellant, the dipping of his hands in sodium carbonate solution and the consequent change in the colour of the hands into pink.
By the time the case came up for trial, the complainant was dead.
In the absence of the evidence of the complainant, the trial Judge noted that the first demand of the bribe at the factory of the complainant had not been proved.
He, however, held that the evidence of the two motbirs was reliable and was amply corroborated by the recovery of the currency notes as well as the presence of phenolphthalein powder on the hands of the appellant.
The trial Judge convicted and sentenced the appellant under section 161, I.P.C. and section 5(1)(d) read with section 5(2) of the Prevention of Corruption Act, 1947.
The High Court which examined the evidence of the motbirs agreed with the findings recorded by the trial Court and dismissed the appeal filed by the appellant.
One of the contentions urged on behalf of the appellant was that once the complainant was not available to give evidence not only of the first demand but also on the payment of bribe pursuant to the demand, the evidence of the two motbirs had assumed considerable importance and it was unwise and dangerous to place implicit reliance on their testimony to convict the appellant 570 as (i) both the motbirs were petty clerks and (ii) by virtue of their service, they were likely to be under police influence.
Dismissing the appeal, ^ HELD: Truth is neither the monopoly nor the preserve of the affluent or of highly placed persons.
In a country where renunciation is worshipped and the grandeur and wild display of wealth frowned upon, it would be the travesty of truth if persons coming from humble origin and belonging to office wise, wealth wise lower strata of society are to be disbelieved or rejected as unworthy of belief solely on the ground of their humble position in society.
[577 F] Khairati Lal vs The State, (1965) 1 Delhi Law Times, 362 overruled.
In the instant case it is factually not correct to say that both the motbirs are petty clerks: one was serving as a clerk in a nationalised bank and the other was a teacher in a middle school.
The testimony of the motbirs which had been accepted as wholly reliable by the trial Judge and the High Court cannot be rejected on the sole ground that they are petty clerks.
[577 E: 578 A B] It may be that officers of Anti Corruption Department have jurisdiction to investigate lapses on the part of clerks in nationalised banks.
It is not clear whether the motbir who was a teacher was a government employee or the school itself was a government school.
It may be that the school was receiving grant but if all institutions which receive grant from government are styled as government departments and have to be treated as falling under the police influence then the net will have to be spread so wide as not to exclude anyone as independent of police influence.
There is no justification in the submission that the two motbirs were persons not likely to be independent of police influence.
[578 D E] Raghbir Singh vs State of Punjab, AIR 1976 S.C. 91, distinguished.
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<s>[INST] Summarize the judgementterlocutory Application No. 1 of 1990.
IN Civil Appeal No. 4444 of 1991).
From the Judgment and Order dated 25.5.1991 of the Allahabad High Court in C.W.P. No. 5267 of 1990.
D.K. Garg and Pradip Misra for the Appellants.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
Leave is granted to the petitioners who were not parties before the High Court in Writ Petition No. 5267 of 1990 to file the special leave petition.
The Registry shall.
therefore.
consequently register this spe cial leave petition.
Special leave is granted.
On 25.5.1990.
a learned Single Judge of the Allahabad High Court is said to have made an order in Writ Petition No. 5267 of 1990.
That brief order for convenience is ex tracted below: has been brought to the notice of the Court that the opp.
parties have violated the time schedule framed by Hon 'ble Supreme Court in the case of Dr. Dinesh Kumar vs 132 M.L.N. Medical College, Allahabad; , in organising the competition to be held on 27.5.90 by Lucknow University for admissions in Post Graduate Medical Courses in the State Medical Colleges.
The Hon 'ble Supreme Court has recently warned in the case of State of Bihar vs Dr. Sanjay Kumar Sinha, AIR 1990) SC 749 that "Everyone including the States.
the Union territories and other authorities running Medical colleges with Post Graduate Courses are bound by our order and must strictly follow the same schedule".
For violating its orders, the Hon 'ble Supreme Court hoped that "there would be no recurrence of it but we would like to administer a warning to everyone that if it is brought to our notice at any time in future that there has been viola tion, a serious view of such default shall be taken.
Keeping in view the above observations the opposite parties are strictly directed not to hold the competitive examina tion scheduled on 27th May, 1990 and admit the petitioners in Post Graduate Medical Courses in the present session on the basis of marks obtained in MBBS Course as has been done for MDS Courses.
The Writ Petition is allowed with no order as to costs" On the basis of that order and relying upon the terms thereof, a learned Single Judge of the Lucknow Bench of the High Court made an order on 4.6.90) directing that steps be taken on the basis of the direction direction made in the order dated 25.5.90 for giving admission to candidates in P.G. Courses.
The net result of these two orders is that the Selection Examination for filling up of the seats in the Post Graduate Medical Courses of the seven medical colleges in U.P. has been cancelled and a direction has been issued to the State Government to grant admission on the basis of M.B.B.S. results.
This Court by order dated 21st August, 1990 directed the Registrar of the Allahabad High Court to transmit the record wherein order dated 25.5.90 is said to have been made.
The Registrar in his letter dated 22nd August, 1990, to this Court in response to the direction has stated that: "there is no such case as writ No. 5267 of 1990 Dr. B. Sheetal Nandwani vs State and Others, and no judgment 133 was delivered by Hon 'ble Mr. Justice Anshuman Singh on 25.5.90 in the said case.
The file is sent to you through special messenger and you are requested to kindly return the file after the Hon 'ble Court 's perusal.
It is further submitted that fake judgment was said to have been produced before different Medical Colleges purporting to have been delivered by Hon 'ble Mr. justice Anshuman Singh, J. on 25.5.1990 in Writ Petition No. 5267 of 1990 directing the opposite parties not to hold competitive examinations scheduled on 27.5.90 and admit the petitioners in Post Graduate Medical Course in the present session on the basis of the marks obtained in M.B.B.S. Course.
In 'Northern India Patrika ' (Allahabad Edition) dated 11.8.90 this matter was published with the heading 'Bogus Judgment aborts entrance Exam ' and only then it came to the notice of the Hon 'ble Court and the Hon 'ble the Chief Justice took up the matter and directed that a CID enquiry be instituted.
On the direction of Hon 'ble the Chief Justice the Government has been moved to get the matter investigated by CID.
" From the report it is manifest that a fake order in a non existent writ petition was produced before the Lucknow Bench of the Allahabad High Court for securing the order dated 4.6.90.
It also transpires that on the basis of al leged order dated 25.5.90 and the subsequent order of 4.6.90 some admissions have been secured in some of the medical colleges.
Those who have taken admission on the basis of such orders.
that is on the basis of the M.B.B.S. result without going through a selection examination cannot be allowed to continue in the Post Graduate Courses.
We are satisfied that there is a deep seated conspiracy which brought about the fake order from Allahabad.
the principal seat of the High Court and on the basis thereof a subsequent direction has been obtained from the Lucknow Bench of the same High Court.
The first order being non existent has to be declared to be a bogus one.
The second order made on the basis of the first order has to be set aside as having been made on the basis of misrepresentation.
We are alive to the situation that the persons who have taken admission on the basis of the M.B.B.S. results are not before us.
The circum stances in which such benefit has been taken by the candi dates concerned do not justify attraction of the application of rules of natural justice of being provided an opportunity to be heard.
At and rate now that we have at the instance of the U.P. Government ordered 134 the selection examination to be held, admission on the basis of M.B.B.S. results cannot stand.
We accordingly direct that admissions, if any on the basis of M.B.B.S. results granted after the impugned orders of the High Court shall stand vacated and the Principals of the medical colleges of U.P. are directed to implement the direction forthwith.
A copy of this order shall be communicated to each of the Principals of the seven medical colleges in the State of U.P. for compliance.
The report of the Registrar of the High Court of Allaha bad indicates that the Criminal Investigation Department of the State has been asked to investigate into the matter.
We are of the view that appropriate investigation should be done by the Central Bureau of Investigation and persons behind this deep seated fraud should be brought to book without any delay.
Purity of the judicial stream should not be allowed to be polluted by such a clandestine move and citizens should not be misled by actions of the conspira tors.
We, therefore, direct that the Central Bureau of Investigation shall step in forthwith and complete the investigation within two months and provide a copy of the report containing the result of the investigation to this Court.
A copy of the report shall simultaneously be submit ted to the learned Chief Justice of the Allahabad High Court.
The appeal is allowed with costs.
As and when the respondents who are said to be petitioners in writ petition No. 5267 of 1990 are identified shall be made to pay the costs of this appeal which we assess at Rs.10,000.
Out of the costs as and when recovered, the appellants shall be entitled to a sum of Rs.3,000 and the remaining sum of Rs.7,000 shall be paid to the Supreme Court Legal Aid Com mittee.
T.N.A. Appeal allowed.
[/INST]For the assessment year 1946 47 the appellant, a Hindu undivided family carrying on business, filed a petition before the income tax Officer, under section 25A of the Indian Income tax Act, 1922, claiming that there had been a partition in the family on April 24,1945.
As regards the income assessable under section 23 Of the Act, the appellant 's case regarding six sums aggregating to Rs. 2,30,346 shown in the accounts as the sale proceeds of ornaments, was that at the partition the jewels of the family were sold and that the price realised therefrom was invested in the business.
The Income tax Officer held that the partition was true and that the family had become divided into five groups, but as regards the amount of Rs. 2,30,346 aforesaid he rejected the explanation given by the appellant as to how the amount came to be received and held that the amount was not the proceeds of the family jewels sold but represented concealed profits of the business.
He accordingly included the said amount in the taxable income.
The appellant 's contentions, inter alia, before the Appellate Tribunal were (1) that the order passed under section 25A of the Act by the Income tax Officer must be held to have decided the factum of a partition in the family as well as the 'possession and division of the jewels, as set up by the appellant, and that it was not open to the Department to contend that the amount in question did not represent the value of the family jewels; and (2) that, in any case, there was no evidence to show that the amount represented undisclosed profits.
Held, that when a claim is made under section 25A of the Indian Income tax Act, 1922, the points to be decided by the Incometax Officer are whether there has been a partition in the family, and, if so, what the definite portions are in which the division had been made among the members or groups of members.
The question as to what the income of the family assessable to tax under section 23(3) was, would be foreign to the scope of an enquiry under section 25A, and any finding thereon would not be conclusive in assessment proceedings under section 23.
416 Held, further, that the assessee in the present case having failed to explain satisfactorily the truth of what is a credit in business accounts, the Income tax Officer was entitled to draw the inference that the amount credited represents in reality a receipt of an assessable nature.
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<s>[INST] Summarize the judgementCriminal Appeal No. 386 of 1978.
From the Judgment and Order dated 19/20th July, 1977 of the Himachal Pradesh High Court in Crl.
A. No. 46 of 1976.
Rakesh Luthra, N.N. Bhatt, L.R. Singh (N.P.) and lrshad Ahmad for the Appellant.
K.G. Bhagat, N.K. Sharma and Ms. A. Subhashini (N.P.) for the Respondent.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
The appellant, K.C. Sharma, alongwith two others was charged for the offence punishable under sections 302 and 201 read with section 34 of the Indian Penal Code for causing the death and concealing the dead body of Joginder Singh.
The Additional Sessions Judge, Kangra Division at Dharamsala convicted all the accused under section 302/34 and directed them to undergo imprisonment for life and to pay a fine of Rs.500 and also to the sentence of two years rigor ous imprisonment and fine of Rs.500 for the offence of section 201/34, in default of payment of fine for a further period of three months rigorous imprisonment.
All the sentences were directed to run concurrently.
On appeal the Division Bench of the High Court of Himachal Pradesh by judgment dated July 20, 1977 acquitted accused 2 and 3 of the offence under section 302 IPC and confirmed the conviction and sentence of the appellant and set aside the sentence of fine.
The leave having been granted by this Court, this appeal has been filed.
The narrative of prosecution case runs thus: The de ceased Joginder Singh, resident of Jogipura.
Kangra on November, 10, 1974.
while going to Pathankot with some currency notes in his possession went on his way to Jassur Village to meet his friend one Bala Pahalwan.
On enquiry the latter was said to be absent in the village.
The deceased came in contact with the appellant and both went to the Dhaba of PW. 7, Joginder Singh Paul to have some drink, but PW. 7 did not allow them to take liquor inside the Dhaba.
Both of them sat in the back side of the Dhaba to have drink.
PW. 8 Tamil Singh and one Jai Onkar were also invited to have drink with them.
All of them together consumed the liquor and ate meat.
The deceased paid the price of the liquor and meat and when he had become tipsy, PW. 8 suggest ed to take the deceased to Pathankot or to keep him at Dhaba 110 Beli where at he could make necessary arrangements for their stay but the appellant insisted upon taking the deceased to Kangra.
Thereafter the appellant and the deceased boarded the Truck No. HPK 4179 driven by A. 2, Madho Ram, Driver and A. 3, Bihari Lal, Cleaner.
PW. 8 and the other left the place.
The truck was loaded with the bricks and the appel lant and the deceased sat on the bricks in the body of the truck and went towards Kangra side.
PW. 12, the Octroi Clerk at Nagpur states that the truck driven by A. 2 went towards Baijnath.
PW. 13.
Burfiram, Chowkidar at Ichhi Marketing Co op.
Society spoke that he saw the truck driven by A. 2 and A. 3 and got unloaded the bricks at the godown of the said Society at about mid night but the deceased was not seen there.
It is further the case of the prosecution that while the deceased or accused were going in the truck, there ensued a quarrel between them over some money matter and the appellant took iron screw driver and gave blows on the head and face of the deceased.
Consequently the deceased was half dead.
He was thrown out of the truck but finding him not dead put him in the truck and all the accused severed the head with an iron saw and burried the trunk under stones in the outskirts of the village Dhadhu and carried the head with them in the truck.
The head was hidden at a place between Guggal and Chaitru on the Kachcha road branching off the main road to the village Ichhi.
On November 13, 1974, PW. 6 Karrudi Ram, the Chowkidar of Mauza Bandi, during twilight, had gone to answer nature 's call at the outskirts of the village Dhadhu and noticed the blood stains and a torn pant near the stones.
On further probe the hand of the deceased was seen projecting from the stones and he noticed the dead body.
He went and reported to Bidhu Ram, PW. 10.
the Pradhan of the village and two others.
All of them went to the spot, noticed the dead body.
10 kept a watch during the night.
On November 14, 1974 at about 7.00 or 8.00 a.m. PW. 6 went to the Police Station and lodged the com plaint.
PW. 26, the A,S.I. recorded and issued the First Information Report and proceeded to the spot.
He recovered the articles on and near the dead body under PW. 11, Panch nama and conducted inquest and sent the dead body for post mortem.
The Doctor conducted autopsy.
On November 15.
1974 the parents of the deceased came to the Police Station and identified the clothes of the deceased.
On November 16, 1974, PW. 27, the Sub Inspector of the Police took over the investigation.
He contacted one Kuldip Singh, a Conductor in Kapila Transport Company from whom he came to know that on November 10, 1974, the deceased and the appellant were seen consuming liquor at Jassur.
Thereafter PW. 27 and PW. 10, Bidhu Ram, Pradhan of Guggal Panchayat went to the appel lant 's village Sahaura and was sent for the appellant.
The appel 111 lant on coming to him was found to have shaved off his moustaches.
PW. 27 had enquired as to why he had removed his moustoches upon which the appellant was claimed to have replied that he had removed his moustaches due to demise of his maternal uncle.
PW. 10 and PW. 27 took the appellant to Jassur for identification purposes.
The appellant pointed out PW. 7, the owner of the Dhaba and the latter identified the appellant as one seen in the company of the deceased and having consumed liquor.
Equally of PW. 8.
Thereafter the appellant was taken back to PW.
10 's village and PW.
27 left the village for further investigation.
On enquiry made by PW. 10, in the shop of one Mangath Ram and in the company of one Raghunath, to reveal the truth to him, the appellant was stated to have requested PW. 10 whether he could save him if he would tell the truth.
Thereupon PW. 10 stated that he could not save him but if he would speak the truth he would help himself.
Thereupon the appellant was stated to have made extra judicial confession giving out the details of consuming liquor with the deceased; their going together on the truck, the quarrel that ensued between them; his hitting the deceased with the screw driver, throwing the. dead body, thinking that he died, on the road realising that he was not dead, lifting him and putting him in the body of the truck and all the accused cutting the head of the deceased with the saw blade and burrying the trunk under the stones and hiding the head at different place and thereby they had committed the crime.
10 gave this information to PW. 27 on the next day, namely, November 25, 1974.
Thereon all the accused were arrested.
On November 27, 1974, the Driver A. 2 was stated to have made a statement under section 27 of the Evidence Act.
exhibit PW. 9/A leading to discovery of the hidden head at a place between Guggal and Chaitru.
This statement had been made in the presence of PW. 9 and another and the severed head was recovered under Memo exhibit PW. 9/B. This was in the presence of PW. 10 and another.
The head was sent to the Doctor for post mortem examination.
The Doctor verified and found it to be correct and the doctor corelated the trunk of the dead body and the head belonging to the de ceased.
On November 30., 1974, pursuant to statement made by the appellant and A. 3 under exhibit PW.
16/B leading to recover one iron saw without handle and a piece of cloth wrapped to one of its sides was recovered from a bush near Kathman Mor and PW. 10 and another are Panch witnesses and found the saw blade contained with blood stains and a piece of cloth of torn pant.
They were recovered under exhibit PW. 16/C.
The clothes of the appellant were also claimed to have been recovered from his house under exhibit PW.
16/H which was stained with blood and the same were recovered in the presence of PW. 16 The Serologist found the blood stains disintegrated on all the 112 items.
On the basis of this evidence the prosecution laid the chargesheet against all the accused.
As stated earlier the appellant now stands convicted and sentenced for the offences under sections 302 and 201, I.P.C. The two others did not file appeal against their convict under section 201 I.P.C.
The entire prosecution case rested on circumstantial evidence.
As regards the appellant, the circumstances relied on the prosecution are three, namely,(i) the appellant and the deceased were last seen together by PW. 7, the owner of the liquor shop Dhaba and PW. 8, the companion who had liquor with the deceased and the appellant; (ii) the extra judicial confession made to PW. 10, the Pradhan of Guggal Gram Panchayat; and (iii) the discovery of saw blade pursu ant to the statement made by the appellant and A. 3 under section 27 of the Evidence Act.
The question, therefore, is whether the prosecution proved guilt of the appellant beyond all reasonable doubt.
In a case of circumstantial evidence.
all the circumstances from which the conclusion of the guilt is to be drawn should be fully and cogently established.
All the facts so estab lished should be consistent only with the hypothesis of the guilt of the accused.
The proved circumstances should be of a conclusive nature and definite tendency, unerringly point ing towards the guilt of the accused.
They should be such as to exclude every hypothesis but the one proposed to be proved.
The circumstances must be satisfactorily established and the proved circumstances must bring home the offences to the accused beyond all reasonable doubt.
It is not necessary that each circumstances by itself be conclusive but cumula tively must form unbroken chain of events leading to the proof of the guilt of the accused.
If those circumstances or some of them can be explained by any of the reasonable hypothesis then the accused must have the benefit of that hypothesis.
In assessing the evidence imaginary possibilities have no role to play.
What is to be considered are ordinary human probabilities.
In other words when there is no direct wit ness to the commission of murder and the case rests entirely on circumstantial evidence, the circumstances relied on must be fully established.
The chain of events furnished by the circumstances should be so far complete as not to leave any reasonable ground for conclusion consistent with the inno cence of the accused.
If any of the circumstances proved in a case are consistent with the innocence of the accused or the chain of the continuity of the circumstances is broken, the accused is entitled to the benefit of the doubt.
113 In assessing the evidence to find these principles.
it is necessary to distinguish between facts which may be called primary or basic facts on one hand and inference of facts to be drawn from them.
on the other.
In regard to the proof of basic or primary facts.
the court has to judge the evidence in the ordinary way and in appreciation of the evidence in proof of those basic facts or primary facts, there is no scope for the application of the doctrine of benefit of doubt.
The court has to consider the evidence and decide whether the evidence proves a particular fact or not.
Whether that fact leads to the inference of the guilt of the accused or not is another aspect and in dealing with this aspect of the problem the doctrine of benefit would apply and an inference of guilt can be drawn only if the proved facts are inconsistent with the innocence of the accused and are consistent only with his guilt.
There is a long distance between may be true and must be true.
The prosecution has to travel all the way to establish fully the chain of events which should be consistent only with hypothesis of the guilt of the accused and those circumstances should be of conclu sive nature and tendency and they should be such as to exclude all hypothesis but the one proposed to be proved by the prosecution.
In other words.
there must be a chain of evidence so far consistent and complete as not to leave any reasonable ground for a conclusion consistent with the innocence of the accused and it must be such as to show that within all probability the act must have been done by the accused and the accused alone.
The question emerges, therefore is whether the prosecu tion has established the three circumstantial evidence heavily banked upon by the prosecution in proof of the guilt of the appellant.
The first circumstance is that the de ceased and the appellant were last seen together by PW. 7 and PW. 8.
From the evidence it is clear that there is no prior intimacy of the appellant and the deceased.
They happened to meet per chance.
Equally from the evidence it is clear that PW. 7, the liquor shop owner and PW. 8 who had liquor with the appellant and the deceased are also absolute strangers to the deceased and the appellant.
Admittedly there is no identification parade conducted by the prosecu tion tO identify the appellant by PW. 7 or PW. 8.
The appel lant was stated to have pointed out to PW. 7 as the one that sold the liquor and PW 8 consumed it with him and the de ceased.
Therefore it is not reasonably possible to accept the testimony of PW. 7 and PW. 8 when they professed that they have seen the appellant and the deceased together consuming the liquor.
It is highly artificial and appears on its face a make believe story.
114 The next piece of evidence is the alleged extra judicial confession made by the appellant to PW. 10.
An unambiguous extra judicial confession possesses high probative value force as it emanates from the person who committed the crime and is admissible in evidence provided it is free from suspicion and suggestion of its falsity.
But in the process of the proof of the alleged confession the court has to be satisfied that it is a voluntary one and does not appear to be the result of inducement, threat or promise envisaged under section 24 of the Evidence Act or was brought about in suspicious circumstances to circumvent Section 25 and 26 of the Evidence Act.
Therefore, the court has to look into the surrounding circumstances and to find whether the extra judicial confession is not inspired by any improper or colateral consideration or circumvention of the law suggest ing that it may not be true one.
For this purpose the court must scrutinise all the relevant facts such as the person to whom the confession is made, the time and place of making it, the circumstances in which it was made and finally the actual words used by the accused.
Extra judicial confession if found to be voluntary, can be relied upon by the court alongwith other evidence on record.
Therefore, even the extra judicial confession will also have to be proved like any other fact.
The value of the evidence as to the confes sion depends upon the verocity of the witness to whom it is made and the circumstances in which it came to be made and the actual words used by the accused.
Some times it may not be possible to the witness to reproduce the actual words in which the confession was made.
For that reason the law insists on recording the statement by a Judicial Magistrate after administering all necessary warnings to the accused that it would be used as evidence against him.
Admittedly PW.
10 and the appellant do not belong to the same village.
From the narrative of the prosecution story it is clear that PW. 27, and PW. 10 came together and appre hended the appellant from his village and was taken to Jassur for identification.
After he was identified by PW. 7 and PW. 8 it was stated that he was brought back to Gaggal village of PW. 10 and was kept in his company and PW. 27 left for further investigation.
Section 25 of the Evidence Act provides that no confession made to a police officer shall be proved as against a person accused of any offence.
Section 26 provides that no confession made by any person while he is under custody of the police officer, unless it be made in the immediate presence of a magistrate, shall be proved as against such person.
Therefore, the confession made by an accused person to a police officer is irrelevant by operation of Section 25 and it shall be proved against the appellant.
Likewise the confession made by the appellant while he is in the custody of the police shall not 115 be proved against the appellant unless it is made in the immediate presence of the magistrate, by operation of Sec tion 26 thereof.
Admittedly the appellant did not make any confession in the presence of the magistrate.
The question, therefore, is whether the appellant made the extra judicial confession while he was in the police custody.
It is incred ible to believe that the police officer, PW. 27, after having got identified the appellant by PW. 7 and PW. 8 as the one last seen the deceased in his company would have left the appellant without taking him into custody.
It is obvious, that with a view to avoid the rigour of Section 25 and 26, PW. 27 created an artificial scenerio of his leaving for further investigation and kept the appellant in the custody of PW. 10, the Pradhan to make an extra judicial confession.
Nothing prevented PW. 27 to take the appellant to a Judicial Magistrate and had his confession recorded as provided under section 164 of the Crl.
P.C. which possesses great probative value and affords an unerring assurance to the court.
It is too incredulous to believe that for mere asking to tell the truth the appellant made voluntarily confession to PW. 10 and that too sitting in a hotel.
The other person in whose presence it was stated to have been made was not examined to provide any corroboration to the testimony of PW. 10.
Therefore, it would be legitimate to conclude that the appellant was taken into the police custo dy and while the accused was in the custody, the extra judicial confession was obtained through PW. 10 who accommo dated the prosecution.
Thereby we can safely reach an irre sistible conclusion that the alleged extra judicial confes sion statement was made while the appellant was in the police custody.
It is well settled law that Sections 25 and 26 shall be construed strictly.
Therefore, by operation of Section 26 of the Evidence Act, the confession made by the appellant to PW. 10 while he was in the custody of the police officer (PW. 27) shall not be proved against the appellant.
In this view it is unnecessary to go into the voluntary nature of the confession etc.
The third circumstance relied on is the statement said to have been made by the appellant under section 27 of the Evidence Act leading to discovery of the consequential information, namely, saw blade, is not of a conclusive nature connecting the appellant with the crime.
The recover ies were long after the arrest of the appellant.
The blood stains on all the articles were disintegrated.
So it was not possible to find whether it is human blood or not.
Moreover, from the prosecution evidence it is clear that the deceased himself was an accused in an earlier murder case and it is obvious that he had enemies at his back.
Absolutely no motive to commit crime was attributed to the appellant.
116 No doubt the appellant and two others have been charged for an offence under section 302 and 201 read with Section 34, namely, common intention to commit the offences and A. 2 and A. 3 were acquitted of the charge under section 302/34, I.P.C. and that there is no independent charge under section 302, I.P.C.
If, from the evidence, it is established that any one of the accused have committed the crime individual ly, though the other accused were acquitted, even without any independent charge under section 302, the individual accused would be convicted under section 302, I.P.C. sim plicitor.
The omission to frame an independent charge under section 302, I.P.C. does not vitiate the conviction and sentence under section 302, I.P.C. Thus considered we find that the prosecution has utterly failed to prove any one of the three circumstances against the appellant and the chain of circumstances was broken at every stage without connecting the accused to the commission of the alleged crime as the prosecution failed to prove as a primary fact all the three circumstances, much less beyond all reasonable doubt bringing home the guilt to the accused, and to prove that the accused alone had committed the crime.
Therefore, the appellant is entitled to the benefit of doubt.
The conviction and sentence of the appellant for the offences under section 302 or Section 201 of I.P.C. are set aside.
The appellant is on bail granted by this Court after nine years ' incarceration.
The bail bond shall stand can celled.
He shall remain at liberty unless he is required in any other case.
Before parting with the case, it is necessary to state that from the facts and circumstances of this case it would appear that the investigating officer has taken the appel lant, a peon, the driver and the cleaner for ride and tram pled upon their fundamental personal liberty and lugged them in the capital offence punishable under section 302.
I.P.C. by freely fabricating evidence against the innocent.
Un doubtedly.
heinous crimes are committed under great secrecy and that investigation of a crime is a difficult and tedious task.
At the same time the liberty of a citizen is a pre cious one guaranteed by article 3 of Universal Declaration of Human Rights and also article 21 of the Constitution of India and its deprivation shall be only in accordance with law.
The accused has the fundamental right to defend himself under article 10 of Universal Declaration of Human Rights.
The right to defence includes right to effective and meaningful defence at the trial.
The poor accused cannot defend effec tively and adequately.
Assigning an experienced defence counsel to an indigent accused is a facet of fair procedure and an inbuilt right to liberty and life envisaged under articles 117 19 and 21 of the Constitution.
Weaker the person accused of an offence, greater the caution and higher the responsi bility of the law enforcement agencies.
Before accusing an innocent person of the commission of a grave crime like the one punishable under section 302, I.P.C., an honest, sincere and dispassionate investigation has to be made and to feel sure that the person suspected of the crime alone was re sponsible to commit the offence.
Indulging in free fabrica tion of the record is a deplorable conduct on the part of an investigating officer which under mines the public confi dence reposed in the investigating agency.
Therefore, great er care and circumspection are needed by the investigating agency in this regard.
It is time that the investigating agencies, evolve new and scientific investigating methods, taking aid of rapid scientific development in the field of investigation.
It is also the duty of the State, i.e. Cen tral or State Government to organise periodical refresher courses for the investigating officers to keep them abreast of the latest scientific development in the art of investi gation and the march of law so that the real offender would be brought to book and the innocent would not be exposed to prosecution.
Though article 39A of the Constitution provides fundamental rights to equal justice and free legal aid and though the State provides amicus curiae to defend the indigent accused, he would be meted out with unequal defence if, as is common knowledge the youngster from the Bar who has either a little experience or no experience is assigned to defend him.
It is high time that senior counsel practicing in the court con cerned, volunteer to defend such indigent accused as a part of their professional duty.
If these remedial steps are taken and an honest and objective investigation is done, it will enhance a sense of confidence of the public in the investigating agency.
We fervently hope and trust that concerned authorities and Senior Advocates would take appropriate steps in this regard.
The appeal is accordingly allowed.
P.S.S. Appeal allowed.
[/INST]The appellant tenant was in occupation of a double storeyed building on a monthly rent of Rs. 170.
The respond ent landlady filed an application under Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 for fixation of fair rent.
The Rent Controller took note of the fact that 1/3rd portion of the building was being used for residential purpose and the rest of the building for non residential purpose, namely, for running a school.
He also appointed an Engineer as Commissioner to evaluate the total cost of the building.
The Commissioner adopted the rates prevalent in the Public Works Department and submitted his report.
On the basis of the Commissioner 's report, the Rent Controller worked out the cost at Rs.1,51,820.
Accordingly, the fair rent for the said premises was arrived at Rs.1518 per month at 12 per cent gross return.
Since the respondent landlady had confined her claim for the enhance ment of fair rent to Rs.1,O00 only, the Rent Controller fixed the fair rent at Rs.1,O00.
On appeal, the order of Rent Controller was affirmed by the Court of Small Causes.
On a revision being preferred, the High Court agreed with the valuation adopted and determined the fair rent on the basis that 1/3rd of the premises was used for residen tial purpose and 2/3rd for nonresidential purpose, and, as per sub sections (2) and (3) of Section 4 of the Act, worked out the rent at 9 per cent and 12 per cent respectively on the cost of construction arrived at.
The High Court fixed the fair rent at Rs. 1391.67 per month.
It confirmed the fair rent of Rs. 1,000 as was fixed by the Rent Controller and as confined to by the Respondent landlady.
This appeal, by special leave, is against the High Court 's order.
It 395 was contended that the cost of the building and its market value as worked out was illegal, fallacious and untenable.
Dismissing the appeal, HELD: 1.
Section 4 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 prescribes the principles on the basis of which the fair rent is to be fixed.
In the light of those principles, the evidence adduced by the parties was considered by the Rent Controller, the appellate court and the High Court and they found that the fixation of the fair rent was much in excess of the claim made by the Respondent landlady.
Since she confined her claim to Rs.1,O00 per month, the courts below have fixed the fair rent at Rs.1,O00.
Therefore, on the findings of facts based on consideration of the evidence, this court cannot interfere and come to its own conclusion.
The finding is neither vitiated nor illegal warranting interference.
[210B C] 2.1 Sub section 4 of Section 4 of the Act, clearly indicates that the total cost of construction referred to in sub sections (2) and (3) shall consist of the market value as on the date of application for fixation of the fair rent.
[209C] 2.2 It is obvious that at the time when this Court rendered its decision in Nambiar 's case there was no provi sion in Section 4 as to the date on which the cost of con struction was to be determined, and Rule 12 provided the manner in which the fixation of the fair rent has to be made.
The subsequent amendment brought on the statute in 1973, by the Amending Act 23 of 1973, has incorporated sub section (4) in Section 4 which amplified the date of appli cation as the starting point to fix market value.
As such the fair rent has been rightly determined by the courts below.
[209D E; HI K.C. Nambiar vs The IV Judge of the Court of Small Causes, Madras & Ors., , referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 2371 of 1968.
From the Judgment and Decree dated 20th April, 1967 of the Madhya Pradesh High Court in First Appeal No. l of 1960.
section N. Kacker, Sol.
K. L. Hathi, Rajiv Datta and P. C. Kapur, for the Appellant.
L. N. Sinha, H. K. Puri, Vivek Seth, P. P. Singh and M. C. Dhingra for Respondents Nos. 1 4.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by certificate is directed against the judgment of the High Court of Madhya Pradesh dated 20th April 1, 1967 affirming the decree passed by the Additional District Judge Indore decreeing the plaintiff 's suit.
The facts of the case are detailed in the judgment of the High Court and that of the District Judge and it is not necessary for us to repeat the same all over again.
Briefly, the present action was brought by the plaintiff for recovery of a sum of Rs. 2,00,000 invested by the plaintiff in the Adarsh Bima Company being defendant No. 1 and the predecessor of the appellant, who is defendant No. 3 (Life Insurance Corporation of India).
The action was brought on the basis that the Managing Director of the Adarsh Bima Company by practising fraud and misrepresentation on the plaintiff induced him to part with a sum of Rs. 2,00,000 by purchasing 200 shares of Rs. 100/ each.
The courts 13 below have recorded clear findings of fact that the fraud alleged by the plaintiff has been clearly proved and that the plaintiff had parted with a sum of Rs. 2,00,000 by investing the same in purchase of 2000 shares as a result of which the shares scrips were handed over to the plaintiff and he was assured of a dividend of 4%.
it has also been found as a fact that such a resolution was contrary to the statute of the company.
The suit was contested by the appellant who is defendant No. 3 in the courts below mainly on the ground that after the appellant took over the Adarsh Bima Company, he was not liable for any act of the company which was ultra vires the statutes of the company.
In support of the appeal the Solicitor General submitted two points before us.
In the first place it was contended that on the finding that a fraud was committed on the plaintiff and the act of the Managing Director being ultra vires of the statutes of the company, the company would not be liable although the Managing Director may be personally liable.
Secondly, it was argued that assuming that the company was liable but in view of the provisions of section 7(2) of the (hereinafter called the Act), the liability of the appellant would extend only to matters appertaining to the controlled business as defined in the Act.
As regards the first contention we find absolutely no substance in the same.
There was absolutely no pleading by the defendants that the monies were received by the Managing Director personally and that the same did not go to the coffers of the company.
On the other hand, the plaintiff clearly pleaded in paragraphs 3 (b), 8 (a) and 8(b) of the plaint that the money was paid to defendant No. 1 company which after receiving the amount issued share scrips to the plaintiff.
The relevant portions of the aforesaid statements may be extracted thus: "3 (b) Relying upon the said guarantee and promise given by the defendant No. 2 on the Company 's behalf Plaintiff No. 1 on 11th June, 1947 gave at Jhabua to Defendant No. 1 Company through Defendant No. 2, Government of India 3 percent Loan Bonds of 1953 55 of the value of Rs. 1,00,000 duly endorsed in favour of Defendant No. 1 company. .
The company addressed a letter acknowledging receipt of the application for 1000 shares and the full consideration of the said shares at the rate of Rs. 100 per share and agreed to allot the said 1000 shares to plaintiff No. 4".
14 "8(a) . . . . . .
The plaintiffs submit that the transaction of selling the said 2000 shares of defendant No. 1 Company and registering the same as aforesaid in the names of plaintiffs No. 2 to 4 with a guarantee of minimum return is ultra vires the defendant No. 1 Company and is found to be void and inoperative in law.
8(b) The said 2000 shares of defendant No. 1 Company are as aforesaid applied for and registered in the names of plaintiffs No. 2 to 4.
At all material times when the said shares were registered in the name of plaintiffs No. 2 to 4, the plaintiffs No. 2 to 4 were minors.
The plaintiffs submit that the transaction of issuing the said 2000 shares to plaintiffs No. 2 to 4 who were then minors and registering them as share holders in the Register of defendant No. 1 Company is void in law".
Thus, the plaintiff has clearly alleged that the monies were paid to the defendant company and not to the Managing Director personally.
If the share scrips were issued, to the plaintiff then it must be presumed that the money was received by the company.
This fact has not been denied by the defendant appellant.
In these circumstances, therefore, it is absolutely clear that there is nothing to show that the money was paid to the Managing Director personally and not to the company.
Moreover, this is essentially a question of fact and it does not appear to have been raised before any of the courts below.
For these reasons, therefore, the first contention put forward by the Solicitor General is hereby over ruled.
Coming to the next contention the same undoubtedly merits serious consideration.
Before however examining this contention the following admitted facts may be stated thus: 1.
That the Bima Company was doing merely the business of life insurance and no other; 2.
That on the coming into force of the Act the entire interest of the Company vested in the Government: Section 7(2) of the Act runs thus: "7 (2) The assets appertaining to the controlled business of an insurer shall be deemed to include all rights and powers, and all property, whether movable and immovable, appertaining to his controlled business, including, in particular, cash balances, reserve funds, investments, deposits 15 and all other interest and rights in or arising out of such property as may be in the possession of the insurer and all books of account or documents relating to the controlled business of the insurer; and liabilities shall be deemed to include all debts, liabilities and obligations of whatever kind then existing and appertaining to the controlled business of the insurer.
Explanation: The expression 'assets appertaining to the controlled business of an insurer ' (a) in relation to a composite insurer, includes that part of the paid up capital of the insurer or assets representing such part which has or have been allocated to the controlled business of the insurer in accordance with the rules made in this behalf; (b) in relation to a Government, means the amount lying to the credit of that business on the appointed day".
D It is contended by the Solicitor General that the appellant was liable to discharge only those liabilities which pertained to the controlled business of the insurer.
Sub clause (3) of section 2 of the Act defines 'controlled business ' thus: "controlled business" means (i) in the case of any insurer specified in sub clause (a) (ii) or sub clause (b) of clause (9) of section 2 of the Insurance Act and, carrying on life insurance business . " As we have already pointed out that defendant No. 1 Adarsh Bima Company was carrying on the business of life insurance only.
Thus the moment the Act was passed, the business of the Adarsh Bima Company vested in the Corporation.
Pari passu this contention it was submitted that under section 7(2) of the Act the liability of the appellant would not extend not to any acts which are fraudulent or ultra vires of the statutes of the company.
We are, however, unable to agree with this contention.
The words of section 7(2) of the Act appear to be of the widest amplitude and the section includes all debts, liabilities, obligations of whatever kind then existing and appertaining to the controlled business of the insurer.
There can be no doubt that at the time when the appellant took over the Adarsh Bima Company the obligation to restitute the benefit received by the company from the plaintiff had been fastened and the appellant was legally bound to return the same to the plaintiff under section 65 of the Contract 16 Act in view of the finding of fact recorded by the Courts below that the contract was void.
The question as to whether or not the transaction was ultra vires of the statutes of the company was wholly irrelevant because that was the reason why the contract was void and not a ground for exempting the appellant from its liability to pay.
The words "of whatever kind" are wide enough, to take within their sweep all kinds of transactions entered into by the predecessor company.
The present transaction was undoubtedly entered into by the predecessor company which had received the sum of Rs. 2,00,000 from the plaintiff and had issued share scrips.
In these circumstances, therefore, we do not see how the defendant No. 3 can escape his liability even under section 7(2) of the Act.
As however the plaintiff will be entitled to restitution of the benefits under section 65 of the Act, he can only get the amount which he had paid to the appellant company and not any interest thereon up to the date of the suit.
For these reasons, we are of the opinion that the judgment of the High Court is correct and does not require any interference except a slight modification in the form of the decree.
We, therefore, direct that the plaintiff will be entitled to the decree of Rs. 2,00,000 passed by the courts below but not to the interest of Rs. 47,000 claimed by him and to that extent the decree is hereby modified.
The plaintiff will however be entitled to interest at six per cent per annum from the date of the suit to the date of the payment.
With this modification the appeal is dismissed, but in the circumstances without any order as to costs.
S.R. Appeal dismissed.
[/INST]The plaintiff respondent filed a suit for recovery of a sum of Rs. 2 lakhs invested by him in the Adarsh Bima Company, which was taken over by the appellant, (defendant No. 3) herein, on the basis that the managing,, director of the Adarsh Bima Company by practising fraud and misrepresentation on the plaintiff that the plaintiff would be entitled to an assured dividend of 4%, that too contrary to the statute of the company induced him to part with the said sum by purchasing 200 shares of Rs. 100/ each.
The suit was contested by the appellant mainly on the ground that after the appellant took over the Adarsh Bima Company he was not liable for any act of the company which was ultra vires of the statutes of the company.
The trial Court passed a decree in favour of the respondents and the High Court affirmed it by dismissing the appeal by the appellant.
In appeal by certificate, the appellant contended (a) that on the finding that fraud was committed on the plaintiff and the act of the managing director being ultra vires of the statutes of the company, the company would not be liable although the managing director may be personally liable; and (b) assuming that the company was liable, but in view of the provisions of section 7(2) of the , the liability of the appellant would extend only to matters appertaining to, the controlled business as defined in the Act.
Dismissing the appeal the Court.
^ HELD : (1) The words of section 7(2) of the are of the widest amplitude and the section includes all debts, liabilities, obligations of whatever kind then existing and appertaining to the controlled business of the insurer.
There can be no doubt that but the time when the appellant took over the Adarsh Bima Company.
the obligation to restitute the benefit received by the company from the plaintiff had been fastened and the appellant was legally bound to return the same to the plaintiff under section 65 of the Contract Act, in view of the findings of the Courts below that the contract was void.
[15G H, 16A I] (2) The question as to whether or not the transaction was ultra vires of the statutes of the company was wholly irrelevant because that was the reason why the contract was void and not a ground for exempting the appellant from its liability to pay.
[16A] (3) The words "of whatever kind" in section 7(2) are wide enough to take within its sweep all kinds of transactions entered into by the predecessor company.
The present transaction was undoubtedly entered into by the Predecessor 12 company which had received the sum of Rs. 2 lakhs from the plaintiff and had issued share slips and the appellant, therefore, cannot escape his liability even under section 7(2).
[16 A C] (4) As the plaintiff will be entitled to restitution of the benefits under section 65 of the Contract Act, he can get only the amount which he had paid to the appellant company and not any interest upto the date of the suit.
[16C] [However the Court awarded interest at six percent per annum from the date of the suit, to the date of payment under section 34 of the C.P.C.] (5) The contention that on the finding that a fraud was committed on the plaintiff and the act of the managing director being ultra vires of the statutes of the company, the company would not be liable although the managing director may be personally liable is wrong.
There was absolutely no pleading by the defendants that the monies were received by the managing director personally and in fact the same did not go to the coffers of the company.
From the issue of the share scrips to the plaintiff, it must be presumed that the money was received by the company.
Moreover this question not having being raised before any Courts below and also being a question of fact cannot be gone into.
[13C, E, F, 14D E]
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<s>[INST] Summarize the judgementAppeals Nos. 134 to 137 of 1959.
Appeals by special leave from the judgment and order dated September 20,1957, of the Bombay High Court in Income Tax Reference No. 14 of 1957.
R. J. Kolah, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellants.
K. N. Rajagopal Sastri and D. Gupta, for the respondent.
January 3.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
This judgment governs the disposal of Civil Appeals Nos.
134 to 137 of 1959.
They have been filed by four assessees with special leave, and arise out of similar facts, and it is not necessary to refer to more than one case to consider the point in question.
The assessment year under consideration is 1952 53, and the previous year, the Calendar year, 1951.
In that year, Mr. Tulsidas Kilachand, one of the four appellants, made a declaration of trust in favour of his wife, a portion of which may be quoted here: ". . . 1, Tulsidas Kilachand hereby de clare that I hold 244 shares of Kesar Corporation Ltd. and 120 shares of Kilachand Devchand & Co., Ltd upon trust to pay the income thereof to my wife Vimla for a period of seven years from the date hereof or her death (whichever event may be earlier) and I hereby declare that this trust shall not be revocable." In the year of account, a sum of Rs. 30,404 was received as dividend income on those shares, and the assessee contended that this income, after being grossed up, was not liable to be included in his total income, in view of the third proviso to section 16(1)(c) of the Indian Income tax Act.
The Income tax Officer did not accept this contention, and though the assessment order is not before us, we gather from the statement of the case that the reason he gave was that the income had accrued to or had arisen in the hands of 353 Mr. Tulsidas Kilachand and had been paid by him to his wife.
The Income tax Officer held that the words of the proviso "income arising to any person by virtue of a settlement or disposition" did not apply to this income.
On appeal, the Appellate Assistant Commissioner held that the case was governed by section 16(3)(b), and need not be considered under the third proviso.
to section 16(1)(c) of the Act.
It appears to have been conceded before him that if the former provision applied, the proviso would not save the income from being assessed in the hands of Mr. Tulsidas Kilachand.
The appeal was dismissed.
In the appeal before the Tribunal, Mr. Tulsidas Kilachand again relied upon the third proviso to section 16(1)(c), and contended that the case was riot governed by section 16(3)(b) and that the dividend income could not be included in his assessment.
The Tribunal came to the conclusion that the case was covered either by section 16(3)(a)(iii) or by section 16(3)(b), and that the income from the shares was, therefore, liable to be included in the income of Mr. Tulsidas Kilachand.
The Tribunal, however, raised and referred the following question under section 66(1) of the Act to the High Court of Bombay: "Whether on a true construction of the deed of declaration of trust dated 5th March , 1951, the net dividend income of Rs. 30,404 on 120 shares of Kilachand Devchand & Co., Ltd. and 244 shares of Kesar Corporation Ltd. held under trust by the assessee for the benefit of his wife was income liable to be included in the total income of the assessee? The High Court came to the conclusion that, though section 16(1)(c) was not satisfied in view of the third proviso, section 16(3)(b) was applicable to the case, and answered the question in the affirmative.
In the appeal before us, the case for the Department was based both on section 16(3)(a)(iii) and section 16(3)(b), while the appellants contended that this disposition fell within the third proviso to section 16(1)(c).
The relevant provisions are: 45 354 " 16.
Exemptions and exclusions in determining the total income. (1) In computing the total income of an assessee. . . . . . . . . (c) all income arising to any person by virtue of a settlement or disposition whether revocable or not, and whether effected before or after the commencement of the Indian Income tax (Amendment) Act, 1939 (7 of 1939), from assets remaining the property of the settlor or disponer, shall be deemed to be income of the settlor or disponer, and all income arising to any person by virtue of a revocable transfer of assets shall be deemed to be income of the transferor: Provided. . . . . . . . .
Provided further. . . . . . . .
Provided further that this clause shall not apply to any income arising to any person by virtue of a settlement or disposition which is not revocable for a period exceeding six years or during the lifetime of the person and from which income the settlor or disponer derives no direct or indirect benefit but that the settlor shall be liable to be assessed on the said income as and when the power to revoke arises to him.
(2). . . . . . . . (omitted) (3).
In computing the total income of any individual for the purpose of assessment, there shall be included (a) so much of the income of a wife or minor child of such individual as arises directly or indirectly (i). . . . . . . . . (ii). . . . . . . . . . (iii) from assets transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration or in connection with an agreement to live apart; or (b). so much of the income of any person or association of persons as arises from assets transferred otherwise than for adequate consideration to the person or 355 association by such individual for the benefit of his wife or a minor child or both.
" The object of framing section 16 can almost be taken from the observations of Lord Macmillan in Chamberlain vs Inland Revenue Commissioners (1), where he stated as follows: "This legislation . (is) designed to overtake and circumvent a growing tendency on the part of taxpayers to endeavour to avoid or reduce tax liability by means of settlements.
Stated quite generally, the method consisted in the disposal by the taxpayer of part of his property in such a way that the income should no longer be receivable by him, while at the same time he retained certain powers over, or interests in, the property or its income.
The legislature 's counter was to declare that the income of which the taxpayer had thus sought to disembarrass himself should, notwithstanding, be treated as still his income and taxed in his hands accordingly.
" These observations apply also to the section under consideration, and the Indian provision is enacted with the same intent and for the same purpose.
Section 16 thus lays down certain exemptions and exclusions in determining the total income of an assessee.
Some of the provisions lay down the conditions for inclusion of certain income, while others lay down the conditions for exclusion of other income.
We are concerned with the income accruing in case of settlements and the conditions under which income of a wife is treated as the income of the settlor or disponer or as the income of the husband.
We have to see if the pro visions for exclusion or inclusion apply to this case.
Section 16(1)(c) provides that income from assets remaining the property of the settlor or disponer or arising to any person by virtue of a revocable transfer of assets shall be deemed to be the income of the transferor.
What cl.
(c) means was decided by this Court in Provat Kumar Mitter vs Commissioner of Income tax (2).
There, Provat Kumar Mitter had assigned the dividends only, and had not transferred the relevant shares.
It was held by this Court that this (1) , 329.
(2) 356 was a case of application of one 's own income and not assignment of the source from which the income was derived, which alone saved the income from tax, subject, however, to provisions like section 16(1)(c) and section 16(3).
The deed in favour of the wife in that case gave only a right to the dividends, and not being a transfer of an existing property of the assessee, section 16(1)(c) and the third proviso were not attracted.
That case thus has no application to the facts of the present case, where the disposition is differently made.
The disposition here is for a period of seven years or the life of the settle ' whichever is shorter.
During that period or the life of the settlee, Mr. Tulsidas Kilachand has bound himself upon trust to pay the dividends to his wife and not to revoke the settlement.
The intention is obviously to put this case within the third proviso to section 16(1)(c), because cl.
(c) does not apply to any income arising to any other person provided the disponer derives no direct or indirect benefit, even though the assets remain his property.
If it were only a question of the application of the proviso, this disposition would be exempt.
But by the deed of trust, the settlor holds the shares in trust; the shares do not remain the property of the settlor.
Section 16(1)(c) has, therefore, no application, and the proviso is not attracted.
The section goes on to deal with other situations and to provide for them specially.
Sub section (3) provides specially for assets transferred to the wife or minor child.
Income from assets transferred to the wife is still to be included in the total income of the husband, (a) if the assets have been transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration [vide sub section
(3)(a)(iii)], or (b) so much of the income of any person or association of persons as arises from assets transferred otherwise than for adequate consideration to the person or association by such individual for the benefit of his wife [vide sub section
(3)(b)].
The first question is whether there can be said to be transfer of assets to the wife or to 'any person ' for the benefit of the wife.
The second question is whether there was adequate consideration for the transfer, if 357 there was one The contention of the assessee is that there was no transfer of any assets at all.
It is contended that the ownership of shares involves a bundle of rights, and that they are, generally speaking, (a) right to vote, (b) right to participate in the distribution of assets on dissolution, and (c) right to participate in the profits, e. g., dividends which might be Hi, .declared.
It is pointed out that none of these rights was transferred to the wife, because transfer of assets connotes a creation of a right in the assets in praesenti.
It is urged that there was no transfer of assets either to the wife or to any person for the benefit of the wife but merely a creation of a trust in respect of the shares, the dividends from which were payable to the wife, and that thus section 16(3)(a)(iii) or section 16(3)(b) was not applicable.
It is lastly contended that even if it be held that there was such a transfer, it was for adequate consideration, being for love and affection, which is a good consideration.
The contention that there was no transfer at all in this case is not sound.
The shares were previously held by Mr. Tulsidas Kilachand for himself.
After the declaration of trust by him, they were held by him not in his personal capacity but as a trustee.
No doubt, under sections 5 and 6 of the Indian Trusts Act if the declarer of the trust is himself the trustee also, there is no need that he must transfer the property to himself as trustee; but the law implies that such a transfer has been made by him, and no overt act except a declaration of trust is necessary.
The capacity of the declarer of trust and his capacity as trustee are different, and after the declaration of trust, he holds the assets as a trustee.
Under the Transfer of Property Act, there can be a transfer by a person to himself or to himself and another person or persons.
In our opinion, there was, in this case, a transfer by Mr. Tulsidas Kilachand to himself as a trustee, though there was no formal transfer.
The assessee also stresses the words "any person or association of persons" in section 16(3)(b), and contends that such a person must be other than the husband, who transfers.
The word "any person" is wide 358 enough to include the husband, when he transfers property to himself in another capacity.
The change of capacity makes him answer the description "any person".
This deed must be regarded as involving a transfer by the husband to a trustee, and even though the husband is the same individual, in his capacity as a trustee he must be regarded as a person distinct from the transferor.
In our opinion, section 16(3)(b) covers the case.
It remains to consider whether there was adequate consideration for the transfer.
Reliance has been placed only upon love and affection.
The words "adequate consideration" denote Consideration other than mere love and affection, which, in the case of a wife, may be presumed.
When the law insists that there should be "adequate consideration" and not good consideration", it excludes mere love and affection.
They may be good consideration to support a contract; but adequate consideration to avoid tax is quite a different thing.
To insist on the other meaning is really to say that consideration must only be looked for, when love and affection cease to exist.
In our opinion, this case falls within the special rules concerning wife and minor child, laid down in section 16(3)(b) and not within the third proviso to section 16(1)(c).
It must thus be held that there was a transfer of the assets to the husband trustee for the benefit of the wife, The answer given by the High Court was thus correct.
The appeals fail, and are dismissed with costs.
One hearing fee.
Appeals dismissed.
[/INST]The respondent, holding the substantive rank of a Head Constable in the Madras Police Service, was promoted to officiate as a probationary Sub Inspector and, on the completion of the period of probation, placed in the category of approved probationers for confirmation when substantive vacancies arose.
Instead of being confirmed he was, for administrative reasons, reverted to his substantive post as the number of vacancies in the post of Sub Inspectors was not sufficient to include him.
Having failed to obtain redress from the Government, he moved the High Court under article 226 of the Constitution.
Annexure 1 of r. 3 of the service rules provided that the percentage of promotions from the rank of Head Constable to that of Sub Inspector was to be "upto not more than 30% of the cadre", but provided no limitation for direct recruitment, r. 4 provided that no vacancy shall be filled by the appointment of a person who had not yet commenced his probation when an approved probationer or a probationer was available; cl.
(a) of r. 5 provided that, for want of vacancy, the probationers were to be discharged first in order of juniority and thereafter the approved probationers in order of juniority and cl.
(b) provided that this order of discharge might be departed from in cases involving, among others, exceptional administrative inconvenience.
The Single judge, who heard the matter, held that there was a violation of r. 3 of the Service Rules and directed the State not to give effect to the order of reversion if by virtue of his seniority he could be included within the 30% prescribed for rank promotees by that rule.
The Division Bench, on appeal, disagreed with the trial judge as to the scope of r. 3 but dismissed the appeal holding that the rule as to juniority prescribed by r. 5 of the service rules had not been strictly observed.
The State filed an appeal on a certificate granted by the High Court.
Held, that the words "upto and not more than 30% Of the cadre" in the Annexure 1 to r. 3, construed in the context of the provision relating to direct recruits which prescribes no limitation, clearly fix 30 as the maximum percentage of promotions 46 from the rank of Head Constables to the post of Sub Inspectors and leave the appointing authorities free to adopt any other percentage below that figure.
There could, therefore, be no infraction of the rule if the percentage of rank promotees was less than 30% of the total number of the Sub Inspectors on ' the date of the reversion in question.
Rule 4, which regulates the right of probationers and approved probationers to confirmation, applies only to the stage prior to confirmation when the integration of the rank promotees and the direct recruits takes place so as to form a united service and the proportion prescribed by r. 3 has effect.
That rule has to be separately applied to the two classes and, consequently, there was no violation of that rule in appointing direct recruits to substantive posts in preference to the respondent.
Under r. 5(a) the juniority for purposes of reversion has, on the same reasoning, to be determined separately for the direct recruits and the rank promotees who constitute separate classes.
Even otherwise, the impugned order could be sustained under r. 5(b) in view of the case of administrative inconvenience made by the Government and accepted by the Courts below.
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<s>[INST] Summarize the judgement: Criminal Appeal No. 18 of 1953.
Appeal under article 134(1)(c) of the Constitution of India from the Judgment and Order dated the 18th February, 1953, of the High Court of Judicature at Bombay in Criminal Appeal No. 592 of 1952 arising out of the Judgment and Order dated the 21st May, 1952, of the Court of the Presidency Magistrate, 19th Court, Bombay, in Case No. 147/P/ 1951.
B. H. Lulla and Rajinder Narain for the appellants.
Porus A. Mehta for the respondent.
May 13.
The Judgment of the Court was delivered by MEHR CHAND MAHAJAN C.J.
The appellants were charged under section 18(1) of the Bombay Rent I Restriction Act, 1947, for receiving from Shankar Das Gupta through Mathra Das, accused No. 3, on 23rd November, 1950, a sum of Rs. 2,400 as premium or 160 pugree in respect of the grant of lease of Block No. 15 in a building under construction.
The magistrate found 'the appellants guilty of the charge and sentenced each of them to two months ' R.I. and a fine of Rs. 1,200.
Mathra Das was convicted and sentenced to one day 's S.I. and a fine of Rs. 100.
The fourth accused, Roshanlal Kanjilal, was acquitted.
Mathra Das preferred no appeal against his conviction and sentence.
The appellants preferred an appeal to the High Court against their conviction.
This was heard by Gajendragadkar and Chainani JJ.
on the 8th of October, 1952.
It was contended, inter alia, that even if it were held that the appellants had accepted the sum of Rs. 2,400 they could not be said to have committed an offence under section 18(1) of the Act inasmuch as the amount could not in law be held to be a premium in respect of the grant of a lease.
On this point the learned Judged said as follows : " In the present case the work regarding the building which still remained to be done was so important that both the parties agreed that the complainant should get into possession after the said work was completed.
In such a case unless the building is completed the tenant has no right which can be enforced in a Court of law.
If the landlord finds it impossible for any reason to complete the building, what is the right which an intending tenant can enforce against him.
Therefore, in our opinion, there is considerable force in the contention urged by Mr. Lulla that in the present case even if it be held that the accused had received Rs. 2,400 in the circumstances to which we have already referred that would not bring them within the mischief of section 18(1) because there has been no grant of a lease at all.
There is only an agreement that the landlord would lease to the complainant a particular flat after the building has been fully and properly completed.
It does appear that section 18 1 does not bring within its mischief executory agreements of this kind." A contrary view had been expressed in Criminal Revision No. 1178 of 1949, by another Bench of the High Court on the construction of section 18(1).
The 161 matter was therefore referred to the Full Bench.
The question framed for the consideration of the Full Bench was in these terms: If as owners of an in complete building the appellants accepted Rs. 2,400 from the complainant in respect of an agreement between them that the appellants were bound to give and the complainant was entitled to take possession of flat No. 15 in the said building as soon as the said building was completed on the agreed rent of Rs. 75 per month, did the acceptance of Rs. 2,400 by the appellants fall within the mischief of section 18 of Bombay Act LVII of 1947 This question, if answered in the negative by the Full Bench, would have concluded the case.
The Full Bench answered the question referred in the affirmative.
It held that the oral agreement did not constitute a lease but it amounted to an agreement to grant a lease in future, and that the receipt of consideration for an executory agreement was within the mischief of section 18(1) of the Act.
The Full Bench Expressed its opinion in these terms: " What the Legislature has penalized is the receipt of a premium by the landlord and the Legislature has also required a nexus between the receipt by the landlord of a premium and the grant of a lease of any premises.
Therefore a receipt alone by a landlord would not constitute an offence, but that receipt must be connected with the grant of the lease of any premises.
Unless that connection is established no offence would be committed.
The contention of Mr. Lulla on behalf of the accused is that the receipt of the premium must be simultaneous with the grant of the lease.
If the lease comes into existence at a future date, then the receipt of a premium according to him is not "in respect of " the grant of a lease.
Therefore the key words according to us in this section are " in respect of.
" It is relevant to observe that the Legislature has advisedly not used the expression "for" or "in consideration of" or " as a condition of " the grant of a lease.
It has used an expression which has the widest connotation and 21 162 means in its plain meaning " connected with or attributable to," and therefore it is not necessary that there must be simultaneous receipt by the landlord with the grant of the lease.
So long as so 'me connection is established between the grant of the lease and the receipt of the premium by the landlord, the provisions of the section would be satisfied.
In our opinion it is impossible to contend that in the present case there was no connection whatever between the landlord receiving the premium and his granting the lease of the premises.
It is true that when he received the premium he did not grant a lease.
It is true that all that he did when he received the premium was to enter into a contract with his tenant to grant a lease in future.
But the object of the landlord in receiving the premium and the object of the tenant in paying the premium was undoubtedly on the part of the landlord the letting of the premises and oh the part of the tenant the securing of the premises.
Therefore the object of both the landlord and the tenant was the grant of the lease of the premises concerned and that object was achieved partly and to start with by an oral agreement being arrived at between the landlord and the tenant with regard to the granting of this lease, the lease being completed when delivery of possession of the premises would be given.
Therefore, in our opinion, on the facts of this case it is not possible to contend that the payment of the premium received by the landlord was unconnected with the grant of a lease of any premises.
The fact that no grant was made at the time when the premium was received, the fact that there was merely an agreement to grant a lease, the fact that the lease would come into existence only at a future date, are irrelevant facts so long as the connection between the receiving of the premium and the granting of the lease is established.
" On return from the Full Bench, the Division Bench considered the other contentions raised on behalf of the appellants and held that there were no merits in any one of those points and in the result the appeal was dismissed.
It was certified that the case involved a substantial question of law and was a fit one for appeal to this Court.
This appeal is before us on that certificate, 163 The principal question to decide in the appeal is whether the answer given by the Full Bench to the question referred to it is right, and whether receipt of a sum of money by a person who enters into an executory contract to grant a lease of a building under construction falls within the mischief of section 18(1) of the Act Section 18(1) provides: " If any landlord either himself or through any person acting or purporting to act on his behalf receives any fine, premium or other like sum or deposit or any consideration, other than the standard rent. " in respect of the grant, renewal or continuance of a lease of any premises such landlord or person shall be punished " in the manner indicated by the section Under the section the money must be received by the landlord in respect of the grant of a lease.
The section refers to the " grant, renewal or continuance of a lease.
" Prima facie, it would not cover an executory agreement to grant a lease.
The words " renewal or continuance of a lease " clearly suggest that there must be a renewal or continuance of a subsisting lease.
In the context, grant of tenancy means the grant of new or initial tenancy; renewal of tenancy means the grant of tenancy after its termination; and continuance seems to contemplate continuance of a tenancy which is existing.
Whether or not an executory agreement for grant of a lease comes within the ambit of the section by reason of the use of the words " in respect of " would be examined hereinafter.
Before doing so it may be stated that an instrument is usually construed as a lease if it contains words of present demise.
It is construed as an executory agreement, notwithstanding that it contains words of present demise, where certain things have to be done by the lessor before the lease is granted, such as the completion or repair or improvement of the premises, or by the lessee, such as the obtaining of sureties.
(Vide Halsbury 's Laws of England, Second Edition, Vol. 20, pp. 37 39).
On the facts of this case therefore the Full Bench very rightly held that the 164 oral, agreement made between the parties did not constitute a lease but it amounted to an agreement to grant a lease in future.
It may further be pointed out that, in fact, in this case the lease never came into existence.
Moreover, in view of the provisions contained in the Bombay Land Requisition Act XXXIII of 1948, as amended, the appellants could not let out the building even after its completion unless on a proper notice being given the Controller of Accommodation did not exercise his powers under that Act.
It so happened that as soon as the building was completed the Controller of Accom modation requisitioned it, and thus no occasion arose for giving effect to the executory contract.
The question that needs our determination in such a situation is Whether section 18(1) makes punishable receipt of money at a moment of time when the lease had not come into existence, and when there was a possibility that the contemplated lease might never come into existence.
It may be here observed that the provisions of section 18(1) are penal in nature and it is a well settled rule of construction of penal statutes that if two possible and reasonable constructions can be put upon a penal provision, the Court must lean towards that construction which exempts the subject from penalty rather than the one which imposes penalty.
It if; not competent to the Court to stretch the meaning of an expression used by the Legislature in order to carry out the intention of the Legislature.
As pointed out by Lord Macmillan in London and North Eastern Railway Co. vs Berriman(1), " where penalties for infringement are imposed it is not legitimate to stretch the language of a rule, however beneficent its intention, beyond the fair and ordinary meaning of its language.
" The High Court took the view that without stretching the language of section 18(1) beyond its fair and ordinary meaning, the very comprehensive expression " in respect of " used by the Legislature could lead to only one conclusion, that the Legislature wanted the (1) , 295, 165 penal consequences of section 18(1) to apply to any nexus between the receipt by a landlord of a premium and the grant of the lease.
In our judgment, the High Court laid undue emphasis on the words "in respect of" in the context of the section.
Giving the words " in respect of " their widest meaning, viz., " relating to " or " with reference to", it is plain that this relationship must be predicated of the grant, renewal or continuance of a lease, and unless a lease comes into existence simultaneously or near about the time that the money is received, it cannot be said that the receipt was " in respect of " the grant of a lease.
The relationship of landlord and tenant does not come into existence till a, lease comes into existence; in other words, there is no relationship of landlord and tenant until there is a, demise of the property which is capable of being taken possession of If the Legislature intended to make receipts of money on executory agreements punishable, the section would have read as follows: " receives any fine, premium or other like sum or deposit or any consideration other than the standard rent in respect of the lease or an agreement of lease of the premises, such landlord or person shall be punished " in the manner indicated in the section.
The section does not make the intention punishable; it makes an act punishable which act is related to the existence of a lease.
It does not make receipt of money on an executory contract punishable; on the other hand it only makes receipt of money on the grant, renewal or continuance of the lease of any premises punishable and unless the lease come into existence no offence can be said to have been committed by the person receiving the money.
It is difficult to hold that any relationship of 'landlord and tenant comes into existence on the execution of at agreement executory in nature or that the expression " premium " can be appositely used in connection with the receipt of money on the occasion of the executor of such an agreement, It may well be that if a leas( actually comes into existence then any receipt of money which has a nexus with that lease may fall within the mischief of section 18(1), but it is unnecessary to ex press any final opinion on the question as in the present 166 case admittedly no lease ever came into existence and the relationship of landlord and tenant was never created between the parties.
The landlord never became entitled to receive the rent from the tenant and the tenant never became liable to pay the rent.
There was no transfer of interest in the premises from the landlord to the tenant.
On its plain, natural, grammatic meaning, the language of the section does not warrant the construction placed upon it by the Full Bench merely by laying emphasis on the words " in respect of.
" In our opinion the language of the section ; 'in respect of the grant, renewal or continuance of a lease " envisages the existence of a lease and the payment of an amount in respect of that lease or with reference to that lease.
Without the existence of a lease there can be no reference to it.
If the Legislature intended to punish persons receiving pugree on merely executory contracts it should have made its intention clear by use of clear and unambiguous language.
The construction we are placing on the section is borne out by the circumstance that it occurs in Part I of the Act.
Section 6 of this Part provides that " in areas specified in Schedule I, this Part shall apply to premises let for residence, education, business, trade or storage.
" This Part relates to premises let, in other words, premises demised or given on lease and not to premises that are promised to be given on lease and of which the lease may or may not come into being.
The definition of the expression " landlord" also suggests the same construction.
Landlord " as defined in section 5 of the Act 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. .
It is obvious that on the basis of an executory agreement the appellants would not be entitled to receive any rent.
They would only be entitled to receive rent after the lease is executed and actual 167 demise of the premises or their transfer is made in favour of the complainant.
The definition of the expression tenant" also suggests the same construction.
Mr. Mehta for the State, besides supporting the emphasis placed by the High Court on the words " in respect of," contended that that construction could be supported in view of the provisions of sub section (3) of section 18 which is in these terms: " 18(3) Nothing in this section shall apply to any payment made under any agreement entered into before the first day of September, 1940, or to any payment made by any person to a landlord by way of a loan, for the purpose of financing the erection of the whole or part of a residential building or a residential section of a building on the land held by him as an owner, a lessee or in any other capacity, entitling him to build on such land, under an agreement which shall be in writing and shall, notwithstanding anything contained in the Indian , be registered.
Such agreement shall inter alia include the following conditions, namely, (1) that the landlord is, to let to 'such person the whole or part of the building when completed for the use of such person or any member of his family. .
It was suggested that but for this exception the executory agreement would be included within the mischief of section 18(1) and that unless such agreements were within the mischief of the section there would have been no point in exempting them from its provisions.
In our view, this contention is not sound.
In the first place, the exception was added to the section by Act 42 of 1951, subsequent to the agreement in question, and for the purposes of this case section 18(1) should ordinarily be read as it stood in the Act, at the time the offence is alleged to have been commit ted.
Be that as it may, it appears that sub section (3) was added to the section by reason of the fact that some Courts construed section 18(1) in the manner in which it has been construed by the Full Bench in this case, and the Legislature by enacting clause (3) made it clear that agreements of the nature indicated in the 168 subjection were never intended to be included therein.
In our opinion, the language of that section is not of much assistance in construing the main provisions of section 18(1).
The result therefore is that in our view the receipt of money by the appellants from the complainant at the time of the oral executory agreement of lease was not made punishable under section 18(1) of the Act and is outside its mischief, and the Presidency Magistrate was in error in convicting the appellants and the High Court was also in error in upholding their conviction.
We accordingly allow this appeal, set aside the conviction of the appellants and order that they be acquitted.
Appeal allowed.
[/INST]Appellant No. 1 filed a petition challenging the election of the first respondent from the Lambi Assembly Constituency ( 'reserved seat) in the district of Ferozepur, Punjab, at the 1967 general election.
It was urged in the petition that the nomination paper of appellant No. 2 had been wrongly rejected by the Returning Officer who had held that appellant No. 2 was a mochi and as such not a member of the chamar caste mentioned in item 9 of the Constitution (Scheduled Castes) Order, 1950 issued under article 341 of the Constitution.
It was also urged that the Returning Officer had at first accepted the nomination paper but had subsequently reviewed his own order.
The High Court dismissed the petition, whereupon an appeal was filed in this Court.
HELD: (i) On the evidence it was not possible to hold that the Returning Officer had after announcing his decision accepting the nomination paper reviewed his own order afterwards.
(ii) No ground had been made out for disturbing the conclusion of the trial court on the evidence that appellant No. 2 was a mochi and not a member of the chamar caste.
(iii) It was not open to this Court to scrutinise whether a person properly described as a mochi also fell within the caste of chamars and could describe himself as such.
The question was one the determination of which lay within the exclusive power of the President under article 341 of the Constitution.
[1003 B C] , Basavalingappa v.D. Munichinnappa & Ors. ; and Bhaiya Lal vs Harikrishen Singh & Ors., ; , applied.
Article 341 empowered the President to specify not only entire castes races or tribes but also parts or groups within castes, races or tribes which were to be treated as Scheduled Castes in relation to a particular State or Union Territory.
So far as chamars and mochis are concerned, a reference to the Constitution (Scheduled Castes) Order, 1950 shows that the President was not of opinion that they were to be considered to belong to the same caste in all the different States.
In several States chamars and mochis were put on the same footing but not so in the State of Punjab.
Even after the Reorganisation of the Punjab Act, 1966 when the question of specification of Scheduled Castes in the territories created came up for his consideration the President did not take the view that mochis should be classed with chamars in so far as the States of Haryana, Punjab and the Union Territory of Chandigarh were concerned though he directed that in the Union Territories of Delhi and Himachal Pradesh mochis and chamars were to be placed in the same group.
[1000 E, H; 1001 A D]
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<s>[INST] Summarize the judgementtition No. 4305 of 1978.
Under Article 32 of the Constitution.
N. M. Ghatate and section V. Deshpande.
for the Petitioner Soli J. Sorabjee, Addl.
General and Girish Chandra for the Respondent.
The order of the Court was delivered by KRISHNA IYER, J. A litigation with a social dimension, even in a blinkered adversary system, serves a larger cause than the limited lis before the court.
This petition, with non specific reliefs, is One such.
Sobraj, the petitioner, by the frequency of his forensic com plaints against incarceratory torture and Dr. Ghatate, his counsel by the piquancy of his hortative advocacy of freedom behind bars.
have sought to convert the judicial process from a constitutional sentinel of prison justice which, emphatically, it is into a meticulous auditor general of jail cells which, pejoratively, it is not although, on occasions, 'thin partition do their bounds divide`.
Often, as here, the fountain of confusion in penitentiary jurisprudence is forgetfulness of fundamentals.
Once the legal basics are stated, Sobraj, with his disingenuous, finical grievances, will be out of court.
What are the governing principles, decisionally set down by this court in Batra and Sobraj? Has the court jurisdiction to decide prisoners ' charges of violation of rights ? If it has, can it meddle with the prison administration and its problems of security and discipline from an 'innocent ' distance ? Put tersely, both the 'hands off.
doctrine and the 'take over ' theory have been rebuffed as untenable extremes and a middle round has been found of intervening when constitutional rights or statutory prescriptions are transgressed to the injury of the prisoner and declining where lesser matters of institutional order and man management, though irksome to some, are alone involved.
Contemporary profusion of prison torture reports makes it necessary to drive home the obvious, to shake prison top brass from the callous complacency of unaccountable autonomy within that walled off world of human held incommunicado.
Whenever fundamental rights are flouted or legislative protection ignored, to any prisoner 's prejudice, this Court 's writ will run, breaking through stone walls and iron bars, to right the wrong and restore the rule of law.
Then the 515 parrot cry of discipline will not deter, of security will not scare of discretion will not dissuade, the judicial process.
For if courts 'cave in" when great rights are gouged within the sound proof, sight proof precincts of prison houses, where, often, dissenters and minorities are caged, Bastilles will be re enacted.
When law and tyranny begins: and history whispers, iron has never been the answer to the rights of men.
Therefore we affirm that imprisonment does not spell farewell to fundamental rights although, by a realistic re appraisal, courts will refuse to recognise the full panoply of Part III enjoyed by a citizen.
This proposition was not contested by the learned Additional Solicitor General Sri Soli Sorabjee.
Nor does its soundness depend, for us, upon the Eighth Amendment to the U.S. Constitution.
article 21, read with article 19(1) (d) and (5), is capable of wider application than the imperial mischief which gave its birth and must draw Its meaning from the evolving standards of decency and dignity that mark the progress of a mature society, as Batra and Sobraj have underscored and the American judges have highlighted.
Fair procedure is the soul of article 21, reasonableness of the restriction is the essence of article 19(S) and sweeping discretion degenerating into arbitrary discrimination is anathema for article 14.
Constitutional kurana is thus injected into incarceratory strategy to produce prison justice.
And as an annotation of article 21, this Court has adopted, in Kharak Singh 's case(I) that expanded connotation of 'life ' given by Field, J. which we quote as reminder: "Something more than mere animal existence.
the inhibition against its deprivation extends to all those limbs and faculties by which life is enjoyed.
The provision equally prohibits the mutilation of the body by the amputation of an arm or leg, or the putting out of an eye, or the destruction of any other organ of the body through which the soul communicates with the outer world".
The next axiom of prison justice is the court 's continuing duty and authority to ensure that the judicial warrant which deprives a person of his life or liberty is not exceeded, subverted or stultified lt is a sort of solemn covenant running with the power to sentence.
The U.S. Courts have intensified their oversight of State penal facilities reflecting a heightened concern with the extent to which the ills that plague so called correctional institutions violate basic rights.
points out Edward section Crowin.
Although.
the learned author, and.
(1) [1964] I SCR 357.
(2) Supplement to Edward section Corwin 's "The constitution ' and What it means Today; 1976 Edn.
p. 245.
516 indeed, the decisions show that reliance is placed on the Eighth: Amendment, as we have earlier pointed out.
the same.
sensitized attention and protective process emanate from the humane provisions of Part III of our Constitution.
Viewed differently, supposing, a court sentences a person to simple imprisonment or assigns him 'B ' class treatment and the jail authorities unwittingly or vindictively put him under rigorous imprisonment or subject him to 'C ' class treatment, does it not show contempt of the court 's authority and deprivation of liberty beyond a degree validated by the court warrant ? Likewise, where a prisoner is subjected to brutality, exploiting the fact that he is helplessly within the custody of the Jail Administration, does it not deprive the prisoner of his life and liberty beyond the prescribed limits set by the court ? Yet again, where conditions within a prison are such that inmates incarcerated therein will inevitably and necessarily become more sociapathic than they were prior to the sentence, is not the court ' punitive purpose, charged with healing hope, stultified by the prison authorities ? of course, where a prison practice or internal instruction places harsh restrictions on jail life, breaching, guaranteed rights.
the court directly comes in.
Every prison sentence is a conditioned deprivation of life and liberty, with civilised norms built in and unlimited trauma interdicted.
In this sense, judicial policing of prison practices is implied in the sentencing power.
The Criminal judiciary have thus a duty to guardian their sentences and visit prisons hen necessarily.
Many of them do not know or exercise this obligation.
Another jurisdictional facet may be touched upon in view of the widely worded relief sought to treat Sobraj 'in a human and dignified manner, keeping in view the adverse effect of` his confinement upon his mental and physical conditions .
The penological goals which may be regarded as reasonable justification For restricting the right to move freely within the confines of a penitentiary are now well settled.
And if prisoners have title to Article 19, 21 and 14 rights, subject to the limitation we have indicated, there must be some correlation between deprivation of freedom and the legitimate functions of a correctional system.
It is now well settled, as a stream of rulings of courts proves, that deterrence, both specific and general, rehabilitation and institutional security are vital considerations.
Compassion wherever possible and cruelty only where inevitable is the art of correctional confinement.
When prison policy advances such a valid goal, the court will not intervene officiously.
517 This overall attitude was incorporated as a standard by the American National Advisory Commission on Crimine Justice Standards and Goals: '. .
A rehabilitative purpose is or ought to be implicit in every sentence of an offender unless ordered otherwise by the sentencing court ' '.(l) The U.S. Supreme Court summed up: "In a series of decisions this court has held that, even though the governmental purpose be legitimate anti substantial, that purpose cannot be pursued by means that broadly stifle fundamental personal liberties when the and can by more narrowly achieved.
The breadth of legislative abridgment must be viewed in the light of less drastic means for achieving, the same basic purpose."( ') But when an inmate is cruelly restricted in a manner which supports no such relevant purpose the restriction becomes unreasonable and arbitrary and unconstitutionality is the consequence.
Traumatic ` futility is obnoxious to pragmatic legality.
Social defence is the raison of the penal code and bears upon judicial control over prison administration.
If a whole atmosphere of constant fear of violence, frequent torture and denial of opportunity to improve oneself is created or if medical facilities and basic elements of care arid comfort necessary to sustain life are refused then also the humane jurisdiction of the court will become operational based on article 19 '.
Other forms of brutal unreasonableness and anti rehabilitative attitude violative of constitutionality may be thought of in n penal system but we wish to lay down only a broad guideline that where policies.
with a 'Zoological touch ', which do not serve valid penal objectives are pursued in penitentiaries so as to inflict conditions so unreasonable as to frustrate the ability of inmates to engage in rehabilitations.
the court is not helpless.
However as prison system may make rational distinctions in making assignments to inmates of vocational.
educational Land work opportunities available but it is constitutionally impermissible to do sc without as functional classification system.
The mere fact that a prisoner is poor or rich, high born or ill bred, is certainly irrational as a differential ill a secular socialist high republic '.
Since the petitioner charges the jail staff with barbaric and inhuman treatment in prison we are called upon to delineate the broad boundaries of judicial jurisdiction vis a vis prison administration and prisoner 's rights.
(I) "To solve The age old Problem of crime" Roger Lanphear; J. D. p 19 (2) Ibid pr 21 518 The court is reluctant to intervene in the day to day operation of the State penal system; but undue harshness and avoidable tantrums, under the guise of discipline and security, gain no immunity from court writs.
The reason is, prisoners retain all rights enjoyed by free citizens except those lost necessarily as an incident of confinement.
Moreover, the rights enjoyed by prisoners under Articles 14, 19 and 21, though limited, are not static and will rise to human heights when challenging situations arise.
Cooper(1) and Menaka Gandhi(2) have thus compulsive consequence benignant to prisoners.
The petitioner in the present case has contended that barbaric and inhuman treatment have been hurled at him and that intentional discrimination has been his lot throughout.
These allegations invited us to examine the limits and purpose of judicial jurisdiction but we have to apply the principles so laid down to the facts of the present case.
Starry abstractions do not make sense except in the context of concrete facts.
That is why we agree with the propositions Of law urged by Dr. Ghatate but disagree with the distress and discrimination his client wails about.
True, confrontedm with cruel conditions of confinement, the court has an expanded role.
True, the light to life is more than mere animal existence, or vegetable subsistence.(3) True, the worth of the human person and dignity and divinity of every individual inform articles 19 and 21 even in a prison setting.
True, constitutional provisions and municipal laws must interpreted in the light of the normative laws of nations, wherever possible and a prisoner does not forfeit his Part lII rights.
But that are the facts here ? Charles Sobraj is no longer an under trial.
having to serve two sentence of long imprisonment.
He is given all the amenities of .1 'B ' class prisoner.
He goes on hunger strike but medical men take care of him.
Ward I, where he is lodged, gives him the facilities of wards XIll and XIV where he wants to he moved.
He has record of one escape and one attempt at suicide and Interpol reports of many crimes abroad.
There are several cases pending in India against him.
Even so, the barbarity of bat fetters inflicted on him lay a qualmless jail staff was abandoned under orders of this Court.
he seeks the other extreme of of coddling as if a jail were a country club or good hotel.
Give me finer foreigners as companions.
he demands.
Don 't keep convict cooks and warders as (1) [1971] l SCR Sl2.
(2) [1978] l SCR 248 (3) Mohammed Giasuddin vs State of Andhra Pradeh.
; 519 jailmated in my cell he rails.
Remove me from a high security ward like Ward I to a more relaxed ward like Ward 14 or 13, he solicits.
These delicate and genteel requests from a prisoner with his record and potential were turned down by the Superintendent and the reasons for such rejection, based on security, rules and allergy of other inmates to be his risky fellow inmates have been stated on oath.
We cannot be critical of the Administration if it makes a classification between dangerous prisoners and ordinary prisoners.
In the present case, the Superintendent swears, and it is undisputed, that the petitioner is not under solitary confinement.
We further aver that a distinction between under trials and convicts is reasonable and the petitioner is now a convict.
In fact, lazy relaxation on security is a professional risk inside a prison.
The court must not rush in where the jailor fears to tread.
While the country may not make the prison boss the sole sadistic arbiter of incarcerated humans, the community may be in no mood to hand over central prisons to be run by courts.
Each instrumentality must sanction within its province.
We have no hesitation to hold that while Sobraj has done litigative service for prison reform, he has signally failed to substantiate any legal injury.
We, therefore, dismiss the writ petition, making it clear that strictly speaking the petitioner being a foreigner cannot claim rights under article 19, but we have discussed at some length the import of Articles 14, 19 and 21 because they are interlaced and in any case apply to Indian citizens.
, Petition dismissed.
S.R. Petition dismisses.
[/INST]The appellants were charged under sections, 435 and 436 of the Indian Penal Code and were tried by a jury, who returned a majority verdict of guilty.
The Assistant Sessions judge disagreed with the said verdict and made a reference to the High Court.
At the hearing of the reference the counsel for the appellants only contended that the charge to the jury was defective, and did not place the entire evidence before the judges, who only considered the objections ' urged, and nothing more, and held the 35 274 reference to be incompetent and found the appellants guilty and convicted them.
Held, that in a reference under section 307 of the Code of Criminal Procedure it was the duty of counsel to place, and it was incumbent on the High Court to consider, the entire evidence and the charge as framed and placed before the jury and to come to its own conclusion, after giving due weight to the opinion of the trial judge and the verdict of the jury, and to acquit or convict the accused of the offences of which the jury could have convicted or acquitted him.
It was wrong of the ' High Court to pass judgment without considering the entire evidence.
It is not proper for the Supreme Court to adopt the procedure of considering the entire evidence and come to a conclusion which according to the provisions of s.307(3) of the Code of Criminal Procedure the High Court should have done.
Akhlakali Hayatalli vs The State of Bombay, (1954) S.C.R. 435 and Ramanugrah Singh vs The Emperor, A.I.R. T946 P.C. 151, referred to.
</s>
|
<s>[INST] Summarize the judgementAppeal No. 421 of 1961.
Appeal from the judgment and decree dated December 24, 1959 of the Calcutta High Court in Appeal from Original Decree No. 181 of 1956.
M. C. Setalvad, section C. Ghose, J. B. Dadachanji, O.C. Mathur and Ravinder Narain, for the appellant.
862 Bishan Narain and P. D, Xenon, for the respondent.
April 5.
The judgment of the Court was delivered by GAJENDRAGADKAR J.
This appeal arises out of a suit filed by the appellant, the New Marine Coal (Bengal) Private Ltd. against the respondent, the Union of India, on the original side of the Calcutta High Court to recover Rs. 20,343/8/ .
The appellant 's case was that it had supplied coal to the Bengal Nagpur Railway Administration in the month of.
June, 1949, and the amount claimed by it represented the price of the said coal and salestax thereon.
The appellant also made an alternative case, because it was apprehended that the respondent may urge that the contract sued on was illegal and invalid since it did not comply with s.175 (3) of the Government of India Act, 1935.
Under this alternative claim, the appellant alleged that the coal had been supplied by the appellant not intending so to do gratuitously, and the respondent had enjoyed the benefit thereof, and so, the respondent was bound to make compensation to the appellant in the form of the value of the said Coal under section 70 of the Indian Contract Act.
The appellant 's case was that since the said amount had to be paid to it at its Esplanade office in Calcutta, the original side of the Calcutta High Court had jurisdiction to entertain the said suit.
Since a part of the cause of action had accrued outside the limits of the original jurisdiction of the Calcutta High Court, the appellant obtained leave to see under cl. 12 of the Letters Patent.
In its written statement, the respondent admitted the delivery of the coal to the Bengal Nagpur Railway Administration and did not dispute the appellant 's case that it had forwarded to the 863 respondent bills in regard to the amount alleged to be payable to the appellant for the said supply.
The respondent, however, pleaded that the contract on which the suit was based was illegal inasmuch as it had been entered into in contravention of the provisions of section 175 (3) of ' the Government of India Act, 1935; and it was urged that section 70 of the Indian Contract Act had no application.
Besides, the respondent alleged that following the usual practice and course of dealings between the parties, an intimation card was issued and sent to the appellant by the respondent requesting the appellant to obtain payment on presentation of a proper receipt and authority against its bills in question.
Thereafter, the respondent, on receipt of the said intimation card and a proper receipt executed on behalf of the appellant, paid the amount covered by the said bills by an 'account payee ' cheque on the Reserve Bank of India drawn in favour of the appellant which was delivered to the person purporting to have authority to receive payment on behalf of the appellant.
The respondent thus alternatively pleaded satisfaction of the claim, and so, urged that the appellant had no cause of action for the suit.
On these pleadings, seven substantive issues were framed by the learned trial judge.
Issues I & 2 which were framed in respect of the jurisdiction of the Court were not pressed by the respondent, and so, no findings were recorded on them.
On issue No. 3 the learned trial judge found that the contract on which the appellant based his claim was invalid and unenforceable.
Issue No. 4 in regard to the alleged payment of the bills was found against the respondent.
On issue No. 5, the trial Court held that the respondent was bound to pay to the appellant the amount claimed by way of compensation.
Issue No. 6 which was raised by the respon dent under section 80 of the Code of Civil Procedure was not pressed, and therefore, no finding was recorded 864 on it, Issue No. 7 which was framed on the appellant 's allegation that its claim had been admitted by the respondent was answered against the appellant.
In the result, the main finding on issue No. 5 decided the fate of the suit and since the said finding was in favour of the appellant, a decree was passed directing the respondent to pay to the appellant Rs. 20,030/81 .
This amount, according to the decree, had to carry interest at the rate of 6 Percent per annum.
This decree was challenged by the respondent by an appeal before a Division Bench of the said High Court.
The appeal was heard by P. B. Mukarji and Bose JJ.
Both the learned judges agreed that the respondent 's appeal should be allowed and the appellant 's claim dismissed with costs, but their decision was based on different grounds.
Bose J. held that the contract sued on was invalid and that the claim made by the appellant for compensation under section 70 of the Indian Contract Act was not sustainable.
He also found that the appellant 's contention that the said contract which was initially invalid had been duly ratified, had not been proved.
it is on these grounds that Bose J. came to the conclusion that the appellant 's claim could not be granted.
Incidentally, it may be added that Bose J., was not prepared to consider the plea of negligence which was raised by the respondent for the first time in appeal.
Mukarji, J., who delivered the principal judgment of the Appeal Court agreed with Bose J. in holding that the contract was invalid and section 70 was inapplicable.
He, however, took the view that the said contract had been duly ratified and so, he proceeded to examine the question as to whether the appellant 's claim was justified on the merits.
On this part of the case, the learned judge took the view that even if both the appellant and the respondent.
dent were held to be innocent, since the respondent Appeal dismissed. 865 had actually parted with the money, the appellant was not entitled to require the respondent to pay over the said money again, because he thought that as held by Ashhurst J. in Lickbarrow vs Mason (1), it was a well recognised principle of law "that whenever one of two innocent per sons must suffer by the acts of a third, he who enables such third person to occasion the loss must sustain it.
" In the opinion of the learned judge, the intimation card had been duly sent by post by the respondent to the appellant and the fact that the said intimation card went into unauthorised hands of dishonest persons who used it fraudulently for the purpose of obtaining a cheque for the amount in question from the respondent, showed that the appellant had by his negligence enabled the said fraudulent persons to secure the cheque, and so, it was not open to the appellant to claim the amount from the respondent.
It is on these grounds that Mukharji, J., allowed the appeal and dismissed the appellant 's suit with costs.
It is against this judgment and degree that the appellant has come to this Court with a certificate granted by the said High Court.
In the courts below, elaborate arguments were urged by the a ties on the question as to whether the contract, the subject matter of the Suit, was invalid and if yes, whether a claim for compensation made by the appellant could be sustained under section 70 of the Indian Contract Act.
Both these questions are concluded by a recent decision of this Court in the State of We, RI Bengal vs MIS.
B. K. Mondal & Sons (2).
As a result of this decision, there can be no doubt that the contract on which the suit is based is void and unenforceable, and this part of the decision is against the appellant.
It is also clear under this decision that if in pursuance of the said void contract, the appellant has performed his part and the respondent has received the benefit of the performance of the contract by the appellant, (1) 2 T. R. 63, 70.
(2) [1962] Supp. 1 S.C.R. 876.
866 section 70 would justify the claim made by the appellant against the respondent.
This part of the decision is in favour of the appellant.
It is therefore unnecessary to deal with this aspect of the matter at length.
Assuming then that the appellant is entitled to claim the amount from the respondent, two questions still remain to be considered.
The first question is whether the intimation card on the production of which the respondent always proceeded to ' issue a cheque against the bills received by it from the appellant, was received by the appellant or not, and if this question is answered in the affirmative, the other question which will call for our decision is whether by virtue of the fact that after the intimation card had been duly posted by the respondent to the appellant it fell into dishonest hands and was fraudulently used by some persons, that would create an impediment in the way of the appellant 's claim on the ground that the appellant was negligent and his negligence creates estoppel.
Before addressing ourselves to these questions, it would be necessary to set out the material facts as to the dispatch of the intimation card and the fraudulent use which was made of it by persons in whose hands the said card appears to have fallen.
It appears that according to the ordinary course of business, on receiving the bills from the appellant, the respondent used to send an intimation card to the appellant and the said card had to be sent back by the appellant with a person having the authority of the appellant to receive the payment and when it was so produced before the respondent, a cheque used to be issued.
In the present case, it is common ground that a bill was sent by the appellant to the respondent making a total claim of Rs. 20,343/8/ on August 18, 1949.
Thereafter, on October 10, 1949, the respondent sent the intimation card to the appellant addressed at its place of business 135, Canning Street, Calcutta.
This card intimated to the appellant 867 that its claim for the amount specified in its bill would be paid on presentation of a proper receipt and authority between 11 A.M. to 3 P.M. on ordinary days and between 11 A.M. to 1 P. M. on Saturdays.
Along with the card, a form of the receipt was sent and the appellant was asked to sign it.
This intimation card was duly posted.
Later, one Mr. B. L, Aggarwal produced the intimation card before the respondent.
In doing so he produced an endrosement which purported to show that the appellant had authorised him to receive the payment on its behalf.
When the intimation card with the appropriate authority was shown to the respondent, Mr. Aggarwal was asked to pass a receipt and when the receipt was passed in the usual form, an 'account payee ' cheque for the amount in question was given to him.
Mr. Aggarwal took the cheque and left the respondent 's office.
Meanwhile, it appears that some persons had entered into a conspiracy to make fraudulent use of the intimation card which had gone into their custody.
In order to carry out this conspiracy, they purported to form a limited company bearing the same name as that of the appellant.
A resolution purported to have been passed by the Directors of this fictitious company on October 17, 1949 authorised the opening of an account in favour of the Company in the United Commercial Bank Ltd., Calcutta.
This resolution purported to be signed by the Chairman of the Board of Directors Mr. Abinash Chander Chatterji.
Armed with this resolution an, application was made to open an account in the United Commercial Bank Ltd., and while doing so, the Articles of Association purporting to be the Articles of the said fictitious Company were produced and the account was opened with a cheque of Rs. 500/ on October 27, 1949.
On October 26, 1919, the cheque received from the 868 respondent was credited in the said account, and as was to be expected, withdrawals from this account, began in quick succession, with the result that by November 1, 1949, only Rs. 68/ were left in this account.
That, in brief, is the story of the fraud which has been committed in respect of the cheque issued by the respondent to the appellant for the bill dated August 18, 1949.
In the Courts below, the appellant denied that it had received the intimation card from the respondent,and it was alleged on its behalf that in delivering the cheque to the person who presented the said card with the authority purporting to have been issued by the appellant, it cannot be said that the respondent bad given the cheque to any person authorised by the appellant, and so, the appellant was justified in saying that it had not received the payment for its bill.
In support of its case, the appellant examined its Director., Mr. Parikh and its officer, Mr. Bhat.
The respondent led no oral evidence; it, however, relied on the fact that the intimation card bore the postal mark which showed that it had been posted and it was urged that the said postal mark raised a presumption that the card which had been duly posted in the Post office must have, in ordinary course, reached the addressee.
The trial Court noticed the fact that the intimiation card did not bear a corresponding delivery mark as it should have, and it took the view that the onus was on the respondent to show that the said card had in fact been delivered to the appellant.
It then considered the oral evidence adduced by the appe llant and having regard to the fact that.
no evidence had been led by the respondent, it came to the conclusion that the respondent had failed in showing that the intimation card had been duly delivered to the appellant.
Substantially ' it is on the basis of this finding that the decree was passed by the trial Court in favour of the appellant.
869 In appeal, Mukarji, J. took the view, and we think.
, rightly, that the posting of the card having been duly proved, a presumption arose that it must have been delivered to the addressee in ordinary course.
He also considered the oral evidence given by Mr. Parikh and Mr. Bhat and was not satisfied that it was trustworthy.
In particular, the learned judge was inclined to take the view that Mr. Parikh 's statement that his office did not employ any dispatch clerk and did not keep any Chiti note book like the Inward and Outward Register was unbelievably.
In the result, he made a finding that the appellant was negligent in receiving, arranging, recording and dealing with letters addressed to it.
The position of the evidence in respect of this point is no doubt unsatisfactory.
It appears that Mr. Parikh who is the Director of the appellant Company since 1948 is also the Director of K. Wara Ltd. which manages eight collieries like that of the appellant.
K. Wara Ltd., has its office at 135, Canning Street.
The appellant Company also has one office at the said place.
A Post Box in which letters addressed to the appellant and K. Wara Ltd. could be dropped has been kept on the ground floor of the building in which the said offices are situated.
The said Post Box is locked and naturally the key is given to one or the other of the Peons to open the said Box and take out the letters and deliver them to Mr. Parikh Mr. Parikh 's evidence shows that his denial that be had received any intimation card could not be accepted at its face value for two reasons; the first was that even if the intimation card had been received by the Peon and had not been delivered by him to Mr. Parikh, Mr. Parikh would not know that the card had been received and though his statement that he did not get the card may be literally true,, it would not be true in the sense that the card had not been delivered to the 870 appellant Company.
Besides., Mr. Parikh 's statement that he did not employ any dispatch clerk and kept no inward or outward register is prima facie unbelievable, and so, Mukarji J.was inclined to hold that the intimation card may have been received by the appellant Company.
Having made this finding, Mukarji J. proceeded to examine the true legal position in regard to the appellant 's claim, and as we have already observed,he held that since the appellant was guilty of negligence which facilitated the commission of the offence by some strangers,it was precluded from making a claim against the respondent.
As we have already seen, Bose, J. has put his decision on the narrow ground that the contract was invalid and section 7o did not help the appellant.
That ground, however, cannot now sustain the final conclusion of Bose,J., in view of the recent decision of this Court in the case of M/s. B. K. Mondal & Son 's(1).
Therefore, in dealing with the present appeal,we will assume that the finding recorded by Mukarji J., is correct and that the intimation card sent by the respondent to the appellant can be deemed to have been delivered to the appellant.
The question which arises for our decision then is:if the intimation card was thereafter taken by somebody else and fraudulently used,does that create an estoppel against the appellant in regard to the claim made by it in the present case ? In dealing with this point, it is necessary to bear in mind that though the evidence given by Mr. Parikh may be unsatisfactory and may.justify the conclusion that despite his denial, the intimation card may have been delivered to Mr. Parikh, it is not the respondent 's case that Mr. Parikh deliberately allowed either one of his employees or somebody else to make fraudulent use of the said intimation card.
In other words, we must deal with the point of law raised by the appellant on the basis that Mr. Parikh had no connection whatever with the (1) [1962] Supp. 1 S.C.R. 876.
871 fraud committed on the respondent and that whoever obtained the intimation card from Mr. Parikh 's office and used it for a fraudulent purpose acted on his own without the knowledge or consent of Mr. Parikh.
The short question which falls to be considered is if the arrangement for keeping the intimation card in safe custody was not as good and effective as it should have been and somebody managed to pilfer the said card, does it justify the respondent 's case that the appellant was negligent and by virtue of its negligence, it is estopped from making the present claim ? In dealing with this question, it is necessary to remember that the plea of negligence on which estoppel was pleaded by the respondent against the appellant had not been alleged in the written statement.
It is remarkable that the pleadings of both the parties completely ignored the fact known to both of them before the present suit was filed that a cheque had been issued by the respondent and had been fraudulently used by some strangers.
The appellant in its plaint does not refer to the issue of the cheque and its fradulent use and makes a claim as though the respondent had not honoured the bill submitted to it by the appellant; whereas the respondent in its written statement ignores the fact that the cheque had not been received by the appellant but had been fraudulently obtained and encashed by some other persons.
That being the nature of the pleadings filed by the parties in the Trial Court, neither party pleaded any negligence against the other.
It is true that both the parties argued the point of negligence against each other in the appellate Court.
The appellant urged that the respondent should not have delivered the cheque to the person who presented the bill and the intimation card because a stamped receipt had not been produced by the said person as it should have been; the appellant 's case was that it was usual that 872 a stamped receipt had to be produced alongwith the intimation card by a person duly authorised by the appellant before the cheque was delivered to him and since without a stamped receipt the cheque had been delivered, the respondent was guilty of negligence.
This point has been rejected by Mukarji J., but that is another matter.
On the other hand, the respondent pleaded that the appellant was negligent inasmuch as the intimation card which had been sent to it and which must be presumed to have been delivered to it fell into the hands of strangers owing to the negligent manner in which it was handled after it was delivered in the Letter Box of the appellant in 135, Canning Street, Calcutta.
As we have already noticed, Bose, J., refused to entertain the plea of negligence urged by both the parties, whereas Mukarji J., considered it and made a finding in favour of the respondent and against the appellant.
Mr. Setalvad contends that a plea of negligence should have been raised by the respondent in its pleadings and the appellate Court was, therefore, in error in allowing such a plea to be raised for the first time in appeal.
In our opinion, there is some force in this contention.
Negligence in popular language and in common sense means failure to exercise that care and diligence which the circumstances require.
Naturally what amounts to negligence would always depend upon the circumstances and facts in any particular case.
The nature of the contract, the circumstances in which the performance of the contract by one party or the other was expected, the degree of diligence, care and attention which, in ordinary course, was expected to be shown by the parties to the contract, the circumstances under which and the reason for which failure to show due diligence occurred are all facts which would be relevant before a judicial finding can be made on the plea 873 of negligence.
Since a plea of negligence was not raised by the respondent in the trial Court, the appellant is entitled to contend that it had no opportunity to meet this plea and dealing with it in appeal has, therefore, been unfair to it.
Apart.
from this aspect of the matter, there is another serious objection which has been taken by Mr. Setalvad against the view which prevailed with Mukarji, J. He argues that when a plea of estoppel on the ground of negligence is raised, negligence to which reference is made in support of such a plea is not the negligence as is understood in popular language or in common sense ; it has a technical denotation.
In support of a plea of estoppel on the ground of negligence, it must be shown that the party against whom the plea is raised owed a duty to the party who raises the plea.
just as estoppel can be pleaded on the ground of misrepresentation or act or omission, so can estoppel be pleaded on the ground of negligence ; but before such a plea can succeed, negligence must be established in this technical sense .
As Halsbury has observed : "before anyone can be estopped by a representation inferred from negligent conduct, there must be a duty to use due care towards the party misled, or towards the general public of which he is one (1).
" There is another requirement which has to be proved before a plea of estoppel on the ground of negligence can be upheld and that requirement is that "the negligence on which it is based should not be indirectly or remotely connected with the misleading effect assigned to it but must be the proximate or real cause of that result (2).
" Negligence, according to Halsbury, which can sustain a plea of estoppel must be in the transaction itself and it should be so connected with the result to which it led that it is impossible to treat the two separately.
This aspect of the matter has not been duly examined by Mukarji J. when he made his finding against the appellant.
(1) Halsbury 's Laws of England Vol.
15, page 243.
par& 451.
(2) Halsbury 's Laws of England Vol.
15 page 245 para 453, 874 Mukarji, J. thought that the principle laid down by Ashhurst, J. in the case of Lackbarrow (1), was a broad and general principle which applied to the facts in the present case.
It may be conceded that as it was expressed by Ashhurst, J., in the case of Lickbarrow, the proposition no doubt has been stated in a broad and general manner.
Indeed, the same proposition has been affirmed in the same broad and general way by the Privy Council in Commonwealth Trust Ltd. vs Akotey (2).
In that case, the respondent who was a grower of cocoa in the Gold Coast Colony, consigned by railway 1050 bags of cocoa to L., to whom he had previously sold cocoa.
Before a difference as to the price had been settled L. sold the cocoa to the appellants and handed the consignment notes to their agent, who reconsigned the cocoa to the appellants.
The appellants bought in good faith and for the full price.
The respondent then sued the appellants for damages for conversion.
It was held by the Privy Council that by his conduct the respondent was precluded from setting up his title against the appellants, and so his claim was rejected.
In support of the view taken by the Privy Council, reliance was placed on the well known statement of Ashhurst, J., in the case of Lickbarrow) 1), and so, it may be conceded that the broad principle enunciated by Ashhurst,J., received approval from the Privy Council.
Subsequently, however, this question has been elaborately examined by the Privy Council in Mercantile Bank of India Ltd. vs Central Bank of India Ltd., (1), and the validity of the broad and general proposition to which we have just referred has been seriously doubted by the Privy Council.
Lord Wright who delivered the judgment of the Board, referred to the decision in the case of Lickbarrow (1), and observed " 'that it may well be that there were facts in that case not fully elucidated in the report which would justify the decision; but on the (1) 2 T.R. 63, 70.
(2) (3) (1937) L.R. 65 I.A. 75, 86, 875 face of it their Lordships do not think that the case is one which it would be safe to follow.
" Then reference was made to the opinion of Lord Sumner in the case of R .
E. Jones Ltd. vs Waring & Gillow Ltd., (1) where the principle enunciated by Ashhurst J. was not accepted, because it was held that the principle of estoppel must ultimately depend upon a duty.
Lord Lindley similarly in Farquharson Bros. & Co. vs King & Co. (2), pointed out that the dictum of Ashhurst J. was too wide.
A similar comment has been made as to the said observation by other judges to which Lord Wright has referred in the course of his judgment.
It would thus be seen that in the case of The Mercantile Bank of India Ltd. (3 ) the Privy Council has seriously doubted the correctness of the broad observations made by Ashhurst J, in the case of Lickbarrow (4), and has not followed the decision in the care of Commonwealth Trust Ltd. (5).
Therefore, it must be held that the decision of Mukarji J, which proceeded on the basis of the broad and unqualified proposition enunciated by Ashhurst, J., in the case of Lickbarrow cannot be sustained as valid in law.
There arc two other decisions to which reference may usefully be made in considering this point.
In Arnold vs The Cheque Bank, (6), Lord Coleridge, C.J., in dealing with the question of negligence, observed that "no authority whatever had been cited before them for the contention that negligence in the custody of the draft will disentitle the owner of it to recover it or its proceeds from a person who has wrongfully obtained possession of it.
In the case before them, there was nothing in the draft or the endorsement with which the plaintiff had anything to do, calculated in any way to mislead the defendants.
It was regularly endorsed and was then enclosed in a letter to the plaintiffs correspondents, to be sent through the post.
There could be no negligence in relying on the honesty of their (1) (2) (3) (1937) L.R, 65 I.A. 75, 86.
(4) 2 T. If. 63, 70.
(5) (6) , 588, 876 servants in the discharge of their ordinary duty, that of conveying letters to the post; nor can there be any duty to the general public to exercise the same care in transmission of the draft as if any or every servant employed were a notorious thief.
" These observations illustrate how before invoking a plea of estoppel on the ground of negligence, some duty must be shown to exist between the parties and negligence must be proved in relation to such duty.
Similarly, in Baxendale vs Bennett, (1) Bramwell, L.J., had occasion to consider the same point.
In that case, the defendant gave H. his blank acceptance on a stamped paper and authorised H. to fill in his name as drawer.
H. returned the blank acceptance to the defendant in the same state in which he received it.
The defendant put it into a drawer of his writing table at his chambers, which was unlocked, and it was lost or stolen.
C. afterwards filled in his own name without the defendant 's authority, and an action was brought on it by the plaintiff as endorsee for value.
The court of Appeal held that the defendant was not liable on the bill.
Dealing with the question of negligence attributed to the defendant, Bramwell L.J. observed that "the defendant may have been negligent, that is to say, if he had the paper from a third person, as a bailee bound to keep it with ordinary care, he would not have kept it in a drawer unlocked.
" But, said the learned judge, this negligence is not the proximate or effective cause of the fraud.
A crime was necessary for its completion, and so, it was held that the defendant was not liable on the bill.
This decision shows that negligence must be based on a duty owed by one party to the other and must, besides, be shown to have been the proximate or the immediate cause of the loss.
It is in the light of this legal position that the question about estoppel raised by the respondent (1)) (1878) 3 Q,.
B. D. 525, 530.
877 against the appellant in the Appellate Court may be considered.
Can it be said that when the appellant received the intimation card, it owed a duty to the respondent to keep the said card in a locked drawer maintaining the key all the time with its Director? It would not be easy to answer this question in the affirmative; but assuming that the appellant had a kind of duty towards the respondent having regard to the fact that the intimation card was an important document the presentation of which with an endorsement as to authorisation duly made would induce the respondent to issue a cheque to the person presenting it, can the Court say that in trusting its employees to bring letters from the letter box to the Director, the appellant had been negligent ? As we have already observed, in dealing with the present dispute on the basis that the intimation card bad been dropped in the letter box of the appellant, it is possible to hold either that the said card was collected by the Peon and given over to Mr. Parikh, or it was not.
In the former case, after Mr. Parikh got the said card, it had been removed from Mr. Parikh 's table by someone, either by one of the employees of Mr. Parikh or some stranger.
In the latter case, though, technically, the card had been delivered in the latter box of the appellant, it had not reached Mr. Parikh.
In the absence of any collusion between Mr. Parikh and the person who made fraudulent use of the intimation card, can the respondent be heard to say that Mr. Parikh did not show that degree of diligence in receiving the card or in keeping it in safe custody after it was received as he should have ? In our opinion, it would be difficult to answer this question in favour of the respondent.
In ordinary course of business, every office that receives large correspondence keeps a letter box outside the premises of the office.
The box is locked and the key is invariably given to the Peon to collect the letters after they are delivered by Postal Peons.
This course 878 of business proceeds on the assumption which must inevitably be made by all businessmen that the servants entrusted with the task of collecting the letters would act honestly.
Similarly, in ordinary course of business, it would be assumed by a businessman that after letters are placed on the table or in a file which is kept at some other place, they would not be pilferred by any of his employees.
Under these circumstances, if the intimation card in question was taken away by some fraudulent person, it would be difficult to hold that the appellant can be charged with negligence which, in turn, can be held to be the proximate cause of the loss caused to the respondent.
In our opinion, therefore, Mukarji.
J. was in error in holding that the respondent could successfully plead estoppel by negligence against the appellant.
As we have already observed, the question as to whether the claim made by the appellant against the respondent under section 70 is concluded by the decision of this Court in the case of M/s. B. K. Mondal & Sons (1), in favour of the appellant, and so, it must be held that the Division Bench of the High Court erred in dismissing the appellant 's claim.
The result is, the appeal is allowed.
, the decree passed by the appellate Court is set aside and that of the trial Court restored with costs throughout.
Appeal allowed.
[1962] Supp.
I. section R. 876 .
[/INST]There was little internal demand for manganese ore and ' it was extracted mainly for exporting out of India.
Though previously there was no restriction on the grant of export licences from 1956, the Central Government started controlling and restricting the export of manganese ore ' On May 26, 1958, the Central Government issued a notification which contained the policy statement for the period July 1938 to June 1959 under which export quotas were to be granted only to established shippers and mineowners who had exported from 1953 onwards and to the State Trading Corporation.
Mine owners, like the ' appellant who did not have an) export performance in the earlier ),cars were excluded from the scheme.
They could sell their ore only to the established shippers are to the Corporation which they could do only.
at unremunerative prices.
By subsequent policy statements the export was canalised entirely through the Corporation.
Section 3 of the Imports and exports (Control) Act, 1947 empowered the Central Government to make orders restricting or controlling the imports and exports of goods.
The Central Government made the Exports Control Order, 1958, cl. 6(h) of which empowered the Central Government and the licensing authority to refuse to grant a licence "if the licensing authority decides to canalise exports through special or specialized agencies or channels".
The Notification of May 26, 1950, was issued under cl. 6(h).
The appellants contended: (I) that the withholding of the right to engage in the export trade from a class of mineowners constituted an unreasonable restriction on their fundamental right guaranteed under Art, 19(1)(g), (II) that cl. 6 (h) of the order was ultra vires the Central Government as section 3 of the Act 74 permitted it to place restrictions only on goods and not on the persons who might participate in the export, and (iii) that the notification by which canalisation of exports was affected was outside the contemplation of" agency and channel under 1. 6 (h).
Held (per Sinha, C.J., Ayyangar, Mudholkar and Aiyar, that the restrictions and control imposed on the export of manganese ore by the Central Government were legal and did not offend article 19(1) (g).
The restriction or control in the form of channelling or canalising the trade was not outside the limitations which night be imposed on export trading by section 3 of the Act and consequently cl. 6 (h) of the Order permitting canalisation of exports was within the rule making power of the Central Government.
The power to impose restrictions was not confined to goods but extended to persons also.
The canalising of the exports through the established shippers and mineowners was unobjectionable; canalising through the State adding Corporation and the progressive increase through he corporation was a reasonable restriction in the interests of he general public.
The object of these restrictions and control was to enable a regular supply of uniform quality of he ore to the foreign buyers so as to ensure the optimum earning of foreign exchange by the country, and this could rest be attained with the Corporation as the main agency engaged in the trade.
The State Trading ' Corporation was a "special" agency or channel as contemplated by cl.
(h) and the canalising could be done through it.
A special agency is one which is more likely to achieve the object than other gencies or to achieve it in a larger 'measure than others.
Canalising necessarily implied the exclusio n of some groups, and if the canalising was valid the appellant could not complain that he had been excluded from the export trade.
Per Subba Rao, J. The Notifications and policy statements which destroyed the trade of mine owners like the appellant did not impose reasonable restrictions on their fundamental rights and violated article 19 (1) (g).
The creation of a monopoly or near monopoly for the export of manganese ore in favour of the State Trading Corporation could only be achieved by a law made in conformity with article 19 (6) (ii) and not by administrative action like issuing of notifications and policy statement.
The power conferred on the authorities under cl. 6 (h) of the Order to canalise exports through special or specialized agencies or channels was well within the power conferred on the Central Govern ment by section 3 of the Act.
Further, the State Trading Corpo ration was a "special" agency within the meaning of cl. 6(h).
75 But the canalising had to be done in such manner that all persons engaged in the trade could participate in the export of the ore and no one was completely excluded.
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<s>[INST] Summarize the judgementAppeal No. 1955 of 1970.
Appeal by Special Leave from the judgement & other dated the 5th November, 1969 of the Punjab & Harayana High Court in Civil Write No. 309 of 1969.
R. K. Garg, section C. Agarwala and V. J. Francis, for the appellant.
775 V. C. Mahajan and 0.
P. Shorma, for the respondents.
The Judgment of the Court was delivered by RAY, C.J.
This is an appeal by special leave from the judgment dated 5 November, 1969 of the High Court of Punjab and Haryana.
The only person is whether the order of termination of the service of the appellant who was a probationer is in violation of Rule 9 of the Punjab Civil Service (Punishment & Appeal) Rules, 1952.
The appellant was selected by the Public Service Commission as a direct recruit on 20 May, 1965.
He was appointed on 26 May, ' 1965.
He joined as a probationer.
The period of probation was two years.
Rule 8(b) of the Punjab Police Service Rules 1959 states that the services of a member recruited by direct appointment may be dispensed with by the Government on his failing to pass the final examination at the end of his period of training, or on his being reported on during or at the end of his period of probation, as unfit for appointment.
The order terminating the services of the appellant was as follows: The President of India is pleased to dispense with the service of Shri Hari Singh Mann, Probationery Deputy Superintendent of Police, Amritsar on the expiry of his extended period of probation with effect from 2 2 1969(A.N.) under rule 8(b) of the Punjab Police Service Rules 1959, having considered him unfit for appointment to the State Police Service.
The period from 20 5 68 to 2 8 68 which has been treated as leave of the kind due has been excluded from the period of trial (Probation).
" The two contentions which have been advanced before the High Court were repeated here.
First, the order of termination was passed on 30 January, 1969 when the petitioner by reason of expiry of three years stood confirmed on 19/20 November, 1968.
Second the order of termination was one of punishment and the appellant should,therefore, under Rule 9 of the Punjab Civil Service (Punishment and Appeal) Rules have been given opportunity to show cause against the order of termination.
Under the aforesaid (Police Service) Rule 8(b) proviso, the Government could extend the period of probation by not more than one year.
The appellant was appointed on 20 May, 1965 on two years probation.
On 1 July, 1967, there was an order extending the period of probation by one year.
On 20 May, 1968, there was an order terminating the services of the petitioner.
on 20 July.
1968 there was an order revoking the order of termination and extending the period of probation for six months from 20 May, 1968.
The order of termination was on 30 January, 1969.
The appellant was on leave from 20 May, 1968 to 2 August, 1968.
The 776 Government excluded the period of leave from the period of probation.
The object of extending the period of probation is to find out whether the appellant was a fit person.
The appellant could not be confirmed till the period of probation to find out the fitness of the appellant expired.
It cannot therefore be held that the appellant stood confirmed on 19/20 November, 1968 before the period of probation expired in January, 1969.
The appellant relied on Rule 9 of the Punjab Civil Services (Punishment and Appeal) Rules, 1952.
Rule 9 is as follows "Where it is proposed to terminate the employment of a probationer, whether during or at the end of the period of probation, for any specific fault or on account of the un satisfactory record or unfavourable reports implying the unsuitability for the service, the probationer shall be ,apprised of the grounds of such proposal, and given an opportunity to show cause against it, before orders are passed by the authority competent to terminate the appointment".
If (Punishment) Rule 9 applies the services of the appellant could not be terminated without complying with the previsions thereof.
The appellant contended that the order of termination stated that the appellant was considered unfit for appointment and therefore it amounts to punishment to attract rule 9.
The appellant extracted a statement from the affidavit of the Inspector General of Police in answer to the appellant 's petition in the High Court that the appellant 's record during the period of probation was unsatisfactory Reliance is placed on rule 9 where it is said that if the termination of the Services of a probationer be on account of unsatisfactory record he shall be given an opportunity to show cause against it.
The respondent relied on rule 11 of the Punjab Police Service Rules where it is stated that in matters relating to discipline, penalties 'and appeals, members of the Service shall be governed by the Punjab Civil Services (Punishment and Appeal) Rules.
Therefore, it is said by the respondent that Rules 8 and 11 of the Punjab Police Service Rules show that termination of probation which is dealt with in rule 8 is different from matters relating to penalties which are dealt with in rule II of the Punjab Police Service Rules.
Termination on account of unsatisfactory record will attract rule 9 of the Punishment Rules.
It is obvious that at the time of confirmation fitness is a matter to be considered.
The order terminating the services is unfitness for appointment at the time of confirmation, it is not passed on the ground of any turpitude like misconduct or inefficiency.
To hold that the words "unfit to be appointed" are a Stigma would rob the authorities of the power to judge fitness for work or suitability to the post at the time of confirmation.
777 Termination of services on account of inadequacy for the job or for any temperamental or other defect not involving moral turpitude is not a stigma which can be called discharge by punishment.
Fitness for the job is one of the most important reasons for confirmation.
The facts and circumstances do not show that there is any stigma attached to the order of termination.
For these reasons, the appeal fails and is dismissed.
Parties will pay and bear their own costs.
V.M.K. Appeal Dismissed.
[/INST]In the island of Bombay certain lands were held on a tenure known as "Foras".
Under section 2 of Bombay Act VI of 1851 the occupants were entitled to hold the lands subject only to the payment of revenue then payable.
Between 1864 and 1867 the Government of India acquired these lands under the provisions of the Land Acquisition Act (VI of 1857).
On 22 11 1938 the Governor General sold them to certain persons under whom the present respondents claimed.
In April 1942 the appellant acting under the Bombay City Land Revenue Act (Bombay Act II of 1876) issued notices to the respondents proposing to levy assessment on the lands at the rates mentioned therein.
The respondents thereupon instituted two suits disputing the right of the appellant to assess the lands to revenue.
They contended that under the Foras Land Act the occupants had acquired the right to hold the lands on payment of revenue not exceeding what was then payable, that the right to levy even that assessment was extinguished when the Government acquired the lands under the Land Acquisition Act, that the Governor General having conveyed the lands absolutely under the sale deed dated 22 11 1938 the respondents were entitled to hold them revenue free and that even if revenue was payable it could not exceed what was payable under the Foras Land Act.
Held, (i) that under the Foras Land Act (VI of 1851) the occupants of Foras lands acquired a specific right to hold them on payment of assessment not exceeding what was then payable.
(ii) that the right of the Government to levy assessment was not the subject matter of the land acquisition proceedings and that the effect of those proceedings was only to extinguish the rights of the occupants in the lands and to vest them absolutely in the Government.
(iii) that where there is an absolute sale by the Crown it does not necessarily import that the land is conveyed revenuefree.
The question is one of construction of the grant.
The rule is that a grantee from the Crown gets only what is granted by the 168 1312 deed and nothing passes by implication.
When the grant is embodied in a deed the question ultimately reduces itself to a determination of what was granted thereunder.
Section 3 of the Crown Grants Act (XV of 1895) that "all provisions, restrictions conditions and limitations over shall take effect according to their tenor" does not apply when the question is as to the liability to pay revenue.
(iv)that the Foras tenure became extinguished when the lands were acquired under the Land Acquisition proceedings and it was incapable of coming back to life when the lands were sold on 22 11 1938 and the respondents cannot claim a right to pay assessment only at the rate at which it was payable under the Foras Land Act.
Goswammi Shri Kamala Vahooji vs Collector of Bombay ([1937] L.R. 64 I.A. 334), Shapurji Jivanji vs The Collector of Bombay ([1885] I.L.E. , 488), Naoroji Beramji vs Rogers , Deputy Collector, Calicut Division vs Aiyavu Pillay ([1911] , Dadoba vs Collector of Bombay ([1901] I.L.R. , Thakur Jagannoth Baksh Singh vs The United Provinces ([1946] F.L.J. 88) and Collector of Bombay vs Municipal Corpration of the City of Bombay and others ([1952] S.C.R. 43), referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 1695 of 1968.
Appeal by Special Leave from the Judgment and Order dated 4/5 9 67 of the Mysore High Court in W.P. No. 1416/65.
V.P. Raman, Addl.
, S.K. Mehta and Girish Chandra for the Appellant.
H.R. Datar and N. Nettar, for the Respondent.
The Judgment of the Court was delivered by SHINGHAL, J.
This appeal by special leave is directed against the judgment of the High Court of Mysore dated September 4/5, 1967.
The High Court was moved by the State of Mysore under article 226 of the Constitution for quashing the demand notice dated July 21, 843 1962 issued by the Inspector of Central Excise for the payment of Rs. 2,465.91 as excise duty on the products despatched by the State 's Implements Factory.
The demand was made with reference to the newly inserted item 26AA in the First Schedule to the , hereinafter referred to as the Act.
That item was added to the Schedule by the Finance Act of 1962, and it was claimed by the Central Excise Department that, on the date of the amendment, the State Government was in possession of some stock of iron and steel products, namely, flats, squares and rods in its factory, which had been obtained from their manufacturers when they were not excisable arti cles.
The precise claim of the Excise authorities was that the duty became payable on those articles by virtue of the newly inserted item 26AA because the aforesaid stock of iron and steel products was used for the manufacture of agricul tural implements like 'mamties, pickaxes, 'sledge hammers, shovels and ploughs.
The Assistant Collector of Central .Excise explained in his letter dated June 19, 1962, that the agricultural implements which were manufactured in the State 's Implements Factory fell within the purview of item 26AA as they were forged or extruded during the process of manufacturing the agricultural implements.
It was con tended that the demand was justified because the aforesaid iron and 'steel products, out of which the agricultural implements were manufactured, had not borne any excise duty at all.
An appeal was preferred to the Collector of Central Excise against the demand, but without success.
A revision was taken to the Central Government under the provisions of the Act, but it was also dismissed.
That was why the State Government applied to the High Court for quashing the demand and for setting aside the appellate order of the Collector and the revisional order of the Central Government.
The Central Government traversed the claim of the State Government on the ground that as the rods and bars, which were held in stock by the State 's Implements Factory, were "pre excise stock", and as they were put to further process by forging them into shovels, spades and other agricultural implements, they became liable to duty .
until the "pre excise stock" held by the factory on April 24, 1962, was utilised and converted into forged implements and was cleared from the factory.
It was also urged that the peti tion was not maintainable in the High Court as it raised a dispute between the Government of India and the State Gov ernment within the meaning of article 131 of the Constitu tion.
The High Court rejected both the contentions of the Central Government and quashed the impugned demand notice and the appellate and the revisional orders.
That is why the Union of India has preferred the present appeal.
It is not in controversy that the claim for the levy of excise duty was based on sub sections (1) and (1A) of sec tion 3 of the Act which read as follows, "3(1) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced 4 1338SCI/76 844 or manufactured in India and a duty on salt manufactured in, or imported by land into, any part of India as, and at the rates, set forth in the First Schedule.
(1A) The provisions of sub section (i) shall apply in respect of all excisable goods other than salt which are produced or manufactured in India by, or on behalf of, Government, as they apply in respect of good 's which are not produced or manufactured by Government.
" It is therefore quite clear, and is not in dispute before us, that the claim for the levy of excise duty in question could be justified only if it could be shown that excisa ble goods (other than salt) were produced or manufactured in the Implements Factory of the State Government.
It was however admitted in the counter affidavit of the Senior Superintendent of Central Excise as follows, "In the case of the petitioner, since the rods and bars held in stock by the Imple ments.
Factory were pre excise stock and since those rods and bars were put to further proc ess by forging the same into shovels, spades and other agriCultural implements etc.
, they became liable to duty and therefore, duty was demanded on such forged articles during the period that is till such quantities of the bars and rods as were in stock with the facto ry on 24 4 62 were utilised and converted into forged implements and cleared from the facto ry.
" This makes it quite clear that the rods and bars in question were not "produced or manufactured" in the State Govern ment 's implements Factory.
They could not therefore be subjected to the levy of excise duty.
It is true that the rods and bars were utilised for the manufacture of agricul tural implements like shovels and spades; but those agricul tural implements were not of the description specified in item 26AA of the First Schedule with reference to section 3 of the Act.
It is admitted by Mr. Raman that agricultural implements were not included in the First Schedule to the Act and were not excisable articles.
This appears to be so because they are the basic tools of trade by which a vast majority of the citizens of the country earn their livelihood.
There could therefore be no question of levying any excise duty on shovels and spades or other agricultural instruments 'manu factured by the Implements Factory of the State Government and, as has been shown, the rods and bars which formed the pre excise stock of the factory had not been manufactured by the Implements Factory.
Section 3 of the Act could not therefore be invoked to levy excise duty merely on the ground that the "pre excise stock" of rods and bars was utilised for the purpose of manufacturing agricultural instruments.
There is therefore nothing wrong with the view which has prevailed with the High Court in this respect.
845 Mr. Raman tried to argue that the High Court erred in not applying article 131 of the Constitution to the contro versy even though the writ petition was barred thereunder as it fell exclusively within the jurisdiction of this Court under article 131 of the Constitution as a dispute between the Government of India and the State of Mysore.
The argu ment is however futile because there is nothing on the record to show that there was any such dispute between the Central and the State Governments.
As the High Court has pointed out, the Union of India was made a party to the writ petition merely because it had dismissed the revision appli cation of the State Government.
There is thus no merit in this appeal anti it is dismissed with costs.
M.R. Appeal dis missed.
[/INST]The Governor of U.P. issued a Notification under Section 3 A of the U.P. Sales Tax Act, 1948, and the Sales Tax Officer (Section IV) Kanpur, ordered the respondent company to pay tax on the turnover of ' carbon paper at 6%, and that of ribbon at 10%, as per entry 2 of the Notification.
The respondent challenged the order in a writ petition before the High Court.
contending that carbon paper was not 'paper ' with the meaning of entry 2 and its turnover was therefore to be assessed at the rate of 2% prescribed for unclassified goods, and that 'ribbon ' being an accessory and not a part of the typewriter, could only be taxed at the rate of 6% and not 10%.
The High Court allowed the writ and quashed the levy.
The appellant contended that carbon paper does not lose its character as paper in spite of being subjected to chemi cal processes, and that ribbon is not an accessory but an essential part of the typewriter.
Dismissing the appeal the Court, HELD :(1) A word which is not defined in an enactment has to be understood in its popular and commercial sense with reference to the context in which it occurs.
It has to be understood according to the well established canon of construction in the sense in which persons dealing in and using the article understand it.
[839 A B] Attorney General vs Winstanley (1831) 2 Dow & Clark 302:(1901) ; , and Grenfell vs Commissioner of Inland Revenue (1876)1 exhibit D. 242 at p. 248 applied.
(2) The word 'paper ' is understood as meaning a sub stance which is used for bearing writing or printing, or for packing.
or for drawing on.
or for decorating, or covering the wails.
Carbon paper cannot be used for these purposes but is used for making replicas or carbon copies, and cannot properly be described as paper.
[839 G, 840 A B] K. Kilburn & Co. Ltd. vs Commissioner of Sales Tax, U.P. Lucknow (31 S.T.C. 625), Sree Rama Trading Company vs State of Kerala (28 S.T.C. 469).
state of Orissa vs Gestetner Duplicators (P) Ltd. (33 S.T.C. 333 ) Commissioner of Sales Tax, U.P.v.
S.N. Brothers (31 S.T.C. 302) applied.
(3) The above mentioned rule of construction equally applies to ribbon.
an accessory and not a part of the typewriter, though it may not be possible type out any matter without it.
[841 D E] State of Mysore vs Kores (India) Ltd. (26 S.T.C. 87) ap proved.
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<s>[INST] Summarize the judgementAppeals Nos.
23 92 to 2403 of 1969.
Appeals by certificate from the judgment and order dated September 9, 1968 of the Delhi High Court at New Delhi in Civil Writs Nos. 67 to 78 of 1968.
section C. Manchanda, B. B. Ahuja, section P. Nayar and R. N. Sachthey for the appellants.
N. D. Karkhanis, Rameshwar Nath and Seita Vaidialingam for the respondents.
The Judgment of the Court was delivered by HEGDE, J.
These appeals by certificate arise from several writ petitions filed by the H.U.F. M/s. Rai Singh Deb Singh Bist and its Karta Thakur Mohan Singh Bist, challenging the validity of certain notices issued under section 34(1) (a) of the Indian Income tax Act, 1922 (in short the Act) by the Income tax Officer, Central Circle 1, Delhi.
The High Court of Delhi allowed those writ petitions and quashed the impugned notices.
Hence these appeals.
The assessee in these cases is an H.U.F. The assessment years with which we are concerned in these appeals range from 1942 43 to 1953 54.
The assessee filed its returns for these years in due time.
The assessee 's account books showed considerable cash credits in the name of the brothers in law of the 2nd respondent, the Karta of the H.U.F. Those alleged creditors were living in Nepal.
The account books also showed certain credit entries in the name of Rana Anand Nar Singh, alleged to be in connection ' with expenses incurred by him for getting trees cut on behalf of the assessee.
The assessee was a forest contractor.
He had taken large tracts of forests for felling trees in Nepal.
The Income tax 104 Officer went into the genuineness of the cash credit entries standing in the name of the alleged creditors of the assessee as well as to the alleged amount due to one of them.
The contention of the assessee was substantially accepted either by the Appellate Assistant Commissioner or by the Revenue Appellate Tribunal.
With regard to the assessment for the assessment years 1943 44 to 1949 50, the final assessments were made in pursuance of an agreement or settlement arrived at between the assessee and the Deputy Director of Inspection (Investigation) New Delhi on October 18, 1954: Long after the assessments in question were final ised, the Income tax Officer.
issued notices to the appellants under section 34(1) (a) of the Act seeking to reopen the assessments already finalised.
The validity of those notices is in issue.
Before an Income tax Officer can issue a statutory notice under section 34 (1 ) (a), he must have reason to believe that by reason of omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for the years in question, income, profits or gains chargeable to income tax have escaped assessment during those years.
Further, before doing so, he must have recorded his reasons for acting under section 34(1) (a) and the Central Board of Revenue must have been satisfied on those reasons that it is a fit case for the issue of the notice.
The recording of the reasons in support of the belief formed by the Income tax Officer and the satisfaction of the Central Board of Revenue on the basis of the reasons recorded by the Income tax Officer that it is a fit case for issue of notice under section 34 (1 )(a) are extremely important circumstances to find out whether the Income tax Officer had jurisdiction to proceed under section 34(1) (a).
In Calcutta Discount Co. Ltd. vs Income tax Officer, Com panies District 1.
Calcutta and anr.(1) this Court laid down (1) that to confer jurisdiction under section 34 to issue notice in respect of assessments beyond the period of four years, but within a period of eight years, from the end of the relevant year, two conditions had to be satisfied.
The first was that the Income tax Officer must have reason to believe that income, profits or gains chargeable to income tax had been under assessed.
The second was that he must also have reason to believe that such "under assessment" had occurred by reason of either (1) omission or failure on the part of an assessee to make a return of his income under section 22, or (2) omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for that year.
Both these conditions are conditions precedent to be satisfied before the ' Income tax Officer could have jurisdiction to issue a notice for the assessment or re assessment beyond the period (1)41 I.T.R. 191.
105 of four years but within the period of eight years from the end of the year in question.
In Chhugamal Rajpal vs section P. Chaliha and ors.(1) this Court ruled that before an Income tax Officer can be said to have had reason to believe that some income had escaped assessment, he should have some relevant material before him from which he could have drawn the inference that income has escaped assessment.
His vague feeling that there might have been some escape of income from assessment is not sufficient.
This Court also took the view that the Central Board of Revenue before reaching its satisfaction that the case was a fit one to be proceeded under section 3 4 (1 ) (a) must have examined the reasons given by the Income tax Officer and arrived at its own conclusion and that it is not permissible for it to act mechanically.
The same view was again taken by this Court in Sheo Nath Singh vs Appellate Assistant Commissioner of Income tax (Central) Calcutta and ors.
(2) In the instant case, the assessee alleged in his writ petitions that there was no relevant material before the Income tax Officer before he issued notices under section 34 (1) (a) on the basis of which he could have had reason to believe that any income had escaped assessment.
In the writ petitions the assessee called upon the Income tax Officer to produce the report made by him to the Central Board of Revenue as well as the order of the Central Board of Revenue thereon.
Despite this prayer, neither the Union of India nor the Income tax Officer cared to produce the report made by the Income tax Officer to the Central Board of Revenue under section 34(1) (a) or the order of the Central Board of Revenue.
Before the hearing of the writ petitions commenced, the assessee again applied to the Court to call upon the Union of India and the Income tax Officer to produce those documents.
In response to that application, an affidavit was filed before the Court stating that the relevant records could not be traced from the file of the Central Board of Revenue.
Assuming that the concerned records were missing from the file of the Central Board of Revenue, the copy of the report made by the Income tax Officer and the order received by him must have been in the file of the Income tax Officer.
No reason was given for not producing those records.
These circumstances give rise to an adverse inference against the department.
We are constrained to come to the conclusion that the records in question were not produced because they did not assist the department 's case.
Under these circumstances, it is not possible.
to come to the conclusion that the facts necessary to confer jurisdiction on the Income tax Officer to proceed under section 3 4 1 ) (a) had been established.
(1) (2) 8 7. 106 All that was said on behalf of the department was that some time in the year 1955, the assessee sold large tracts of land to two of his brothers in law for a sum of Rs. 47 lakhs but in reality that property was not worth that amount.
We do not know whether there was any basis for this conclusion.
As seen earlier the cash credit entries were brought to the notice of the Income tax Officer before the relevant assessment orders were passed.
He had an occasion to investigate into them.
It is not necessary to go into this question more deeply in view of the fact that there is nothing to show that there was any relevant material before the Incometax Officer before he issued the notices under section 34 (1) (a) to have reason to believe that as a result of the assessee 's failure to state in its return truly and fully any fact, any income had escaped assessment.
In the result these appeals fail and they are dismissed with costs one hearing fee.
S.C. Appeals dismissed.
[/INST]As a result of a judicial enquiry in relation to a complaint by the appellant against the four respondents, summons were issued to the respondents, and before the Magistrate, evidence, oral and documentary, was adduced by the complainant (appellant) in the presence of the accused (respondents).
On a consideration of those materials, the Magistrate framed charges against I all the four accused under sections 120 B/409 1.
P.C. and under section 409, against accused 1 to 3, in September 1968.
Thereafter, the trial proceeded, a large volume of oral and documentary evidence was let in, and all that remained was the examination of two prosecution witnesses and a court witness before closing the trial.
All the prosecution witnesses, examined till then were also cross examined by the respondents.
At that stage, in March 1969, the 4th accused moved the High Court for quashing the proceedings and the other accused followed with similar petitions.
The High Court, in spite of the complainant representing that the trial had almost come to a close quashed the charges and proceedings on the grounds that, the complainant had suppressed material facts, that the two prosecution witnesses should not be allowed to be examined 'in the circumstances of the case ', that the ' examination of the court witness was not necessary as it would only prejudice the accused and under the effect of cross examination, and that the evidence on record ruled out any offence of breach of trust or a conspiracy to commit it.
Allowing the appeal to this Court, HELD : The High Court was in error (a) It is not as if the accused had moved the High Court at the earliest stage when summons was issued to them.
Nor had they ,approached the High Court when charges were framed against them.
If the case of the accused was that the allegations try the complaint did not constitute the offences complained of or that the complainant was to be quashed on any other ground available in law, the accused should have approached the High Court at least when the charges were framed.
[186DE] (b) Assuming there was a suppression of material facts by the complainant that was a matter to be considered by the trial Court.
Similarly, whether the evidence on record established that an offence of breach of trust or a conspiracy to commit it, had been committed, Is again a matter for the trial court to come to a conclusion after, an appraisal of the entire evidence let in by the prosecution and the defence.
The High Court was not justified, at that stage, to have embarked upon an appreciation of the evidence.
[187AC] (c) The accused never challenged the order of the trial court regarding the examination of prosecution witnesses or the court witness, and 180 the High Court was not justified in holding that they should not be examined, and hence, the order regarding their examination should stand.
Jamatraj Kewalji Govani vs The State of Maharashtra, , referred to.
(d) If the High Court had passed the order quashing the charges and proceedings in exercise of its inherent jurisdiction under s.561A, Cr.
P.C. then the exercise of the power by the High Court was not justified, because, the present case does not come within the ambit of the principles laid down by this Court, in R. K. Kapur vs The State of Punjab, [188 A C] (e) Even assuming that the High Court was exercising jurisdiction under section 439, Cr.
P.C., the present was not a. case for interference by the High Court.
The jurisdiction of the High Court is to be exercised nearly, under the section, only in exceptional cases when there is a glaring defect in the procedure or there is a manifest error on a point of law and consequently a flagrant miscarriage of justice.
[188D]
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<s>[INST] Summarize the judgementAppeals Nos. 1164 and 1165 of 1967.
Appeals from the judgment and order dated December 1, 1965 of the Madhya Pradesh High Court, Indore Bench in Misc.
Petition Nos. 18 and 19 of 1964.
M. section K. Sastri, M. N. Shroff for I. N. Shroff, for the appellant (in both the appeals).
B. R. L. lyengar, R. A. Gupta and K. B. Rohatgi, for the respondent (in C. As.
No. 1164 of 1967).
P. C. Bhartari, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the respondent (in C. A. No. 1165 of 1967).
The Judgment of the Court was delivered by Mitter, J.
The State of Madhya Pradesh has come up in appeal to this Court from two orders of the State High Court allowing two writ petitions filed by the two respondents herein for quashing the orders of eviction made against them under Section 3 of the Madhya Pradesh Government Premises (Eviction) Act.
The facts in Civil Appeal No. 1164 of 1967 are as follows.
Many years back, a former Ruler of the Indian State of Jhabua in Central India had given a jagir to his mistress, Paswanji Smt.
Navratanbai.
Navratanbai had either purchased or constructed two houses on College Marg.
According to the Writ Petition fled in the High Court the acquisition was out of her private funds. 'his was not however admitted in the return to the petition.
The successor of the former Ruler Dilipsingh purported to forfeit the jagir in the year 1943.
The order of forfeiture is not on record but is sought to be borne out by an order dated 1st April, 1948, evidently made in anticipation of the merger of the State in the Union of Madhya Bharat which took place on June 29, 1948.
The order addressed to Paswanji Navratanbai ran : "In September 1943 your jagir was confiscated to the State and you were granted Rs. 100 per month by way of allowance vide Parwana No. 1735 dated 23 9 1943 and this amount was being paid to you on behalf of the Huzur from the civil list because such types of allowances etc.
are paid from it.
But now as new arrangements are being 409 made regarding the states of Malwa and there is likelihood of reduction in the percentage of the civil list, therefore, the aforesaid monthly allowance shall henceforth be paid to you every month from State, Treasury from generation to generation.
You may reside in the two big houses of Khasgi during your lifetime in which you are residing at present.
After your lifetime both these houses shall be taken in possession of the Huzur.
You shall have no right to sell or mortgage or create any charge on these houses.
" There is another Huzur order on record dated 30th March, 1948 purporting to declare a large number of immovable properties as the private property of the Ruler and the ruling family.
Among the properties set out at the foot of the order are mentioned : "6.
(e) All houses which are occupied by Bapu Ram singh.
(f) All houses which are in the occupancy of Navratanbai".
When the question of settling the list of private properties of the Rulers of the integrating Estates in Madhya Bharat came up before the Government of India, the Political and External Department of the Madhya Bharat Secretariat passed an order recording a ;decision regarding the settlement of private properties of the State of Jhabua.
The memorandum dated July 25, 1949 of the Madhya Bharat Secretariat, Political and External Department, shows that each department concerned had to take action for handing over all the property to the Ruler concerned and to see that no property out of the properties belonging to the Ruler and/or the State before the formation of Madhya Bharat was left with the Ruler excepting the properties in the enclosed list.
The relevant list,, for the Ruler of Jhabua did not include the properties occupied either by Bapu Ramsingh or Paswanji Navratanbai.
Paswanji Navratanbai protested against the inclusion of her houses in the list of private properties made out by the Ruler of Jhabua and addressed a memorandum to the Raj Pramukh of Madhya Bharat Union for amendment of the inventory submitted by the said Ruler.
No steps appear to have been taken to evict Navratanbai from the said premises in her lifetime.
On 30th April 1962 the Executive Engineer District Dhar, submitted an application under Section 3 read with Section 4 of the Madhya Pradesh Government Premises (Eviction) Act, 1952 for eviction of the respondents in Appeal No. 1164 of 1967 from the two properties formerly belonging to Navratanbai before the.
Sub Divisional Officer Jhabua, Constituted the competent authority under the Act.
An order of eviction made 410 by the Sub Divisional Officer was upheld in appeal to the, Collector.
Shivkunwarbai, widow of late Bapu Gordhansinghji son of Navratanbai filed a writ petition in the High Court for quashing.
the said order.
Appeal No. 1164/1967 is from the said order.
The facts in the other appeal i.e. 1165 of 1967 are similar to the facts just narrated.
In this case the same former Ruler had granted a jagir to his son Ramsingh by his mistress Paswanji Bhagirathibai.
The succeeding Ruler purported to forfeit the jagir and granted a monthly allowance of Rs. 100.
An order similar to the one dated 30th March 1948 already mentioned was passed while the order of April 1, 1948 affected Ramsingh as it did Navratanbai in the other case.
There was an order of eviction as in the other case followed by a writ petition to the High Court.
The central question in these two appeals is, whether the State of Madhya Bharat ever became entitled to these properties in the facts and circumstances mentioned which justified its attempt to evict the respondents under the provisions of the Act of 1952.
This would depend on the finding as to whether these properties were taken over by the Union of Madhya Bharat following the merger of the State of Jhabua therein in 1949.
The fact that some only of the properties set forth in the declaration of 1st April 1948 and claimed by the Ruler as private property "were accepted as such" by the Government of Madhya Bharat does not lead to the inference that all the other items of property in the said declaration were taken over by an Act of State.
There must be some positive evidence of such Act.
It is also possible that the list had wrongly included properties belonging to citizens of the State of Jhabua about which there was no adjudication.
The records only show that out of the list of properties submitted by the Ruler, a certain number of them was treated by the Government of India as being his private properties.
There was no finding with regard to the others that they appertained to the Ruler as distinct from his private property.
As these properties originally belonged to the predecessors in interest of the respondent i.e. in C. A. 1166/1967 and the respondent in C. A. 1165/1967 there must be some evidence of displacement of their title before the Eviction Act could be made applicable to them.
In order to succeed in the appeals the appellant must first establish that the properties had been confiscated by the Ex Ruler and had ceased to belong to Navratanbai or Bapu Ramsingh.
The order of April 1, 1948 records the confiscation of the jagirs and does not record that the houses in the possession of Navratanbai were similarly confiscated, assuming that confiscation was possible by a mere order of this type.
On the other hand, the order shows that Bai Navratanbai was to have full use of the houses for her lifetime but she was not to sell or mortgage the 411 same.
The declared that after her lifetime the property would be taken possession of by the Huzur does not amount to an order of confiscation and a re grant thereof for the donee 's lifetime.
If the properties remained the property of Nawatanbai after the passing of the said order of 1948 nothing was done thereafter to show that she lost her interest in the provides or that the same passed to the Union of Madhya Bharat ailed from the said Union to the State of Madhya Pradesh.
When attempts are made to deprive a person of his lawful inheritance it must be shown by irreproch able evidence that the person in possession ceased to have any interest therein at a particular point of time and that by some process of law the property vested in the person seeking to eject he former lawful possessor.
There is no such evidence in this case.
It follows that the properties, the subject matter of the two appeals, never became the properties of the Ruler of Jhabua ownership whereof passed to the Union of Madhya Bharat and from the Union to the State of Madhya Pradesh.
Section 3 of the Madhya Pradesh Premises (Eviction) Act, 1952 enables the competent authority under the Act to order inter alia that the person in un auhorised occupation lot any Government premises to vacate the same within 30 days of the date of the service of the notice in terms of the section.
Section 4 empowers the competent authority to assess damages on the ground of use and occupation by any person in unauthorised occupation of any Government premises.
In order to enable Government to take proceedings successfully under either of these sections, it must satisfy the Court that the premises in respect whereof action was taken was Government premises.
As the State failed to establish this fact the question of eviction under the Act could never arise.
In the result, the appeals are dismissed with costs.
G.C. Appeals dismissed.
[/INST]It is not possible to define with any precision the limitations of the powers conferred on the Supreme Court by article 136 of the Constitution.
This is an overriding and exceptional power and should be exercised sparingly and with caution and only in special and extraordinary situation.
Beyond this no set formula, or rule can stand in the way of or fetter the exercise of the power conferred on the Supreme Court under article 136 of the Constitution.
Sufficient safeguard and guarantee for the exercise of this power lie in the trust reposed by the Constitution in the wisdom and good sense of judges of the Supreme Court.
This power is not hedged in by technical hurdles of any kind when it is called in aid against any arbitrary adjudication or for advancing the cause of justice or for giving a fair deal to a litigant so that in justice may not be perpetrated or perpetuated.
Conclusiveness or finality given to any decision by any domestic law cannot dater the Supreme Court from exercising the power conferred under article 136 of the Constitution.
The powers given to the Income tax Officer under section 23(3) of the Indian Income tax Act, 1922, however wide, do not entitle him to base the assessment on pure guess without reference to any evidence or material.
An assessment under 9.
23(3) of the Act cannot be made only on bare suspcion.
An assessment so made without disclosing to the assessee the information supplied by the departmental representative and without giving any opportunity to the assessee to rebut the information so supplied and declining to take into consideration all materials which the assesses wanted to produce in support of his case constitutes a violation of the fundamental rules of justice and calls for the powers under article 136 of the Constitution.
Seth Gurmukh Singh vs Commissioner of Income tax, Punjab (1944 I.T.R. 393) approved.
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<s>[INST] Summarize the judgementAppeal No. 1121 of 1970.
Appeal by special leave from the judgment and order dated ' April 24, 1969 of the Bombay High Court in Appeal No. 2 of 1967.
Niren Den, Attorney General, M. C. Bhandara, P. C Bhartari, J. B. Dadachanji, O. C. Mathur and Ravinder Narain., for the appellants.
section V. Gupte, section J. Sarabjee, B. R. Agarwala and A. J. Rana,, for respondent No. 1.
Sharad Monohar and Urmila Sirur, for the interveners.
J. This is an appeal by special leave from an Order of the High Court of Bombay dated 24th April, 1969 in Appeal No. 2 of 1967, substantially confirming the order passed by a single Judge of that Court in Writ Petition No. 474 of 1965.
The appellants before this Court are the Bombay Municipal Corporation and the Municipal Commissioner of Bombay, and the respondents are the owners of 41 final plots Nos. 106 to 116 and 118 to 147 under the Bombay Town Planning Scheme, Santacruz VI.
The area under the Town Planning Scheme, with which we are now concerned, originally fell within the municipal limits of the Bandra Municipal Committee.
That Committee, by a resolution dated 15th June, 1948, declared its intention to frame a Town Planning Scheme under section 9(1) of the Town Planning Act, 1915.
Thereafter, the Municipal Committee was abolished and the area of that municipality was absorbed within the limits of the Bombay Municipal Corporation.
The Corporation, which.
for the purpose of the Act, now became the local authority.
applied to the Government, and on 7th May, 1951, the Government of Bombay sanctioned the making of the Scheme.
On 30th April, 1963, a draft scheme was, prepared and published as required by the Act and it was duly sanctioned by the Government on 6th May, 1954.
On 17th August, 1954, an Arbitrator was appointed to finalize the scheme and the Arbitrator formulated the final Scheme and published the same in the, Official Gazette, forwarding, at the same time, the Scheme to the President of the Tribunal appointed under section 32 of the Act.
In the meantime, the Town Planning Act, 1915 was replaced by the Town Planning Act, 1954 which came into force on 1st April, 1957.
Under section 90 the new Act, the final Scheme already formulated was adopted for continuance and implementation.
Finally, on 21st August, 1958, the final Scheme was sanctioned by the Government which directed that the Scheme should come into force from 1st January, 1959.
The Scheme, as already stated, was known as the Bombay Town Planning Scheme, Santacruz No. VI and covered an area .of about 160 acres divided into two parts by the Chodbunder Road which ran from south to north.
We are not concerned here with the western part.
We are concerned with the eastern part, the total area of which was about 54 acres.
A part of this area belonged to the N. J. Wadia Trust.
In a Trust Petition made to the High Court, a Receiver was appointed on 8th February.
1948 of this trust property.
It appears that unauthorised huts, sheds and stables had been built in this area and the whole of it 411 was full of slums, the removal of which was one of the objects of introducing the Town Planning Scheme.
As the Arbitrator has stated in his Final Scheme, : "The Final Scheme as now drawn up provides for the construction of new roads with necessary storm water drains on the sides of the roads, certain public sites within the area such as School, Playground, Market, Maternity Home etc.
The construction of new roads, the provision of public sites and the removal of slums will provide for the development of this part of the Suburb on proper lines.
" In pursuance of the Scheme, the part of land, which belonged to N. J. Wadia Trust and which was now in the possession of the Receiver, became a part of the Scheme and, under the Scheme, a number of final plots were allotted to the Receiver.
On 31st July, 1962, the Receiver transferred a total area of 69,625 sq.
yards comprised in 41 final plots being Nos. 106 to 116 and 118 to 147 to respondents 1 to 3 and one Cardi.
Cardi sold his plots in due course to respondents 4 and 5.
So, between the five respondents, they became the owners of the above 41 final plots.
As already noted, the Scheme came into force on 1st January, 1959 and, though, under the Scheme, a period of 2 to 3 years had been allowed for the purpose of implementing the Scheme, no action was taken by the Corporation, perhaps due to the resistance offered by the slum dwellers.
The respondents, from whom the betterment charges, etc. were being recovered by the Corporation, called upon the Corporation to implement the Scheme by removing slums, sheds and temporary structures and also to provide roads and drains as directed in the Scheme.
The Corporation, however, remained inactive and, hence, respondents 1 to 3 filed Writ Petition No. 474 of 1965 on the Original Side of the High Court on 13th October, 1965.By this petition, respondents 1 3 prayed to the Court : (1) to issue a writ of mandamus or a writ in the nature of mandamus against the appellants directing them to construct the roads and drains as indicated in the Town Planning Scheme and to complete the same for use within such time as may be fixed by the Court, and (2)to issue a writ of mandamus or any other appropriate writ directing the appellants to remove all the huts.
sheds, stables and temporary structures from the 41 plots referred to above.
412 The learned Judge held that, under the Town Planning Act and the Scheme, it was the primary responsibility of the Corporation, which was the local authority, to implement the Scheme and, accordingly, the writs as prayed were substantially granted.
In appeal, the Appellate Bench of the High Court confirmed the order of the learned Judge with only minor variations.
Hence, the present appeal.
The controversy between the parties has been narrowed down in this Court.
The learned Attorney General, who appeared on behalf of the appellants, did not dispute that, so far as the roads and drains are concerned, it was the primary obligation of the Municipal Corporation to provide the same in accordance with the Scheme.
He also agreed that, if there were any unauthorised structures, huts, sheds and the like on any part of the plots which vested in the Corporation for a public purpose, the same were liable to be removed by the Corporation.
His chief contention, however, is that the Corporation owed no duty to remove the un authorised structures situated in the private plots of the owners who, in his submission, were solely responsible to remove them.
In any event, he further submitted, since the petitioners and their predecessors had authorised these structures and collected rent from the owners or occupants of these structures, a writ of mandamus at their instance should not, in the discretion of the Court, be granted.
The point of substance in this appeal is whether the Munici pal Corporation, as the local authority under the Act owed a duty to remove the unauthorised structure, even though those structures were on private final plots of the respondents.
That the respondents could, by having recourse to law, eject the slum dwellers and remove the huts and structures would no, be a relevant consideration if, under the Act and the Scheme, the duty was imposed on the local authority.
The Scheme had been framed with a view to clear the area of slums.
In fact, Note 11 attached to the Redistribution Statement under the Scheme directs that "all huts, sheds, stables and such other temporary structures including those which do not conform to the regulations of the Scheme, shall be removed within one year from the date the Final Scheme comes into force.
Persons thus dishoused will be given a preference in the allotment of land or accommodation in Final Plot No. 16.
" We will have occasion to consider this Note No. 11 at a later stage; but what is to be noted now is that the slums were to be cleared and the dishoused persons were to be accommodated in final plot No. 16 which was specifically allotted to the Corporation.
Before turning to the provisions of the Act and the Scheme for the determination of the issue before us, it may be necessary 413 to note here that the writ issued by the learned single Judge with regard to these huts, sheds and structures was clarified in appeal by limiting the writ as follows: "that the respondents 1 and 2 (the present appellants) do remove within one year from today all unauthorised huts, sheds, stables and other temporary structures standing and lying on the petitioners ' (the present respondents) said forty one final plots.
" We asked Mr. Gupte, learned counsel for the respondents, as to what exactly was meant by the term "unauthorised" whether it meant not authorised by the owners of the plots or not authorised by the Municipal Corporation or something else.
He informed us that the relief that he really wanted was in terms of section 55 of the Act which gives the power to the local authority to remove, pull down or alter any building or other work which contravenes the Town Planning Scheme.
If any of the structures or huts and sheds, etc.
which were situated in these 41 plots did not contravene the Town Planning Scheme, he did not and could not ask for a writ of mandamus for the removal of the same.
In view of this submission, the controversy is further narrowed down and the only question.
with which we are now concerned, is whether the Corporation is bound under the law to remove such of the structures, sheds and huts situated in the respondents ' plots in so far as.
they contravene the Town Planning Scheme.
In our opinion, the Corporation is so bound.
It is not necessary to go through the several provisions of the Town Planning Act.
There can be no doubt that the Corporation, as the local authority, is wholly responsible for the preparation and implementation of every development plan.
The preamble shows that the Town Planning Act, 1954, which was intended to be a consolidating and amending Act relating to town planning, was enacted with a view to ensure that Town Planning Schemes are made in a proper manner and their execution is made effective.
It was, therefore, necessary to provide that the local authority shall prepare a development plan for the entire area within its jurisdiction.
By section 3 of the Act, the local authority is required to carry out a survey of the area within its jurisdiction within a certain time and publish a development plan.
In due course, such a development plan is sanctioned by the Government; but, in the meantime, by section 12 of the Act, stringent restrictions are placed on the property owners in the matter of development of or construction on their private properties as soon as the local authority declares its intention to prepare a development plan.
After the development plan is finally sanctioned by the Government, the next step is for the local authority to make one or more Town Planning Schemes as provided in section 18.
The 8 LI340Sup.
CI/71 414 rest or the Act is mostly concerned with the preparation of the Town Planning Schemes and section 2 9 (1) (a) provides that, after the local authority has declared its intention to make a scheme under section 22, no person shall, within the area included in the scheme, erect or proceed with any building or work or remove, pull down, alter, make additions to, or make any substantial repair to any building, part of a building, a compound wall or any drainage work or remove any earth, stone or material, or subdivide any land, or change the user of any land or building unless such person has applied for and obtained the necessary permission of the local authority.
These restrictions, though very stringent, are obviously in the interest of the preparation of the.
Town Planning Scheme, because, if structures come up when the scheme is being prepared, the whole object of town planning will be frustrated.
The Arbitrator appointed under the Scheme has to lay out the roads, the drains and make provision for public places such as gardens, hospitals and the like and, if private owners start erecting structures of more or less permanent nature, the cost of the Scheme might become prohibitive and the Scheme itself will flounder.
Such is the importance of the Final Scheme as sanctioned by the Government that, under section 51(3), the Town Planning Scheme has the same effect as if it were enacted in the Act.
The Scheme naturally deals with the disposition of the land in the whole area.
Titles are displaced and regulations are made with directions as to how the whole of the Scheme is to be implemented.
The Arbitrator appointed under the Scheme has to lay out enacted in the Act.
Against this background, we have to determine the question in issue before us.
The important provisions, bearing upon the controversy, are sections 53, 54 and 55 of the Act.
Section 53 provides : "On the day on which the final scheme comes into force, (a) all lands required by the local authority shall, unless it is otherwise determined in such scheme, vest absolutely in the local authority free from all encumbrances; (b) all rights in the original plots which have been reconstituted shall determine and the reconstituted plots shall become subject to the rights settled by the Town Planning Officer.
" It will be seen that all lands in the area which is subject to the Scheme, to whomsoever they might have originally belonged, 415 would absolutely vest in the local authority if, under the Scheme, the same are allotted to the local authority.
As a necessary corollary to this, all rights in the original plots of the private owners would determine and if, in the Scheme, reconstituted or final plots are allotted to them, the same shall become subject to the rights settled by the Town Planning Officer in the Final Scheme.
The original plots of one owner might completely disappear, being allotted to the local authority for a public purpose.
Such a private owner may be paid compensation or a reconstituted plot in some other place may be allotted to him.
This reconstituted plot may be also made subject to certain other rights in favour of others as determined by the Town Planning Officer.
In other cases, the original plot of the owner may be substantially cut down and he may be compensated elsewhere by being allotted a smaller or a bigger piece of land in a reconstituted plot.
The learned Attorney General pointed out that, so far as the present case is concerned, the final plots coincide with the original plots of the private owners.
That may be so; but that consideration is irrelevant for a proper construction of the statute.
It is inherent in every town planning scheme that titles are liable to be displaced and an owner may get a reconstituted plot which belonged, prior to the Final Scheme, to some other owner.
In such a case, if the original plot belonging to 'A ' was not encumbered by any.
unauthorised huts and 'A ' is allotted in the Scheme a reconstituted plot of another, encumbered or littered over with unauthorised sheds and huts, would it be just to say that 'A ', who is to be put into possession under the Scheme, of the reconstituted plot, should take legal action for the ejectment of the hutment dwellers ? For aught we know he may be non suited on the ground of limitation or adverse possession.
In any case, the Scheme will on the one hand, put an innocent owner to undeserved trouble and, on the other, not achieve the object of removing the hutment dwellers as speedily as possible, thus frustrating the very object of town planning.
It is not as if such a situation was not visualised by the Legislature, because the very next section, viz., section 54 gives ample powers to the local authority to do the needful.
That section says : "On and after the day on which the final scheme comes into force any person continuing to occupy any land which he is not entitled to occupy under the final scheme may, in accordance with the prescribed procedure, be summarily evicted by the local authority.
" All that the local authority has to see for the purpose of section 54 is whether any person is occupying any land in disregard of the rights determined under the final scheme and, if he does so, he 416 is to be summarily evicted by the local authority.
Section 55 is more explicit on the question.
Sub section (1) is as follows: "(1) On and after the day on which the final scheme comes into force the local authority may after giving the prescribed notice and in accordance with the provisions of the scheme (a)remove, pull down, or alter any building or other work in the area included in the scheme which is such as to contravene the scheme or in the erection or carrying out of which any provision of the scheme has not been complied with; (b) execute any work which it is the duty of any person to execute under the scheme in any case where it appears to the local authority that delay in the execution of the work would prejudice the efficient operation of the scheme.
" Sub clause (a) of the sub section gives the local authority power to remove, pull down or alter any building or other work in the whole of the area included in the scheme if such building or work contravenes the scheme, or if, in the erection or carrying out of the building or work, the provision of the scheme has not been complied with.
In short, every building or work, which is in contravention of the Town Planning Scheme, wherever it may be in the whole of the area under the Scheme, could be removed pulled down or altered by the local authority which alone is named as the authority for that purpose.
For example, the Scheme in this case, by its Note 11, requires that all huts, sheds, stables and such other temporary structures, which do not conform with the Scheme, are liable to be removed within one year of the Scheme which is regarded under section 51(3) as part of the Act.
If the owner or occupant of the temporary structure does not remove the structure within one year, the local authority is empowered to do that.
Sub clause (b) takes care of any work which, under the Scheme, any private person is liable to execute in a certain time.
If there is delay in the execution of the work, the local authority is given the power to execute the work.
The question then would arise : at whose cost this work is to be executed ? For that, provision is made in sub section
(2) which is as follows: "(2) Any expenses incurred by the local authority under this section may be recovered from the persons in default or from the owner of the plot in the manner provided for the recovery of sums due to the local authority under the provisions of this Act.
" 417 The expenses incurred by the local authority in this connection are recoverable from the person in default, viz., the person indicated in the Scheme and who has defaulted in executing the work.
To make sure that the expenses are recovered, sub .S. (2) makes them recoverable not merely from the p erson in default, but also from the owner of the plot.
Disputes are likely to arise whether any building or work contravenes a Town Planning Scheme and, so, provision is made for the same in sub section (3) which is as follows : " (3) If any question arises as to whether any building or work contravenes a town planning scheme, or whether any provision of a town planning scheme is not complied with in the erection or carrying out of any such building or work, it shall be referred to the State Government ' or any officer authorised by the State Government in this behalf and the decision of the State Government or of the officer, as the case may be shall be final and conclusive and binding on all persons.
" It will, thus, be seen that section 55 provides a self contained code by which buildings and works situated in the whole of the area under the Scheme are liable to be removed or pulled down by the local authority if those buildings or works contravene the Town Planning Scheme.
A proper implementation of the Scheme would undoubtedly entail considerable cost, but provision for the same is made in Chapter VIII of the Act, section 66 of which provides for the recovery of what are commonly known as betterment charges.
The costs of the scheme are to be met wholly or in part by a contribution to be levied by the local authority for each plot included in the Final Scheme calculated in proportion to the increment which is estimated to accrue in respect of such plot by the Town Planning Officer.
The whole scheme or the Act, therefore, and especially sections 53 to 55 leave no doubt that it is the primary duty of the local authority to remove all such buildings and works in the whole of the area which contravene the Town Planning Scheme.
The Scheme and the regulations made thereunder must be read as supplemental to the Act and, when that is done, there is no room for any doubt whatsoever that the local authority is entirely responsible for removing the huts, sheds, stables and other temporary structures which contravene the Town Planning Scheme.
The Scheme gives a statement of works to be constructed under the Scheme which comprises a number of roads and the drainage system.
The Scheme then specifies which final plots under the Scheme are reserved for public or municipal purposes.
In the section dealing with the regulations controlling the development of the area under the Scheme, the various final plots are 418 mentioned and directions have been given as to how they are to be utilised.
Regulation 6 is as follows : "No hut or shed whether for residential user or otherwise, or temporary moveable shops on wheels or such other temporary structures shall be allowed within the area of the Scheme.
" It is possible to construe this regulation as prospective in operation, because regulation 9 provides that any person contravening any of the aforesaid regulations or any of the provisions of the Scheme is liable to be prosecuted and fined.
As a part of the Scheme, there is a Redistribution and Valuation Statement which shows which are the original plots, who were the owners thereof, whether those plots were encumbered or leased out, who the mortgagees and lessees were, what is the number of the reconstituted or the final plot allotted to such owners, what contributions have to be made by the owners and what additions or deductions are to be taken into account while deciding the contributions.
In the case of some of the final plots, certain rights are given and liabilities imposed and, in suitable cases, compensation also is directed to be paid.
And, then, to this Redistribution and Valuation Statement, eleven Notes are appended which are important Note 1 says that all rights of mortgagors or mortgagees if any, existing in the original plots are transferred to their corresponding final plots.
Note 2 deals with the rights of lessors and lessees in the original plots.
By Note 3, all rights of passage hitherto existing are extinguished.
By Note 4, agreements in respect of original plots are transferred to the final plots.
By Note 5, the tenures of all original plots are transferred to the corresponding final plots.
Note 6 permits the original plot owners to remove their detachable material on the plot if they are deprived of the same.
They are required to remove their wire fencing, compound wall, sheds, huts or other structures.
They can do so within three months from the date on which the final Scheme comes into force, the idea being that the final plots must be clean plots for being allotted to another under the Scheme.
This permission under Note 6 has been given not because the local authority has no power to remove wire fencing, huts, sheds, etc.; that power is there as already shown under section 55.
But this is a concession made in favour of the owner.
Since the owner is required to remove himself from this plot, he is permitted to take away whatever material he could easily remove.
And, then, Note 11, to which reference has already been made, provides that all huts, sheds, stables and such other temporary structures including those which do not conform to the regulations of the Scheme, are required to be removed within one year from the date the final Scheme comes into force.
The Note refers not merely to huts, 419 sheds, stables which do not conform to the regulations of the Scheme, but also to all huts, sheds, stables and such other temporary Structures.
Whosoever the owner or the occupant of the same might be, he is required to remove the same within one year from the date the Final Scheme comes into force.
This is an important regulatory provision which has the effect as if enacted in the Act.
If the owner or the occupant of these huts, sheds and stables does not remove the same within one year from the date this final Scheme comes into force, he would be contravening the provisions of the Scheme and, thereupon, the local authority will have the power under section 5 5 (1) (a) to remove or pull down these huts, sheds, stables, etc.
Note 11 has taken due note of the fact that, if the huts, sheds, stables, etc. are demolished, the owners or occupants thereof will become dishoused.
Hence, further provision is made that persons thus dishoused will be given preference in the allotment of land or accommodation in Final Plot No. 16 allotted to the Corporation.
In other words, it is implicit in this Note that the Corporation may not hesitate to pull down or remove these huts and sheds, etc., because provision is already made for allotment of land in the Corporation 's Plot.
The Note, therefore, indirectly establishes that it is the primary duty of the Corporation as the local authority to remove all offending huts, sheds, stables and temporary structures in the whole area under the Scheme and not merely from those areas which are allotted to the Corporation under the Scheme.
Our attention was invited by the learned Attorney General to the Maharashtra Regional and Town Planning Act, 1966 which came into force on 11 th January, 1967.
The Act came into force when the present litigation was pending in the High Court; but it does not appear that any reference was made to the provisions of that Act.
It is a more comprehensive legislation with regard to development and planning than the Bombay Town Planning Act, 1954 to the provisions of which we have already made a reference.
By section 165(1) of the Maharashtra Regional and Town Planning Act, 1966, the Bombay Town Planning Act, 1954 is repealed; but, by virtue of sub section (2) of section 165, all Schemes finalised under the Bombay Town Planning Act, 1954 are deemed to have been framed under the corresponding provisions of this Act and the provisions of this Act shall have effect in relation thereto.
The more important provisions of the Bombay Town Planning Act, 1954, to which a reference has been made by us above.
were sections 53, 54 and 55.
The corresponding provisions in the new Act are sections 88, 89 and 90.
Section 53 consisted of two clauses (a) and (b).
They are the same as the first two clauses (a) and (b) of the corresponding section 88.
One% more clause (c) is added which provides that the Planning Authority shall hand over possession of the final plots to the owners to 420 whom they are allotted in the final Scheme.
The Planning Authority is the same as the local authority under the Bombay Town Planning Act, 1954 in the present case, the Bombay Municipal Corporation.
There was no specific provision in section 53 directing the local authority to hand over possession of the , 'final plots; but, in our opinion, that was implicit in the Scheme when the original plots were reconstituted and the reconstituted plots were allotted to the owners of the original plots.
Clause (c) of section 88, therefore, merely clarifies what was implicit in section 53 of the old Act.
Section 54 of the old Act corresponds to sub section
(1) of section 89 of the new Act.
Sub section
(2) of section 89 is a new provision which makes it obligatory upon the Commissioner of Police and the District Magistrate to assist the Planning Authority in evicting per sons from the final plots when there is unlawful opposition to the same.
Section 55 of the old Act corresponds to section 90 of the new Act and is practically the same in content.
In our opinion, therefore, there is nothing in the new Act which requires us.
to reconsider the above finding.
It is clear, therefore, on a consideration of the provisions of the Bombay Town Planning Act, 1954 and especially the sections of that Act referred to above, that the Corporation is exclusively entrusted with the duty of framing and implementation of the Planning Scheme and, to that end, has been invested with almost plenary powers.
Since development and planning is primarily for the benefit of the public, the, Corporation is under an obligation to perform its duty in accordance with the provisions of the Act.
It has, been long held that, where a statute imposes a duty the performance or non performance of which is not a matter of discretion, a mandamus may be granted ordering that to be done which the statute requires to be done (See Halsbury 's Laws of England, Third Edition, Vol.
II, p. 90).
It was, however, contended by the learned Attorny General that, after all, a writ of mandamus is not a writ of course or a writ of right but is, as a rule, a matter for the discretion of the court.
That is undoubtedly the case.
It is pointed out by Lord Hatherley in The Queen vs The Church Wardens of All Saints, Wigan and Others(1), that upon a prerogative writ there may arise many matters of discretion which may induce the Judges to withhold the grant of it matters connected with delay, or possibly with the conduct of the parties; but, as further pointed out by his Lordship, when the Judges have exercised their discretion in directing that which is in itself lawful to be done, no other Court can question that discretion in so directing.
In the present case, the High (1) 421 Court has exercised its discretion in directing the issue of the writ and this Court, in an appeal by special leave, will not ordinarily question that discretion.
In The Queen vs Garland and Another(1) which was cited by the learned Attorney General before us, mandamus was refused practically on the ground that the petitioners therein had not come before the Court with clean hands.
In that case, the trustee, , proved the will of the testator, but not claim themselves to be admitted to the copyholds, though they were bound to do so, and called upon the lord of the manor to admit the infant heir by his guardians.
The lord refused.
If the trustees had done their duty by admitting to the copyholds, the lord would have been entitled to a double fine instead of a single fine on the admittance of the heir.
In these circumstances, the Court refused a mandamus to compel the lord to admit the heir as, in the opinion of the Court, the effect of granting it would be to enable the trustees to evade payment of a double fine, and to commit a breach of trust by not acquiring themselves the legal estate in the copyholds.
Nothing of that nature to disqualify the respondents in this case for a writ in their favour has been pointed out to us.
The only submission of the learned Attorney General is that so far as the huts, sheds, etc., which are within the final plots of the respondents are concerned, they must be 'Presumed to be therewith the permission of the respondents or their predecessors in title, specially when it is known that some fee, compensation or rent was recovered by them from the owners or occupants of these huts and sheds.
It is not the case that the petitioners, while, on the one hand, asking for a mandamus against the Corporation, are resisting the enforcement of the Scheme through the owners and occupants of the slums on the other.
If the owners of these final plots merely recovered some amounts from the hutment dwellers by way of compensation or rent, that act cannot be regarded as importing any disqualification for the purposes of mandamus.
After all, their ' land was being used by others and, perhaps, the respondents are also liable to pay local taxes.
We have not been shown one provision in the whole of the Act which requires the owners of the plots to take any action against the hutment dwellers.
The Scheme came into force in 1959 and it is an admitted fact that, till 1964, nothing at all was done by the Corporation to implement the Scheme.
The respondents served notices on the Corporation to enforce the Scheme, but, for one reason or the other, the Corporation merely stalled effective action.
We do not, therefore, think any adequate reasons have been given for refusing the writ.
In the result, the appeal is liable to be dismissed with only the following modification in the Appellate Court 's Order: (1) 422 For the following words: "that the respondents 1 and 2 do remove within one year from today all unauthorised huts, sheds, stables and other temporary structures standing and lying on the petitioners ' said forty one final plots" the following should be substituted : "that the respondents 1 and 2 do remove within one year from today all such huts, sheds, stables and other temporary structures standing or lying on the petitioners ' said forty one final plots as contravene the Scheme or in the erection or carrying out of which any provision of the Scheme has not been complied with.
" Subject to this modification in the Order, the appeal is dismissed with costs.
Since a stay had been granted by this Court, it would be necessary to allow reasonable time for compliance by the appellants.
The periods already given by the trial Court, as modified by the Appellate Court, shall be counted from the date of this judgment.
V.P.S. Appeal dismissed.
[/INST]In August 1958, the State Government sanctioned a final town planning scheme The Bombay Town Planning Scheme, Santa Cruz, No. VI and directed that the scheme should come into force from 1st January 1959.
As part of the scheme there was a Redistribution and Valuation Statement and to the Statement some Notes were appended.
Note 11 provided that 'all huts, sheds, stables and Such other temporary structures including those which do not conform to the regulations of the scheme are required to be removed within one year from the date the final scheme comes into force. ' In pursuance of the scheme plots were allotted, Ind the respondents became the owners of certain plots.
Huts, sheds and stables had been built on those plots by slum dwellers.
, Since the appellant Corporation took no action for implementing the scheme, the respondents, from whom betterment charges were being recovered by the appellant, called upon the appellant to implement it by removing the Slums, etc., and to provide roads and drains as directed in the scheme.
The appellant however, remained inactive, and the respondents filed a petition for the issue of a mandamus to the appellant and the High Court allowed the petition.
In appeal to this Court, on the questions : (1) Whether the appellant was bound in law to remove the structures out the private plots of the respondents in so far as they contravened the Town Planning Scheme, and (2)whether a writ of mandamus could issue at the instance of the respondents when they had collected rents from the Occupants of the hut ments, etc.
HELD : (1) Under section 51(3) of the Town Planning Act, 1954, the final scheme as sanctioned by the Government has the same effect as if it were enacted in the Act.
The scheme and its regulations must, therefore.
be read as supplemental to the Act.
, Under section 53, all rights in the original plots of the private owners would determine, and if, in the scheme, reconstituted or final plots are allotted to them, they shall become subject to the rights settled by the Town Planning Officer in the final Scheme.
The fact that the final plots coincided with the original plots of the) private owners would not make any difference.
Under section 54 the local authority has to see whether any person is occupying any land in disregard of the rights determined under the scheme, and if he does so, he is to be summarily evicted by the local authority.
Under section 55(1)(a) every building ,or work which is in contravention of the town planning scheme, wherever it may be in the area under the scheme, Could be removed, Pulled down ,or altered by the local authority which alone is named as the authority for that purpose.
[414 D E; 415 A B, C D. H; 416 F F; 417 G] 409 In the present case, note 11 refers not merely to huts, sheds, stables which do not conform to the regulations of the scheme, but also to all huts, sheds, stables and such other temporary structures; and whosoever the owner or occupant may be, he is required to remove it within one year from the date the final scheme came into force.
Hence, if the owner or occupant did not so remove he would be contravening the provisions of the scheme and thereupon the local authority will have the power under s.55 (1) (a) to remove or pull them down.
The note takes note of the fact that the occupants of the hutments will be dishoused and makes provision for allotment of land to such dishoused persons.
B C] Therefore, it is the primary duty of the Corporation as the local authority to remove all offending huts, etc., in the whole area under the scheme and not merely from those areas which are allotted to the Corporation.
That the respondent could, by having recourse to law, eject the slum dwellers and remove their huts would not be a relevant consideration since the duty is imposed by the Act on the appellant.
Further, there is no provision in the Act which requires owners of the plots to, take action against the hutment dwellers.
[419 D E; 421 F G] The Maharashtra Regional and Town Planning Act.
1966, which came in to force during the pendency of the petition in the High Court has provisions corresponding to the 1954 Act which are practically of the same content.
Hence the position is the same under the 1966 Act also.
[419 E F, G H; 420 C D] (2) Since development and planning is primarily for the benefit of public, the Corporation is under an obligation to perform its duty in accordance with the provisions of the Act.
A mandamus may hence be, issued to the appellant ordering that to be done which the statute requires to be done.
[420 E F] In the present case, the High Court exercised its discretion in directing the issue of the writ and this Court, in appeal by special leave, will not ordinarily question that discretion.
The mere fact that the owners of the plots received some amounts from the hutment dwellers by way of compensation or rent would not import any disqualification for issuing a mandamus at their instance.
[421 A, F] Queen vs The Church Wardens of All Saints, Wigan, and Queen vs Garland, , referred to.
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<s>[INST] Summarize the judgementCivil Appeal No. 1980 of 1970.
From the Judgment and order dated 16.11.69 of the High Court of Punjab & Haryana in F.A.O. No. 120/62.
Mrs. Urmila Kapur and S.K. Bagga for the Appellant.
The Judgment of the Court was delivered by MISRA , J.
Hardyal , the respondent , entered into a contract with the State of Punjab , Public Works Department (Buildings and Roads Branch) for the construction of certain bridges and culverts on the Mukerian Naushehra Road.
The agreement between the parties was evidenced by a writing.
The written agreement contained an arbitration clause which provided that dispute , if any , between the parties would be referred to the Superintending Engineer, Public Works Department (Buildings and Roads) , Jullundur Circle.
It 11 appears that no period was fixed in the agreement of reference for giving the award and therefore Period of four months as prescribed 652 in clause 3 of the First Schedule attached to the would be the statutory period for giving the award.
Some dispute did arise between the parties.
The respondent , therefore , sent a notice on January 7, 1960 to the Superintending Engineer requesting him to accept his claim to the tune of Rs. 7,568 and give his award accordingly.
The respondent claimed this amount of compensation broadly on two counts: (1) that the sub Divisional Officer had got certain bridges demolished which according to the respondent had been constructed strictly in terms of the agreement , and (2) that the respondent had also been directed to stop the work.
The arbitrator gave his award against the respondent on April 28 , 1961 , but after the expiry of the prescribed period.
It is , how ever admitted by the respondent that he participated in the proceedings before the arbitrator even after the expiry of the statutory period.
The respondent challenged the award by filing an objection under section 30 of the on a number of grounds.
On the pleas taken by the respondent the Senior Sub Judge framed the following four issues: (I) whether the objections were premature , (2) whether the arbitrator had misconducted himself or the proceedings , (3) whether the award was against natural justice , and (4) whether the award was made after inordinate delay.
The learned Judge overruled all the objections and upheld the award.
Issue No. l Was not pressed before him.
The contention of the respondent that reasonable opportunity had not been afforded to him to adduce evidence , by the arbitrator , was also repelled by the learned Judge.
He observed "One of the grounds taken up for setting aside the award as stated in the application was that the petitioner was not afforded a reasonable opportunity to adduce evidence.
But the record of the proceedings dated 24th of April , 1961 shows that the parties did not want to say any thing further and the hearing of the case was , therefore, closed under such circumstances.
" The plea regarding misconduct on the part of the arbitrator was also overruled and dealing with this point the learned Judge observed: 653 "Nothing has been POINTED out to me in the court during the course of the arguments as to how the arbitrator has misconducted himself and the proceedings.
" The plea regarding delay in giving the award was rejected on the ground that the respondent had been participating in the proceedings before the arbitrator even after the expiry of the prescribed period of limitation.
The respondent took the matter in appeal to the High Court.
When the matter came up before a learned Single Judge he referred the following two points for decision by a Division Bench on account of the importance of the question involved in the case and also on account of conflict of judicial opinion on the point: 1.
Whether the award given after the expiry of the prescribed period without extension of time by the court was invalid ? 2.
Whether the rejection of the objection regarding delay in giving the award on the ground that the objector had participated in the arbitration proceedings even after the expiry of the period of limitation prescribed would by necessary implication amount to extending the time under section 28 of the by the Court ? The Division Bench allowed the objection of the respondent regarding delay in giving the award holding that a party to an arbitration agreement is not estopped from challenging the award on the ground of delay merely because it has participated in the arbitration proceedings even after the expiry of the prescribed period without any demur.
On the second point the High Court held that mere dismissal of the objection regarding delay in the award does not amount to extension of time by the court under section 28(1) of the and indeed time can be extended by the Court by the exercise of sound judicial discretion.
Accordingly the appeal was allowed , the order of the Senior Sub Judge was set aside and the case was sent back to the trial court for deciding afresh whether it was a fit case for condoning the delay in giving the award by the arbitrator after affording opportunity to the parties to adduce evidence, 654 The State has now come up in appeal on a certificate granted by the High Court under article 133(1)(c) of the Constitution , as it then stood.
The same points have been reiterated before this Court.
Before dealing with the points involved it will be convenient to refer to the relevant provisions of the .
Section 3 reads; "3.
An arbitration agreement , unless a different intention is expressed therein , shall be deemed to include the provisions set out in the First Schedule in so far as they are applicable to the reference.
" Section 28 reads: "28.
(1) The court may , if it thinks fit , whether the time for making the award has expired or not and whether the award has been made or not , enlarge from time to time the time for making the award.
(2) Any provision in an arbitration agreement whereby the arbitrators or umpire may , except with the consent of all the parties to the agreement , enlarge the time for making the award , shall be void and of no effect.
" Clause 3 of First schedule provides: "3.
The arbitrators shall make their award within four months after entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the court may allow.
" A perusal of these provisions indicates that it is open to the parties to an arbitration agreement to fix the time within which the arbitrator must give award , but it has to be so stated in the agreement itself.
If per chance no time has been specified by the parties in the arbitration agreement.
then by virtue of operation of section 3 read with cl. 3 of the First Schedule the award must be given within four months of the arbitrator entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the court may allow.
655 Sub section (I) of section 28 is very wide and confers full discretion on the court to enlarge time for making the award at any time.
The discretion under sub section
(I) of section 28 should , however , be exercised judiciously.
Sub section (2) of section 28 also makes it evident that the court alone has the power to extend time.
It further provides that a clause in the arbitration agreement giving the arbitrator power to enlarge time shall be void and of no effect except when all the parties consent to such enlargement.
It is not open to arbitrators at their own pleasure without consent of the parties to the agreement to enlarge time for making the award.
In H.K. Wattal vs V.N. Pandya(1) dealing with section 28(1) of the this Court observed: "There is no doubt that the arbitrator is expected to make his award within four months of his entering on the reference or on his being called upon to act or within such extended time as the court may allow.
Reading clause 3 of the Schedule along with section 28 one finds that the power to enlarge the time is vested in the court and not in the arbitrator.
Clause 3 and section 28(1) exclude by necessary implication the power of the arbitrator to enlarge the time.
This is emphasised by section 28(2) which provides that even when such a provision giving the arbitrator power to enlarge the time is contained in the agreement , that pro vision shall be void and of no effect , The headnote of section 28 brings out the force of this position in law by providing that the power is of the court only to enlarge time for making the award.
Sub section (2) of section 28 , however , indicates one exception to the above rule that the arbitrator cannot enlarge the time , and that is when the parties agree to such an enlargement.
The occasion for the arbitrator to enlarge the time occurs only after he is called upon to proceed with the arbitration or he enters upon the reference.
Hence it is clear that if the parties agree to the enlargement of time after the arbitrator has entered on the reference , the arbitrator has the power to enlarge it in accordance with the mutual agreement or consent of the parties.
That such a consent must be a post reference consent , is also clear from section 28(2) which renders null and void a provision l. ; 656 in the original agreement to that effect.
In a sense where a provision is made in the original agreement that the arbitrator may enlarge the time , such a provision always implies mutual consent for enlargement but such mutual consent initially expressed in the original agreement does not save the provision from being void.
It is , therefore, clear that the arbitrator gets the jurisdiction to enlarge the time for making the award only in a case where after entering on then arbitration the parties to the arbitration agreement consent to such enlargement of time.
The next question that crops up for consideration is what will be the effect if a party to the arbitration took part in the proceedings before the arbitrator even after the expiry of four months , that is , the period prescribed for giving the award.
Some High Courts have taken the view that in such a situation the condition of four months period will be deemed to have been waived.
Such a view has been taken by the Allahabad High Court in Shambhu Nath vs Surja Devi.(1) A learned Single Judge of that High Court observed: "A party to an arbitration agreement who voluntarily takes part in the arbitration proceedings after the expiry of four months will be deem , d to have waived the implied condition as to time." A similar view has been taken by the Madhya Pradesh High Court in Shivlal vs Union of India(2).
In Ganesh Chandra vs Artatrana(3) a single Judge of the Orissa High Court observed: "If the parties , after the expiry of four months, submit themselves to the jurisdiction of the arbitrators and take part in the proceedings enabling them to pass an award , it cannot be said that the arbitrators acted without jurisdiction.
In such a contingency , the principle of waiver and estoppel would have full application.
Once we hold that the law precludes parties from extending time after the matter has been referred to the arbitrator , it will be (1) AIR 1961 All. 180.
(2) AIR 1975 M.P. 40.
(3) AIR 1965 Orissa 17.
657 contradiction in terms to hold that the same result can be brought about by the conduct of the parties.
The age long established principle is that there can be no estoppel against a statute.
It is true that the time to be fixed for making the award was initially one of agreement between the parties but it does not follow that in the face of a clear prohibition by law that the time fixed under cl. 3 of the Schedule can only be extended by the court and not by the 1 parties at any stage , it still remains a matter of agreement and the rule of estoppel operates.
It need be hardly emphasized that the Act has injuncted the arbitrator to give an award within the prescribed period of four months unless the same is extended by the court.
The arbitrator has no jurisdiction to make an award after the fixed time.
If the award made beyond the time is invalid the parties are not estopped by their conduct from challenging the award on the ground that it was made beyond time merely because of their having participated in the proceedings before the arbitrator after the expiry of the prescribed period.
The policy of law seems to be that the arbitration proceedings should not be unduly prolonged.
The arbitrator therefore has to give the award within the time prescribed or such extended time as the court concerned may in its discretion extend and the court along has been given the power to extend time for giving the award.
As II observed earlier , the court has got the power to extend time even after the award has been given or after the expiry of the period prescribed for the award.
But the court has to exercise its discretion in a judicial manner.
The High Court in our opinion was justified in taking the view that it did.
This power , however , can be exercised even by the appellate court.
The present appeal has remained pending in this Court since 1970.
No useful purpose will be served in remanding the case to the trial court for deciding whether the time should be enlarged in the circumstances of this case.
In view of the policy of law that the arbitration proceedings should not be unduly prolonged and in view of the fact that the parties have been taking willing part in the proceedings before the arbitrator without a demur, this will be a fit case , in our opinion , for the extension of time.
We accordingly extend the time for giving the award and the award will be deemed to have been given in time.
The other questions involved in the case.
however , have not been dealt with by the High Court and it rest content by making a 658 bald observation that there is no other point to be decided in this appeal.
The objector respondent had raised a number of pleas fore challenge the award giving rise to four issues.
It was , therefore , obligatory for the High Court to consider those points unless they had been given up by the objector respondent.
There is nothing on the record to suggest that the respondent had given up those grounds.
The case will , therefore , have to be sent back to the High Court for deciding the other issues involved in this case.
We accordingly allow the appeal in part and set aside that part of the order by which the High Court remanded the case to the trial court for deciding whether time should be extended.
The case is sent back to the High Court for deciding other issues involved.
In the circumstances of the case the parties shall bear their own costs.
A.P.J. Appeal allowed.
[/INST]Section 2(1) (f) of the Provides that an article of food shall be deemed to be adulterated if the article consists wholly or in part of any filthy, putrid, disgusting, rotten, decomposed or diseased animal or vegetable substance or is insect infested or is otherwise unfit for human consumption.
The respondent was prosecuted for an offence under section 7 read with section 16 of the Act.
The prosecution case was that a sample of lal mirchi powder was taken from the grocery shop of the respondent.
On an analysis by the Public Analyst it was found that the sample contained nine living meal worms.
Thor was no other evidence in support of the case of the prosecution that the lal mirch powder was adulterated.
The learned Magistrate found that the prosecution had failed to prove that the lal mirchi powder was adulterated and acquitted the respondent.
The High Court dismissed the Criminal Revision Petition filed by the appellant State in limine.
Dismissing the appeal by the State, ^ HELD: (I) The words 'worm ', 'infest ' and 'insect ' are defined in Webster 's New World Dictionary (1962 Edition). 'Worm ' means "any of many long, slender, soft bodied Creeping animals, some segmented, that live by burrowing underground or as parasites, as the earth worm, tapeworm," 'Infest ' means "to overrun or inhabit in large numbers, usually so as to be harmful or 465 bothersome, swarm in or about. 'Insect ' means "any of a large group of small invertebrate animals characterized, in the adult state, by division of the body into head, thorax, and abdomen, three pairs of membranes wings: beetles, bees, flies, wasps, mosquitoes, etc.
are insects.
" The same meaning is given of the above three words in the Shorter Oxford Dictionary.
Therefore, it is not possible to hold that a worm and an insect are the same.
[467C E] M/S Narkeklange Roller Flour Mills and another vs The Corporation of Calcutta 1973 (Prevention of Food Adulteration Cases) 257, referred to.
(2) Even if the nine worms found by the Public Analyst in the sample are considered to be insects, the certificate of the Public Analyst does not support the case of the prosecution that the lal mirchi powder was adulterated, for the Public Analyst has not expressed his opinion that the lal mirchi powder was either worm infested or insect infested or that on account of the presence of the meal worms the sample was unfit for human consumption.
Therefore, the prosecution has not established by any satisfactory evidence the requirement of Section 2(1) (f) of the Act.
Consequently no interference is called for with the Judgement of the High Court.
[473G H] Municipal Corporation of Delhi vs Kacheroo Mal ; , Municipal Corporation of Delhi vs Tek Chand Bhatia ; , held inapplicable.
Per Varadarajan J.
No opinion is expressed as to which of the two views expressed in Municipal Corporation of Delhi vs Kacheroo Mal, ; , and Municipal Corporation of Delhi vs Tek Chand Bhatia [1980] I S.C.R.910 is correct, Since this Bench also is of equal strength.
Moreover, it is not necessary to do so having regard to the facts of the present case.
[473F ] Per Ranganath Misra 1.
(concurring in the conclusion) The true meaning of section 2(1) (f) has been brought out in Municipal Corporation of Delhi vs Tek Chand Bhatia, 11980] I SCR 910 and the conclusion that 'it would not be necessary in such a case to prove further that the article of food was unfit for human consumption ' is a correct statement of the law.
In the instant case, the prosecution evidence is inadequate to warrant interference.
[474B C]
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<s>[INST] Summarize the judgementAppeal No. 390 of 1963.
Appeal by special leave from the award dated December 11, 1959, of the Industrial Tribunal, Assam at Gauhati in Reference No. 7 of 1959.
C.B. Agarwal, J.N. Hazarika and K.P. Gupta, for the appellants.
Sankar Bannerjee, P.K. Chatterjee, D.N. Gupta and B.N.Ghosh, for the respondents.
November 25, 1963.
The judgment of the Court was delivered by GAJENDRAGADKAR, J.
This appeal by special leave arises from an industrial dispute between the respondent, the Management of 11 Tea Estates and the appellants, their workmen.
It appears that the appellants raised a dispute against the respondent in regard to the lay off declared by them in the 11 550 estates in question in February, 1959.
The said (ay off lasted for 45 days and the appellants ' contention was that the lay off was not justified, and so, they were entitled to their full wages for the period of the lay off.
The respondent 's Managing Agents for the nine Companies that run the 11 tea estates in question, resisted this claim on the ground that the lay off was justified and they alleged that the appellants were not entitled to anything more than the compensation prescribed by section 25C of the (hereinafter called 'the Act ').
This dispute was referred to the adjudication of the Industrial Tribunal by the Governor of Assam under section 10(1)(d) of the Act.
The 11 tea estates which are concerned with this dispute were described in Appendix A to the order of reference.
It is common ground that these 11 tea estates ' are run by nine Companies and M/s. Macneill and Barry Ltd. are the Managing Agents of all these companies.
The case for the respondent was that the tea estates in question which are all situated in Cachar District had to face a long period of depression in trade by reason of the poor prices generally commanded by the tea produced by them.
In 1959, the management faced a very difficult financial position and it took the view that in the interests of the employees and its own business, it would be appropriate to lay off the workmen for a certain period in order to avoid closure of business.
The circumstances which caused financial depression were beyond the control of the management and lay off was, therefore, inevitable and fully justified.
On the other hand, the appellants urged that there were other tea estates in the district of Cachar which had to face similar problems; the labour costs incurred by the respondent were not higher than the corresponding costs incurred by the other tea estates, the burden of taxes was the same for all the tea estates in the district and the quality of the tea produced was relatively similar.
They contended that the difficulty which the respondent had to face 551 was partly the result of its mismanagement and neglect.
They pleaded that the workmen employed by the respondent had been promised continuous work throughout the year and the declaration of lay off for such a long period as 45 days exposed them to the risk of semi starvation.
The appellants also urged that depression in trade or financial difficulties which may be characterised as trade reasons did not justify the lay off under the relevant Standing Order, and so, they justified their claim for full wages during the period of the lay off.
The Tribunal has held that the relevant Standing Order No. 8 justified the lay off.
The trade reasons resulting from the depression in trade and financial liabilities arising therefrom fell within the scope of the Standing Order; it has also held that the last clause in the Standing Order which was general in terms could be relied upon by the respondent in support of its plea that the lay off was justified.
In the alternative, the Tribunal thought that even if the lay off was not justified by the relevant clause in the Standing Order, the respondent had a common law right to declare a lay off and this right was recognised by section 25C of the Act.
According to the Tribunal, section 25 C recognises this common law right and since it is a statutory provision, it over rides the relevant clause in the standing Order.
Having thus found that the lay off was justified, the Tribunal proceeded to examine the question as to whether the trade reasons on which the respondent relied had 'been proved.
It then considered the relevant documentary evidence bearing on the point and noticed some general features applicable to all the tea companies before it.
"They have suffered losses which are by no means inconsiderable", said the Tribunal, "and some of the companies have not been able to declare dividends in time during the last ten years, though others have declared them from year to year.
" The Tribunal rejected the respondent 's contention that the losses were due to high labour charges, but it found that the tea companies were not making adequate profits.
It was satisfied that 552 the companies had reserves and large capital assets and would not have found it difficult to raise necessary finances.
On the whole, the Tribunal thought it necessary to distinguish between the different tea estates with which it was dealing, and having considered their respective individual cases, it came to the conclusion that out of the nine companies, five companies need not have declared lay off for 45 days.
In its opinion, there was justification for lay off in their cases, but its duration should have been 21 days.
Acting on this finding, the Tribunal has ordered that for the 24 days in excess of three weeks for which the lay off was justified the said companies should pay their workmen full wages and not merely the compensation prescribed by section 25C of the Act.
In regard to the remaining four companies, the Tribunal held that the lay off was fully justified, and so, the workmen were not entitled to full wages for the period of the lay off.
In other words, the award made by the Tribunal partially granted relief to the appellants inasmuch as it gave them full wages against five companies for 24 days only.
These five companies are: Bhubandhar, Doyapore, Western Cachar, Borak and Koyah.
The other four companies in respect of which the Tribunal has given no relief to the workmen are: Doodputlee ' Majagram, Scottpore and Tarrapore.
It is this award which has given rise to the present appeal by the appellants.
The first question which arises for our decision is whether the Tribunal was justified in holding that section 25C recognises the common law right of the respondent to declare a lay off for reasons other than those specified in the relevant clause of the Standing Order.
While dealing with this argument, we must proceed on the assumption that the financial difficulties experienced by the respondent at the relevant time which have been compendiously described by it as constituting trading reasons for the lay off do not fall within the purview of the said relevant clause.
The respondent 's argument is that though the trading reasons may not justify the declaration of the lay off 553 under the said clause, as prudent employers who must be given liberty to run their industry in the best manner they choose, they have a common law right to declare a lay off if they feel that the alternative to the lay, off would be closure and acting bonafide they want to avoid closure and adopt the lesser evil,, of declaring the lay off.
Does section 25C of the, Act justify this argument? Section 25C(1) which, recognises the right of the workmen who are laid; off, for compensation, provides that whenever a workman therein specified has been laid off, he shall be paid by the employer for whole of the period of the lay off, except for such weekly holidays as may intervene, compensation at the rate prescribed by the section.
The proviso to this section lays down that the compensation payable to a workman during any period of twelve months shall not be for more than; 45 days; and this proviso seems to indicate that the legislature thought that normally the period of lay off within 12 months may not exceed 45 days.
Section 25C(2), however, contemplates the possibility that the period of lay off may exceed 45 days, and it lays down that if during any period of 12 months, a work , man is laid off for more than 45 days, whether continuously or intermittently, he shall be paid compensation in the manner indicated by it.
Thus, the position is that workmen who are laid off are entitled to compensation and the method in which the said compensation has to be calculated has been prescribed by the two clauses of section 25C.
It is, however, significant that when section 25C deals with workmen who are laid off and proceeds to prescribe the manner in which compensation should be paid to them, it is inevitably referring to the lay off as defined by section 2(kkk) of the Act.
The said section defines a "lay off" (with its grammatical variations and cognate expressions) as meaning: "the failure, refusal, or inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or the breakdown of machinery or for any other reason 554 to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrench ed.
" It would be legitimate to hold that lay off which primarily gives rise to a claim for compensation under section 25C must be a lay off as defined by section 2(kkk) If the relevant clauses in the Standing Orders of industrial employers make provisions for lay off and also prescribe the manner in which compensation should be paid to them for such lay off, perhaps the matter may be covered by the said relevant clauses; but if the relevant clause merely provides for circumstances under which lay off may be declared by the employer and a question arises as to how compensation has to be paid to the workmen thus laid off, section 25C can be invoked by workmen provided, of course, the lay off permitted by the Standing Order also satisfies the requirements of section 2(kkk).
Whether or not section 25C can be invoked by workmen who are laid off for reasons authorised by the relevant clause of the Standing Order applicable to them when such reasons do not fall under section 2(kkk), is a matter with which we are not directly concerned in the present appeal.
The question which we are concerned with at this stage is whether it can be said that section 25C recognises a common law right of the industrial employer to lay off his workmen.
This question must, in our opinion, be answered in the negative.
When the laying off of the workmen is referred to in section 25C, it is the laying off as defined by section 2(kkk), and so, workmen who can claim the benefit of section 25C must be workmen who are laid off and laid off for reasons contemplated by section 2(kkk); that is all that section 25C means.
If any case is not covered by the Standing Orders, it will necessarily be governed by the provisions of the Act, and lay off would be permissible only where one or the other of the factors mentioned by section 2(kkk) is present, and for such lay off compensation would be awarded under section 25C.
Therefore, we do not think that the Tribunal was right in holding that section 25C recognises the inherent right 555 of the employer to declare lay off for reasons which he may regard as sufficient or satisfactory in that behalf.
No such common law right can be spelt out from the provisions of section 25C.
That takes us to the question whether the lay off in the present case is justified under Rule 8 of the, Standing Orders which have been duly certified under ' the Industrial Employment (Standing Orders) Act, (No. 20 of 1946).
The relevant portion of Rule 8 reads thus: "Closing and re opening of sections of the in dustrial establishments, and temporary stoppages of work, and the rights and liabilities of the employer and workmen arising therefrom.
(a) (1) The Manager may at any time in the event of fire, catastrophe, break down of machinery, stoppage of power or supply, epidemic, civil commotion, strike, extreme climate conditions or other causes beyond his control, close down either the factory or field work or both without notice.
In cases where workmen are laid off for short periods on account of failure of plant or a temporary curtailment of production, the period of unemployment shall be treated as compulsory leave either with or without pay, as the case may be, when, however, workmen have to be laid off for an indefinitely long period, their services may be terminated after giving them due notice or pay in lieu thereof.
" It will be seen that the circumstances under which a lay off can be declared have been specifically described by Rule 8(a)(1).
Two grounds have been urged before us by Mr. Banerjee in support of the Tribunal 's conclusion that the impugned lay off is justified.
He contends that the clause "stoppage of supply" may cover cases of stoppage of financial assistance.
The argument is that in 1959 when the lay off was declared.
the companies found that they 556 could not raise enough money to carry on the operations in the tea gardens, and so, it was a case of stoppage of supply.
If that be so, the lay off would be justified.
In our opinion, this argument is wholly misconceived.
Stoppage of supply must, in the context, mean stoppage of raw material or other such thing.
In regard to the factory, the stoppage of supply may mean the stoppage of tea leaves, or in the case of field work, it may mean the stoppage of supply of other articles necessary for field operations.
It is impossible to accept the argument that "supply" in the context can mean money or funds.
The other argument urged before us is that the last clause of R. 8(a)(i) which refers to "other causes beyond his control" would take in the financial difficulties of the Cos.
We are not inclined to accept this argument also.
Other causes beyond his control for one thing should be similar to the causes that have preceded; even otherwise we see no justification for the argument that the financial difficulty which is alleged to have confronted the respondent was beyond its control.
In fact, on this point the Tribunal has made a definite finding that though the respondent had produced a letter from the Chartered Bank of the 9th April, 1959 in which the Bank expressed its re luctance to afford financial facilities, it was by no means clear that the Companies acting through their Managing Agents completely failed to raise the necessary finances at the relevant time.
As the Tribunal has observed, the letter written by the Bank shows that it had promised to consider the matter and write to the Companies again; no evidence was produced to show what the Bank subsequently stated and whether finances became available or not ' On the other hand, it is clear that at the end of the period of the lay off, all the Cos. started operating their tea gardens and we have been told that the operations have continued uninterrupted ever since.
Besides, the letter on which reliance is placed was written in April, 1959, whereas the lay off was declared in February, 1959.
Therefore, there is no evidence on the record which can justify 557 the assumption made by Mr. Banerjee when he raised the contention that the financial difficulties faced by the respondent at the relevant time were beyond its control.
The fact that some of the Cos. have been incurring losses and have not made profits would not necessarily show that the financial position which they had to face at the relevant time was beyond their control.
It is true, as Mr. Banerjee has pointed out, that the three Cos. Scottpore, Tarrapore and Doodputalee have not been able to pay dividends between 1951 to 1958 and it may be that with the exception of the year 1954, the position of all of them is not very satisfactory; but, on the other hand, there are other tea gardens in the same area and it is not suggested or shown that their position was any better than that of the companies before us.
It is also true that at the relevant time, all the tea companies in Cachar in general, and the Managing Agents of the nine companies before us in particular M/s. Macneill and Barry Ltd. were trying their best to persuade the Assam Government to give them some relief in the matter of taxation.
But the question which we have to decide is whether the financial position disclosed by the evidence on the record can be described as constitu ting a cause beyond the control of the respondent.
We are not inclined to answer this question in favour of the respondent.
Besides, as we have already indicated, having regard to the factors specified by Rule 8(a)(i) before the clause in regard to other causes beyond his control was introduced, it would not be easy to entertain the argument that a trading reason of the kind suggested by Mr. Banerjee can be included in that clause.
Therefore, we are satisfied that the Tribunal was in error in holding that the impugned lay off could be justified by Rule 8(a)(i).
Rule 8(a) (iii) which refers to temporary curtailment of production must obviously be read in the light of R. 8(a)(1) and if the case of the present lay off does not fall under R. 8 (a)(i), R. 8(a) (iii) would not improve the position.
Mr. Banerjee has then urged that the present Standing Orders which were duly certified under the 558 Standing Orders Act came into force in 1950, whereas section 2(kkk) which defines a lay off was added to the Act by the Amending Act 43 of 1953 on the 24 th October, 1953.
His argument is that the Standing Orders having been certified before the definition of the lay off was introduced in the Act, the respondent is entitled to rely upon the said definition in support r of the plea that the impugned lay off was justified.
Basing himself on the definition of the lay off as prescribed by section 2(kkk), Mr. Banerjee urged that this definition was wider than R. 8(a)(1) of the respondent 's Standing Orders and would take in the trading reasons on which he relies.
We are not prepared to accept the argument that in the present case, the respondent can rely on the definition of lay off as prescribed by section 2(kkk).
It will be recalled that the Standing Orders which have been certified under the Standing Orders Act became part of the statutory terms and conditions of service between the industrial employer and his employees.
Section 10(1) of the Standing Orders Act provides that the Standing Orders finally certified under this Act shall not, except on agreement between the employer and the workmen, be liable to modification until the expiry of six months from the date on which the Standing Orders or the last modification thereof came into operation.
If the Standing Orders thus become the part of the statutory terms and conditions of service, they will govern the relations between the parties unless, of course, it can be shown that any provision of the Act is inconsistent with the said Standing Orders.
In that case, it may be permissible to urge that the statutory provision contained in the Act should over ride the Standing Order which had been certified before the said statutory provision was enacted.
Assuming without deciding that section 2(kkk) may include the trading reasons as suggested by Mr. Banerjee, the definition prescribed by section 2(kkk) is not a part of the operative provisions of the Act, and so, the argument that there is inconsistency between the definition and the relevant Rule of the Standing Orders does not assist Mr. Banerjee 's case.
If there had been a provision in the Act specifically providing 559 that an employer would be entitled to lay off his workmen for the reasons prescribed by section 2(kkk), it might have been another matter.
The only provision on which reliance has been placed is contained in section 25C and that, as we have already seen, merely takes in the definition of lay off inasmuch as it refers to the workmen as laid off and provides the manner in which compensation would be paid to them.
An alleged conflict between the definition of lay off and the substantive rule of the Standing Orders would not, therefore, help the respondent to contend that the definition over rides the statutory conditions as to lay off included in the certified Standing Order.
Therefore, we do not think Mr. Banerjee would be entitled to contend that section 2(kkk) of the Act is wider than the relevant Rule in the Standing Orders and should apply to the facts of this case.
We ought to make it clear that in dealing with this argument, we have not thought it necessary to consider whether the broad and general construction of section 2(kkk) for which Mr. Banerjee contends is justified.
In fact, Mr. Agarwala for the appellants has very strongly urged that the words "for any reason" found in section 2(kkk) will not take in the trading considerations.
He contends and prima facie with some force that the said words must be construed ejusdem generis with the words that precede them.
(vide Management of Kairbetta Estate, Kotagiri vs Rajamanickam & Ors.)(1) According to him, the circumstances specified in section 2(kkk) which justify a lay off must be integrally connected with production, and so, trading reasons cannot be included in that definition.
According to this argument, the distinguishing features of the genus of which the several circumstances mentioned in the definition are different species, are: they are beyond the control of the employer, are expected to be of a short duration, and are of compulsive effect.
As we have already indicated, we do not think it necessary to decide this interesting point in the present appeal because we are satisfied that the present dis (1) ; 560 pute must be governed by Rule 8(a)(1) of the respondent 's Standing Orders.
In the result, we reverse the finding of the Tribunal that the lay off declared by the respondent for 45 days in 1959 was justified.
That being so, it is unnecessary to consider the individual cases of the nine respective companies, because whatever may have been their respective financial position, under the relevant Rule they could not validly declare a lay off at all, nor could they have declared the lay off in exercise of their alleged common law right.
The questions referred to the Tribunal must, therefore, be answered in favour of the appellants.
The appeal is accordingly allowed and the appellants ' claim for full wages for the 45 days of lay off in respect of the 11 tea gardens is awarded to them.
The appellants will be entitled to their costs throughout.
Appeal allowed.
[/INST]As a result of the lay off declared by the respondent in the II tea estates, managed by them an industrial dispute arose between the respondent and their workmen, the appellant.
The respondent justified the lay off on the ground that its financial position was very difficult and that the lay off was appropriate in the interests of the employees and their own in order to avoid closure of business.
The appellants urged, inter alia, that the depression in trade or financial difficulties which may be characterised as trade reasons did not justify the lay off under the relevant Standing Order, and so, they justified their claim for full wages during the period of the lay off.
The Tribunal held that the relevant Standing Order No. 8 justified the lay off, and the trade reasons resulting from the depression in trade and financial liabilities arising therefrom fell within the scope of the Standing Order.
Alternatively, the Tribunal thought that even if the lay off was not justified by the relevant clause of the Standing Order, the respondent had a common law right to declare a lay off and this right was recognised by section 25C of the and since it is a statutory provision, it overrides the relevant clause in the Standing Order.
In appeal by special leave: Held: (i) The Tribunal was not right in holding that section 25C of the recognises the inherent right of the employer to declare lay off for reasons which he may regard as sufficient or satisfactory in that behalf.
No such common law right can be spelt out from the provisions of section 25C.
When the laying off of the workmen is referred to in section 25C, it is laying off as defined by section 2 (kkk), and so, workmen who can claim the benefit of section 25C must be workmen who are laid off for the reasons contemplated by section 2(kkk); that is all that section 25C means.
If in any case the lay off is not covered by the Standing Orders, it will necessarily be governed by the provisions of the Act, and lay off would be permissible only where one or the other of the factors mentioned by section 2(kkk) is present, and for such lay off compensation would be awarded under section 25C. 549 (ii) "Stoppage of supply" must, in the context, mean stoppage ' of raw material or other such thing.
In regard to the factory, "stoppage of supply" may mean the stoppage of tea leaves, or in the case of field work, it may mean the stoppage of supply of other articles necessary for field operations.
"Supply" in the context cannot mean money or funds.
(iii) The last clause of r. 8(a) (i) of the Standing Order which refers to "other causes beyond his control" would not take in the financial difficulties of the companies.
Other causes beyond his control for one thing should be similar to the causes that have preceded; even otherwise there is no justification for the argument that the financial difficulty which is alleged to have confronted the respondent was beyond its control.
Rule 8(a) (iii) which refers to temporary curtailment of production must obviously be read in the light of r. 8(a) (i) and if the case of the present lay off does not fall under r. 8(a) (i), r. 8(a)(iii) would not improve the position.
(iv) The present dispute must be governed by r. 8(a)(i) of the respondent 's Standing Orders.
It cannot be accepted that the Standing Orders having been certified before the definition of the lay off was introduced in the Act, the respondent is entitled to rely upon the said definition in support of the plea that the impugned lay off was justified.
Management of Kairbetta Estate, Kotagiri vs Raja manickam & Ors., ; , referred to.
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<s>[INST] Summarize the judgementAppeal No. 58 of 1958.
Appeal from the Judgment and decree dated April 5, 1955, of the Calcutta High Court in Appeal from Original Order No. 206 of 1953, arising out of the judgment and order dated May 20, 1953, of the Fourth Additional Sub Judge, 24 Paris at Alipore in Misc.
Case No. 15 of 1951.
C. K. Daphtary, Solicitor General of India, C. B. Aggarwala and Sukumar Ghose, for the appellants.
H. N. Sanyal, Additional Solicitor General of India and R. C. Datta, for the respondents Nos. 3 and 4. 1960.
September 15.
The Judgment of the Court was delivered by SARKAR J.
This appeal arises out of an execution proceeding.
It is filed by the decree holders and is directed against the judgment of the High Court at Calcutta setting aside the order of a learned Subordinate Judge at Alipore dismissing the objection of a judgment debtor to the execution.
The High Court held that the decree having earlier been executed in full, the present proceedings for its execution were incompetent and thereupon dismissed the decree holders ' petition for execution.
The question that arises is whether the decree had earlier been executed in full.
The facts appear to have been as follows: One Sukeshwari Alied sometime prior to 1944 possessed of three plots of land which at all material times, bore premises Nos. 26, 27 and 28, Dum Dum Cossipore Road, in the outskirts of Calcutta.
She left a will of which defendants Nos. 1, 2 and 6 were the executors.
682 The executors granted leases of these different plots of land to defendants Nos. 3, 4 and 5 respectively and put them in possession.
Certain persons called Mohatas whose interests are represented by the appellants in the present appeal, claimed that Sukeshwari had only a life interest in the lands which on her death had vested in them and the executors had therefore no right to grant the leases.
They filed a suit against the executors and the tenants on September 15, 1954, in the Court of a Subordinate Judge at Alipore for a decree declaring that the defendants had no right to possess the lands and for khas possession by evicting the defendants from the lands by removing the structures, if any, put up by them there.
On March 30, 1948, the learned Subordinate Judge passed a decree for khas possession in favour of the Mohatas and gave the defendants six months time to remove the structures put up on the land.
It is the execution of this decree with which the appeal is concerned.
Defendant No. 3 appealed from this decree and that appeal succeeded for reasons which do Dot appear on the record.
It is not necessary to refer to defendant No. 3 further as we are not concerned in this appeal with him.
It may however be stated that he was in possession of premises No. 26 and no application for execution appears to have been made against him.
The executor defendants also appealed from the decree.
The other two tenants, defendants Nos. 4 and 5, did not appeal.
Of these tenants we are Concerned only with defendant No. 4, the Bengal Breweries Ltd., a company carrying on business as distillers.
It was in possession of premises No. 27, on which it had built a factory for distilling liquor and yeast.
Defendant No. 5 was in possession of premises No. 28 on which stood some temples.
On September 22, 1948, the Mohatas the decree.
holders, filed an application in the Court of the learned Subordinate Judge for execution of the decree against defendants Nos. 1, 2, 4, 5 & 6.
On September 25, the learned Subordinate Judge passed an order in execution 683 issuing a writ for delivery of possession of premises Nos. 27 and 28 to the decree holders by removing, any person bound by the decree who refused to vacate the same and fixed November 22 for making the return to the writ.
On September 28, the decree holders applied to the learned Subordinate Judge for obtaining help from the police for executing the decree.
On September 29, the executor defendants applied for a short stay of execution to enable them to obtain a stay order from the High Court.
Defendant No. 4 also itself made an application for staying the execution for two months to enable it to come to an arrangement with the decree holders in the meantime.
On the decree holders assuring the Court that they would not execute the decree till 2 p. m. of the next day these two petitions by the judgment debtors were adjourned till September 30.
On September 30, 1948, the two petitions for stay were taken up for hearing by the learned Subordinate Judge.
With regard to the petition by the executor defendants, he observed that he had no power to stay execution in view of 0. 41, r. 5, of the Code of Civil Procedure and thereupon dismissed that petition.
The petition for time by defendant No. 4 was also dismissed but in respect of it the following observation appears in the order: " The decree holders undertake that they will allow the company to carry on normal business for six weeks from now by which time the company will settle matter with the decree holders ".
Thereafter on the same day the decree holders deposited in Court, the necessary costs for police help for executing the decree and the learned Subordinate Judge requested the police to render the necessary help on October 1, 1948.
It also appears that subsequently on the same day defendant No. 4 filed another petition for stay of execution and also a petition under section 47 of the Code objecting to the execution, alleging that there was a tentative arrangement between it and the decree holders that it would pay Rs. 150 as monthly rent and it need not file any appeal to challenge the validity of the decree.
The decree holders opposed these petitions by defendant 684 No. 4.
The learned Subordinate Judge made no order on them but adjourned them to November 11, 1948, as he felt that the matter required investigation.
On October 1, 1948, the Nazir of the Court proceeded to premises Nos. 27 and 28 with certain police officers to execute the decree in terms of the writ.
He found the gate of premises No. 27 closed but later the manager of defendant No. 4 opened it at his request.
What happened thereafter appears from the return of the Nazir which is in the following words: " We then entered into the factory house and delivered possession in each of the buildings at about 10 30 a. m. Before removal of the furniture and other movables from those buildings there was an amicable settlement between the decree holders and the manager of the factory that the factory will run its normal business as before for 6 weeks and in the meantime the executive body of the factory will make settlement with the decree holders and some of the decree holders ' men will remain there as guards ".
It is admitted that the decree holders ' guards were thereafter posted on the premises.
The Nazir then proceeded to premises No. 28 and the return also shows that he delivered possession of these premises to ' the decree holders, The relevant portion of the return is in these words: "Then we proceeded towards the premises No. 28 (Old No. 8) Consisting of 2 temples and found that the priest of the temple was present.
He amicably came out of the compound and possession was delivered of the temples, lands, tanks and other plots mentioned in the writ.
" After possession had been delivered, the decree holders executed on the same day a receipt in acknowledgment of possession having been received by them.
That receipt is in these terms: " Received from Sri Bhabataran Banerjee, Naib Nazir, District Judge 's Court, Alipore, 24 Parganas, delivery of possession of premises Nos. 7 and 8 (formerly Nos. 27 and 28) Dum Dum Cossipore Road in the above execution case, this day at 10 30 a.m. including all buildings, tanks, gardens and temples, etc., all these mentioned in the writ in its schedule.
" 685 The receipt by mistake describes the premises as " formerly " Nos. 27 and 28 for the premises then bore these numbers.
It appears that at 11 15 a. m. on October 1, 1948, the executor defendants moved the High Court) for a stay of execution in the appeal filed by them from the decree.
The High Court directed an ad interim stay.
After this order had been made the executor defendants moved the learned Subordinate Judge on the same day for consequential orders on the strength of the stay of execution granted by the High Court.
The learned Subordinate Judge thereupon made the following order : " In the special circumstances recall the writ provisionally.
To 5th November, 1948, for, fresh consideration if formal stay order is not received in the meantime ".
This order was passed on the verbal representation of the lawyers for the executor defendants that the High Court had directed the stay of execution for there had not been time for the High Court 's order to be formally drawn up and produced before the learned Subordinate Judge.
On November 22, 1948, which was the day fixed for making the return to the execution of the writ, the following order appears to have been passed by the learned Subordinate Judge in the execution case: " Possession delivered.
One third party has filed an application under Or. 21, r. 100, C.P.C. Let the execution case be put up after the disposal of Misc.
Case No. 13 of 1948.
" The Miscellaneous Case No. 13 of 1948 was the one started on the petition of the third party under Or. 21, r. 100 of the Code, objecting to his removal by the execution.
This third party was one Bhairab Tewari and he presumably was claiming some right in premises No. 28 for there was no question of his making any claim to premises No. 27 which were exclusively in the possession of defendant No. 4.
The ad interim stay issued by the High Court on October 1, 1948, in the appeal filed by the executor defendants, came up for final hearing and resulted in the following order on January 21, 1949.
"If anything is due on account, of costs which 686 has not been paid, that amount will be deposited in the Court below by defendant No. 4 (i.e., Mr, Sen 's client) within a month from to day, and then three month 's time from to day will be given to him to remove the machineries and vacate that portion of the land in suit which he is occupying as a lessee and which he is using now as a brewery.
In default of the deposit being made and also in default of vacating the premises as directed above, this Rule will stand discharged.
We do not stay delivery of possession in respect of any other item in which defendant No. 4 or No. 1, or any other defendant save and except defendant No. 3 is interested.
" The appearances of the parties recorded in this order do not show any appearance having been made in connection with it by defendant No. 4.
It does not appear from the records what other proceedings, if any, were taken in the appeal by the executor defendants but it is agreed that appeal was dismissed on September 8, 1954.
Defendant No. 4 did not vacate at the end of the three months mentioned in the order of January 21, 1949.
The parties then took proceedings in Criminal Courts under section 144 of the Code of Criminal Procedure and other connected provisions.
It is not necessary to refer to these proceedings and it is enough to state that they did not affect the possession of premises No. 27 by defendant No. 4, who continued in possession till the United Bank of India Ltd. took over possession as hereinafter stated.
On September 8, 1949, the following order was made by the learned Subordinate Judge in the execution case: " Decree holder takes no other steps.
Possession so far as regards the Bengal Breweries are concerned, delivered.
Ordered that the execution case be dismissed on part satisfaction.
" On September 27, 1951, the decree holders made a 687 fresh application for execution against defendant No. 4 alone by evicting it from premises No. 27.
Defend ant No. 4 put in an objection against the execution under section 47 of the Code alleging that so far as it was concerned, the decree had been fully executed as a result of the earlier execution proceedings which terminated by the order of September 8, 1949, and that further execution was not permissible in law.
It is out of this objection that the present appeal has arisen and the question for decision is whether the objection to the execution so raised, is sound.
As earlier stated, the learned Subordinate Judge dismissed the objection to the execution but on appeal the High Court set aside his order and dismissed the petition for execution.
The High Court granted a certificate for an appeal to this Court on June 15, 1956 and on August 3, 1956, the High Court passed an order directing that the appeal be admitted.
On August 11, 1960, an order was made by this Court adding three persons named Mool Chand Sethia, Tola Ram Sethia and Hulas Chand Bothra as parties respondents to this appeal.
The order however provided that the appellants decree holders would have a right to object to the locus standi of these persons in the appeal.
At the hearing before us only these added parties appeared to contest the appeal The appellants have raised a preliminary objection that the added parties have no locus standi and cannot be heard in the appeal.
It appears that defendant No. 4 had executed three successive mortgages of premises No. 27 with all structures and appurtenances, to a bank called the Coming Banking Corporation Ltd. The first of these mortgages had been executed on May 25, 1944, and the other two mortgages had been executed after the suit in ejectment had been filed but before that suit had been decreed.
The assets of the Coming Banking Corporation Ltd. became subsequently vested in the United Bank Limited.
Some time in 1953, the United Bank filed a suit for enforcement of the mortgages.
On May 30, 1955, a final mortgage decree was passed 88 688 in favour of the United Bank.
On July 20, 1956, the mortgaged properties were put up to auction and purchased by the United Bank.
On March 1, 1958, the mortgage sale was confirmed and subsequently the United Bank was put in possession of premises No. 27.
On July 13,1960, the United Bank Conveyed premises No. 27 along with all structures and appurtenances and all its right, title and interest therein to these added respondents.
It is by virtue of this conveyance that the added respondents obtained the order from this Court dated August 11, 1960, making them parties to the appeal.
Defendant No. 4, the Bengal Breweries Ltd., is now in liquidation and it has not entered appearance to this appeal nor taken any steps to defend it.
It appears to us that the added respondents were properly brought on ' record.
The decision of this Court in Saila Bala Dassi vs Nirmala Sundari Dassi (1), supports that view.
There it was held that an appeal is a proceeding within the meaning of section 146 of the Code and the right to file an appeal carried with it the right to continue an appeal which had been filed by the person under whom the appellant claimed and on this basis a purchaser from the appellant under a purchase made prior to the appeal was ' brought on the record of the appeal.
We think that on the same principle the added respondents in the case before us were properly brought on the record.
It is not in dispute that if the decree was once executed against defendant No. 4 in full, then it cannot be executed over again regarding premises No. 27.
In other words, if possession had been fully delivered to the decree holders in.
execution of the decree on October 1, 1948, the decree must have been wholly satisfied and nothing remains of it for enforcement by further execution.
The decree was for khas possession and under Or. 21, r. 35, of this Code in execution of it possession of the property concerned had to be delivered to the decree holders, if necessary, by remov ing any person bound by the decree who refused to vacate the property.
The records of the proceedings (1) ; 689 show that such possession was delivered.
Defendant No. 4 was the party in possession and bound by the decree.
With regard to defendant No. 4, the order made on September 8, 1949, states, " Possession so far as regards the Bengal Breweries are concerned, delivered.
" This is an order binding on the decree holders.
It has not been said that this order was wrong nor any attempt made at any time to have it set aside or to challenge its correctness in any manner.
The same is the position with regard to the order of November 22, 1948, recording on the Nazir 's return that possession had been delivered in terms of the writ.
The order of September 9, 1949, no doubt further ' states, " Ordered that the execution case be dismissed on part satisfaction ".
The words " part satisfaction " in this order, however clearly do not refer to part satisfaction as against defendant No. 4, the Bengal Breweries, for the order expressly states, " possession so far as regards the Bengal Breweries are concerned, delivered.
" The decree had therefore been satisfied in full as against the Bengal Breweries Ltd. and consequently as regards premises No. 27 in its possession.
Even the learned Subordinate Judge who held the execution maintainable found that " the decree holders had no doubt previously got possession ".
Notwith standing this, the learned Subordinate Judge decided that the decree could still be executed as he took the view that at the hearing before the High Court on January 21, 1949, defendant No. 4 " must have ignored the delivery of possession by the Naib Nazir and he cannot now be heard to say that the delivery of possession by the Naib Nazir was legal and valid ".
For reasons to be stated later, we are unable to agree with this view.
It is true that the Nazir 's return showed that defendant No. 4 had not been bodily removed.
But the same return also shows that it had not been so removed because of certain arrangement arrived at between it and the decree holders and as the decree holders had not required the removal of defendant No. 4 from the premises.
Now under Or. 21, r. 35 a person in possession and bound by the decree has to be removed 690 only if necessary, that is to say, if necessary to give the decree holder the possession he is entitled to and asks for.
It would not be necessary to remove the person in possession if the decree holder does not want such removal.
It is open to the ' decree holder to accept delivery of possession under that rule without actual removal of the person in possession.
If he does that, then lie cannot later say that he has not been given that possession to which he was entitled under the law.
This is what happened in this case.
The decree holders in the present case, of their own accept ed delivery of possession with defendant No. 4 remaining on the premises with their permission.
They granted a receipt acknowledging full delivery of possession.
They permitted the execution case to be dismissed on September 8, 1949, on the basis that full possession had been delivered to them by defendant No. 4.
The fact that they put their guards on the premises as mentioned in the Nazir 's return would also show that they had obtained full possession.
It was open to the decree holders to accept such possession.
Having once done so, they are bound to the position that the decree has been fully executed, from which it follows that it cannot be executed any more.
In the case of Maharaja Jagadish Nath Roy vs Nafar Chandra Parmanik (1) an exactly similar thing bad happened and it was held that the decree was not capable of further execution.
It was there said at p. 15, " The case, therefore, seems to me to be one of those cases in which a decree holder having armed himself with a decree for khas possession executes that decree in the first instance by obtaining symbolical possession only with some ulterior object of his own, and thereafter subsequently and as a second instalment asks for khas possession.
The question is whether such a course is permissible under the law.
I am of opinion that it is not ".
We entirely agree with the view that was there expressed.
The learned Solicitor General appearing for the appellants contended that the order of September 30, (1) 691 1948, shows that the decree holders bad undertaken to allow defendant No. 4 to carry on normal business for six weeks and therefore, on October 1, 1948, when they proceeded to execute the decree, they were not seeking to execute it in full by removing defendant No. 4 from possession.
He said that the execution on October 1, 1948, was therefore not complete as defendant No. 4 had not been removed pursuant to the undertaking given on September 29, 1948.
We are unable to read the order made on September 8, 1949, or the Nazir 's return and the receipt granted by the decree holders in a manner contrary to the plain meaning of the words used in them, because of the undertaking.
Further, it is not the case of the decree holders that order, the Nazir 's return or the receipt is incorrect or had come into existence through any misapprehension.
The legality or correctness of none of these was ever nor is now challenged.
The order of September 8, 1949, is binding on the decree holders and they cannot now go behind its terms.
For the same reason, neither can they go behind the order of November 22, 1948, recording in terms of the Nazir 's return that possession had been delivered.
It further seems to us that if the undertaking meant that defendant No. 4, was not to be removed from possession, then the execution would have been stayed, which it was not, for the only way in which it was possible to execute the decree was by removal of defendant No. 4 from possession as it was alone in actual possession, the executor defendants claiming only rent from it as landlord.
Then again the order in which the undertaking appears, also states that the stay of execution against defendant No. 4 as asked by it, was refused.
Besides this, the order sheet shows that immediately after the order stating the undertaking had been made another order was made on the same day acknowledging receipt from the decree holders of the costs of the police for helping the execution and directing that the police might be approached to render any help necessary on October 1, 1948, at the time of the execution of the decree.
The only possible way to reconcile all the various orders, the return 692 and the receipt, is to proceed on the basis that by the undertaking the decree holders agreed that after they had taken possession, they would allow defendant No. 4 to continue its business on the premises for six weeks with their permission.
Such undertaking does not show that it was not intended to remove defendant No. 4 from possession.
The learned Solicitor General also contended that the fact that the undertaking was confined only to a period of six wee s would show that the decree holders were not permitting defendant No. 4 to continue in possession after they had obtained possession from it, for then no period would have been mentioned.
We are unable to accept this argument for there is nothing to prevent the decree holders after they had obtained possession under the decree, to grant permission to defendant No. 4 to continue in possession for any period they.
liked; such permission could be for six weeks or for any longer or shorter period as the decree holders thought fit.
The learned Solicitor General then contended that the case was one where the decree had been partly executed on one day and execution had been stopped on that day for want of time or other reason, with the object of continuing it on a subsequent day.
In such a case, he said, there would be nothing to prevent subsequent execution of the same decree.
It does not seem to us that the present case is of this nature.
The orders and documents on the record are against this view.
The further execution is not in the course of the earlier execution but is a fresh execution.
The interruption in the execution was for over two years.
Apart from other things, the placing of their own guards on the premises by the decree holders could only be on the basis that they had taken possession.
The learned Solicitor General said that the guards had been put there with the permission of defendant No. 4.
The Nazir 's return is entirely against such a view.
Indeed, it is difficult to see why defendant No. 4 would permit the decree holders ' guards on the premises unless it was on the basis that possession had been taken by the decree holders and the guards 693 were there to protect their possession.
The guards were subsequently removed but it does not appear, from the records.
in what circumstances they were ' removed.
Nor do we think that the order of October 1, 1948, assists the decree holders.
That order directed the writ to be recalled provisionally.
The order was wholly infructuous for the writ had earlier been duly executed.
The learned Subordinate Judge himself came to that finding.
as we have said, is also clear from the records of the execution case.
The writ could not be recalled after it had been 'executed fully.
Nor does the order establish that the decree had been executed in part only.
The writ was not in fact recalled before the decree had been executed in full.
The order of September 8, 1949, makes it impossible to hold that the writ was recalled after it had been executed in part only.
The other argument advanced by the learned Solicitor General was based on the order of the High Court dated January 21, 1949.
It was said that order indicated that the decree had not been executed by removing defendant No. 4 from possession because it, in substance, was an order for a stay of execution of the decree.
It was also said that the order must have been on the basis of a representation by defendant No. 4 and a finding that the decree had not been executed by removing defendant No. 4 from possession.
The contention was that finding and representation was binding on defendant No. 4 and therefore on the added respondents and further that having obtained the order on the basis that it had not been ousted from possession in execution, defendant No. 4 and hence the added respondents, could not be permitted to approbate and reprobate that position and now be heard to say that the decree had been executed in full.
We think that both these contentions are ill founded.
The order is far from clear.
We have already pointed out that there is nothing in it to show that defendant No. 4 had asked for any stay.
Defendant No. 4 had not appealed from the decree.
It was not 694 entitled to a stay of the execution of the decree.
It was in possession of the premises with the permission of the decree holders.
The permission had initially been for six weeks which period had expire was executor defendants who had obtained an ad interim stay from the High Court on October 1, 1948.
This order was infructuous because forty five minutes prior to the time that it was made, the decree had been executed in full.
In those circumstances the Court on January 21, 1949, may be at the request of defendant No. 4, gave it three months ' time to vacate the premises.
The request, if any, by defendant No. 4 does not involve a representation that the decree had not been executed in full.
It may, at most, mean that the six weeks ' permission initially granted by the decreeholders might be further extended.
With regard.
to the other contention, namely, that the order of January 21, 1949, amounted to a finding that the decree had not been executed in full, we have to point out that no such finding appears on the face of it.
The order was made on an interlocutory proceeding and was only in aid of the final decision in the appeal.
The proceeding in which the order was made did not involve a decision of the issue whether the decree had earlier been executed in full.
No finding on such an issue can therefore be implied in the order.
This order does not in our view in any way prevent the added respondents from contending that the decree had been executed in full.
In the result this appeal fails and it is dismissed.
We do not think it fit to make any order as to costs.
Appeal dismissed.
[/INST]On November 15, 1954, the Registrar wrote to the company of which the appellant was the Managing Agent under section 137, Indian Companies Act, 1913, that it had been represented to him that the business of the company was carried on in fraud and called upon it to furnish certain information.
On April 15, 1955, the Registrar made a report to the Central Government under section 137(5) to the effect that in his opinion the affairs of the company were carried on in fraud of contributories and they disclosed an unsatisfactory state of affairs and that a case had been made out for an investigation under section 138.
Thereupon, the Central Government, on November 1, 1955, appointed an Inspector to investigate the affairs of the company and to report thereon.
The Inspector was authorised under section 140 to examine any person on oath, and he wrote to the appellant that he would examine him on oath in relation to the business of the company.
On April 1, 1956, the Indian Companies Act, 1913, was repealed by the Indian , which conferred wider and more drastic powers of investigation.
On July 26, 1956, the Central Government accorded approval under section 239(2) of the new Act to the Inspector exercising his powers of investigating into and reporting on the affairs of the company.
In May 1957 the Inspector served notices upon the appellant calling upon him to attend his office on the date and the time specified for the purpose of being examined on oath and to produce certain account books and papers relating to the company.
The appellant challenged the investigation and contended : (i) that since the Inspector was appointed under the old Act he had no jurisdiction to exercise the powers referable to the provisions of the new Act, (ii) that section 240 of the new Act which provided for the production of documents and, evidence at such investigations offended article 20(3) of the Constitution, and (iii) that section 239 of the new Act which conferred powers on inspectors for investigation and section 240 offended article 14 of the Constitution.
418 Held, that the Inspector appointed under section 138(4) of the old Act must be deemed to have been appointed under section 235 of the new Act and had authority and power to issue notices under section 240 of the new Act.
Section 645 of the new Act provided that the appointment of an Inspector under the old Act shall, on repeal of the old Act and on coming into force of the new Act, have effect as if it was made under the new Act.
Section 646 which provided that nothing in the new Act shall affect the operation of section T38 of the old Act as respects inspectors was not an exception or proviso to section 645 and the two sections being saving sections had to be read as independent of and in addition to, and not as exceptions to, each other.
Held, further that section 240 of Indian , did not offend article 20(3) of the Constitution.
For invoking the constitutional right against testimonial compulsion guaranteed under article 20(3) there must be at the relevant stage a formal accusation against the party pleading the guarantee relating to the commission of an offence which may result in a prosecution.
The enquiry undertaken under section 240 by the Inspector was in substance an enquiry into the affairs of the company; at this stage there was no accusation, formal or otherwise, against any specified individual.
The mere fact that a prosecution may ultimately be launched against the alleged offenders would not retrospectively change the complexion or character of the proceedings held by the Inspector when he makes the investigation.
Maqbool Hussain vs The State of Bombay, ; , section A. Venkataraman vs The Union of India, [1954] S.C.R. 1150, M. P. Sharma vs Satish Chandra, District Magistrate, Delhi, ; , Thomas Dana vs State of Punjab, [1959] Supp. 1 S.C.R. 274 and Mohammed Dastagir vs The State of Madras, ; , relied on.
Held, further that SS. 239 and 240 of the Indian , did not violate article 14 of the Constitution.
These sections denied the company and persons in charge of the management of such companies the ordinary protection afforded to witnesses under section 132 of the Evidence Act and under section 161(1) and (2) of the Criminal Procedure Code.
As they were entrusted with the financial interests of a large number of citizens it was legitimate to treat such companies and their managers as a class by themselves and to provide for necessary safeguards and checks against abuse of power by the managers.
The basis of the classification is founded on an intelligible differentia which has a rational relation to the object sought to be achieved.
Shri Ram Krishna Dalmia vs justice Tendolkar, [1959] S.C.R. 297, applied.
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<s>[INST] Summarize the judgementmpt Petition No. 159 of 1992.
IN Special Leave Petition (C) No. 12709 of 1991.
From the Judgment and Order dated 26.4.1991 of the Calcutta High Court in Appeal No. 232 of 1990.
M.L. Verma, R. Mukhejee, J. Gupta and M.L. Chibber for the Petitioners.
Ranjan Dutta, Mrs. N. Dutta, Mrs. Mridula Ray and M.N. Shroff for the Respondents.
The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J.
In a suit for specific performance certain interlocutory orders were passed by a Single Judge of the Calcutta High Court.
On appeal a Division Bench of the said Court modified the said orders.
A number of special leave petitions were filed in this Court against the orders of the Division Bench.
Though the petitioners in these special leave petitions are different, the contesting respondents in all these cases are common, namely Russel Estate Corporation and its managing partner Sri Hari Narayan Bhan.
For the purpose of this petition, it is enough to mention that each of the petitioners in these S.L.Ps. is claiming to be entitled to allotment of one or more of the flats being constructed by the respondents at Calcutta.
Their complaint has been that ignoring the agreements in their favour, the 753 respondents have been allotting the constructed flats in favour of third parties thereby seeking to defeat their rights.
On 1.8.1991 a Bench of this Court comprising section Ranganathan, M. Fathima Beevi and N.D. Ojha, JJ. passed the following order in I.A. No.2 of 1991 after hearing the respondents.
"Counsel accepts notice.
in the meantime, till this Special Leave Petition is disposed of, respondents 1 & 2 should not make any further allotment of any other flats in the building in dispute, with effect from today.
Counsel for the petitioner contends that the allotment of the flat, originally allotted to him, to some other person violates an oral order of a Division Bench of the High Court.
It will be open to the petitioner to move the High Court for appropriate relief in this regard if so advised." This Contempt Petition is filed complaining that the respondents have allotted certain flats in favour of third parties in violation of the said order.
So far as the petitioners in this Contempt Petition (Major) Genl.
B.M. Bhattacharjee and Smt.
section Laha) are concerned, they claim to be interested in the flats on the 8th floor of the said building.
At any rate the complaint in this Contempt Petition pertains to the said two flats.
The petitioners say that the said flats have been allotted to the third parties in the month of January, 1992.
They rely upon the report of a group of investigators (National Bureau of Investigation) in support of the said plea.
Notice was issued to the respondents.
In their counter (filed by Shri Hari Narayan Bhan) it is stated that the two floors on the 8th floor (described as east and west flats) were allotted on 26th April, 1991 itself i.e., long prior to the order of this Court dated 1.8.1991.
It is denied that the allotment of said flats took place in the month of January, 1992.
The correctness of the Report of the National Bureau of Investigation is disputed.
It is, however, conceded that the possession of the said flats was handed over to the said third parties on 17th August, 1991 which is admittedly a date subsequent to the date on which this Court passed the aforesaid restraint order.
It is also not disputed by them that the registered sale deeds in respect of said flats in favour of the said third parties were 754 also executed in March, 1992.
The report of the Receiver (Smt.
Pratibha Bonnerjea, a retired Judge of the Calcutta High Court who was appointed as such by an order of this Court dated 7.1.1992) also supports the petitioners ' allegations.
The relevant portion of the Report reads as follows: "Present condition of these two flats in the floor.
The western apartment in the 8th floor is occupied by one Mr. & Mrs.
Kamal Thavrani, Ms. Thavrani said that they are in occupation of the flat from December, 1991.
Mr. K.K. Thavrani said that he had taken both the eastern and western apartments in the 8th floor.
He produced a copy of the agreement executed on 26.4.91 on a stamp paper purchased on 26.4.91 by M/s. Russel Estate Corporation.
The agreement relates to both the flats on the 8th floor for a total consideration of Rs. 13,40,000.
It is stated that the occupiers have taken possession in December, 1991.
Mr. Thavrani submits that the conveyance have been registered in March, 1992 but he is unable to produce the registered conveyance as the same is still lying with the Registrar.
We found eastern flat was not complete.
Wooden work was going on.
Photos Nos.
3 to 5 are attached to this effect.
" At the bearing of this Contempt Petition the respondents ' counsel took the stand that the delivery of possession on 17.8.1991 and the execution of the registered sale deed in March, 1992 do not constitute violation of the Order dated 1.8.1991.
His submission is that this Court merely restrained the allotment of flats.
Allotment, according to the learned Counsel, means entering into the agreement of sale.
Inasmuch as the agreement of sale with respect to the said two.
flats on the 8th floor was entered into long prior to the said Order of this Court, it is submitted, there is no disobedience to the order of this Court.
it is submitted that delivery of possession and the registration of the sale deed(s) is in pursuance of the aforesaid agreement of sale and not in pursuance of any agreement of We entered into on or after 1.8.1991.
The counsel further submitted that even on the date when the aforesaid order was passed on 1.8.1991, the second respondent had represented to this Court that agreement of sale in respect 755 of all the flats have already been entered into.
In this view, it is submitted, there has been no misrepresentation or suppression of relevant facts on their part.
We may mention that when we indicated our disagreement with the above stand during the course of hearing, the counsel for the respondents, Shri Dutta took time till 14th of January, 1993 to file a further affidavit/additional counter and/or documents in continuation of the counter already filed.
The second respondent has accordingly filed a further affidavit on 14.1.1993.
The counsel for the petitioners ' disputes the correctness, genuineness and validity of the agreement, allegedly entered into on 26.4.1991 in respect of said flats.
According to him, it is a fabricated document.
He points out that the stamp paper for the said agreement of sale was purchased by the Russel Estate Corporation and not by the purchaser of the flats.
It is also pointed out that the agreement is not a registered one and that it could have been fabricated at any time putting a back date.
It is not necessary for us to pronounce upon the disputed question whether the agreement dated 26.4.1991 relating to the said two flats on the 8th floor is true and genuine.
Assuming that the said agreement is true, we are yet of the opinion that the respondents have committed gross contempt of this Court by their brazen violation of the order dated 18 1991.
By the said order this Court directed the respondents 1 and 2 not to make "any further allotment of any other flats in the building in dispute with effect from today. ' Now what does the word "allotment" mean in the context.
In our opinion, the said word must be understood reasonably and having regard to the context.
The first respondent is not like a Government Department or Public Corporation where an allotment order or allotment letter is issued from the office in pursuance of which other steps are taken.
The first respondent is a proprietary concern, according to the petitioners, whereas according to the respondents it is a partnership concern.
In either event, there is no such thing as "allotment" in its case.
Even now, it is not their case that they have issued any orders or letters of allotment.
According to them, there was first an agreement of sale, then delivery of possession and finally a registered sale deed.
We are of the opinion that in the context and circumstances, the word "allotment" in the said order means making over of the flats.
In other words, it means delivery of possession 756 and registration of the sale deeds.
An agreement of sale, that too unregistered, has no significance in the context, difficult as it is to verify its truth and correctness.
This court could not be presumed to have interdicted such an uncertain thing.
It must be remember that even according to the respondents they had represented to this Court, at the time the said order was passed, that they have already entered into agreements of sale in respect of the flats and yet this Court chose to pass the said order.
In the circumstances, it cannot mean anything else than delivery of possession of flats and their sale.
It may also mean an agreement of sale but its meaning is certainly not confined to an agreement of sale.
To say so, as do the respondent, is to rob the order of any meaning or content.
Mr. Dutta, the learned counsel for the respondents contended that the second respondent understood the allotment in a particular manner and that the said misunderstanding, if any, was bona fide.
We are not prepared to agree.
Firstly, there could not have been any doubt in the mind of Respondent with respect to the meaning of the order.
Secondly, assuming that he had any doubt regarding its meaning, the least he could have done was to ask for a clarification of the said Order.
He could well have represented that he had already entered into an agreement of sale on 26.4.1991 in restpect of these flats and that he may be permitted to deliver possession and/or execute sale deeds in respect of said flats in favour of third parties.
He did nothing of the sort.
Having placed a highly restrictive and unwarranted interpretation upon the order of this Court, he went ahead and not only delivered possession of the flats to third parties subsequent to the said order but also registered sale deeds in their favour.
He thus rendered the said order nugatory.
It was not open to the respondents to place a convenient interpretation upon the order and proceed to act upon it, thereby totally nullifying the order of this Court.
In this context, we ought to refer to the conduct of the second respondent as disclosed from the order of this Court dated August 7, 1992 to which one of us (B.P. Jeevan Reddy, J.) was a party.
The first two paragraphs of the said order may be quoted in rull.
"In these special leave petitions notice was duly served on the respondents and the matters came up for hearing initially before a Bench of this Court comprising of Ranganathan J., Fathima Beevi J. and Ojha J. on 31.7.91 and 757 1.8.91when the parties were heard and certain interim orders were passed.
Thereafter it was listed before a Bench of this Court (of which Ranganathan J. and V. Ramaswami J. were members) on a number of occasions at which the respondents were represented and no objection was voiced against the hearing of the matters by the said Bench.
However, sometime later an attempt was made on behalf of the respondents to have these matters transferred from this Bench to some other Bench on the allegation that one of the Judges (Ranganathan J.) was biased against the respondents.
This request was made before a Bench presided over by the learned Chief Justice by the second respondent who appeared in person and made the request for the transfer of the case.
The prayer was rejected by the learned Chief Justice on 11.11.1991.
Thereafter the matter was again fisted before a Bench consisting of Ranganathan J., V. Ramaswami J. and Ojha J.
On different occasions without any demur from the parties.
It was then listed before a Bench comprising of Ramaswamy J., Yogeshwar Dayal J. and Mohan J. on 4.3.92.
This Bench directed the cases to be posted before a Bench of which Ranganathan J. is a member.
About this time, an application seems to have been presented to the Registrar that this case should be transferred to some other Bench.
However, the matters came up before us again some time last week when counsel for the respondents agreed that the matters may be listed this week.
The matters were fisted yesterday.
A person claiming to be the son of the second respondent made a request that the matter should not be heard by this Bench.
We rejected this request and made it clear to him that he should make arrangements for the conduct of the case.
The matters did not reach yesterday and when the matters came up today, a letter dated 6.8.92 written by the second respondent to his counsel revoking the counsel 's vakalatnama has been placed before us.
But the respondent No. 2 did not appear before us nor did he make other arrangements for the conduct of the case.
Sri Chatterjee, his advocate on 758 record, appeared but expressed his inability to conduct the case since his client had withdrawn the vakalatnama.
We understand that in one of the matters the respondents are represented by another counsel whose vakalatnama is also seen to have been revoked but she has not appeared or sought permission to withdraw from the case.
In these circumstances we have no other option but to proceed against the respondents ex parte.
We are unable to accede to the respondents request made on a previous occasion by the son of the second respondent for transfer of case to some other Bench.
The circumstances narrated above would show that the respondent has appeared before the Bench on several occasions without protest.
The request made for transfer, after the rejection of the earlier petition by the learned Chief Justice, is belated and is just an attempt by the second respondent to circumvent the order already passed by the Chief Justice rejecting a request for transfer and only because the Constitution of the Bench is not to his liking.
Such a request, we are clear, cannot be countenanced.
" It should be noticed that the said order dated August 7, 1992 was passed not only in the special leave petitions but also in this very Contempt Petition.
The attitude adopted by them before the Receiver (Smt.
Pratibha Bonnerjea retired Judge of Calcutta High Court, appointed by this Court as a Receiver in this case) also discloses the total disregard and disrespect the Respondents have towards the orders of this Court.
The Receiver says: "The next day, by a letter dated 22.8.92, Mr. H.N. Bhan informed me that he would not submit to the order dated 7.8.92 as the Bench was not properly constituted due to the fact that the Hon 'ble Mr. Justice V. Ramaswami was one of the judges and that an application would be moved for recalling the said order.
Thereafter, there was complete non cooperation by M/s. Russel Estate Corporation.
" The conduct of the second respondent as evidenced from the aforesaid material establishes beyond doubt that the second respondent 759 was trying to play with this Court and was consistently flouting its orders.
In the circumstances, the theory of bona fide belief, now put forward before us by his counsel, cannot be accepted.
We may at this stage deal with the further affidavit filed by the second respondent on 14.1.1993.
In para 3 of the affidavit the second respondent has stated that he has the highest regard for this Court, that he has all along complied with the orders passed by this Court and that he never intended to flout or defy the orders of the Court.
He stated further "if in spite of the aforesaid, any order of this Hon 'ble Court has been violated, the same has been so done through mistake, inadvertence and by a misunderstanding of the meaning and purport of that order and surely not intentionally and for which unconditionally apologise for self and on behalf of the Respondent firm and I beg to be excused." Then in paragraphs 4 to 12 he has "without waiving the aforesaid and fully relying thereupon" repeated the contentions which were urged by his counsel before us and which we have dealt with hereinbefore.
He stated that he understood this court 's order dated 1.8.1991 as prohibiting only the entering into of agreements of sale and not delivery of possession or registration of the sale deeds.
All the said contentions we have dealt with hereinbefore.
They need not be reiterated here.
So far as the apology contained in para 3 of the second respondent 's further affidavit is concerned, it may firstly be mentioned that it is not really an unconditional apology though it purports to say so.
While tendering unconditional apology in para 3, the second respondent has tried to defend his action in the subsequent paragraphs.
Secondly, even if we construe paragraph 3 as tendering an unconditional apology, we are not minced to accept the same having regard to the conduct of the respondent which we have adverted to hereinbefore with reference to the order of this court and the report of the Receiver.
Accordingly, we reject the apology tendered in para 3 of the further affidavit.
For the above reasons, we hold the second respondent guilty of Contempt of this Court.
Having regard to the facts and circumstances of this case, we impose a sentence of one month 's imprisonment in addition to a fine of Rs. 2,000 upon the second respondent.
The fine shall be paid into this Court within two weeks from today, in default thereof the second 760 respondent shall undergo a further imprisonment of two weeks.
The second respondent shall also pay the costs of the respondents in this Contempt case which are assessed at Rs. 5,000 within two weeks from today.
In case of failure, the Respondents are free to execute this order as a decree of Court and recover the same from the Respondents.
Mr. H.N. Bhan, who is present in the court, be taken into custody forthwith to undergo the sentence of imprisonment.
G.N. Petition allowed.
[/INST]The petitioners in the writ petition challenged the constitutional validity of chapter III C read with Section 58B(5A) of the introduced by the Banking Laws (Amendment) Act, 1983.
Along with the writ petition were had several civil appeals, where the appellants had unsuccessfully challenged the aforesaid provisions as violative of Articles 14 and 19 of the Constitution, in the High Court of Delhi, which upheld their validity, and granted a certificate to appeal to this Court vide Kanta Mehta vs Union of India, The newly incorporated Section 45S of the provided that no individual or firm or an unincorporated association of individuals shall, at any time, have deposits from more than the number of depositors specified against each in the table mentioned therein.
It was further provided that where at the commencement of the Act, the deposits held were not in accordance thereof,a period of two years was prescribed for bringing down the number of depositors within the relative limits specified in the Act, and contravention thereof was rendered penal. 'These provisions were brought into force on February 15, 1984.
On behalf of the petitioners it was submitted that Section 45B was 833 violative of the fundamental rights under Article 19(1) kg) of the Constitution as it restricts the number of depositors and the rate of interest under Section 4(2)(iii) of the Kerala Moneylenders Act, 1958, that the two year period prescribed under Section 42 is unreasonable, and that under the Kerala Act with effect from 15110185 only 149% interest alone could be charged.
It was further submitted that while receiving deposits it was not an offence and making it a criminal liability and directing payment, would amount to ex postfacto law offending Article 20(1) of the Constitution.
The writ petition and appeals were contested by submitting on behalf of the Reserve Bank of India that it was open to the Government to regulate economic activities, and that while examining the validity of such provisions courts a laws have regard to the wisdom of the Legislature as it alone has the necessary information and expertise pointing to the needs for such a legislation.
Attention was also drawn to the provisions of the Non Banking Financial Companies (Reserve Bank) Directions of 1966 which came into force on January 1, 1969 which specifically provided that deposits shall be reduced to 25% of the paid up capital for which a two years period was prescribed and that similar directions knows as Non Banking Financial Companies Reserve Bank Directions, 1977 came to be issued with effect from 1st of July, 1977, Dismissing the writ petition and the appeals, this Court, HELD: 1.
The impugned legislation no doubt places restrictions on the right of the appellants to carry on business, but what is essential is to safeguard the rights of various depositors and to see that they are not preyed upon.
[844G] 2.
The Reserve Bank of India, right from 1966, has been monitoring and following the functioning of non banking financial institutions which invite deposits and utilise those deposits either for trade or for other various industries.
A ceiling for acceptance of deposits and to requires maintenance of certain liquidity of funds as well as not to exceed borrowings beyond a particular percentage of the net owned funds have been provided in the corporate sector.
But for these requirements, the depositors would be left high and dry without any remedy.
[844H, 845A] 3.
Even the corporate sector was not free from blame.
It had done damage to the economy and brought ruination to small depositors.
Ex 834 perience had shown that In many cases deposits taken by the companies had not been refunded on the due dates, either the companies had gone in liquidation or funds are depleted to such an extent that the companies were not in a position to refund the deposits.
It was accordingly considered necessary to control the activities of the companies when accepting deposits from the 'the public".
That was why Section 58A in the Companies Act of 1956 came to be introduced.
[845B, C D] 4.
The danger of allowing deposits to be accepted without regulation is so acute and urgent, that to bind the hands of the Legislature that only one course alone is permissible and not to permit a play of joints would be to totally make it ineffective in meeting the challenge of the social evil.
The mechanics of any economic legislation has necessarily to be left to the judgment of the executive and unless it is patent that there is hostile discrimination against a class, the processual basis has to be accepted 5.
May be, Kerala Moneylenders Act restricts the rates of Interest under Section 4(2)(iii) but that cannot enable the writ petitioners to disregard these provisions introduced by the Banking laws (Amendment) Act 1983 being the non banking financial institutions.
[846D] 6.
Section 45 (1) (bb) of the Reserve Bank Act defines 'deposit.
If there are enough sources of deposit there is no reason why the appellants and the writ petitioners cannot reduce the deposits.
The prescription of the two year period for reduction is therefore reasonable.
[847D] 7.
Moreover, similar directions cam to be issued as Miscellaneous Non Banking Companies (Reserve Bank) Directions.
If, therefore, this was the position, it cannot be contended that suddenly the companies like the appellants and the writ petitioners are called upon the reduce deposits.
Even otherwise, the interests of the depositors is the prime concern.
[847G, 849B] Kanta Mehta vs Union of India and others, Company Cases Vol.
62 1987 page 769, approved.
Chiney Bottling Co. Pw. Ltd. vs Assistant Registrar of Companies, Madras, page 770, disapproved.
DCM Ltd. vs U. O.I., ; ; Srinivasa Enterpries vs Union 835 of India; , ; State of West Bengal vs Swapan Kumar Guha ; ; R.K Garg vs Union of India ; and Fatehchand Himmatlal and others vs State of Maharashtra ; , referred to, Reserve Bank of India vs Peerless General Finance and Investment Co. Ltd, ; ; Peerless General Finance and Investment Co. Ltd vs Reserve Bank of India, @ 354; Delhi Cloth and General Mills vs Union of India; , at page 468 and Reserve Bank of India vs Timex Finance and Investment Co. Ltd., at page 354, referred to.
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<s>[INST] Summarize the judgement: Civil Appeals Nos. 14 and 15 of 1955.
Appeals by special leave from the decision dated September 30, 1953, of the Labour Appellate Tribunal of India, Lucknow in Civil Appeals Nos.
111 198 of 1953 and III 321 of 1953.
section section Dhawan, G. C. Mathur and C. P. Lal, for the appellants and respondent No. 2 (Unions) in both the Appeals.
H. N. Sanyal, Additional Solicitor General of India, and section P. Varma, for the respondent No. I in C. A. No. 14 of 1955.
N. C. Chatterjee and Radhey Lal Aggarwala, for the respondent No. 1 in C. A. 15 of 55.
November 20.
The following Judgment of the Court was delivered by IMAM J.
These two appeals by special leave have been heard together as they arise out of a single judgment of the Labour Appellate Tribunal of India, Lucknow, dated September 30, 1953, passed in seven appeals before it.
As the question for consideration in the appeals before this Court is the same, this judgment will govern both the appeals before us.
Civil Appeal Nos.
14 and 15 of 1955 arise out of Appeal Nos. 111 198 of 1953 and 111 321 of 1953 respectively before the Labour Appellate Tribunal.
The question for consideration before the Labour Appellate Tribunal was whether the awards from which the seven appeals had been filed before that Tribunal were valid in law and made with jurisdiction.
It is this very question which arises in the appeals before us.
Before dealing with the question raised in these appeals it is necessary to state certain facts.
On March 15, 1951, the Governor of Uttar Pradesh made a, General Order consisting of numerous clauses under 974 powers conferred on him by cls.
(b), (c), (d) and (g) of section 3 and section 8 of the Uttar Pradesh (Act XXVIII of 1947), hereinafter referred to as the Act, in supersession of the general Order No. 781 (L)/XVIII dated March 10, 1948.
The Order of March 15, 1951, was numbered 615 (LL)/ XVIII 7 (LL) of 1951, hereinafter referred to as Order No. 615.
Under cl. 16 of Order No. 615, the decision of the Tribunal or Adjudicator was to be pronounced within 40 days, excluding holidays but not annual vacations observed by courts subordinate to the High Court, from the date of reference made to it by the State Government concerning any industrial dispute.
The proviso to it authorised the State Government to extend the period for the submission of the award from time to time.
On February 18, 1953, this clause was amended and the time of 40 days was altered to 180 days.
On December 17, 1952, the judgment of this Court in the case of Strawboard Manufacturing Co., Ltd. vs Gutta Mill Workers ' Union (1), was pronounced.
In consequence of this decision the Act was amended by the Uttar Pradesh Industrial Disputes (Amendment) Ordinance, 1953 (Ordinance No 1 of 1953), hereinafter referred to as the Ordinance, promulgated by the Governor of Uttar Pradesh.
The Ordinance came into force on May 22, 1953.
By the provisions of section 2 of the Ordinance section 6 A was introduced into the Act.
Section 2 of the Ordinance states "After section 6 of the U. P. (hereinafter referred to as the Principal Act), the following shall and be deemed always to have been added as section 6 A "6 A. Enlargement of time for submission of awards.
Where any period is specified in any order made under or in pursuance of this Act referring any industrial dispute for adjudication within which the award shall be made, declared or submitted, it shall be competent for the State Government, from time to time, to enlarge such period even though the period originally fixed or enlarged may have expired." (1)[1953] section C. R. 439.
975 Section 3 of the Ordinance states : "Removal of doubts and validation For the removal of doubts it is hereby declared that : (1)any order of enlargement referred to in section 6A made prior to the commencement of this Ordinance under the Principal Act or any order passed thereunder which would have been validly and properly made under the Principal Act if section 6 A had been part of the Act shall be deemed to be and to have been validly and properly made thereunder; (2)no award whether delivered before or after the commencement of this Ordinance in any industrial dispute referred prior to the said commencement for adjudication under the Principal Act shall be invalid oil the ground merely that the period originally specified or any enlargement thereof had already expired at the date of the mkaing, declaring or submitting of the award and any action or proceeding taken, direction issued or jurisdiction exercised in pursuance of or upon such award be good and valid in law as if section 6 A had been in force at all material dates; (3)every proceeding pending at the commencement of this Ordinance before any court or tribunal against an award shall be decided as if the provisions of section 6 A bad been in force at all material dates.
" The following chart will show the date of reference, the date on which the period of 40 days expired, the dates and the periods of enlargement, the date of submission of the award and the date of filing of the appeal, in the seven appeals before the Labour Appollate Tribunal: 124 976 Date on which 40 Appeal No. Date of days, available for Date & Period reference the initial sub of enlargement mission of the if any award expired * $ 111 186/53 13 2 1953 3 4 1953 Nil 6 4 1953 5 5 1953 111 187/53 28 1 1953 18 3 1953 Nil 13 4 1953 5 5 1953 111 321/53 28 1 1953 18 3 1953 Nil 26 6 1953 18 7 1953 111 183/53 28 1 1953 18 3 1953 Nil 13 4 1953 4 5 1953 111 323/53 9 2 1953 29 3 1953 Nil 22 6 1953 20 7 1953 111 209/53 15 1 1953 5 3 1953 13 3 1953 9 4 1953 8 5 1953 (up to 31 3 1953) 17 4 1953 111 198/53 19 8 1952 10 10 1953 (i) 4 11 1952 13 5 1953 up to 11 11 1952 (ii) 26 12 1952) (up to 31 12 1952) (iii) 13 1 1953 (up to 31 1 1953) (iv) 11 2 1953 (up to 10 3 1953) *) Date of submission of the award.
$) Date of filing of the appeal.
125 977 The Labour Appellate Tribunal found that the award in appeal No. 111 198 of 1953 was made not only on the expiry of the period of enlargement but also long after the expiry of 180 days from the date of reference.
In the case of the other appeals the awards were made on the expiry of 40 days but within 180 days of the reference.
Appeals Nos. 111 321 and 323 of 1953 were filed after the commencement of the Ordinance and the others before its commencement.
In the case of the Swadeshi Cotton Mills Co., Ltd. (Civil Appeal No. 14 of 1955), the Governor by an order dated August 19, 1952, referred the dispute between the said Mills and its workmen to the Additional Regional Conciliation Officer, Kanpur for adjudication, on the issue stated therein, in accordance with the provisions of Order No. 615.
In the case of Kamlapat Motilal Sugar Mills (Civil Appeal No. 15 of 1955), the Governor by his order dated January 28, 1953, referred the dispute between the said Mills and its workmen, on the issue mentioned therein, to the Regional Conciliation Officer, Lucknow for adjudication in accordance with the provisions of Order No. 615.
In both these orders of reference no date was specified within which the Regional Conciliation Officers of Kanpur and Lucknow were to submit their awards.
All that was stated in these orders was that they shall adjudicate the dispute in accordance with the provisions of Order No. 615.
It is only by reference to cl. 16 of Order No. 615 that it is possible to say that the decisions of these Conciliation Officers were to be pronounced within the time specified in the Orders of reference and that would be 40 days from the date of reference.
In the case of the Swadeshi Cotton Mills, there were several periods of enlargement of time but in the case, of the Kamlapat Motilal Sugar Mills there was no enlargement of time, as will appear from the above mentioned chart.
Under section 3 of the Act the State Government, for the purposes mentioned therein, could, by general or special order, make provisions for appointing Industrial Courts and for referring any industrial dispute for conciliation or adjudication in the manner provided 978 in the order.
Order No. 615 was a general order made by virtue of these provisions.
Clause 10 of that Order authorized the State Government to refer any dispute to the Industrial Tribunal or if the State Government, considering the nature of the dispute or the convenience of the party, so decided, to any other person specified in that behalf for adjudication.
Clause 16 specified the time within which the decision of the Tribunal or the Adjudicator had to be pronounced, provided the State Government could extend the period from time to time.
Section 6(1) of the Act specifically stated that when an authority to which an industrial dispute had been referred for award or adjudication had completed its enquiry, it should, within such time as may be specified, submit its award to the State Government.
It would appear therefore, that the Act required the submission of the award to be made within a specified time, which time, in the absence of a special order of reference of an industrial dispute for conciliation or adjudication under section 3 of the Act, would be determined by the provisions of a general order made by the Government in that behalf.
An order of reference of an industrial dispute for adjudication without specifying the time within which the award had to be submitted would be an invalid order of reference.
In fact, the orders of reference in the cases under appeal specified no time within which the award had to be submitted.
All that they directed was that the dispute shall be adjudicated in accordance with the provisions of Order No. 615.
If these orders of reference are read along with cl. 16 of Order No. 615, then it must be deemed that they specified the time within which the award had to be submitted as 40 days from the dates of reference.
The proviso to cl. 16 of Order No. 615 empowering the State Government to extend the period from time to time within which the award had to be submitted was found to be an invalid provision, having regard to section 6(1) of the Act, by this Court in the case of Strawboard Manufacturing Co. Ltd. vs Gutta Mill Workers ' Union (1).
If the matter had stood there (I) ; 979 only, the awards, having been submitted beyond forty days from the dates of reference, would be invalid as the periods of extension granted from time to time by the State Government for their submission could not be taken into consideration.
The Act, however, was amended by the Ordinance and section 6 A was added to the Act and according to the provisions of section 2 of the Ordinance, section 6 A of the Act must be deemed to have formed a part of the Act at the time of its enactment.
Section 6(1) and section 6 A of the Act must therefore be read together.
Section 6(1) of the Act specifically stated that the award must be submitted within a specified date in an industrial dispute referred for adjudication after the completion of the enquiry.
Under section 6 A, however, the State Government was empowered from time to time to enlarge the period even though the period originally fixed or enlarged might have expired.
The orders of reference in these appeals, as stated above, specified 40 days within which the awards had to be submitted.
The State Government could, however, enlarge the periods within which the awards had to be submitted under section 6 A by issuing other orders in the case of each reference extending the time within which the awards had to be submitted.
Admittedly, .no such order was, in fact, passed in the case which is the subject of Civil Appeal No. 15 of 1955, and in the case which is the subject of Civil Appeal No. 14 of 1955, although orders extending the time for the submission of the award were made and the last order extended the time to March 10, 1953, yet the award was submitted on May 13, 1953.
The awards in these cases were, therefore, made in the one case beyond the time specified in the order of reference and in the other beyond the extended period within which the award had to be submitted.
It was urged on behalf of the appellant, the State of Uttar Pradesh, that as cl. 16 of Order No. 615 had been amended whereby 180 instead of 40 days had been provided as the period within which an award had to be submitted, the orders of reference in the cases before as must be construed as specifying 980 180 days within which the awards had to be submitted.
In other words, cl. 16, although amended on February 18, 1953, was retrospective in operation.
Order No. 615 is a general order under which conciliation boards and industrial tribunals may be set up to deal with industrial disputes.
It is true that el.
16 enjoins that the decisions by the tribunal or the adjudicator must be pronounced within a specified number of days but this is a general direction.
An order of reference is a special order.
It could have stated the manner in which the industrial dispute was to be adjudicated and it could also have specified the time within which the decision had to be pronounced.
As the orders of reference in the cases before us merely stated that they were to be decided in accordance with the provisions of Order No. 615, the disputes had to be adjudicated in the manner so provided and the orders of reference must, accordingly, be read as having specified 40 days as the time within which the awards had to be submitted.
Subsequent amendment of cl. 16, whereby 180 days instead of 40 days was provided as the time within which the award had to be submitted, could not affect an order of reference previously made according to which the award had to be submimitted within 40 days.
We cannot agree with the submission made on behalf of the appellant that cl. 16, as amended, must be given retrospective effect and the orders of reference previously issued must be regarded as specifying the time of 180 days for the submission of the awards.
Section 6(1) of the Act is to the effect that the authority to which an industrial dispute has been referred for adjudication must submit its award within such time as may be specified.
This section read with section 6 A of the Act, on a proper interpretation of their provisions, makes it clear that the time within which the award shall be submitted is the period specified in the order of reference.
Mere amendment of cl. 16 would not, therefore, affect the period already specified in the order of reference.
It seems to us, therefore, that the amendment to el.
16 did not materially affect the position and the awards in the cases before us had to be submitted within 981 40 days from the dates of the orders of reference or within the enlarged time for the submission of the awards.
What is the effect of section 3 of the Ordinance is a matter which now remains to be considered.
This section purported to remove doubts and to validate orders of extension of time for the submission of an award.
It also purported to validate certain awards.
There is no difficulty in construing cl.
(1) of this section.
It validates all orders of extension made prior to the commencement of the Ordinance as if section 6 A of the Act had been a part of the Act always.
In other words, orders of extension of time made under the general order, promulgated under section 3 of the Act, would be regarded as made under section 6 A. Clause (3) of section 3 of the Ordinance also does not present any difficulty in construing its provisions.
It directs that every proceeding pending before any Court or Tribunal at the commencement of the Ordinance against an award shall be decided as if section 6 A of the Act had been in force at all material dates.
Clauses (1) and (3) of this section merely re emphasise the provisions of section 6 A of the Act, which, in our opinion, are clear enough even in the absence of the aforesaid clauses.
It is cl.
(2) of section 3 of the Ordinance which requires careful examination.
Learned Counsel for the appellants contended that el.
(2) was sufficiently wide in its terms to include all awards and not merely awards which bad become final as held by the Labour Appellate Tribunal.
The words at the end of the clause " as if section 6 A had been in force at all material dates " were redundant and they should be ignored.
Indeed, according to him, there was no need for the existence of el.
(3) in view of the provisions of cl.
Clause (2) validated all awards whether made before or after the commencement of the Ordinance even if the period specified within which they were to be submitted or any enlargement thereof had already expired in so far as they could not be questioned merely on that ground alone and this would cover even a proceeding pending in any Court or Tribunal at the commencement of the Ordinance against an award, 982 Mr. N. C. Chatterjee, appearing for respondent No. 1, in Civil Appeal No. 15 of 1955, contended that the Labour Appellate Tribunal took the correct view that cl.
(2) of section 3 of the Ordinance covered cases where the awards had become final.
He further developed his argument in support of the decision of that Tribunal on the following lines.
Such clarification, as was sought to be made, by section 3 of the Ordinance must be construed in relation to section 6 A of the Act and not independently of it.
If an award were made outside the ambit of section 6 A then the whole of section 3 of the Ordinance could not apply to such a case.
Section 3(1) of the Ordinance validated all orders of enlargement of time which were made prior to the commencement of the Ordinance.
Such orders should be deemed to have been validly made as if section 6 A had been a part of the Act.
Section 3(2) of the Ordinance was enacted to prevent the validity of an award being questioned when it had been submitted after the specified period for its submission or any enlargement thereof.
The words " as if section 6 A had been in force at all material dates " merely connote that there must be an order of enlargement made by the Government in the exercise of its powers under section 6 A of the Act.
Section 3(2) of the Ordinance had no application to a case where an award was made independently of the exercise of the powers of the Government under section 6 A. Section 3(2) and (3) of the Ordinance were subservient to section 6 A of the Act.
The Tribunal apparently took the view that there was repugnance between sub sections
(2) and (3) of section 3 of the Ordinance and so it made an attempt to avert that repugnance by putting an artificial restriction on the scope of sub section
(2) of section 3.
In holding that section 3(2) applied only to awards that have become final, the Tribunal overlooked the fact that this sub section referred to awards which may be made even after the commencement of the Ordinance and it is not easy to appreciate how finality could be said to attach to these awards on the date when the Ordinance was promulgated.
The Tribunal also felt impressed by the argument that if section 6 A applied to appeals or 983 proceedings against awards pending at the date of the commencement of the Ordinance, there was no reason why the same provision should not apply to appeals or proceedings which may be taken against the awards after the commencement of the Ordinance.
In giving expression to this view, however, the Tribunal clearly overlooked the fact that section 3 (3) is deliberately confined to proceedings against an award pending at the commencement of the Ordinance and no others.
There can be little doubt, in our opinion, that the main purpose of the Ordinance was to validate orders of extension of time within which an award had to be submitted as well as to prevent its validity being questioned merely on the ground that it had been submitted beyond the specified time or any enlargement thereof.
Apart from an order of extension of time the Ordinance purported to deal with at least three situations so far as the submission of an award was concerned.
One was where an award was submitted before the commencement of the Ordinance and against which no proceeding was pending before any Court or Tribunal at the commencement of the Ordinance; another was where an award was submitted after the Ordinance came into force.
These cases were dealt with by cl.
(2) of section 3 of the Ordinance.
The third was the case where an award was submitted before the commencement of the Ordinance against which a proceeding was pending before a Court or a Tribunal before the Ordinance came into force.
Section 3(3) of the Ordinance was so drafted that it should not interfere with judicial proceedings already pending against an award.
It merely directed that such a proceeding must be decided as if section 6 A had been a part of the Act from the date of its enactment.
Where, however, no judicial proceedings against an award were pending it was the intention of the Ordinance that the award shall not be questioned merely on the ground that it was submitted after the specified period for its submission or any enlargement thereof.
Although section 3(2) of the Ordinance is not happily worded and appears to have been the result of hasty legislation, we think, that upon a reasonable construction of 125 984 its provisions its meaning is clear and there is no real conflict between its provisions and the provisions of cl.
(3) of the section.
The words " as if section 6 A had been in force at all material dates " have to be given some meaning and they cannot be regarded as redundant as suggested on behalf of the appellants.
Grammatically they should be regarded as referring to any action or proceeding taken, direction issued or jurisdiction exercised in pursuance of or upon an award.
Section 6 A of the Act, however, has nothing to do 'With this and these words car not apply to that part of the clause.
These words also cannot refer to a case where the award has been made beyond the specified period and in which there has been no order of enlargement of time as section 6 A of the Act does not apply to such a lase.
The words in question, therefor, can only apply to that part of the clause which refers to an enlargement of time for the submission of the award, which is the only purpose of section 6 A of the Act.
In our opinion, if section 3(2) of the Ordinance is read in this way an intelligible meaning is given to it which is consistent with section 6 A of the Act and not in conflict with section 3(3) of the Ordinance.
The awards referred to in section 3(2) are awards against which no judicial proceeding was pending at the commencement of the Ordinance.
In our opinion, the provisions of section 3(2) and (3) are not in conflict with each other.
We cannot accept the view of the Labour Appellate Tribunal that section 3(2) refers only to awards that had become final.
Having construed the provisions of section 3 of the Ordinance, it is now necessary to deal specifically with the appeals before us.
Appeal No. III 198/53 of the Labour Appellate Tribunal, out of which Civil Appeal No. 14 of 1955 arises, was filed before the commencement of the Ordinance and by virtue of section 3(3) of the Ordinance the appeal had to be decided as if the provisions of section 6 A had been in force at all material dates.
To such an appeal the provisions of cl.
(2) of section 3 of the Ordinance would not apply.
This appeal would, therefore, be governed by cl.
As in this case, the award had been submitted on May 13, 1953, 985 and the last date of enlargement gave time for the submission of the award up to March 10, 1953, the award was submitted beyond time and, therefore, was invalid as having been made without jurisdiction.
In Civil Appeal No. 15 of 1955, arising out of Appeal No. 111 321 of 1953 of the Labour Appellate Tribunal, the appeal was filed before that Tribunal after the commencement of the Ordinance.
The award was submitted long after the period, namely, 40 days, within which it had to be submitted and there were no orders of enlargement of time.
Section 3(2) of the Ordinance and not section 3(3) would, therefore, apply to this appeal.
The award in this case consequently has been validated by virtue of the provisions of section 3(2) of the Ordinance and its validity cannot be questioned merely on the ground that it was submitted after the period within which it should have been submitted.
In the result, Civil Appeal No. 14 of 1955 is dismissed with costs and Civil Appeal No. 15 of 1955 is allowed with costs and the decision of the Labour Appellate Tribunal in Appeal No. 111 321/53 before it is set aside.
Appeal No. 14 of 1955 dismissed.
Appeal No. 15 of 1955 allowed.
[/INST]The appellants were the trustees of a charity fund known as The Charity Fund founded by Sir Sassoon David, Baronet of Bombay ".
Clause 13 Of the deed of trust, after declaring that the trustees should apply the net income for all or any of the following purposes, namely, (a) the relief and benefit of the poor and indigent members of Jewish or any other community of Bombay or other parts of India or of the world either by making payments to them in cash or providing them with food and 924 clothes and/or lodging or residential quarters or in giving education including scholarships to or setting them up in life or in such other manner as to the said Trustees may seem proper or (b) the institution maintenance and support of hospitals and schools, colleges or other educational institutions or (c) the relief of any distress caused by the elements of nature such as famine, pestilence, fire, tempest, flood, earthquake or any other such calamity or (d) the care and protection of animals useful to mankind or (e) the advancement of religion or (f) other purposes beneficial to the community not falling under any of the foregoing purposes I added by way of provisos (i) that in applying the net income for the purposes mentioned in sub cl.
(a) the trustees must give preference to the poor and indigent relations or members of the family of Sir Sassoon David, including distant and collateral relatives, (2) that for the said purpose the trustees must apply not less than half of the income for the benefit of the members of the Jewish community of Bombay only, including the said relatives of Sir Sassoon David and Jewish objects.
The question for determination was whether the income from the trust fund was exempt from taxation under section 4(3)(i) Of the Indian Income tax Act.
The High Court came to the conclusion that the trust fund could nut be said to be held, wholly or partly, for religious or charitable purposes involving an element of public utility and answered the question in the negative.
Held, that there could be no doubt that each one of the pri mary purposes mentioned in the deed of trust, including the one mentioned in sub cl.
(a), properly construed, involved an element of public utility and thus they constituted a valid charitable trust.
Although it was open to the trustees to spend the entire income for the purpose mentioned in sub cl.
(a), that could not detract from the validity of the trust since the relations or family members of the founder did not come in directly under any of the other purposes and could do so only under sub cl.
(a) as preferential beneficiaries to be selected from out of the class of primary beneficiaries prescribed by it, in terms of the provisos.
The test of the validity of such a public charitable deed of trust should be whether or not at the primary stage of eligibility it could be said to possess that character.
In re Koettgan 's Will Trusts, , applied.
Trustees of Gordhandas Govindram Family Charitable Trust vs Commissioner of Income tax (Central), Bombay, [1952]21 I.T.R.231, distinguished and held inapplicable.
The circumstance that in selecting the actual beneficiaries 925 from the primary class of beneficiaries under sub cl.
(a), the trustees had to give preference under the provisos, to the relations or members of the family of Sir Sassoon David, could not therefore affect the public charitable trust constituted under sub cl.
(a) and the income from the trust properties was entitled to exemption under section 4(3)(i) Of the Indian Income tax Act.
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<s>[INST] Summarize the judgementPetition No. 13688 of 1983 etc.
Under Article 32 of the Constitution of India) T.U. Mehta and S.M. Ashri for the Petitioners.
Dr. Y.S. Chitale, G.L. Sanghi, V.C. Mahajan, R.B. Datar, Miss Bina Tamta, S.K. Mehta, M.K. Dua, Aman Vachhar, H.S. Parihar, Vipin Chandra, G.D. Gupta, M.L. Kaicker and V.B. Saharya for the Respondents.
Bye law No. 3(1) reads as follows: "3(1).
No person shall keep or ply for the hire a cycle rickshaw in Delhi unless he himself is the owner thereof and holds a licence granted in that behalf by the Commissioner on payment of the fee that may, from time to time, be fixed under sub section (2) of section 430.
Provided that no person will be granted more than one such licence.
No person shall drive a cycle rickshaw for hire unless he holds a driving licence granted in that behalf by the Com missioner on payment of the fee that may, from time to time be fixed under sub section (2) of section 430.
" The petitioners are owners of cycle rickshaws.
Some of them own two or more cycle rickshaws which are hired out by them to rickshaw pullers under a contract under which the rickshaw pullers have to pay some amount to the owners of the cycle rickshaws at the end of the day out of their earnings during the day.
In order to eliminate the exploita tion of rickshaw pullers by the owners of the cycle rick shaws the Delhi Municipal Corporation amended the Cycle Rickshaw Bye laws, 1960 by introducing bye law No.3.
Under that bye law only the owner of the cycle rickshaw can obtain a licence to keep a cycle rickshaw or to ply 908 for hire and only one such licence would be issued to a person.
By necessary implication it excludes persons who own a number of cycle rickshaws from applying for licences and prohibits the hiring out of the cycle rickshaw by the owner in favour of a rickshaw puller against payment of considera tion.
The contention of the petitioners is mainly dependent upon section 48 1(I)L(5) of the Act which reads thus: "481(1).
Subject to the provisions of this Act the Corpora tion may, in addition to any bye laws which it is empowered to make by any other provision of this Act, make bye laws to provide for all or any of the following matters.
namely: . . . . . . . . .
L. Bye laws relating to miscellaneous matters . . . . . . . . . . (5).
the rendering necessary of licences (a) for the proprietors or drivers of hackney carriages; cycle rickshaws, thelas and rehires kept or plying for hire or used for hawking articles; . . . . . . . . . " It is argued on behalf of the petitioners that the above provision in the Act does not permit the Corporation to make a bye law which prohibits the issue of licences to the owners of cycle rickshaws who are not themselves rickshaw pullers.
It is also urged that the bye law is violative of Article 19(1)(g) of the Constitution.
The respondentCorpora tion contends that the impugned bye law No. 3 is within the scope of the authority conferred on it by the Act to make the bye law in question and that it is not opposed to Arti cle 19(1)(g).
The constitutional validity of a similar provision in the Punjab Cycle Rickshaws (Regulation of Licence) Act, 1976 (Punjab Act 41 of 1975) came up for consideration before this Court in Azad Rickshaw Pullers Union (Regd) Ch, Town Hail, Amritsar & Ors., etc.
vs State of Punjab & Others, ; In the course of its judgment the Court approved a scheme flamed for providing financial assistance to the richshaw pullers for acquiring cycle rickshaws.
The 909 provision of the Act which was impugned in that petition was, however, left untouched.
On the same date this Court pronounced another judgment in Nanhu & Ors., etc.
vs Delhi Administration & Ors., ; in which the very same bye law with which we are concerned in these cases came up for consideration.
That case was disposed of by this Court by a short order which reads thus: "We have disposed of today applications from cycle rickshaw pliers of Amritsar Municipality where a scheme has been worked out to help them become owners of cycle rickshaws.
A similar scheme, says the Solicitor General appearing for the Delhi Administration, will be extended to the Delhi territo ry.
We, therefore, annex a copy of the judgment in Writ Petitions Nos.
839 of 1979 and 563 of 1979 Azad Rickshaw Pullers Union, Amritsar and others vs State of Punjab & Others and Nanak Chand and Others vs State of Punjab and Others, respectively to this judgment.
There is another problem which arises in these two cases and that is that the Delhi Administration has put a ceiling on the total number of cycle rickshaws permissible to be plied within its territory perhaps we do not know for certain this number may not accommodate all the applicants for cycle rickshaws plying licencees.
We are told that apart from the applicants in this Court under Article 32 of the Constitution, there are numerous petitioners who have ap proached the High Court of Delhi under Article 226 of the Constitution and yet others who have filed suits in civil courts for the same relief.
All that we can do is to accept the suggestion made by the learned Solicitor General that the Delhi Administration will effectively publicize and notify applications for licencees for plying of cycle rick shaws and all those who apply will be considered on their merits including length of service as cycle rickshaw pliers.
The criteria that the Delhi Administration will adopt must be reasonable and relevant; otherwise it will be open to the aggrieved parties to challenge the selection.
Likewise we do not want to fetter the rights of parties aggrieved if the ceiling upon the total number of rickshaws permissible within the Delhi territory is arbitrary.
On the basis of reasOnable criteria the Delhi Administra 910 tion will direct the concerned Municipal authorities to grant licences for plying rickshaws and if the applicants so chosen are not owners themselves all the facilities we have indicated in the Amritsar order will be extended to such cycle rickshaw pliers fixing reasonable time limits.
With these directions we dispose of the applications.
Until fresh licences are issued by the Delhi Administration and the Municipal authorities the present petitioners will be al lowed to ply their cycle rickshaws.
" It is clear from the above order that this Court did not say anything about the constitutional validity of bye law No. 3.
We, however, find on a consideration of the language of clause (5) in section 481(1)L of the Act that the bye law falls within the scope of the power conferred on the Corpo ration to frame bye laws for the issue of licences in re spect of cycle rickshaws which are kept or used for plying in the Delhi Municipal Corporation area.
While framing bye laws under the above statutory provision it is permissible for the Corporation to restrict the issue of licences only to the owners of the rickshaws who themselves act as rick shaw pullers.
This is apparently done to prevent exploita tion of the rickshaw pullers by the owners of the cycle rickshaws.
A licensing authority may impose any condition while issuing a licence which is in the interest of the general public unless it is either expressly or by necessary implication prohibited from imposing such a condition by the law which confers the power of licensing.
The restriction imposed by the Corporation in the present case is according to us in the interest of the general public.
In Man Singh and Others vs State of Punjab and Others, the petitioners contended that the provision in the Punjab Cycle Rickshaw (Regulation of Licence) Act, 1976 was viola tive of Articles 19(1)(g) and 21 of the Constitution as also Articles 14 and 16 of the Constitution.
This Court negativ ing the said contention observed thus: "In the instant case, section 3 of the Punjab Act has the effect of making it possible for the rickshaw puller to ply the rickshaw as owner of the vehicle and thereby to be the full owner of the income earned by him.
No longer will he be obliged to part with an appreciable portion of that income in favour of another who owns the vehicle.
The Punjab Act is beneficial legislation bringing directly home to the rick shaw puller the entire fruit of his dally toil.
The enact ment is intended as a social welfare measure against the exploitation of the poor and unemployed by rapacious 911 cycle rickshaw owners who by reason of their superior finan cial resources fatten their wealth from the sweated toil of rickshaw pullers.
Even if we look at the impugned legisla tion from the point of view of its impact on the fundamental right of rickshaw owners who give them on hire to rickshaw pullers for plying, it is plain that the legislation consti tutes a reasonable restriction on the right of such rickshaw owners to carry on the business of hiring out cycle rick shaws inasmuch as the exercise of the right is excluded by legislation designed for the economic and social welfare of rickshaw pullers, who constitute a significant sector of the people, a sector so pressed by poverty and straightened by the economic misery of their situation that the guarantee of their full day 's wages to them seems amply justified.
" We do not, therefore, find any ground to set aside the bye law in question either on the ground that it is outside the scope of section 48 1 of the Act or on the ground that it is opposed to the provisions of the Constitution.
The above contentions, therefore, fail.
During the pendency of these proceedings the Court issued notices to the Punjab National Bank, the Bank of Baroda and the State Bank of India and also the Credit Guarantee Corporation of India (Small Loans) to ascertain whether the banks are willing to extend financial assistance to the rickshaw pullers to acquire the ownership of cycle rickshaws and to ply them within the Corporation area and also to ascertain whether the Credit Guarantee Corporation of India Small (Loans) would guarantee the loans advanced to the rickshaw pullers.
The learned counsel for these banks and the Credit Guarantee Corporation of India (Small Loans) have submitted that the banks are willing to advance upto Rs.2,000 by way of loan at reasonable rate of interest to the rickshaw pullers on the security of the cycle rickshaws owned by them in order to assist the rickshaw pullers to acquire the cycle rickshaws.
The banks have put forward before the Court two schemes: (1) the scheme for finance to cycle rickshaw pullers, and (2) Self employment programme for urban poor (SEPUP) under which it is possible for them to give financial assistance to the rickshaw pullers.
The Credit Guarantee Corporation of India (Small Loans) is agreeable to guarantee the repayment of loans advanced to the rickshaw pullers.
The Corporation authorities are agree able to issue necessary eligibility certificates to the rickshaw pullers to obtain the loan.
912 In view of the above submissions, we direct the several branches of the Punjab National Bank, the Bank of Baroda and the State Bank of India operating in Delhi to give financial assistance to rickshaw pullers who wish to own cycle rick shaws and ply them under licences issued by the Corporation subject to their producing the necessary eligibility certif icate issued by the Corporation and satisfying the other terms of the Schemes referred to above.
We also direct the Delhi Administration to comply with the directions issued by this Court in Nanhu & Others (supra).
In the course of the argument the learned counsel for the petitioners incidentally made a complaint about the seizure of cycle rickshaws by the Corporation officers without issuing an acknowledgment to the owners whenever they found that the cycle rickshaws were being used on the roads contrary to the rules.
The learned counsel for the Corporation stated that whenever the cycle rickshaws are seized written acknowledgments will be issued to the owner if he is found near the cycle rickshaw at the time of its seizure.
We record the above statement made on behalf of the Corporation.
These petitions are accordingly disposed of.
No costs.
S.R. Petitions disposed of.
[/INST]The assessee, in CA 1546 of 1974, M/s British India Corporation Ltd. claimed capital Reserve, Stocks and Stores Reserves, Bad and doubtful debts Reserves, Obsolescence reserve, Loans and Insurance reserve, investment reserve and forfeited moneys reserves as "standard deduction" as defined in section 2(a) of the in the computation of its profits under the relevant Income Tax Act.
The claim having been disallowed, the question has been referred to this Court by the Tribunal.
In Civil Appeal No. 1599/74 the Saran Engineering Company Ltd. claimed similar deductions in respect of capital reserve, Rehabilitation Reserve, Stores Reserve forfeited moneys Reserve and Bad and doubtful debts reserve.
The Income Tax Officer rejected the claim.
On appeal the Appellate Assistant Commissioner allowed the claim in part.
The Tribunal however allowed the assessee 's claim in full in further appeal while rejecting the Revenue 's appeal against A.A.C 's order.
At the instance of the Revenue, the Tribunal referred the matter to the High Court.
The High Court answered the reference partly in favour of the Revenue by negativing the claim as to forfeited moneys reserve and 399 restricting the quantum of amount allowed by the AAC regarding capital reserve, as the assessee did not seek a reference against it.
Hence the appeal by Revenue by Special Leave.
In the Special Leave Petition No. SLP (C) 4815A/77 the High Court 's rejection order of the revenue 's request under section 256(2) for calling for a case against the Tribunal 's findings regarding the Gratuity Reserve, Reserve for Sepcial Survey, Reserve for contingencies, fleet Replacement reserve, Reserve for exempted Profits under section 84 of the Income Tax Act, Reserve for Investment depreciation and Dividend Equalisation Reserve but allowing only in relation to the Reserve for special Survey come to be considered.
Allowing the two civil appeals in part and dismissing the Special Leave Petition, the Court ^ HELD: 1.
In the facts and circumstances of the case, except the obsolescence Reserve and the forfeited moneys reserve, all the Reserves, namely, capital Reserve, Stocks and Stores Reserve, Bad and doubtful debts reserves, Loans and Insurance Reserve, Investment reserve, and rehabilitation reserve are to be included in the computation of capital according to the provisions in the Second Schedule to the . 2.
Where the liability has actually arisen or anticipated legitimately by the assessee though the quantum of the liability has not been determined, to meet such present liability cannot be treated as "reserve".
A fund, however, created for payment of a liability which had not already arisen or fallen due but orly a provision with regard to the sum that might become liable to be paid is "other reserve within the meaning of rule (1) of second schedule and should be taken into account in computing the capital of the company for the purpose of the Companies (Profit) Surtax Act, 1964.
Except the item relating to Reserve for special survey, it is not necessary to call for any statement of the case in respect of other items in SLP (C) 4815A/77.
[406G H; 407A] Commissioner of Income Tax, Kanpur vs The Elgin Mills Ltd., Kanpur, [1986] 3 SCR P. 408, followed.
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<s>[INST] Summarize the judgementSpecial Leave Petition (Civil) No. 9524 of 1987.
From the Judgment and order dated 25.5.1987 of the Delhi High Court in F.A.O. No. 58 of 1987.
R.B. Datar and Ranjit Kumar for the petitioner.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
The respondent No. 1 herein was awarded the contract in question for the construction of staff quarters for the Municipal Corporation of Delhi, the petitioner herein and the work had to be completed within the stipulated period mentioned in the contract.
Since, however, the work was not being done in the manner as the Delhi Municipal Corporation thought it ought to have been done, the petitioner wrote 29 letters during June, 1978 to July, 1980 regarding the timely completion of the work.
It is alleged that the work was not completed by the 15th of January, 1980 as per the schedule in the contract.
Show cause notice was given to the respondent contractor.
The contractor failed to give satisfactory reply and according to the petitioner, the contract was rescind.
Thereafter several other letters were written which are not material to refer.
183 There was an arbitration clause in the agreement.
On 2nd November, 1982 an application was filed under section 20 of the (hereinafter called 'the Act ') in the Delhi High Court.
A learned Single Judge of the said High Court directed reference of the dispute and directed the Commissioner of the Municipal Corporation or anyone nominated by him to enter into reference.
The Commissioner on 17th of March, 1983 appointed one Shri S.M. Hasnain, Arbitrator and Superintending Engineer No. II, of the Municipal Corporation of Delhi as the arbitrator.
He is respondent No. 2 in this petition.
The said arbitrator entered upon the reference and thereafter on 21st of August, 1984 submitted his award allowing some claims of the contractor and some counter claims of the Municipal Corporation.
The Municipal Corporation filed its objections to the said award.
The learned Single Judge of the High Court by his judgment and order dated 22nd of October, 1986 directed that the award be made a rule of the Court.
A Letters Patent Appeal was filed thereafter but the same was summarily dismissed by a Division Bench of the Delhi High Court on 25th May, 1987.
The petitioner seeks leave in this petition under Article 136 of the Constitution to challenge the said order.
As the learned Division Bench did not give reasons, we must refer to the order of the learned Single Judge.
The arbitrator gave reasons in support of the award.
The question is whether reasonableness of the reasons in a speaking award is justiciable under Article 136 of the Constitution.
We are of the opinion that such reasonableness of the reasons given by an arbitrator in making his award cannot be challenged in a proceeding like the present.
It is desirable, however, that we state our reasons for so holding.
In order to appreciate this the award of the arbitrator must be looked into.
The arbitrator in his award has dealt with various claims, one of the main claims was the claim of 23,850 out of which 8,300 was in the form of fixed deposit receipt carrying interest and the balance amount of 15,520 was deducted as security of 10% from the bills of the claimant.
According to the claimant this amount had wrongly been forfeited by the Corporation at the time of rescission of the contract and that the same should be refunded to him.
It was held by the arbitrator that there was provision in the agreement for extension of time for completion of the contract, as well as for levy of compensation for delay.
Therefore, it could not be taken that time was the essence of the contract.
The arbitrator had opined that according to the respondents ' own admission there was delay of nearly four 184 Months in the commencement of the work due to giving of the layout etc.
There was also delay in the execution of sanitary work by another contractor previously employed by the petitioner and this work was still incomplete at the time of the making of the award and as such complete site had not been made available to the present contractor in time.
Further there was provision in the agreement for extension of time or levy of compensation for delay and, therefore, according to the arbitrator time could not be considered in such a contract to be the essence of the contract.
Furthermore, subsequent to the expiry of the stipulated period of completion, the Corporation did not make time the essence of the contract by directing the claimant to complete the work within a specified period but instead rescinded the contract.
In those circumstances it was held by arbitrator that the decision of rescission of the contract has bad, wrongful and hence the claim of Rs.23,820 was considered to be just.
We do not find any lack of reason in the reasons given by the arbitrator.
Whether in a particular contract time was the essence of the contract or not is a mixed question of law and fact.
But the reasons given by the arbitrator appear to be reasonable and have rational nexus with the conclusion arrived at by him.
It was stated that it was admitted on behalf of the Corporation that there was initial delay of four months.
This was controverted by the Corporation.
They say that there was no admission.
This, in our opinion was a significant factor that there was some delay and in spite of the delay the corporation gave letters to the contractor to complete the work and in the contract itself there was provision for extension of time.
In our opinion, where reasons germane and relevant for the arbitrator to hold in the manner he did have been indicated, it cannot be said that it was unreasonable.
Another factor the arbitrator had noted was that the site was not available due to the conduct of another contractor previously employed by the petitioner.
This factor is also a relevant factor.
The fourth item of the award was a claim for damages for Rs.60,000().
This amount was not granted on the ground that the claimant was not able to prove this amount.
The fifth item in the award was a claim for interest at 18 % per annum on certain items from the date of rescission of the contract to the date of payment of decretal amount.
The arbitrator allowed the interest as the amount had been withheld due to unjustified and wrongful rescission of the contract.
Reasons given by the arbitrator appear per se not unreasonable.
The arbitrator has not awarded any costs.
There were also counter claims by the Corporation against the contractor.
The first counter claim was forfeiture of Rs.23,820 on account on the rescission of the contract.
Inasmuch as the rescission was held to be unjustified in the facts of this case, the forfeiture was also held to be wrongful.
There was a claim of 185 Rs.32,640 as payment of compensation at 10% of Rs.3,28,400, but as the time was not the essence of the contract and the rescission of the contract was unjustified, this claim could not be sustained and it was so rejected by the arbitrator.
The next claim was for Rs.85,620 for the execution of the remaining work at the risk and cost of the respondent.
The arbitrator found that the contractor had as far as possible discharged his contractual obligation and the rescission of the contract was unjustified and wrongful.
Therefore, the Corporation 's claim for getting the work executed at the risks and costs of the contractor was unjustified and the claim was so logically rejected and no amount was awarded on that score.
The next claim was for Rs.2739 on account of mild steel Lying with the contractor.
On examination it was found that some quantities of steel had been consumed in the work and as such recovery could only be made for the balance quantity of 1172 kgs.
at the recovery rate of Rs.1.50 per kg.
and the claim was, therefore, allowed in favour of the Corporation for Rs.1,758.
The Corporation further claimed a sum of Rs.6,083.20 on account of non return of certain steel.
After taking into account the steel consumed in the work and after allowing for permissible variation and wastage, it was held that recovery claim for Rs.3,862 only was justified.
The award was made accordingly.
There was another claim of Rs.6,473 on account of penal rate recovery of mild steel.
It was held for good reasons indicated in the award that the claim for Rs.5,620 was justified.
The Corporation claimed Rs.13,578 for penal rate recovery of cement for the quantity in excess of the theoretical consumption.
After going into the material the arbitrator found that the cement issued to the claimant was consumed in the work and the claim of the Corporation for the penal rate recovery was not justified.
The next was the claim for Rs.1400 by the Corporation on account of non return of 700 empty cement bags to the Municipal store.
This was enquired into and found to be justified and a sum of Rs.1400 was awarded in favour of the Corporation.
There was a further claim of Rs.65 for adjustment of cost of steel on account of three transfer entries.
From the documents produced the claim was awarded in favour of the Corporation.
The next claim was for interest at the rate of 12% per annum w.e.f. 1.9.81 on the amount of alleged counter claim preferred against the claimant.
As it was held that the rescission of the contract was unjustified and wrongful, the Corporation was at liberty to recover its justified claims from the dues of the claimant at its disposal and pay the balance amount to the claimant within a reasonable time.
There was a further claim for Rs.10,000 as arbitration costs and the claim was rejected.
It appears to be very reasonable and fair award.
186 In this case, there was no violation of any principles of natural justice.
It is not a case where the arbitrator has refused cogent and material factors to be taken into consideration.
The award cannot be said to be vitiated by non reception of material or non consideration of the relevant aspects of the matter.
Appraisement of evidence by the arbitrator is ordinarily never a matter which the Court questions and considers.
The parties have selected their own forum and the deciding forum must be conceded the power of appraisement of the evidence.
In the instant case, there was no evidence of violation of any principle of natural justice.
The Arbitrator in our opinion is the sole judge of the quality as well as quantity of evidence and it will not be for this Court to take upon itself the task of being a judge of the evidence before the arbitrator.
It may be possible that on the same evidence the Court might have arrived at a different conclusion than the one arrived at by the arbitrator but that by it self is no ground in our view for setting aside the award of an arbitrator.
It is familiar learning but requires emphasis that section 1 of the Evidence Act, 1872 in its rigour is not intended to apply to proceedings before an arbitrator.
P.B. Mukharji, J. as the learned Chief Justice then was, expressed the above view in Haji Ebrahim Kassam Cochinwall vs Nothern Indian oil Industries Ltd., A.I.R. 1951 Calcutta 230 and we are of the opinion that this represents the correct statement of law on this aspect.
Lord Goddard, C.J. in Mediterranean & Eastern Export Co. Ltd. vs Fortress Fabrics Ltd., observed at pages 188/189 of the report as follows: "A man in the trade who is selected for his experience would be likely to know and indeed to be expected to know the fluctuations of the market and would have plenty of means of informing himself or refreshing his memory on any point on which he might find it necessary so to do.
In this case according to the affidavit of sellers they did take the point before the Arbitrator that the Southern African market has slumped.
Whether the buyers contested that statement does not appear but an experienced Arbitrator would know or have the means of knowing whether that was so or not and to what extent and I see no reason why in principle he should be required to have evidence on this point any more than on any other question relating to a particular trade.
It must be taken I think that in fixing the amount that he has, he has acted on his own knowledge and experience.
The day has long gone by when the Courts 187 looked with jealousy on the jurisdiction of the Arbitrators.
The modern tendency is in my opinion more especially in commercial arbitrations, to endeavour to uphold Awards of the skilled persons that the parties themselves have selected to decide the questions at issue between them.
If an Arbitrator has acted within the terms of his submission and has not violated any rules of what is so often.
called natural justice the Courts should be slow indeed to set aside his award.
" This in our opinion is an appropriate attitude.
In this case the reasons given by the arbitrator are cogent and based on materials on record.
In Stroud 's Judicial Dictionary, Fourth Edition, page 2258 states that it would be unreasonable to expect an exact definition of the word "reasonable".
Reason varies in its conclusions according to the idiosyncrasy of the individual, and the times and circumstances in which he thinks.
The reasoning which built up the old scholastic logic sounds now like the jingling of a child 's toy.
But mankind must be satisfied with the reasonableness within reach; and in cases not covered by authority, the verdict of a jury or the decision of a judge sitting as a jury usually determines what is "reasonable" in each particular case.
The word "reasonable" has in law the prima facie meaning of reasonable in regard to those circumstances of which the actor, called on to act reasonably, knows or ought to know.
See the observations, in Re a Solicitor [ 1945] K.B .
368 at 371 of the report .
After all an arbitrator as a Judge in the words of Benjamin N. Cardozo, has to exercise a discretion informed by tradition, methodized by analogy, disciplined by system, and subordinated to "the primordial necessity of order in the social life".
F Indeed reading the award of the arbitrator, one would say that he acted reasonably and rationally.
In the premises the award of the arbitrator was assailed on trivial grounds and the challenge was rightly rejected by the High Court.
The respondent is entitled to the costs of the challenge upto the High Court.
So far as the costs of this petition to this Court is concerned, parties are directed to bear their respective costs.
The petition for leave to appeal is, therefore, dismissed and the leave refused.
P.S.S. Petition dismissed.
[/INST]The respondents mortgaged a house property in Bhavnagar with ID possession to a business firm in July, 1947.
The ground floor of the house was already in the occupation of a tenant and hence the mortgagors endorsed the rent deed to the mortgagee for the remaining period of the lease.
Clause 5 of the mortgage deed gave option to the mortgagee to give the house property on rent to anyone and made the mortgagors accountable for loss of rental income.
Clause 7 empowered the mortgagee to keep the property in his possession till the mortgage debt was repaid.
Clause 10 entitled the mortgagors to redeem the mortgage at any time and stated that as soon as redemption took place, the mortgagee should return the documents of title and re deliver possession of the house to the mortgagors.
Notwithstanding the mortgage purporting to be possessory the deed provided for payment of interest, and for the mortgagee to demand repayment of the mortgage amount at any time it deemed fit.
When the existing tenant vacated the portion occupied by him, in November, 191;6, the mortgagee inducted the appellant as a tenant.
The Saurashtra Rent Control Act, 1951 had in the meantime come into force.
This was replaced by the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 with effect from 1.1.1964.
The ejectment proceedings initiated by the mortgagee against the tenant appellant were pending when the mortgage was discharged in October, 1972 in terms of the memo of compromise, which stated that the ground floor of the house had been given on rent to the appellant, that the mortgagee had filed a case against him, that in such circumstances the 77 vacant possession of the ground floor could not be delivered, and that the mortgagors were entitled to obtain vacant possession of the said portion from the appellant.
In the execution proceedings taken out by the mortgagors thereafter the executing court held that they were entitled to get only symbolic delivery and not physical possession of the leased property.
The High Court held that as the mortgage was an anomalous mortgage, the rights of the mortgagee have to be determined with reference to the terms of the mortgage deed, that though the mortgage deed permitted the mortgagee to create tenancies, the said permission did not extend to granting lease beyond the term of the mortgage and it was subject to the stipulation in the mortgage deed that the mortgagee should deliver possession whenever the mortgage was redeemed, and hence when the mortgagee 's right to possession came to an end, he ceased to be a lessor and the appellant was bound to surrender possession and he had no right to invoke the provisions of the Rent Acts to continue his tenancy, and that the appellant was not a necessary party to the suit or the execution application, as his possession was akin to that of a sub lessee and the execution application was therefore legally maintainable against him.
In this appeal by certificate it was contended for the appellant tenant that his tenancy rights were protected under the Saurashtra Rent Act and the Bombay Rent Act, that the mortgagors had given an unrestricted power to the mortgagee to create a tenancy for any length of time, and were therefore, bound to accept the lease transaction even after the redemption of the mortgage deed, that his tenancy rights became enlarged by the subsequent legislation enacted for affording protection to tenants, and that by reason of the authority given to the mortgagee to create tenancy the mortgagors had constituted the mortgagee as their agent and hence they as principals were bound by the acts of their agent.
Dismissing the appeal, ^ HELD: 1.1 A tenancy created by a mortgagee in possession may be binding even after the termination of the title of the mortgagee in possession if the mortgagors had concurred to the grant of the lease.
[88B] 1.2 In the instant case, the mortgagors had not empowered the mortgagee to create a tenancy which would be binding on them after the 78 redemption of the mortgage.
The authorisation given to the mortgagee was not an unconditional and absolute one.
It was circumscribed by the stipulation that the mortgagee should re deliver the possession of the property whenever the mortgage was redeemed.
The lease granted by the mortgagee could not thus enure beyond the term of the mortgage.
[9lE, 90A, 91BC] 1.3 This was not a case where the mortgagee was put in possession of the mortgaged property in older to appropriate the usufructs in lieu of interest.
The mortgagors had agreed to pay interest to the mortgagee at mercantile rate and also as per contractual rate.
Furthermore, the mortgage deed absolved the mortgagee of any liability for loss of income from the mortgaged property due to fall in rent or non payment of rent or due to non leasing of the property and keeping the house vacant.
On account of these guarantees the mortgagee was under no compulsion to lease out the property just because of the permission given to him to grant lease, either to secure rental income in lieu of interest or on grounds of prudent management.
The mortgagee should have realised that by inducting the appellant, he was running the risk of being unable to deliver possession of the house to the mortgagors when the mortgage was redeemed and thereby he would be contravening clauses 7 and 10 of the mortgage deed.
[90D E] 1.4 The mortgage in the instant case was an anomalous mortgage and not an usufructuary one.
The rights of the parties to the mortgage therefore would be governed by section 98 of the , which provides for determination of the rights of the parties in accordance with the terms of the mortgage deed.
Consequently, the appellant could claim tenancy rights only as against his landlord viz. the mortgagee and not against the mortgagors.
As soon as the mortgagee 's rights became extinguished by redemption of the mortgage, neither he nor anyone inducted by him had a right to be in possession of the mortgaged property.
[85CE, 91F] Film Corporation Ltd. vs Gyan Nath, ; Purshottam vs Madhavaji Meghaji, ; AIR 1976 Gujarat 161; ; SV Venkatarama Reddiar vs Abdul Gani Rowther & Ors.
AIR 1980 Madras 276; and Devkinandan vs Roshan Lal, AIR , referred to.
No question of imprudence can arise where the rights of the tenant were enlarged by tenancy legislation enacted after the tenant was put in possession by the mortgagee.
In the instant case, the appellant 's rights, as a tenant, did not become enlarged by means of any tenancy 79 legislation which came to be enacted after the lease was granted.
The Saurashtra Rent Control Act, 1951 was already in force when the appellant was inducted into possession from December 4, 1956.
It cannot be claimed that the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 which had replaced the Saurashtra Act from January 1, 1964, was a subsequent tenancy legislation that had enlarged the tenancy rights of the appellant, since the second appeal pertaining to the standard rent application and the suit for ejectment filed by the mortgagee were instituted in 1963 before the repeal of the Saurashtra Act.
[88A, 91E, 88F,H, 89AB,DE] Mahabir Gope vs Harbans Narain, ; ; Asa Ram vs Ram Kali, ; Dahya Lal vs Rasul Mohammed Abdul Rahim, [1963] 3 SCR l; Prabhu vs Ram Dev, ; and Mula 's , 7th Edn.
p. 514, referred to.
The relationship between the parties to the mortgage was always one of debtor and creditor.
There was, thus, no question of the mortgagors constituting the mortgagee as their agent.
[9lD] D 4.
The appellant had no independent rights and hence it was not necessary that he should have been made a party to the suit filed by the mortgagors after the redemption of the mortgage.
His position was akin to that of a sub tenant whose rights were co terminus with those of the tenant himself.
The mortgagors were, therefore, entitled to seek ejectment of the mortgagee and the tenant inducted by him.
The execution application taken against the mortgagee would be binding on the appellant.
[9lG H]
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<s>[INST] Summarize the judgementtition (CRL.) No. 1218 of 1990.
(Under Article 32 of the Constitution of India).
John Joseph and T.G.N. Nair for the Petitioner.
A.D. Giri, Solicitor General, Ashok Bhan, Ms. A. Subhashini and T.T. Kunhikannan for the Respondents.
The Judgment of the Court was delivered by VERMA J.
This writ petition under Article 32 of the Constitution of India is by the mother of the detenu Noor alias Babu to quash the detention order F. No. 801/1/90 PITNDPS dated 25.1.1990 passed under Section 3 of the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988 (in short 'PIT 'NDPS Act ') and the order of confirmation F. No. 801/1/90 PITNDPS dated 24.4.1990 'passed under Section 9(f) read with Section 10(2) of the PITNDPS Act, by the Central Government directing detention of the detenu for a period of two yeare w.e.f. 30.1.1990.
The only argument advanced in support of this writ petition is infraction of Article 22(5) of the Con 424 stitution of India.
The facts material for the point raised are stated hereafter.
The detenu was arrested from his family estate at Kochuveetil House, Kuthugal, Udumpanchola Taluk, Idikki District, Kerala on 19.10 1989 on the accusation that he and his brothers were involved in extensive illicit cultivation of ganja plants (Cannabis Sativa) in violation of the provisions of (in short 'NDPS Act '), He was produced before the Judicial Magistrate who rejected his bail application.
The Sessions Judge also rejected the bail application once but late, granted conditional bail.
Thereafter, the detention order dated 25.1.1990 was served on the detenu on 30.1.1990.
It was stated therein that even though prosecution of the detenu was likely to be initiated under the NDPS Act, there was likelihood of the detenu indulging in cultivation and production of narcotic drugs (ganja) on the detenu being released on bail on account of which there was compelling necessity to detain him under the PITNDPS Act.
The detenu was informed that he had a right to make representation to the detaining authority, Central Government and the Central Advisory Board against the detention order.
The mode of address of the representation to the Central Government and the Central Advisory Board was also indicated in the detention order along with the grounds of detention in accordance with Article 22(5) of the Constitution of India.
The detenu 's case was referred by the Central Government to the Central Advisory Board on 2.3.1990.
During pendency of the reference before the Advisory Board, the detenu made his representation on 24.3.1990 and addressed it to the Advisory Board.
The Advisory Board considered the reference relating to the detenu made by the Central Government and also the detenu 's representation submitted to it.
The Advisory Board, gave the opinion that there was sufficient cause to justify his preventive detention.
The Central Government then made the order dated 24.4.1990 confirming his detention and directed that the detenu Noor alias Babu be detained for a period of two years w.e.f. 30.1.1990.
It is admitted that the Advisory Board considered the detenu 's representation before sending its opinion to the Central Government along with the entire record including the representation submitted by the detenu.
It is also admitted that the Central Government made the order of confirmation dated 24.4.1990 on receipt of the opinion of the Advisory Board, but there was no independent consideration of the detenu 's representation by the Central Government at any time.
In the counter affidavit filed initially by Shri A.K. Roy, Under Secretary to 425 the Government of India, this fact was not clearly stated and, therefore, we directed an additional affidavit to be filed.
In the additional affidavit filed by Shri A.K. Roy, it has not been disputed that the Central Government did not at any time consider independently the detenu 's representation addressed to and given to the Advisory Board.
In the additional affidavit, the stand of the Central Government in this behalf has been stated thus: ".
Since the detenu in the present case has not made any representation to the Central Government, the assertion in para 2 of the grounds of petition that no opportunity was afforded by the Central Government to the said detenu is vehemently denied.
The question of consideration of a representation and providing of an opportunity would only arise when a representation is duly made to the Central Government.
" On the above facts, the question is: Whether there has been any infraction of the guarantee under Article 22(5) of the Constitution as a result of Central Government 's omission to consider the detenu 's representation independent of its consideration by the Advisory Board? The Central Government 's stand is that the detenu 's representation being addressed to the Advisory Board to which it was submitted during pendency of the reference before the Advisory Board, there was no obligation on the Central Government also to consider the same independently since the representation was not addressed to the Central Government.
The Constitutional mandate in Article 22(5) was considered recently by a Constitution Bench in K.M. Abdulla Kunhi and B.L. Abdul Khader vs Union of India and Ors., State of Karnataka and Ors., JT , in view of some conflict in earlier decisions of this Court regarding the detaining authority 's obligation to consider the detenu 's representation independently of the Advisory Board 's duty in this behalf.
The Constitution Bench held as follows: "It is now beyond the pale of controversy that the constitutional right to make representation under clause (5) of Article 22 by necessary implication guarantees the constitutional right to a proper consideration of the representation.
Secondly, the obligation of the Government to afford to the detenu an opportunity to make representation is distinct from the Government 's obligation to refer the 426 case of detenu along with the representation to the Advisory Board to enable it to form its opinion and send a report to the Government.
It is implicit in clauses (4) and (5) of Article 22 that the Government while discharging its duty to consider the representation, cannot depend upon the views of the Board on such representation.
It has to consider the representation on its own without being influenced by any such view of the Board.
The obligation of the Government to consider the representation is different from the obligation of the Board to consider the representation at the time of hearing the references.
The Government considers the representation to ascertain essentially whether the order is in conformity with the power under the law.
The Board, on the other hand, considers the representation and the case of the detenu to examine whether there is sufficient case (sic) for detention.
The consideration by the Board is an additional safeguard and not a substitute for consideration of the representation by the Government.
The right to have the representation considered by the Government, is safeguarded by cl.
(5) of Article 22 and it is independent of the consideration of the detenu 's case and his representation by the Advisory Board under cl.
(4) of article 22 read with Section 8(c) of the Act.
(See: Sk.
Abdul Karim & Ors.
vs State of West Bengal, [ ; ; Pankaj Kumar Chakrabarty & Ors.
vs State of West Bengal, [1970]1 SCR 543; Shayamal Chakraborty vs The Commissioner of Police Calcutta and Anr., [ ; ; B. Sundar Rao and Ors.
vs State of Orissa, [ 1; John Martin vs State of West Bengal, 1 1; section K. Sekawat vs Stale of West Bengal; , and Haradhan Saha & Anr.
vs State of IVest Bengal and Ors.
, ; (emphasis supplied) It is thus clear that the obligation of the Government to consider the representation is different and in addition to the obligation of the Board to consider it at the time of hearing the reference before giving its opinion to the Government.
Consideration of the representation by the Government has to be uninfluenced by the view of the Advisory Board.
In short, the detenu 's right to have the representation considered by the Government under Article 22(5) is independent of the consideration of the detenu 's case and his representation by the Advi 427 sory Board.
This position in law is also not disputed before us.
The learned Solicitor General, however, contended that in the present case there being no representation addressed to the Central Government, the only representation made by the detenu being addressed to the Advisory Board during pendency of the reference, there was in fact no representation of the detenu giving rise to the Central Government 's obligation to consider the same.
The question is: Whether this contention can be accepted in the face of the clear mandate in Article 22(5) of the Constitution? It is undisputed that if there be only one representation by the detenu addressed to the detaining authority, the obligation arises under Article 22(5) of its consideration by the detaining authority independent of the opinion of the Advisory Board in addition to its consideration by the Advisory Board while giving its opinion.
In other words, one representation of the detenu addressed only to the Central Government and not also to the Advisory Board does not dispense with the requirement of its consideration also by the Advisory Board.
The question, therefore, is: Whether one of the requirement of consideration by Government is dispensed with when the detenu 's representation instead of being addressed to the Government or also to the Government is addressed only to the Advisory Board and submitted to the Advisory Board instead of the Government? On principle, we find it difficult to uphold the teamed Solicitor General 's contention which would reduce the duty of the detaining authority from one of substance to mere form.
The nature of duty imposed on the detaining authority under Article 22(5) in the context of the extraordinary power of preventive detention is sufficient to indicate that strict compliance is necessary to justify interference with personal liberty.
It is more so since the liberty involved is of a person in detention and not of a free agent.
Article 22(5) casts an important duty on the detaining authority to communicate the grounds of detention to the detenu at the earliest to afford him the earliest opportunity of making a representation against the detention order which implies the duty to consider and decide the representation when made, as soon as possible.
Article 22(5) speaks of the detenu 's 'representation against the order ', and imposes the obligation on the detaining authority.
Thus, any representation of the detenu against the order of his detention has to be considered and decided by the detaining authority, the requirement of its separate consideration by the Advisory Board being an additional requirement implied by reading together clauses (4) and (5) of Article 22, even though express mention in Article 22(5) is only of the detain 428 ing authority.
Moreover, the order of detention is by the detaining authority and so also the order of its revocation if the representation is accepted, the Advisory Board 's role being merely advisory in nature without the power to make any order itself.
It is not as if there are two separate and distinct provisions for representation to two different authorities viz. the detaining authority and the Advisory Board, both having independent power to act on its own.
It being settled that the aforesaid dual obligation of consideration of the detenu 's representation by the Advisory Board and independently by the detaining authority flows from Article 22(5) when only one representation is made addressed to the detaining authority, there is no reason to hold that the detaining authority is relieved of this obligation merely because the representation is addressed to the Advisory Board instead of the detaining authority and submitted to the Advisory Board during pendency of the reference before it.
It is difficult to spell out such an inference from the contents of Article 22(5) in support of the contention of the learned Solicitor General.
The contents of Article 22(5) as well as the nature of duty imposed thereby on the detaining authority support the view that so long as there is a representation made by the detenu against the order of detention, the aforesaid dual obligation under Article 22(5) arises irrespective of the fact whether the representation is addressed to the detaining authority or to the Advisory Board or to both.
The mode of address is only a matter of form which cannot whittle down the requirement of the Constitutional mandate in Article 22(5) enacted as one of the safeguards provided to the detenu in case of preventive detention.
We are, therefore, unable to accept the only argument advanced by the learned Solicitor General to support the detention.
On this conclusion, it is not disputed that there has been a breach by the Central Government of its duty under Article 22(5) of the Constitution of India to consider and decide the representation independently of the Advisory Board 's opinion.
The order of detention dated 25.1.1990 as well as the order dated 24.4.1990 of its confirmation passed by the Central Government are, therefore, quashed.
This shall not, however, affect the detenu 's prosecution for the alleged offence and it shall also not be construed as a direction to release him in case he is in custody as a result of refusal of bail.
The writ petition is allowed, accordingly.
G.N. Petition allowed.
[/INST]The original occupant of the suit godowns had on 1.10.1963 granted to the appellant a licence in respect of the premises and subsequently by a deed of assignment dated 13.8.1966 assigned all its rights, title and interest in the premises in favour of the appellant.
The appellant had in the meantime by agreement dated 27.3.1964 permitted the second respondent to store goods in the premises.
The appellant thereafter requested the Corporation to recognise it as the principal occupant of the premises by means of a formal agreement.
This request was at first rejected by the Corporation on the ground that the second respondent, had been already in occupation of the premises.
Subsequently the Corporation examined the terms and conditions of the agreement dated 27.3.1964 and after satisfying itself the Corporation transferred the occupancy right to the appellant on the appellant executing a formal agreement dated 17.6.1967.
A notice dated 25.7.1969 terminating tenancy in terms of the agreement dated 17.6.1969 was served on the appellant.
This was followed by an enquiry under the Bombay Municipal Corporation Act 1888 which resulted in the order of eviction dated 6.1.1971, the appellant being the principal tenant and the second respondent as a sub tenant.
The enquiry officer, acting as a delegate in terms of section 68 and exercising the power of Commissioner of the Municipal Corporation of Greater Bombay, the first respondent under section 195B, ordered eviction of the appellant on the ground of sub letting the premises.
The enquiry officer, on inspection, found that the second respondent was in occupation of the premises as a sub lessee that the appellant 830 had sub let the premises contrary to the terms of the conditions of occupation and had thus become an unauthorised occupant liable to be evicted from the premises in terms of section 105B, and passed an order of eviction against the appellant.
This order was, on appeal, set aside by the appellate officer, on appreciation of the evidence and the terms of the agreements, the appellate officer held that the agreement dated 27.3.1964, approved and recorded the assignment and transfer of the right, title and interest of the original occupant to the appellant, and recognised the appellant as the principal occupant, and that the Corporation was at all material times aware of the appellant 's relationship with the second respondent and the occupation of the premises by the second respondent under the appellant.
The eviction of the appellant solely on the ground of sub letting was therefore unwarranted.
The High Court in exercise of its jurisdiction under Article 227 of the Constitution held that the appellate officer was wrong in saying that the circumstances had not altered so as to warrant an order of eviction on the ground of sub lease, and that the lease in favour of the appellant had been duly determined by the Corporation in terms of the contract, and the appellant having thus become an "unauthorised" occupant was as such liable to be evicted under clause (b) of sub section (1) of section 105B.
The High Court accordingly set aside the order made by the appellate officer under section 105B and restored the order of eviction made under section 105B by the Enquiry Officer.
In the appeal to this Court it was submitted on behalf of the appellant that persons in occupation of premises under authority are not liable to be evicted otherwise than on any one of the statutorily specified grounds, and that the application of clause (b) of sub section (1) of section 105B, is confined to persons in unauthorised occupation, and that the appellate officer having found that the Corporation when it entered into an agreement of occupation with the appellant on 17.6.1967 fully aware of the terms and conditions under which the second respondent was in occupation of the premises under the appellant, the High Court was not justified in upholding the eviction of the appellant on the very same ground.
On behalf of the respondent No. 1 Corporation it was submitted that in view of the finding that the sub lease granted or renewed by the appellant was contrary to clauses (6) and (2) of the agreement dated 17.6.1967 the appellant has, after the expiry of the period stipulated in 831 the notice dated 25.7.1969, become an unauthorised occupant, and is liable to be evicted in terms of clause (b) of sub section (1) of section 105B.
On the question: whether it is open to the Corporation to have recourse to clause (b) of sub section (1) of section 105B to order eviction of the appellant as an unauthorised occupant, and whether clause (b) is attracted where eviction is sought to be made by determination of authority otherwise than in terms of the statute.
Allowing the appeal, the Court, HELD: 1.
Section 105A to section 105H of Chapter VA were inserted in the Act in 1961 to provide for speedy eviction of persons in unauthorised occupation of Corporation premises.
(839C) Section 105A(d) defines 'unauthorised occupation '.
This definition shows that occupation of Corporation premises without authority for such occupation is an unauthorised occupation.
Such occupation includes continuance in occupation by a person after the authority under which he occupied the premises has "expired" or it has been "duly determined".
the definition thus includes not only a trespasser whose initial and continued occupation has never been under any valid authority, but it also includes in equal measure a person whose occupation at its commencement was under authority, but such authority has since expired, or, has been duly determined Which means validly determined.
The expiry of authority to occupy occurs by reason of the terms or conditions of occupation.
On the other hand, the determination of authority to occupy to be due or valid must be founded on one of the grounds specified by the statute.
Any order of eviction on the ground of either "expiry" or due determination" has to be made in accordance with the procedure prescribed by the statute.
[839D H] 3.
Clause (a) of sub section (1) of section 105B contains various grounds upon which a person is liable to be evicted.
Clause (b) says that unauthorised occupation itself is a ground for eviction.
Sub section (2) speaks of show cause notice before an order of eviction by notice is made under sub section (1).
Sub section (3) has conferred sufficient power on the Commissioner to enforce an order of eviction made by him under sub section (1).
For the purpose of holding an enquiry under the Act, the Commissioner is invested with all the powers of a Civil Court (Section 105E) An appeal lies from every order of the Commissioner 832 under section 105B or section 105C to the appellate officer, namely the Principal Judge of the City Civil Court of Bombay (section 105F), whose orders are final and not liable to be "called in question in any original suit, application or execution proceeding" (Section 105G).
[841E G] 4.
The satisfaction of the Commissioner, which is the condition precedent to the exercise of power of eviction by the summary procedure prescribed by the Act, may be in respect of any of the circumstances falling under clauses (a), (b) or (c) of sub section (1) of section 105B.
Clause (a) contemplates eviction of any person on any one of the grounds mentioned in sub clauses (i) to (iv) thereof.
These grounds relate only to a person in authorised occupation of Corporation premises.
They have no application to a trespasser.
[841H 842B] 5.
Likewise, clause (c) presumably applies to authorised occupation of Corporation premises, which the Commissioner is empowered to terminate by ordering eviction of the occupant otherwise than on any of the grounds specified under clause (a), provided the Commissioner is satisfied that the premises in question are required by the Corporation in the public interest.
All that the Commissioner has to satisfy himself in a case falling under clause (c) is as regards the public interest requiring eviction.
Construction of parks, playgrounds, hospitals, colleges, markets, destitute homes and the like will indeed qualify for invoking the Commissioner 's power under clause (c).
[842C] 6.
Clause (b) is a powerful weapon for eviction of an unauthorised occupant.
This clause is applicable equally to a trespasser as it is to a person whose occupation has ceased to be an authorised occupation by reason of expiry of authority in terms thereof or due determination of authority under clause (a) or clause (c) of sub section (1) of section 105B. [842D] 7.
If a person is in occupation without authority, as in the case of a trespasser, or if the authority under which a person has been in occupation has expired in terms thereof and he continues to remain in occupation of the premises, he will be liable to be evicted on the ground mentioned in clause (b) of sub section (1) of section 105B, but in accordance with the procedure laid down in that section and on the satisfaction of the Commissioner, expressed by an order, as to the lack or expiry of authority.
[842E F] 8.
Sub letting as such, without more, is not a ground for eviction 833 under clause (a) (ii).
What attracts eviction in terms of that provision is sub letting which is contrary to the terms or conditions of occupation.
[843C] In the instant case, the appellate officer has found that the occupation of the premises by the second respondent under the appellant was well known to the Corporation; the terms and conditions of that occupation were closely scrutinised by the Corporation before recognising the transfer of rights and interest from the previous principal occupant to the appellant; and, it was on that basis and with that knowledge that the Corporation authorised the occupation of the premises by the appellant in terms of the agreement dated 17.6.1967.
In such circumstances, whatever right of occupation which the second respondent enjoyed under the appellant must be deemed to have been incorporated as a term of the authority granted by the Corporation in favour of the appellant.
The appellate officer has categorically found that there was no evidence whatsoever to indicate that the circumstances in which the premises had been occupied by the second respondent had in any manner, or at any time, altered so as to affect the terms or conditions under which the appellant was recognised as the principal occupant.
The Corporation is, accordingly on the facts found, estopped from having recourse to the ground falling under clause (a) (ii) of sub section (1) of section 105B. [843D G] 9.
In proceedings under Article 227 of the Constitution, the high Court was not justified in interfering with the findings of fact rendered against the Corporation by the appellate officer.
[843H 844A]
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<s>[INST] Summarize the judgementAppeals Nos. 2459 and 2460 of 1968 and 1161 and 1162 of 1971.
Appeals by certificate/special leave from the judgment and order dated April 1, 1968 of the Calcutta High Court in Income tax Reference No. 163 of 1964.
N. A. Palkhivala, T. A. Ramachandran and D. N. Gupta, for the appellant (in all the appeals).
Jagadish Swarup, Solicitor General, B. B. Ahuja, R. N. Sach they and B. D. Sharma for the respondent (in all the appeals).
The Judgment of the Court was delivered by Hegde, J.
The first two appeals have been brought by certi ficate and the other two by special leave.
The later two appeals came to be filed because the certificates on the basis of which the earlier appeals were brought, were found to be defective inasmuch as the High Court had not given any reason in support of those certificates.
Hence it is sufficient, if we deal with the later two appeals.
The appellant is a non resident British Shipping Co. whose ships ply in waters all over the world including the Indian waters.
For the assessment years 1960 61, and 1961 62 (the relevant accounting years being calendar years 1959 and 1960), the Income tax Officer computed its total income taxable under the 12 L 256 Sup CI/72 170 Indian Income tax Act, 1922 (which will hereinafter be referred to as the, Act) by taking into account the ratio certificates issued by the Chief Inspector of Taxes, U.K. which were based on the assessments made on the appellant in U.K. During the relevant period, there was in U.K. "investment allowance" corresponding to "development rebate" under the Act.
The certificates issued by the Chief Inspector contained the percentage ratio of the total world profits of the appellant to its world earnings and similarly the percentage ratio of the wear and tear allowance and the investment allowance to its total world earnings.
In making the assessment the Income tax Officer purported to proceed on the basis of rule 33 of the Indian Income tax Rules 1922.
The said rule reads : "In any case in which the Income tax Officer is of opinion that the actual amount of the income, profits or gains accruing or arising to any person residing out of the taxable territories whether directly or indirectly through or from any business connection in the taxable territories, or through or from any property in the taxable territories or through or from any assets or source ,of income in the taxable territories, or through or from any money lent at interest and brought into the taxable territories in cash or in kind cannot be ascertained, the amount of such income, profits or gains for the purposes of assessment to income tax may be calculated on such percentage of the turnover so accruing or arising as the Income tax Officer may consider to be reasonable, or on an amount which bears the same proportion to the total profits of the business of such person (such profits being computed in accordance wi th the provisions of the Indian Income tax.
Act), as the receipts so accruing or arising bear to the total receipt of the business, or in such other manner as the Income tax Officer may deem suitable.
" The Income tax Officer proceeded to assess the appellant assessee on the second of the three bases mentioned in rule 33; but in computing Indian earnings, he did not include the destination earnings ' received in India ie.freight received in Indian ports in respect of cargo loaded at non Indian ports nor did he take into account the investment allowance granted to the appellant in its U.K. assessments.
Aggrieved by the order of the Income tax Officer, the assessee took up the matter in appeal to the Appellate Assistant Commissioner.
The Appellate Assistant Commissioner accepted the contention of the assessee as regards the inclusion of the desti 171 nation earnings in the computation of the *Indian earnings of the assessee but rejected its contention as regards the investment allowance.
Aggrieved by the order of the Appellate Assistant Commissioner both the assessee as well as the Revenue appealed to the income tax Appellate Tribunal.
The Tribunal allowed the appeal of the assessee and dismissed that of the Revenue.
Thereafter at the instance of the Revenue, the following two questions of law were referred to the High Court under section 66(1) of the Act.
Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the destination earnings collected in India should be considered as part of the Indian earnings in determining the assessee 's Indian income under Rule 33 of the Income tax Rules ? Whether, on the facts and in the circumstances of the case, the Tribunal was right in allowing the claim of the assessee for the investment allowance under the U.K. Act (corresponding to the development rebate under the Indian Income tax Act, 1922) in the compu tation of its total world income for the purpose of determining the assessee 's Indian income under rule 33 of the Income tax Rules, 1922 ?" The High Court answered the first question in favour of the, assessee and the second in favour of the Revenue.
Hence these appeals by the assessee.
The Revenue has not appealed against the decision of the High Court as regards Question No. 1.
Hence we have only to consider whether the decision of the High Court relating to Question No. 2 is in accordance with law.
At the commencement of his arguments Mr. Palkhivala, learned Counsel for the assessee indicated that rule 33 may not be applicable to the facts of the case; but he said that for the purpose of this case, he was prepared to proceed on the basis that the said rule is the governing provision.
The authorities under the Act as well as the High Court have examined the facts of this case on the basis of rule 33.
The second question referred to the High Court requires the High Court to express its opinion whether on the facts and in the circumstances of the case, the Tribunal was right in allowing the claim of the assessee for the investment allowance under the U.K. Act in the computation of the total world income for the purpose of determining the assessee 's Indian income under rule 33.
Under these circumstances, it would not be appropriate for, us at this stage to ignore the ,earlier proceedings and examine the case afresh on a wholly diffe 172 rent basis.
Hence we have not gone into the question whether rule 33 is applicable to the facts of the case.
We are proceeding on the assumption that it applies.
An mentioned earlier, the assessee is a non resident.
Its liability to pay tax arises under sections 3 and 4 of the Act.
The total income that arose or accrued or deemed to have arisen or accrued to it in this country in the relevant previous years is liable to be taxed in this country.
Section 10(2) provides for certain allowances to be deducted while computing the taxable income.
Section 10 (2) (vib) deals with the development rebate.
The material part of that section reads: "In respect of a new ship acquired or new machinery or plant installed after the 3 1st day of March, 1954 which is wholly used for the purposes of the business carried on by the assessee, a sum by way of development rebate in respect of the year of acquisition of the ship or of the installation of the machinery or plant, equivalent to, (i) in the case of a ship acquired after the 3 1st day of December, 1957, forty per cent of the actual cost of the ship to assessee, and (ii) in the case of a ship acquired before the 1st day of January, 1958 and in the case of any machinery or plant, twenty five per cent.
of the actual cost of the ship or machinery or plant ,to the assessee.
" The proviso to that clause says "Provided that no allowance under this clause shall be made unless (a) the particulars prescribed for the purpose of clause (vi) have been furnished by the assessee in respect of the ship or machinery or plant; and (b) except where the assessee is a company being a licensee within the meaning of the (54 of 1948), or where the ship has been acquired or the machinery or plant has been installed before the 1st day of January, 1948 an amount equal to seventy five per cent of the development rebate to be actually allowed is debited to the profit and loss account of the relevant previous year and credited to a reserve, account to be utilised by him 173 during a period of ten years next following : or the purposes of the business of the undertaking except (i) for distribution by way of dividends or profits, or (ii) for remittance outside India as profits or for the creation of any asset outside India, and if any such ship, machinery, or plant is sold or otherwise transferred by the assessee to any person other than the Government at any time before the expiry of ten years from the end of the year in which it was acquired or installed, any allowance made under this clause shall be deemed to have been wrongly allowed for the purposes of this Act.
" It may be noted that in the case.
of a shipping company like the appellant before us, whose ships ply all over the world, it may not be possible to strictly comply with the provisions contained in section 4 of section 10(2).
The provisions dealing with the levy of Income tax are not identical in all countries.
It may well nigh be impossible for a shipping company like the appellant to rigidly comply with the requirements of the laws in force in the numerous countries where it can be said to have earned income.
Possibly to get over such a difficulty rule 33 was enacted.
That is how the Revenue had proceeded in assessing the appellant.
Evidently in exercise of its power under section 5(8) of the Act, which says that "all officers and persons employed in the execution of this Act shall observe and follow the orders, instructions and directions of the Central Board of Revenue.
", the Central Board of Revenue had issued the notification dated February 10, 1942.
Under that notification instructions had been issued to the assessing authorities, laying down the principles to be applied in assessing the foreign shipping companies.
As regards the British Shipping Companies, they were directed to permit those companies "to elect to be assessed on the basis of a ratio certificate granted by the U. ' K. authorities regarding the income or loss and the wear and tear allowance".
At the time that notification was issued the Act did not provide for a development rebate.
Therefore that notification does not refer to any development rebate.
But it is made clear by that notification that a British Shipping Company can elect to be assessed on the basis of a ratio certificate granted by the U.K. authorities regarding the income or loss which means the net income or net loss.
During the relevant previous years, the Act 174 provided for deduction of the development rebate in the computation of the taxable income.
During those years the U.K. Income tax Act provided for a similar allowance; but that allowance was known as investment allowance.
We were informed at the bar that in those years, the percentage of devlopment rebate allowed under the Act was the same as that allowed under the U.K. law as investment allowance.
In about the beginning of 1964 M/s. Turner Morrison & Co.which was the a agent of several British Shipping Companies in India appears to have written to the Board of Revenue seeking its advice as to how the British Shipping Companies could claim development rebate.
In reply to that letter, the Board of Revenue wrote to them as follows "Sub: Assessment of British Shipping Companies on the basis of ratio certificates Treatment of investment allowance granted in the U.K.
I am directed to reply your letter dated 8th Feb. 1957 on the above subject and to state that as the development rebate which corresponds to the investment allowance granted in the U.K. is allowed under the In dian Income tax Act from the assessment year 1956 57, there is no objection to allow the investment allowances for the purpose of the computation of the Indian Income of British Shipping Companies.
This would, however be subject to the condition that the investment allowance would be permitted as a deduction only to the extent to which the rate of the allowance granted in the U.K. is not greater than the rate of development rebate allowed under the Indian Income tax Act.
" We were informed that the copies of that letter were sent to the Income tax Commissioners in the various States.
From this letter, it is clear that the Board of Revenue had instructed the taxing authorities to take into consideration the investment allowance granted by the U.K. authorities in computing the taxable income of the British Shipping Companies.
At this stage, it is necessary to mention that the proviso to cl.
(vib) of section 10(2) referred to earlier was incorporated into the Act sometime after the above instructions were issued by the Board of Revenue.
The authorities under the Act have proceeded on the basis that the computation of the income of the assessee has to be made on the second of the three bases mentioned in rule 33.
This assumption appears to be incorrect.
Admittedly the profits of the assessee company were not computed in accordance with the provisions of the Act.
That being so, the second basis mentioned 175 in rule 33 cannot be applied.
This aspect was brought to the notice of the High Court.
But the High Court refused to consider the same on the ground that both the Revenue as well as the assessee had proceeded before the authorities under the Act on the assumption that the second basis mentioned in rule 33 is the relevant basis.
In our opinion the High Court erred in adopting that approach.
The fact that the authorities under the Act as well as the parties were under a mistaken impression cannot alter the true position in law.
It is obvious that that basis could not have been applied.
That being so the computation of the appellant 's income had to be made either under the first basis viz. the calculation of the profits and gains on such percentage of the turnover accruing or arising as the Income tax Officer may consider to be reasonable or on the third basis i.e. 'in such other manner as the Income tax Officer may doom suitable '.
From the assessment orders made by the Income tax Officer, it does not appear that in computing the taxable income of the assessee, he adopted the first basis.
The most appropriate basis under which he could have computed the income was the last basis viz. "in such other manner as the Income tax Officer may deem suitable.
" While adopting that basis, the Income tax Officer is not required to rigidly apply the various conditions prescribed in the Act in the matter of granting one or the other of the permissible allowances.
He may adopt any equitable basis so long as that basis does not conflict either with rule ' 3 or with the instructions or directions given by the Board of Revenue.
The power given to the Income tax Officer under that basis is a very wide power.
That power is available not only to the Income tax Officer but also to the Appellate Assistant Commissioner and the Tribunal.
As the Tribunal had determined the tax due from the appellant on the basis of the ratio certificate given by the U.K. authorities, it cannot be said that the decision reached by the Tribunal was an unreasonable one.
The Tribunal 's decision accords with the instructions given by the Board of Revenue.
The fact that the Proviso to section 10 (2) (vib) was incorporated into the Act after the Board issued its instructions cannot affect either the validity of rule 33 or the force of the instructions issued by the Board of Revenue because neither rule 33 nor the instructions issued were strictly in accordance with section 10(2).
They merely lay down certain just and fair methods of approach to a difficult problem.
The learned Solicitor General appearing for the Revenue at one stage of his arguments contended that the instructions issued 176 by, the, Board of Revenue cannot have any binding effect and those instructions cannot abrogate or modify the provisions of the Act.
.But he did not contend that the Rule 33 is ultra vires the Act.
The instructions, in question merely lay down the manner of applying rule 33.
Now coming to the question as to the effect of instructions issued under section 5 (8) of the Act, this Court observed in Navnit Lal C. Javeri vs K. K. Sen Appellate Asstt.
Commissioner Bombay : (1) "It is clear that a circular of the kind which was issued by the Board would be binding on all officers and persons employed in the execution of the Act under section5(8) of the, Act.
This circular pointed, out to all the officers that it was likely that some of the companies might have advanced loans to their share holders as a result of genuine transactions of loans, and the idea was, not to affect such transactions and not to bring them within the mischief of the new provison." The directions given in that circular clearly deviated from the Provisions of the Act, yet this Court held that the circular was binding on the Income tax Officer.
For the reasons mentioned I above, Civil Appeals Nos. 1161 and 1162 of 1971 are allowed and in substitution of the answer given by the High Court to question No. 2, we answer that question in the affirmative and in favour of the assessee.
The assessee is entitled to its costs in those appeals both in this Court as well as in the High Court costs one set.
Civil Appeals Nos. 2459 and 2460 of 1968 are dismissed as being not maintainable.
In those appeals, there will be no order as to costs.
G.C. C.A.s Nos.
1161 and 1162/71 allowed.
C.A.s Nos.
2459 and 2460/68 dismissed.
[/INST]The object of the Banking Companies Act, 1949 is to provide a machinery for expeditious and speedy termination of proceedings in liquidation and in the absence of any specific provisions of the Act to the contrary or any rules framed by the High Court under section 45 G of the Act (inserted by Act XX of 1950) the normal procedure for deciding all claims under section 45 B of the Act (inserted by Act XX of 1950) should be a summary proceeding originating with an applica tion.
But the court in its discretion may think fit to direct or the rules of the High Court may provide that a suit is the proper remedy in view of the nature of claim made and the questions involved in such claim.
Sree Bank vs Mukherjee ([1950] , referred to.
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<s>[INST] Summarize the judgementminal Appeal No. 240 of 1959.
Appeal by special leave from the judgment and order dated July 15, 1959, of the Calcutta High Court in Criminal Revision No. 135 of 1959.
section C. Mazumdar, for the appellant.
Sukumar Ghose, for the respondent No. 1. 1962.
March 26.
The Judgment of the Court was delivered by KAPUR, J.
This is an appeal against the judgment and order of the High Court of Calcutta passed in revision against the order of the Additional Session,% Judge, Howrah, who had modified the order of conviction of the respondents under section 488 read with a. 386(1)(b) of the Calcutta Municipal Act (Act III of 1923) as extended to the Municipality of Howrah, hereinafter called the 'Act '.
The appellant before us is the Chairman of the Municipal Committee of Howrah who is the complainant and the respondent is a company with its premises at No. 1 Swarnamoyee Road, where it was carrying on the manufacture of bobbins, card pine, shuttles etc.
They were also storing their wood and timer in those premises.
49 The charge against the respondent was that it was using the premises within the municipality of Howrah without a license as required under section 386 of the Act and was therefore guilty under section 488 of the Act.
The defence of the respondent was that the premises had been licensed as a warehouse under the West Bengal Fire Services Act, 1950 (Act 18 of 1950) and consequently because of section 38 of that Act, section 386 of the Act stood repealed and the respondent was not required to take out another license under, section 386 of the Act.
The Magistrate, before whom the case was tried, was of the opinion that the effect of a. 38 of the West Bengal Fire Services Act was that the power of the Municipality to require a license under a. 386 of the Act for user as a warehouse had been taken away and therefore in respect of the rest of the premises used as a factory or for other purposes the applicability of section 386 remains unimpaired.
He found that the respondent was running a factory with workshops fitted with electric power in the premises for the manufacture of bobbins, card pins, shuttles etc.
He convicted the respondent under section 488 and sentenced him to a fine of Rs. 250.
In appeal the learned Additional Sessions Judge held that section 38 of the West Bengal Fire Services Act does not repeal all the three clauses of section 386 of the Act but partially repeals a. 386(3) which deals with the levy of fees and therefore a license under section 386(1) will still have to be taken but as the premises had al.
ready been licensed as a warehouse the respondent company could not be required to pay any fees under a. 386(3) of the Act.
The object, according to the learned Sessions Judge, was that the levy of fees twice over in respect of the same premises was prohibited and not that the license was not required.
The sentence of fine was therefore reduced from Rs. 250 to Rs. 10 only.
Against this order the appellant took a revision to the High Court.
50 The High Court held that where the premises are licensed as a warehouse under the Fire Services Act but a portion of it is used as a workshop the Municipal Committee has No. longer the power to levy any fees for granting the license in respect of the premises even though there may be a liability to take out a license i.e. while it may be necessary to take out a license under section 386(1) of the Act no fees could be charged and as the whole of the premises in case had been licensed as a warehouse under the West Bengal Fire Services Act no part of the premises would be liable for any charge of fees for granting a license.
A further argument was also raised for the appellant in the High Court and that was that a. 38 of the West Bengal Fire Services Act did not apply to the Howrah Municipality at all because the Howrah Municipality is governed neither by the Calcutta Municipal Act nor by the Bengal Municipal Act but by the Calcutta Municipal Act as extended to Howrah i. e. as modified in accordance with the powers conferred on the Government by section 541(2) of the Calcutta Municipal Act.
But the High Court was of the opinion that a. 38 of the West Bengal Fire Services Act is applicable to the Howrah Municipality and there.
fore repelled this last argument.
The revision was therefore dismissed, and the rule was discharged.
Against that order the appellant has come in appeal by special leave.
The main argument raised by the appellant was that section 38 of the West Bengal Fire Services Act could not affect the operation of section 386 of the Calcutta Municipal Act as it was extended to the Howrah Municipality.
Section 38 of the former Act reads as under: "On the application of this Act to Calcutta or any other Municipality, section 51 38 6 of the Calcutta Municipal Act, 1923, or section 370 of the Bengal Municipal Act, 1932, as the case may be, shall be deemed to be repealed in so far as they entitle the Corpo ration of Calcutta or the Commissioners of the Municipality to levy fees in respect of any premises or part thereof licensed as a warehouse under this Act".
It was contended that section 38 of that Act does not repeal section 386 of the Act because the interpretation of that section is that it repeals section 386 of the Calcutta Municipal Act 1923 which entitles the Corporation of Calcutta to levy fees and section 370 of the Bengal Municipal Act, 1932 which entitles the Commissioners of other Municipalities to levy fees in respect of any premises licensed as a warehouse; in other words the argument was that in the case of Corporation of Calcutta section 386 of the Act shall be deemed to be repealed to the extent mentioned in section 38 and in the case of other Municipalities and the Commissioners of those Municipalities s.370 of the Bengal Municipal Act.
1932 shall be deemed to be repealed to the extent that, s.38 is applicable and as Howrah Municipality is neither the Corporation of Calcutta nor is it governed by section 370 of the Bengal Municipal Act, section 38 is inoperative.
To test the correctness of this argument it is necessary to refer to the provisions by which the Act was extended to the Municipality of Howrah.
Under so.
540 and 541 of the Calcutta Municipal Act the Provincial Government was empowered to extend all or any of the provision of that Act to the Municipality of Howrah.
Under section 542 the effect of the extension was that the Bengal Municipal Act 1932 stood repealed qua the Municipality of Howrah from the date of such extension and sub cl.
(b) of that section provides: "Except as the Provincial Government may otherwise by notification in the Official 52 Gazette direct, all rules, by laws, orders, directions and powers made, issued or conferred under the portions of this Act which have been so extended and in force at the date of such extension, shall apply to the said municipality or part, in Supersession of all corresponding rules, by laws, orders, directions and powers made, issued or conferred under the said Bengal Municipal Act, 1932" and by an explanation to that section the extension of the Act did not put the Municipality of Howrah tinder the authority of the Corporation of Calcutta.
By a Gazette Notification NO.
260M of January 18, 1932 practically the whole of the Act, excepting the provisions which are not necessary, was extended to the Municipality of Howrah.
The language extending the Act was as follows: "Howrah.
260M. 18th January 1932 In exercise of the power conferred by sub section (2) of section 541 of the Calcutta Municipal Act, 1923 (Bengal Act III of 19 3).
the Government of Bengal (Ministry of Local Self Government) are pleased to extend to the Municipality of Howrah the following pro visions of the Calcutta Municipal Act 1923, subject to the modifications and restrictions specified therein which are 'shown in antique type.
As a result of this extension section 386 was extended to the Municipality of Howrah with this modification that in place of the word "Corporation of Calcutta ' the word "Commissioners" was substituted.
In 1951 the Calcutta Municipal Act 1951 being West Bengal Act 33 of 1951 was enacted thus replacing Act 3 of 1923 which was therefore repealed.
In the new Act corresponding provision to sections 540, 541 and 542 are sections 589, 590 and 591.
Section 614 of the new Act provides that the provisions of Act III of 1923 as extended to the Municipality of Howrah shall continue to be in force until the provisions of the new 53 Act are extended to that Municipality under the new Act.
Thus the effect of the extension by the Notification under sections 540 and 541 of the Calcutta Municipal Act is that to the Municipality of Howrah an amended Act with an amended section 386 is applicable and not section 386 of the Act III of 1923.
Keeping this in view we have then to see how far section 38 of the West Bengal Fire Services Act 1950 (Act 18 of 1950) has affected the operation of section 386 as it applies to the Municipality of Howrah.
Section 38 provides that section repeals section 386 of the Act III of 1925 to the extent therein mentioned.
It also repeals section 370 of the Bengal Municipal Act as it applies to the Commissioners of Municipalities in Bengal.
It does not apply to section 386 as modified and is inapplicable to the Municipality of Howrah because in section 386 as applicable to the Corporation of Calcutta the word used is ",Corporation" and not "Commissioners" and wherever the word "Corporation" is used in section 386 it is replaced by the word "Commissioners" in section 386 as it applies to the Howrah.
Municipality.
It cannot be said therefore that section 38 repeals section 386 of the Act III of 1923 as it applies to the Howrah Municipality.
In a somewhat similar case a similar view was taken by the Privy Council.
See Secretary of State for India vs Hindusthan Co operative lnsurance Society (1).
In that case certain provisions of the Land Acquisition Act were incorporated by reference Into the Calcutta Improvement Act 1911.
By an amendment of 1921 the right of appeal to the Privy Council from the decision of the High Court was provided in matters failing under the Land Acquisition Act.
It was held that the right of appeal so given was not applicable to the award of a tribunal under the Calcutta Improvement Act assessing compensation in respect of land acquired under the provisions of the.
Land Acquisition Act.
Dealing with this matter Sir George Lowndes quoted with (1) (1931) L.R. 58 1.A. 259.
54 approval the observations of Lord Westbury in Ex parts St. Sepulchre 's (1) and observed: "It seems to be no less logical to hold that where certain provisions from an existing Act have been incorporated into a subsequent Act, no addition to the former Act, which is not expressly made applicable to the subsequent Act, can be deemed to be incorporated in it, at all events if it is possible for the subsequent Act to function effectually without the addition".
Although a. 38 of the West Bengal Fire Services Act extends to the whole of Bengal and to the extent there set out it repeals section 386 of the Calcutta Municipal Act which applies to the Corporation of Calcutta and section 370 which applies to the other Municipalities of Bengal yet it does not affect the operation of section 386 of the former Act as modified and extended to the Municipality of Howrah by the notification which has been set out above.
The reason for that is that the language of section 386 has been modified to make it appropriate in its application to the Municipality of Howrah and for that purpose in place of the word `corporation ' the word " 'Commissioners" has been substituted.
Thus modified it is not a. 386 of the Calcutta Municipal Act but a different section.
Therefore what s.38 of the West Bengal Fire Services Act repeals is section 386 of the Calcutta Municipal Act and not section 386 of that as modified and applied to the Municipality of Howrah.
It may look rather anomalous but that is what the effect of the modification of the language is.
In our opinion therefore the contention of the appellant is well founded 'and section 38 of the West Bengal Fire Services Act does not repeal section 386 as modified and as applicable to the Municipality of Howrah.
From the point of view of the respondent the result may be unfortunate (1) , 376.
55 but that is the interpretation of the language of the various sections which are relevant in the present case.
We therefore allow the appeal, set aside the order of the High Court and convict the respondent of the offenses charged, but in view of the fact that the appellant succeeds on a question of interpretation we do not think it necessary to increase the sentence of fine imposed by the learned Sessions Judge, The, appeal is allowed to that extent.
Appeal allowed.
[/INST]On February 14, 1953, the Government of Punjab referred certain disputes between the appellant company and its workmen to the Industrial Tribunal which had been consti tuted on August 29, 1953, by a notification issued under section 7 of the industrial Disputes Act, 1947, by which G, an Advo cate, was appointed as the Industrial Tribunal for Punjab.
When the reference was pending the Act was amended.
The Amendment Act inter alia repealed section 7 of the principal Act and replaced it by sections 7A, 7B and 7C, and by section 30 provided for a saving clause in respect of the proceedings pending before the Tribunal constituted under the principal Act.
On April 19, 1957, the Punjab Government issued a notification under section 7 of the Act and section 30 of the Amendment Act extending the life of the Tribunal constituted under the repealed section 7 and also extending the term of G as the member.
On the same date another Notification was issued under section 7A of the Act constituting a new Tribunal and appointing G as the Presiding Officer up to June 3, 1957.
Under section 70 (b) the age of retirement for members was fixed at sixty five and under that provision G would have to retire by June 3, 1957.
The Punjab Government intervened and passed the Industrial Disputes (Punjab Amendment) Act, 1957, raising the age of retirement of members to sixty seven years.
After G had retired on June 3, 1959, the Punjab Government issued a notification appointing another person as the Presiding Officer of the Industrial Tribunal.
The appellant challenged the legality of the reference on the grounds, inter alia, (1) that G was not qualified to be appointed to the Tribunal under section 7 (3) (c) of the Act, as he was over sixty years and, therefore, the reference to him dated 90 February 14, 1955, was incompetent, and (2) that the Indus trial Disputes (Punjab Amendment) Act, 1937, was passed with a view to benefit a single individual, G, and, therefore, was void as offending article 14 of the Constitution of India.
Held, (1) section 7(3)(c) of the , did not import any qualification based on the age of the person to be appointed, and that the appointment of G on August 29, 1953, was valid under that section.
On the true Construction of article 217 of the Constitution of India, the prescription of age therein is a condition attached to the duration of the office and not a "qualifica tion" for appointment to it.
G.D. Karkare vs T.L. Shevde, I.L.R. and Prabhudayal vs State of Punjab, A. I. R. 1959 Punj.
460, approved.
(2) the Industrial Disputes (Punjab Amendment) Act,1957,not contravene article 14 of the Constitution, because thoughthe occasion which inspired the enactment of the statutemight be to benefit an individual, it was of general application and could not therefore be held to be discriminatory.
Ameerunissa vs Mehboob; , , distinguished.
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<s>[INST] Summarize the judgementCivil Appeal No. 358 of 1973 Appeal by special leave from the Judgment and order dated the 6th February, 1967 of the High Court of Judicature at Bombay in Special Civil Application No. 1967 of 1965.
M. C. Bhandare, P. H. Parekh, section Bhandare, Manju Jaitley, for Respondents Nos.
1 4, 12, 15" 17, 24, 27 30, 35, 36, 47, 49, 54 63, 75, 80, 82, 86, 87, 89, 90, 94, 96 107.
The Judgment of the Court was delivered by ALAGIRISWAMI, J.
This appeal arises out of the judgment of the Bombay High Court in Special Civil Application No. 1967 of 1965.
The 118 respondents are workmen of the appellant company working in different departments of the company 's works.
Respondent I to 14 are Syphon Pumpers.
They filed 14 applications before the Additional Authority under section 15 of the Payment of Wages Act claiming overtime wages for the period February 1957 to January 1958 Respondents 15 to 80 are Mains workers.
They filed 66 applications before the same authority claiming overtime wages for the period December 1956 to November 1957.
Respondents 81 to 118 filed 38 applications before the Third Additional Authority claiming wages for weekly off days.
They belonged to the Mains, Heating Appliances and Fitting Departments.
They had joined the appellant company 1 after 1948.
The relevance of the reference to their having become workers of the company after 1948 will become clear when we deal with the facts of this case later.
293 Before the Authority under the Payment of Wages Act the company contended that all the claims were barred under an award of the Industrial Tribunal in Ref.
No. 54 of 1949, which was made on 30 3 1950 and published on 11 5 1950.
The Authority held that (1) the claims of the Booster Attendants for wages for overtime work and weekly off days were covered by the award, (2) the clams of applicants other than Booster Attendants were not covered by the award, and (3) the Bombay Shops & Establishments Act was not applicable to them, and dismissed the applications of respondents 1 to 80.
The applications made by respondents 81 to 113 were allowed by the Third Additional Authority holding that the award was no bar to those applications and that the provisions of the Bombay Shops & Establishments Act were applicable.
Appeals were filed by respondents 1 to 88 in the Court of Small Causes, Bombay.
The appellant company filed an appeal against the judgment in the applications of respondents 81 to 118.
The Court of Small Causes dealt with the appeals filed by the workmen as well as the appeal filed by the company and by a common judgment held that the claims of workers for overtime wages and wages for weekly off days were barred by the award.
The workmen appeals were therefore dismissed and the company 's appeal was allowed.
It was.
however, held that the appellant company was a commercial establishment within the meaning of that term under the Bombay Shops & Establishments Act.
All the workmen filed a writ petition, out of which this appeal arises, challenging the judgment of the Court of Small Causes.
High Court held that the claims of the respondents were not barred by the award and remanded the applications of respondents 1 to 80 to the Authority under the Payment of Wages Act for ascertaining and decreeing the Amount.
As regards respondents 81 to 118 the judgment of the Third Additional Authority under the Payment of Wages Act was restored.
As the award of the Industrial Tribunal, Bombay in Ref No. 54 of 1949 is the most important factor that has to be taken into account in considering this appeal it would be proper to refer to portions of that award which relate to this appeal.
About 23 demands covering variety of subjects were referred to the Tribunal.
The demands out of which this appeal arises were No. 11 and 12 dealt with in paragraphs 113 to 126 of the award.
Demand No. 11 was as follows: (a) Workers should get a paid weekly off.
(b) Workers of Mains, Services and District fittings departments and lamp repairers, who have been adversely affected in the matter of their earnings on account of closing down of the overtime and Sunday work should be compensated for the loss suffered by them.
compensation being the amount lost by them since e scheme was introduced.
" 294 Demand No 12 was as follows A All work extending beyond the scheduled hours of work should be paid for at overtime rate (i.e., double the rate of wages).
" In discussing demand No. 11 the Tribunal pointed out that what the workers were asking for was paid weekly day off for those workers who were actually getting a weekly day off, though without pay.
It appears that in this company prior to 1946 most of the workers used to work for all the seven days of the week.
By about August 1946, however, weekly days off were enforced upon the major section of the workmen.
The company and the union had entered into an agreement about June 1946 as regards wage scales of various categories of workers.
The Tribunal, therefore, assumed that in respect of most of the daily rated workers the wages must have been fixed on the basis of what their monthly income would be for 26 working days In the cases of the classes of workers specifically mentioned in demand 11(b) a weekly day off was enforced some time in the year 1949, while in the case of lamp repairers the weekly day off was enforced from 1st April 1949.
Those categories of workers, therefore, used to .
work for all the 7 days of the week and earn wages for all the days till a short time before the reference.
The Tribunal, therefore, proceeded on the basis that in their case it cannot be said that daily rates of wages were fixed with reference to a month of 26 working days and therefore with the introduction of the weekly day off the wages of these workers were reduced, and that the concession of a weekly off would be a very doubtful benefit if as a result the monthly income of these E, workers was to go down.
The Tribunal granted the demand under demand No. 11 (b) in respect of workers who had been working on Sundays also till 1948.
Some doubts having arisen in respect of this portion of the award a reference was made to the Tribunal under rule 20A of the Industrial Disputes (Bombay) Rules for clarification.
The doubt raised was whether the company was bound to give a paid weekly day off to the workers of the Mains Department and to pay them compensation for the loss suffered by them.
It appears that the company gave a paid weekly day off to all personal mentioned in demand No. 11 except workers of the Mains on the ground that they were not persons who were till 1948 required to work on Sundays and in respect of whom a weekly day off was introduced thereafter.
The Tribunal pointed out that the paid weekly day off was given only to people who till recently used to work on all the seven days of the week and that it was unfortunate that the company had not at the hearing of the main adjudication specifically drawn attention to the fact that the workers of the Mains were not till recently required to work for all the seven days of the week.
The Tribunal, however, held that it was clearly a condition laid down for the grant of this benefit that the person concerned must be one who till 1948 was required to work on Sundays and in respect of whom a weekly day off was introduced thereafter.
295 The importance of the year 1948, to which we have referred m earlier part of the judgment, would now become apparent.
Respondents 81 to 118 who joined the company after 1948 contended that the award did not bind them.
In this they are manifestly wrong.
An award of an Industrial Tribunal in a reference under section 10 of the industrial Disputes Act binds not only persons who were the workmen of the employer at the time the award was made but also workmen who came to work under the employer after the award.
it would not be correct, therefore, to hold that they would be entitled to be paid separately for the weekly day off.
It must be presumed that their scales of pay were the same as for the workmen who were working before 1948 also.
There was no averment to the contrary.
They cannot, therefore, be allowed an extra benefit which would not be available to the same category of workmen who were working under the employer since before 1948.
The High Court seems to have been of the impression that these workmen were entitled to be paid for the days off either under the award or under s 18(3) of the Bombay Shops and Establishments Act.
It seems to have assumed that there was a scale of wages for weekly off days under the award.
That this is an obvious mistake would be apparent from a reading of paragraphs 114 and 115 of the award to the following effect: "114.
It must be remembered that the wages of daily rated workers are ordinarily fixed with reference to what their monthly income would be on the basis of a month consisting of 26 working days.
This undoubtedly secures to them the benefit of holidays with pay.
The company and the union have entered into an agreement about June 1946 as regards wage scales of various categories of workers that in respect of most of the daily rated workers the wages must have been fixed on the basis of what their monthly income would be for 26 working days.
Some difference must however be made in the case of the classes of workers specifically mentioned in demand 11(b).
Until recently these categories of workers used to work for all the 7 days of the week and earn wages for all the days.
Certainly it cannot be said in their case that their daily rates of wages were fixed with reference to a month of 26 working days.
Time demand in respect of workers of the Mains Services and District Fittings Departments and lamp repairers and others who were till l 948 required to work on Sundays and in respect of whom a weekly day of was introduced thereafter without any corresponding increase in their wages is granted.
" The matter would be further clear when paragraph 14 of the award is read, wherein the Tribunal has observed: "While therefore, I approve of Rs. 30 as the minimum wage for male mazdoors (coolies) which is at present given 296 to the workers in this Company, I think both the maximum and the increments provided are rather low when compared to what is now a days awarded even in the case of some of the smaller concerns in the engineering industry.
I, therefore, award to the unskilled workers (male coolies) a wage scale of Rs. 1 2 6 to Rs. 1 10 6.
If they are monthly paid their monthly wages should be arrived at by multiplying the daily wages by 26.
" The total wages for 26 days at Rs. 1 2 6 a day is Rs. 30/ .
it is not said that the categories of workers mentioned in demand No. 11(b), who were covered by the award, are paid separately for the days off.
it is not contended that their wage scales have not been refixed in pursuance of the direction given in the award, except of course in the case of persons who even before 1948 were not working on Sundays also Nor is it alleged that pre 1948 and post,l948 workers arc paid differently.
The reasoning of the High Court cannot, therefore, be supported and the company is entitled to succeed on this part of the case.
Coming now to the question of overtime, the demand before the Tribunal was that overtime rates should be double the rate of wages.
That demand was rejected in the general form.
The demand seems to have been made on the analogy of the provisions of the Factories Act.
The Tribunal pointed out that there would be no justification in making a distinction between workers covered by the Factories Act and workers not covered by that Act in respect of overtime payment if the workers were doing the same or similar work but that the same cannot be applied in respect of all types of work particularly where the work was of a very intermittent nature, and that where the nature of the work itself was such that.
regular overtime becomes necessary the deterrent element must not enter in determining the rate of overtime.
The union pointed out several specific categories in respect of whom injustice was done.
One of these instances was that of booster attendants and their case was specifically dealt with and provided for.
The grievance of the workers of the Mains department was that they were made to work till 1.30 p.m.
On Saturdays while factory workers were let off at 1 p.m. and that 47 1/2 hours a week has bean a very long standing privilege of the workmen of this company and that if they are required to work for half an hour more on Saturdays the should be paid overtime at double the rate.
After discussing this question the Tribunal specifically came to the conclusion that no directions in that respect were necessary.
We cannot therefore agree with the respondents that the sentences at the end of paragraph 126 to the following effect: "I however recommend that where overtime work is given to workers not covered by the Factories Act, the rate should at least be the single basic wage plus dearness allowance.
I do not however desire to give any general directions without knowing the nature of the work.
" 297 would cover these cases.
Demand No. 12 is in respect of all workers of the company.
The specific case of workers in the Mains department has been dealt with and rejected; so also in the case of coke supply coolies and motor drivers.
The workmen concerned here being all workmen of the Mains department, the question of their being paid overtime wages under the provisions of the award does not arise.
The question however remains whether they are entitled to be paid overtime wages under the provisions of section 12(3) of the Bombay Shops & Establishments Act.
That Act was in force when the award under consideration was given.
It is not correct to say that the workers are entitled to overtime payment by virtue of an amendment made to the Act in 1970.
The 1970 amendment had nothing to do with the right of payment of overtime wages.
The contention on behalf of the company is that the right to overtime wages based on any ground what soever should he deemed to have been dealt with and rejected by the Tribunal which gave the award in 1 950.
Though the demand for overtime wages was in general terms it could have been or it ought to have been supported either as one of the items of industrial dispute or as flowing from out of the provisions of the Factories Act or flowing from the provisions of the Bombay Shops and Establishments Act.
It was the duty of the party making the demand, who tried to justify the demand, to support it on any one of the alternative basis.
They could not have been ignorant of the provisions of the Bombay Shops & Establishments Act.
(Incidentally, though in this case it seems to have been conceded on behalf of the company that the workers are governed by the Bombay Shops & Establishments Act, it is contended on behalf of the. company that the concession should be deemed to have been made only for the purpose of this case and not for all purposes).
It is further contender that the demand for overtime were under the provisions of the Bombay Shops & Establishments Act should be deemed to be barred on principles analogous to those of the rejudicata.
Reliance is placed upon the decision of this Court in Bombay Gas Co. vs Shridhar Bhau(1).
But in that case the question whether the workmen should get overtime wages in the same way as the workmen governed by the Factories Act had been considered in the reference which resulted in the award of 1953 and before the Tribunal it was conceded by the workmen that they were not governed by the Factories Act and the claim for the same overtime wages as those Payable to workers under the Factories Act was based on the ground that there was no reason for any distinction between the two sets of workmen.
It was.
therefore, held that 'so long as the award remains in force it must be held that these workmen are not governed by the Factories Act and are not entitled to the benefits thereof '.
In the present case also the question under the Factories Act had been considered but not the question whether they are entitled to overtime 298 wages under the provisions of the Bombay Shops & Establishments Act.
We consider that the workmen could and ought to have raised the question that even if they were not entitled to claim overtime wages at the same rate as payable to workers governed by the Factories Act, they should at least be paid the same rate as those payable to persons governed by the Bombay Shops & Establishments Act.
The workers neither put forward the contention that they were entitled to the benefit of the Bombay Shops & Establishments Act nor even that on considerations similar to those applicable to the persons governed by the Bombay Shops & Establishments Act they should also be paid overtime wages under the provisions of that Act.
Incidentally it shows that the question as to whether the Bombay Shops & Establishments Act is applicable to those workmen has been raised for the first time in these proceedings.
The doctrine of res judicata is a wholesome one which is applicable not merely to matters governed by the provisions of the Code of Civil Procedure but to all litigations.
It proceeds on the principle that there should be no unnecessary litigation and whatever claims and defences are open to parties should all be put forward it the same time provided so confusion is likely to arise by so putting forward all such claims.
It was observed by this Court in Devilal Modi vs Sales Tax Officer: "The general principle underlying the doctrine of res judicata is ultimately based on considerations of public policy.
One important consideration of public policy is that the decisions pronounced by courts of competent jurisdiction should be final, unless they are modified or reversed by appellate authorities; and the other principle is that no one should be made to face the same kind of litigation twice .
over, because such a process would be contrary to considerations of fair play and justice, vide: Daryao and Others vs The State of U.P & Others v The State of U.P & Others ; We are therefore of opinion that the question of overtime wages should be deemed to have been dealt with and disposed of by the Tribunal on whatever the basis of the claim for overtime wages may be.
The disputes between this company and its workers quite often come to this Court.
The case in Bombay Gas Co. v Shridhar Bhau (supra) is one such.
The other cases are found in Bombay Gas Co. Ltd vs Gopal Bhiva (2) and Ramlanshan Jageshwar vs Bombay Gas Co. (3) 299 If the workers are dissatisfied with any of the items in respect of which their claim has been rejected it is open to them to raise a fresh industrial dispute.
The award has stood the test of time for 25 years a very rare occurrence indeed these days.
[/INST]Rule 3(1)(ii) of the Orissa Industries Service Rules, 1971, provided that the junior grade of the service shall include the posts of Deputy Directors, Senior lecturers in Engineering, Schools etc.
besides the posts of Principal, Engineering Schools (except Mining Engineering) and Polytechnics which carry a special scale of pay.
The 1st respondent was appointed a lecturer in a Mining Engineering School.
In 1960, the School was brought under the administrative Control of the Industries Department of the State Government, and the respondent became an officer of the Industries Department.
Later.
he was appointed Principal of the School.
In 1964, there was a bifurcation of the common cadre of the Department, and a separate cadre for teaching posts of Engineering Schools in the State was created.
In 1967, the two cadres were again merged forming a combined cadre for the officers of the Industries Department.
The reason given for the merger was that the separate cadre for teachers was not beneficial to them because, promotion prospects for them were bleak in view of the limited posts available for promotion.
After the merger, in 1969, even though the 1st respondent was senior to the 2nd respondent, the latter was promoted as Joint Director superseding the former.
The High Court quashed the order and struck down r. 3(1)(ii) as violative of article 16.
Dismissing the appeal to this Court, ^ HELD: (1) In the resolution of 1967 merging the two cadres it was stated that the conditions of service of all the officers will be governed by a set of cadre rules to be framed later, but no such rules were framed at the time of promotion of the 2nd respondent.
The 1971 rules were framed during the pendency of the writ application, filed by the 1st respondent, in the High Court.
There was, therefore, at the time of promotion of the 2nd respondent, nothing to show that the post of a teacher or the Principal of a Mining Engineering School WAS treated as an ex cadre post and on a separate footing for the purpose of promotion to the administrative posts.
[303G H] (2) Rule 3(1)(ii) when it says in the first part Senior lecturers in Engineering Schools, it includes senior lecturers of Mining Engineering School also.
Even when the two cadres were separated, all Engineering Schools including Mining Engineering Schools were placed on the SAME Footing.
But, in the last part of the rule when referring to the post of Principal, the Principal of a Mining Engineering School is excluded.
The exclusion is without any justification or reasonable basis.
[304E H] Therefore, the rule is violative of articles 14 and 16 and the non consideration of the case of the 1st respondent at the time of promotion of the 2nd respondent was wholly arbitrary and illegal.
[33H; 304H] (3) It is however not necessary to strike down the entire rule 3(1)(ii).
It is sufficient if the words 'except Mining Engineering ' are struck down and deleted.
[304H]
</s>
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<s>[INST] Summarize the judgementCivil Appeal No. 1178 of 1984 From the Judgment and Order dated the 15th July, 1982 of the High Court of Madras in Civil Revision Petition No. 3396 of 1981.
AND Civil Appeal No. 6211 of 1983 From the Judgment and Order dated the 5th November, 1982 of the High Court of Andhra Pradesh in Civil Revision Petition No. 2477 of 1982.
WITH Civil Appeal No. 1992 of 1982 From the Judgment and Order dated the 17th December, 1981 of the High Court of Madras in Civil Revision Petition No. 152 of 1981 .
WITH Civil Appeal No. 1959 of 19X2 From the Judgment and Order dated the 14th December, 1981 of the High Court of Madras in Civil Revision Petition No. 1630 of 1980.
WITH Civil Appeal No. 3668 of 1982 From the Judgment and Order dated the 20th October, 1982 of the High Court of Madras in Civil Revision Petition No. 4087 of 1982.
WITH Civil Appeal No. 2246 of 1982 From the Judgment and Order dated the 5th November, 1981 of the High Court ot Madras in Civil Revision Petition No. 1397 of 198( ' AND Civil Appeal No. 4012 of 1982 From the Judgment and Order dated the 23rd November, 1982 of the High Court of Madras in Civil Revision Petition No. 3983 of 1981 Y. section, Chitale and P. N. Ramalingam for the Appellant in Civil Appeal No. 1178 of 1984.
652 P.G. K. K Mani, V. shekher and P.R. Setharaman for the Respondents in Civil Appeal No. 1178 of 1984 A.K. Sen and A.T.M. Sampath for the Appellant in Civil Appeal No. 6211 of 1983.
T.V.S. Narasimhachari for the Respondent K Ramkumar for the Appellant in Civil Appeal No. 1992 of A. T. M. Sampath for the Respondent.
A. section Nambiar for the Appellant in Civil Appeal No. 1659 of 1982.
K section Ramamurthy, and A.T.M. Sampath, for the Appellant in Civil Appeal No. 3668 of 1982.
C. section Vaidianathan and K. K Mani for the Respondents.
M. G. Ramachandran, and A.V. Rangam for the Appellant in Civil Appeal No. 2246 of 1982.
T. section Krishnamurthy Iyer for the Respondent.
T. section Krishnamurth Iyer.
and section Balakrishna for the Appellant in Civil Appeal No. 4012 of 1984.
Padmanbhan and D.N. Gupta for the Respondent in Civil Appeal No. 4012 of 1982.
The following Judgments were delivered FAZAL ALI, J.
These appeals invlove more or less an identical point of law relating to the interpretation of the term 'wilful default ' appearing in the proviso to section 10 (2) of the Tamil Nadu Buil dings (Lease and Rent Control) Act, 1960 (hereinafter referred to as the 'Act ') coupled with the Explanation which seeks to explain the intent Or the proviso.
We have heard counsel for the parties at great length and a large number of authorities have been cited before us in support of both the parties.
Before we take up the points of law involved in these appeals we would briefly narrate the bare facts of each of these cases in order to test the correctness of the points argued before us.
653 In Civil Appeal No. 1178 of 1984, the respondent landlord let A out the suit premises No. 3 B, New No 2 B, Davidson Street, Broadway Madras, to the appellant tenant on a monthly rent of Rs. 600 for non residential use.
The appellant, despite repeated reminders, did not pay the rent for the period from October 1978 to August 1979.
The respondent filed a suit on 2 12.79 for evicting the appellant on two grounds wilful default in payment of rent, and (2) material acts of waste committed in the building.
It may be mentioned here that before filing a suit for eviction of the appellant, the respondent on 17.9.79 sent a two months` notice to the appellant.
through his Advocate to clear up the dues.
The appellant on receipt of the notice paid up the amount of the arrears, amounting to Rs. 6,600 on 3.10.79, i.e., within the stipulated period of two months.
But, the respondent contended that in view of the past conduct of theappellant he was guilty of wilful default within the meaning of proviso to section 10 (2) of the Act.
So far as this appeal is concerned, as the entire rent had been paid up in pursuance of the notice dated 17.9.79 even prior to the filing of the suit, it is manifest that on the date of filing of the suit no cause of action in presenti having arisen, the suit should have been dismissed on this short ground alone as being not maintainable.
As indicated above, it was not open to the landlord after having received the entire amount of arrears before filing of the suit to have filed a suit for past conduct of the tenant.
This appeal, therefore, merits dismissal on this ground alone.
In Civil Appeal No. 6211 of 1983, the respondent tenants were given the suit premises No. 171582, Ward B, Old corresponding No. 2, New No. 5181582 Abid Road, Hyderabad, on a monthly rent of Rs. 225 which was, by mutual consent, increased to Rs. 275 per month in the year 1964.
From 1.7.66, the rent was again agreed to be increased to Rs. 300 per month.
The appellants landlord filed a suit under section 10 of the Andhra Pradesh Buildings (Lease, Rent and Eviction Control) Act, 1960 on 12.11.71, against the respondents for eviction on three grounds; (1) wilful default by the tenants in payment of rent for the months of September, October and November 1971 (total amount being Rs. 900, (2) the tenants sublet the premises to one Hanumantha, and (3) that the premises were required bona fide for their own use.
However, during toe pendency of the matter, the original landlords sold away their interest in the property in favour of the present appellants before us and, therefore, the question of bona fied requirement abated there itself.
654 The Rent Controller upheld both the grounds of wilful default and subletting.
Aggrieved by the said decision, the respondents tenant filed an appeal to the Chief Judge, City Small Causes Court, Hyderabad and the learned Chief Judge by his judgment held that wilful default in payment of rent for the month of September 1971 as also the question of sub letting was proved.
Against this decision of the Chief Judge, City Small Causes, the respondents filed a revision petition in the High Court.
It is not in dispute that the rent from September, 1971 on wards has not been paid and that by the time the eviction petition was filed, the default was only for the month of September 1971.
The High Court agreed with the lower courts with regard to wilful default for the month of September, 1971 and reversed the finding with regard to subletting but on the ground of wilful default ordered eviction of the respondents.
In civil Appeal No. 1992 of 1982, the respondent landlord filed an eviction petition against the appellant tenant on the grounds of wilful default and the premises needing repairs.
However, the second ground was not pressed and the only point which survived for deter mination was whether there was any wilful default on the part of the appellant.
The brief facts are that the appellant became a tenant under the father of the respondent in 1953 at a monthly rent of Rs. 15 which was subsequently mutually agreed to be increased to Rs. 49 per month.
The respondent contended in his petition that the appellant became a defaulter in payment of the rent as he did not pay the rent for the months of June 1977 to January 1978.
The respondent also issued a notice on 16.1.78 demanding the dues amounting to Rs. 392.
The appellant sent a detailed reply on 30.1.78 alongwith a Bank Draft for Rs. 392 which was, however, not encashed by the respondent and returned to the appellant subsequent to the filing of an eviction petition which was filed on 11.8.1978.
The Rent Controller found the tenant to be a wilful defaulter and consequently order his eviction.
However, on appeal the Appellate Authority reversed the finding of the Rent Controller and accepted the plea of the tenant that as he was ill he was not able to pay the rent.
In revision, the High Court did not agree with the finding of the Appellate Authority and restored the finding of the Rent Con troller and ordered the eviction of the appellant, holding that the explanation offered by the tenant could not be accepted as his sons were carrying on the business in the same premises and nothing pre vented them from paying the rent to the landlord of the appellant was ill.
655 In Civil Appeal No. 1659 of 1982, the respondent landlord filed an eviction petition against the appellant tenant in respect of a nonresidential premises on two grounds: (1) wilful default in payment of rent from 1.5.77 to 31,8.77, and (2) bona fide requirement for personal use.
The Rent Controller, after an equiry, ordered eviction of the tenant on both the grounds and the Appellate Authority confirmed the findings of the Rent Controller.
The landlord issued a lawyer 's notice on 1.9.77 to the tenant to clear up the dues.
After receipt of the notice the tenant paid the rent of two months ' only and for the remaining two months the tenant could not offer any satisfactory explanation and, therefore, the High Court in revision agreed with the findings of both the courts below in regard to wilful default of payment of arrears of rent and ordered eviction of the tenant on this ground alone.
The High Court, however, did not agree with the findings of the courts below with regard to bona fide requirement of the landlord and held that the landlord could not ask for a non residential portion for residential purposes having leased it out for a non residential purpose.
In Civil Appeal No. 3668 of 1982, the appellant took out the premises from the respondent for non residential use on a monthly rent of Rs. 350.
There was some misunderstanding between the parties over payment of rent and as a result of which it was agreed that the tenant would deposit the rent in the Bank.
The respondent landlord filed an eviction petition on 1.4.1980 in the court of the Rent Controller, after verifying from the Bank, that the tenant had not deposited the rent for the months of January and February 1980, thereby committing a wilful default.
The authorities below found against the arrangement of depositing the rent in the Bank and ordered the eviction of the appellant on the ground of wilful default.
The High Court upheld the decision of the courts below and held that the appellant had wilfully defaulted in the payment of rent and ordered the eviction of the appellant.
In Civil Appeal No. 2246 of 1982, the respondent landladies let out the premises to the tenant appellant for non residential use on a monthly rent of Rs. 105.
The respondents filed an eviction petition on 2.11.76 against the tenant on the ground of wilful default for non payment of rent for the period from January 1976 to September 1976, i.e., for a period of 9 months.
But before filing the eviction petition, the respondents on 6.7,1976 issued a notice to the tenant to pay the dues and on 17.7.76 the appellant paid a sum of Rs. 630 which was accepted by the landladies without prejudice.
The Rent 656 Controller found that the default in payment of rent was not wilful and therefore dismissed the appl.cation of the landladies.
On appeal, the Appellate Authority reversed the finding of the Rent Controller and held that the default, was wilful.
In revision, the High Court did not agree with the contention of the appellant that he was not wilful defaulter as immediately after filing of the eviction petition he had paid the entire arrears even before the serving of summons The High Court held that there was no satisfactory explanation by the tenant for nonpayment of rent for the period from January to June 1976 before the issue of notice Even after the payment of rent the tenant committed further default till the petition for eviction was filed on 2.11.76.
The high Court, therefore, upheld the finding of the Appellate Authority and ordered eviction of the tenant on the ground of wilful default.
In civil appeal No. 4012 of ' 1982, the appellant is in occupation of the residential premises bearing No 17 (New No 59), Burkit Road T. Nagar, Madras on a monthly rent of Rs. 325 payable according to English calendar month.
The respondent filled an eviction petition against the appellant on the ground of wilful default and bona fide requirement for her own occupation.
It was stated on behalf of the respondent landlady that the appellant committed wilful default in payment of rent from June 1976 onwards and after repeated demands a sum of Rs. 1000 was paid by him on 1.4.1977.
He had paid rent for five months to the Income Tax Department on behalf of the respondent but he did not produce any receipt evidencing payment to the Income Tax Department.
Assuming that the appellant had made the said payment, the respondent further contended that from February 1977 to July 1978 the appellant was in arrears, thereby committing a wilful default.
The Rent Controller did not agree with the contentions of the respondent and held that the default was not wilful and the requirement for own Occupation of the landlay was not bona fide.
On appeal, the Appellate Court came to the conclusion that the tenant had committed wilful default in payment of rent from May 1976 onwards as on 1.4.77 and from December 1976 as on 10.4.77.
However, the appellate authority was of the view that the respondent had not been able to prove her case for bona fide requirement.
But, on the around of wilful default, the eviction of the appellant was ordered.
In reviston, the High Court agreed with the findings of the Appellate Court and confirmed the eviction of the appellant on the ground of wilful default.
From a detailed survey of the provisions of the various Rent Acts prevailing in the States and various Union Territories of our 657 country, it appears that the provisions regarding eviction for default A in payment of rent are not uniform and differ from State to State.
Some Acts do not mention `wilful default ' at all, some mention it in a negative form while some put it in an affirmative form.
To cut the matter short, from a review of the various Rent Acts the position that emerges is that the provisions relating to eviction are couched in three different types of default (1) Acts which expressly mention 'wilful default ' without defining the same, (2) Acts which do not mention the words 'wilful default ' at all but confer a right on the landlord to evict the tenant on pure and simple default after a certain period of time when the rent has become due, which is also different in different States, (3) Acts which use the expression 'wilful default ' but in a negative form rather than in an affirmative form.
D These are the A.P. Buildings (Lea5e, Rent and Eviction) Control Act of 1960, The Orissa House Rent Control Act, 1967 and the Pondicherry Buildings (Lease & Rent Control) Act, 1969 (hereinafter referred to as the 'A P. Act, 'Orissa Act ' and 'Pondicherry Act ' respectively) The last category of the Acts is the Tamil Nadu Act, which is the Statute in question and which makes a marked improvement by broadening the ambit of 'wilful default ' in the proviso to section 10 (2) which is further clarified by virtue of the Explanation added to the said proviso by Act No 23 of 1973.
There are other Rent Acts which not only use the expression 'wilful default ' but which also give a sort OF a facility to a tenant even for an ordinary default to pay the entire rent together with interest, on payment of which the suit for eviction is dismissed or, at any rate, they contain provisions by which even if a suit for eviction is filed, the tenant is required to pay the entire arrears of rent, costs and interest, failing which his defence is struck out and the suit for eviction is decreed automatically.
In these circumstances, for the purpose of the present cases, it is not necessary for us to make a roving enquiry into or carry on a detailed survey of the Acts which do not use the term 'wilful default '.
We might usefully refer only to those Acts which contain the term 'wilful default ' either in a negative or in a positive form.
These Acts, as already indicated, are the A.P., Orissa, Pondicherry and the Tamil Nadu Acts.
Though we are concerned mainly with the Tamil Nadu 658 Act yet in order to understand the contextual background of the words 'wilful default ' and its proper setting, we might briefly examine the relevant provisions of the aforesaid Acts.
Section 10 (2) of the A.P. Act is the only provision which confers protection to the tenant from eviction under certain conditions.
Proviso to that sub section runs thus: "Provided that in any case falling under clause (i), if the Controller is satisfied that the tenant 's default to pay or tender rent was not wilful, he may notwithstanding anything in section 11, give the tenant a reasonable time, not exceeding fifteen days, to pay or tender the rent due by him to the landlord up to the date of such payment or tender and on such payment or tender, the application shall be rejected.
" It may be noticed that although the default contemplated by the Act is wilful yet it has been put in a negative form which undoubtedly gives sufficient leeway to the tenant to get out of the rigours of the statutory provision.
The proviso to s.7 (2J of the Orissa Act is similarly worded and the relevant portion of which runs thus: "Provided that in any case falling under clause (i) if the Controller is satisfied that the tenant 's default to pay or tender rent was not wilful." Pondicherry Act is another statute which also contains the word 'wilful ' in a negative form, the relevant portion of which runs thus: "Provided that in any case falling under clause (i) if the Controller is satisfied that the tenant 's default to pay of tender rent was not wilful. " The aforesaid Acts undoubtedly contemplate that a default simpliciter would not be sufficient to evict the tenant but it must further be shown that the default was not wilful.
The Act, however is silent on the mode and the manner in which a court may decide as to what is wilful and what is not wilful.
Thus, the Act has left it to the courts to decide this question.
So far as the Tamil Nadu Act is concerned, it clearly defines as to what is 'wilful default '.
Proviso to section 10 (2) of the Act runs thus: "Provided that in any case falling under clause (i) if the Controller is satisfied that the tenant 's default to pay or tender rent was not wilful, he may, notwithstanding anything 659 contained in section 11, give the tenant a reasonable time, t not exceeding fifteen days, to pay or tender the rent due by him to the landlord up to the date of such payment or tender and on such payment or tender, the application shall be rejected.
" This proviso was clarified by an Explanation added to it by Act No. 23 of 1973 which provides a clear criterion to determine as to what is wilful default and what is not.
in this connection, it was submitted by counsel for the tenants that despite the Explanation it is open to the Court on an appraisement of the circumstances of each case to determine whether or not the default was wilful and in doing, so it cannot be guided wholly and solely by the Explanation which is merely clarificatory in nature.
If the Court in the circumstances of each case finds that the default is not wilful then it can come to this finding despite the Explanation.
On the other hand, the argument ot the counsel for the landlords is that the very purpose of the Explanation is to briny about uniformity in court decisions by laying down a conclusive yardstick in the shape of the Explanation which says that a default would be wilful only if the landlord gives two months ' notice to the tenant and the tenant does not pay the rent after the expiry of this period.
In other words, the argument seems to be that the Explanation is to be read into the proviso so that the word 'wilful ' will have to be defined and interpreted in accordance with the criterion laid down by the said Explanation, i.e., 'issue of two months ' notice. ' The arguments merits consideration but before coming to any conclusion it may be necessary for us to examine the exact meaning of the words 'Wilful default ' as also the interpretation and the scope of the Proviso and the Explanation.
Prima facie, there seems to be some force in the argument of the counsel for the tenants that unless the conditions of the Explanation are fulfilled, whatever may be the nature of the default, it cannot be a 'wilful default ' as contemplated by the Proviso.
Before, however, going into this question further, let us find out the real meaning and content of the word 'wilful ' or the words 'wilful default '.
In the book 'A Dictionary of Law ' by L.B. Curzon, at page 361 the words 'wilful ' and 'wilful default ' have been defined thus: 'Wilful ' deliberate conduct of .l person who is a free agent, knows what he is doing and intends to do what he is doing.
660 'Wilful default ' Either a consciousness of negligence or breach of duty; or a recklessness in the performance of a duty.
In other words, 'wilful default ' would mean a deliberate and intentional default knowing full well the legal consequences thereof.
In Words and Phrases ', Volume 11 A (Permanent Edition) at page 268 the word 'default ' has been defined as the non performance of a duty, a failure to perform a legal duty or an omission to do something required.
In volume 45 of 'Words & Phrases ', the word 'wilful ' has been very clearly defined thus: 'Wilful ' intentional; not incidental or involuntary: done intentionally, knowingly, and purposely, without justifiable excuse as distinguished from an act done carelessly; thoughtlessly, heedlessly or inadvertently: in common parlance word 'wilful ' is used in sense of intentional, as distinguished from accidental or involuntary.
P. 296 "Wilful" refers to act consciously and deliberately done and signifies course of conduct marked by exercise of volition rather than which is accidental, negligent or involuntary.
In Volume III of Webster 's Third New International Dictionary at page 2617, the word 'wilful ' has been defined thus: "governed by will without yielding to reason or with out regard to reason; obstinately or perversely self willed.
" The word 'default ' has been defined in Vol.
I of Webster 's Third New International Dictionary at page 590 thus; "to fail to fulfil a contract or agreement, to accept a responsibility; to fail to meet a financial obligation.
" In Black 's Law Dictionary (4th Edn.) at page 1773 the word 'wilful ' has been defined thus: "Wilfulness" implies an act done intentionally and designedly; a conscious failure to observe care; Conscious; knowing; done with stubborn purpose, but not with malice.
The word "reckless" as applied to negligence, is the legal equivalent of "willful" or "Wanton".
661 Thus, a consensus of the meaning of the words 'wilful default ' appears to indicate that default in order to be wilful must be intentional, deliberate, calculated and conscious, with full knowledge of legal consequences flowing therefrom.
Taking for instance a case where a tenant commits default after default despite oral demands or reminders and fails to pay the rent without any just or lawful cause, it cannot be said that he is not guilty of wilful default because such a course of conduct manifestly amounts to wilful default as contemplated either by the Act or by other Acts referred to above.
The next question that arises for consideration is as to what is the scope of a proviso and what is the ambit of an Explanation either to a proviso or to any other statutory provision.
We shall first take up the question of the nature, scope and extent of a proviso.
The well established rule of interpretation of a proviso is that a proviso may have three separate functions.
Normally, a proviso is meant to be an exception to something within the main enactment or to qualify something enacted therein which but for the proviso would be within the purview of the enactment In other words, a proviso cannot be torn apart from the main enactment nor can it be used to nullify or set at naught the real object of the main enactment.
Craies in his book 'Statute Law ' (7th Edn.) while explaining the purpose and import of a proviso states at page 218 thus: "The effect of an excepting or qualifying proviso, according to the ordinary rules of construction, is to except out of the preceding portion of the enactment, or to qualify something enacted therein, which but for the proviso would be within it.
The natural presumption is that, but for the proviso, the enacting part of the section would have included the subject matter of the proviso.
" Odgers in 'Construction of Deeds and Statutes ' (Fifth Edn.) while referring to the scope of a proviso mentioned the following ingredients: P. 317 "Provisos These are clauses of exception or qualification in an Act, excepting something out of, or qualifying something in, the enactment which, but for the proviso, would be within it.
" P. 318 "Though framed as a proviso, such a clause may exceptionally have the effect of a substantive enactment.
" 662 Sarathi in 'Interpretation of Statutes ' at pages 294 295 has collected the following principles in regard to a proviso: (a) When one finds a proviso to a section the natural presumption is that, but for the proviso, the enacting part of the section would have included the subject matter of the proviso.
(b) A proviso must be construed with reference to the preceding parts of the clause to which it is appended.
(c) Where the proviso is directly repugnant to a section, the proviso shall stand and be held a repeal of the section as the proviso speaks the later intention of the makers.
(d) Where the section is doubtful, a proviso may be used as a guide to its interpretation; but when it is clear, a proviso cannot imply the existence of words of which there is no trace in the section.
(e) The proviso is subordinate to the main section.
(f) A proviso does not enlarge an enactment except for compelling reasons.
(g) Sometimes an unnecessary proviso is inserted by way of abundant caution.
(h) A construction placed upon a proviso which brings it into general harmony with the terms of section should prevail.
(i) When a proviso is repugnant to the enacting part, the proviso will not prevail over the absolute terms of a later Act directed to be read as supplemental to the earlier one.
(j) A proviso may sometimes contain a substantive provision.
" In the case of Local Government Board vs South Stoneham Union,( ') Lord Macnaghten made the following observation: "I think the proviso is a qualification of the preceding enactment, which is expressed in terms too general to be quite accurate." In Ishverlal Thakorelal Almaula vs Motibhai Nagjibhai(2) it was held that the main object of a proviso is merely to qualify the main enactment.
In Madras & Southern Maharatta Railway Co. Ltd. vs Bezwada Municipality,(3) Lord Macmillan observed thus: (1) (2) [1966] 1 SCR 367.
(3) ATR 663 "The proper function of a proviso is to except and to deal with a case which would otherwise fall within the general language of the main enactment, and its effect is confined to that case.
" The above case was approved by this Court in Commissioner Of Income Tax, Mysore, etc.
vs Indo Mercantile Bank Ltd.
,(l) where Kapur, J. held that the proper function of a proviso was merely to qualify the generality of the main enactment by providing an exception and taking out, as it were, from the main enactment a portion which, but for the proviso, would fall within the main enactment.
In Shah Bhojraj Kuverji Oil Mills & Ginning Factory vs Subhash Chandra Yograj Sinha,(2) Hidayatullah, J, as he then was, very aptly and succinctly indicated the parametres of a proviso thus: "As a general rule, a proviso is added to an enactment to qualify or create an exception to what is in the enactment, and ordinarily, a proviso is not interpreted as stating a general rule.
" In West Derby vs Metropolitan Life Assurance Co.(3) while guarding against the danger of interpretation of a proviso, Lord Watson observed thus: "a very dangerous and certainly unusual course to import legislation from a proviso wholesale into the body of the statute.
" A very apt description and extent of a provio was given by Lord Oreburn in Rhodda Urban District Council vs Taff Vale Railway Co.(q) where it was pointed out that insertion of a proviso by the draftsman is not always strictly adhered to its legitimate use and at times a section worded as a proviso may wholly or partly be in substance a fresh enactment adding to and not merely excepting something out of or qualifying what goes before.
To the same effect is a later decision of the same Court in Jennings add Another vs Kelly(5) where it was observed: "We must now come to the proviso, for there is, I think, no doubt that in the construction of the section the (1) [1959] 2 supp.
SCR 256.
(2) ; (3) (4) [l909] AC 253.
(5) 664 whole of it must be read and a consistent meaning if possible given to every part of it The words are "provided that such licence shall be granted only for premises situate in the ward or district electoral division in which such increase in population has taken place".
There seems to be no doubt that the words "such increase in population" refer to the increase of not less than 25 per cent of the population mentioned in the opening words of the section " While interpreting a proviso care must be taken that it is used to remove special cases from the general enactment and provide for them separately.
In short, generally speaking, a proviso is intended to limit the enacted provision so as to except something which would have other wise been within it or in some measure to modify the enacting clause.
Sometimes a proviso may be embedded in the main provision and becomes an integral part of it so as to amount to a substantive provision itself.
Apart from the authorities referred to above, this Court has in a long course of decisions explained and adumbrated the various shades; aspects and elements of a proviso.
In State of Rajasthan vs Leela Jain,( ') the following observations were made: "So far as a general principle of construction of a proviso is concerned, it has been broadly stated that the function of a proviso is to limit the main part of the section and carve out something which but for the proviso would have been within the operative part." In the case of Sales Tax Officer, Circle 1, Jabalpur vs Hanuman Prasad(2), Bhargava, J. Observed thus: "It is well recognised that a proviso is added to a principle clause primarily with the object of taking out of the scope of that principal clause what is included in it and what the legislature desires should be excluded." In Commissioner of Commercial Taxes and Ors.
vs R.S. Jhaver and Ors.,(3) this Court made the following observations: (1) [1965]1 S C.R. 276.
(2) [1967] I S.C.R. 831.
(3) [1968]1 S.C.R. 148.
665 "Generally speaking, it is true that the proviso is an exception to the main part of the section; but it is recognised that in exceptional cases a proviso may be a substantive provision itself " In Dwarka Prasad vs Dwarka Das Saraf,(l) Krishan Iyer, J. speaking for the Court observed thus: B "There is some validity in submission but if, on a fair construction, the principal provision is clear, a proviso can not expand or limit it.
Sometimes a proviso is engrafted by an apprehensive draftsman to remove possible doubts, to make matters plain, to light up ambiguous edges.
Here, such is the case If the rule of construction is that prima facie a proviso should be limited in its operation to the subject matter of the enacting clause, the stand we have taken is sound.
To expand the enacting clause, inflated by the proviso, sins against the fundamental rule of construction that a proviso must be considered in relation to the principal matter to which it stands as a proviso.
A proviso ordinarily is but a proviso, although the golden rule is to read the whole section, inclusive of the proviso, in such manner that they mutually throw light on each other and result in a harmonious construction.
In Hiralal Rattanlal etc.
vs Staie of U.P. and Anr.(2) etc.
this Court made the following observations: "Ordinarily, a proviso to a section is intended to take out a part of the main section for special treatment.
It is not expected to enlarge the scope of the main section.
But cases have arisen in which this Court has held that despite the fact that a provision is called proviso, it is really a separate provision and the so called proviso has substantially altered the main section.
" We need not multiply authorities after authorities on this point because the legal position seems to be clearly and manifestly well established.
To sum up, a proviso may serve four different purposes: (1) [1976]1 S.C.R. 128.
(2) [1973] 1 S.C.C.216.
666 (1) qualifying or excepting certain provisions from the main enactment; (2) it may entirely change the very concept of the intendment of the enactment by insisting on certain mandatory conditions to be fulfilled in order to make the enactment workable; (3) it may be so embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour of the substantive enactment itself; and (4) it may be used merely to act as an optional addenda to the enactment with the sole object of explaining the real intendment of the statutory provision.
These seem to be by and large the main purport and parameters of a proviso.
So far as the Act in question is concerned, the matter does not rest only on the question of wilful default, but by an amendment (Act No. 23 of 1973) an Explanation, in the following terms, was added to the proviso to section 10 (2) of the Act: "Explanation For the purpose of this sub section, default to pay or tender rent shall be construed as wilful, if the default by the tenant in the payment or tender of rent continues after the issue of two months ' notice by the landlord claiming the rent.
" We have now to consider as to what is the impact of the Explanation on the proviso which deals with the question of wilful default.
Before, however, we embark on an enquiry into this difficult and delicate question, we must appreciate the intent, purpose and legal effect of an Explanation.
It is now well settled that an Explanation added to a statutory provision is not a substantive provision in any sense of the term but as the plain meaning of the word itself shows it is merely meant to explain or clarify certain ambiguities which may have crept in the statutory provision.
Sarathi in 'Interpretation of Statutes ' while dwelling on the various aspects of an Explanation observes as follows: "(a) The object of an explanation is to understand the Act in the light of the explanation.
667 (b) It does not ordinarily enlarge the scope of the original A section which it explains, but only makes the meaning clear beyond dispute." (P. 329) Swarup in 'Legislation and Interpretation ' very aptly sums up the scope and effect of an Explanation thus: "Sometimes an explanation is appended to stress upon a particular thing which ordinarily would not appear clearly from the provisions of the section.
The proper function of an explanation is to make plain or elucidate what is enacted in the substantive provision and not to add or substract from it.
Thus an explanation does not either restrict or extend the enacting part; it does not enlarge or narrow down the scope of the original section that it is supposed to explain .
The Explanation must be interpreted according to its own tenor; that it is meant to explain and not vice versa." (P.P. 297 298.) Bindra in 'Interpretation of Statutes ' (5th Edn.) at page 67 states thus: "An explanation does not enlarge the scope of the original section that it is supposed to explain.
It is axiomatic that an explanation only explains and does not expand or add to the scope of the original section.
The purpose of an explanation is, however, not to limit the scope o the main provision.
The construction of the explanation must depend upon its terms, and no theory of its purpose can be entertained unless it is to be inferred from the language used.
An 'explanation ' must be interpreted according to its own tenor .
" The principles laid down by the aforesaid authors are fully supported by various authorities of this Court.
To quote only a few, in Burmah Shell Oil Storage and Distributing Co.
Of India Ltd. and Anr.
vs Commercial Tax Officer and Ors.(l) a Constitution Bench decision, Hidayatullah, J. speaking for the Court.
Observed thus: "Now, the Explanation must be interpreted according to its own tenor, and it is meant to explain cl.(1)(a)of the (1) [1961] I S.C.R. 902.
668 Article and not vice versa.
It is an error to explain the Explanation with the aid of the Article, because this reverses their roles.
" In Bihta Cooperative Development Cane Marketing Union Ltd. and Anr.
v The Bank of Bihar and Ors(i).
, this Court observed thus: "The Explanation must be read so as to harmonise with and clear up any ambiguity in the main section, It should not be so construed as to widen the ambit of the section.
" In Hiralal Rattanlal 's case (supra), this Court observed thus: "On the basis of the language of the Explanation this Court held that it did not widen the scope of clause (c) But from what has been said in the case, it is clear that if on a true reading of`an Explanation it appears that it has widened the scope of the main section, effect be given to legislative intent notwithstanding the fact that the Legislature named that provision as an Explanation." In Dattatraya Govind Mahajan and Ors.
vs State of Maharashtra and Anr(2).
, Bhagwati, J. Observed thus: "It is true that the orthodox function of an explanation is to explain the meaning and effect of the main provision to which it is an explanation and to clear up any doubt or ambiguity in it.
Therefore, even though the provision in question has been called an Explanation, we must construe it according to its plain language and not on any a priori considerations.
" Thus, from a conspectus of the authorities referred to above, it is manifest that the object of an Explanation to a statutory provision is (a) to explain the meaning and intendment of the Act itself, (b) where there is any obscurity or vagueness in the main enactment, to clarify the same so a to make it consistent with the dominant object which it seems to subserve, (1) [1967]1 S.C.R. 848.
(2) [l977]2 S C.R. 790.
669 (c) to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful, (d) an Explanation cannot in any way interfere with or change the enactment or any part thereof but where some gap is left which is relevant for the purpose of the Explanation, in order to suppress the mischief and advance the object of the Act it can help or assist the Court in interpreting the true purport and intendment of the enactment, and (e) it cannot, however, take away a statutory right with which any person under a statute has been clothed or set at naught the working of an Act by becoming an hindrance in the interpretation of the same.
Having, therefore, fully discussed the main scope and ambit of a proviso and an Explanation, we shall now proceed to elucidate the various provisions of the Act and other Acts.
We have already discussed that although almost every State has its own Rent Act, neither the Explanation nor the statutory clause concerning the term 'wilful default ' is mentained therein These Acts seem to proceed only on the simple word 'default ' and perhaps to buttress their intention they have laid down certain guidelines to indicate the grounds of ejectment wherever a default takes place.
Looking generally at such Acts, they seem to have first provided statutorily a particular date or time when the tenant on being inducted under the contract of tenancy, is to pay the rent.
Such a provision may or may not be against the contract of the tenancy and if it is to that extent, it overrides the contract.
This, therefore, gives sufficient notice to any tenant inducted in any premises that he must pay the rent according to the yard stick set out by the Act, failing which he runs the risk of being evicted for default.
Some Acts, however, have provided a particular number of defaults to enable the Rent Controller or Court to find out whether such a default would entitle the landlord to get an order of eviction.
There are some other Acts which have made rather ingenious and, if we may say so, apt provisions for expediting the process of eviction in case of default by providing that whenever a suit for eviction is filed against a tenant on the ground of default, the tenant in order to show his bona fides must first deposit the entire rent, arrears and cost in the court of the Rent Controller where the action is filed on the very first date of hearing, failing which the court or the authority concern 670 ed would be fully justified in striking down the defence and passing an order of eviction then and there.
The dominant object of such a procedure is to put the tenants on their guard.
It is true that such provisions are rather harsh but if a tenant goes on defaulting then there can be no other remedy but to make him pay the rent punctually unless some drastic step is taken.
These Acts, therefore, strike a just balance between the rights of a landlord and those of a tenant.
For deciding these cases, it is not necessary for us to go either into the ethics or philosophy of such a provision because we are concerned with statutes having different kinds of provisions.
With this little preface we would now examine the working and relevant provisions of the Act alongwith similar provisions contained in the other three Acts, viz., A.P., Orissa, and Pondicherry Acts, which are almost in pari materia the proviso to section 10 (2) of the Act.
The only difference between the Act and the other Acts is that where as an Explanation is added to the proviso to section 10 (2) of the Act, no such Explanation has been added to the provisions of the other three Acts; hence we have now to consider the combined effect of the proviso taken in conjunction with the Explanation.
We may, therefore, extract the Explanation again to find out what it really means and to what extent does it affect the provisions of the Proviso: Explanation For the purpose of this sub section, default to pay or tender rent shall be construed as wilful, if the default by the tenant in the payment or tender of rent continues after the issue of two months ' notice by the landlord claiming the rent;" If we analyse the various concomitants of the Explanation, the position seems to be that (a) there should be a default to pay or tender rent, (b) the default should continue even after the landlord has issued two months ' notice claiming the arrears or rent, (c) if, despite notice, the arrears are not paid the tenant is said to have committed a wilful default and consequently liable to be evicted forthwith.
The question is; do these three conditions whittle down the effect of the proviso or merely seeks to explain the intendment of a wilful default ? One view which may be possible and which form the basis of the argument of the connsel for the tenants is that mere non 671 payment of arrears of rent after issue of two months ' notice cannot in A all circumstances automatically amount to a wilful default if the nonpayment does not fulfil the various ingredients pointed out by us while defining the term 'Wilful default '.
The other view which has been canvassed before us by the counsel for landlords is that in view of the Explanation once it is proved that after issue of two months ' notice if the tenant does not pay the arrears within the stipulated period of two months he is liable to be ejected straightaway.
Another view is that such an interpretation would be extremely harsh and penal in nature because if, after receipt of the notice, the tenant is not able to pay the arrears due to circumstances beyond his control, of which the court is satisfied it will be putting a serious premium or handicap on the right of the tenant.
In the same token, it was argued that if such an interpretation is put on the Explanation then the entire provisions of the Proviso become otiose thus rendering the said Proviso nugatory.
Another aspect that must be stressed at this stage is that where a tenant has committed default after default without any lawful or reasonable cause and the said defaults contain all the qualities of a wilful default, viz., deliberate, intentional, calculated and conscious, should he be given a further chance of locus paenitentiae ? After hearing counsel for the parties at great length, we feel that although the question is difficult one yet it is not beyond solution.
If we keep the objects of the proviso and the Explanation separate, there would be no difficulty in deciding these cases.
To begin with, section 13 (2) (i) of the Act lays down that where the Controller is satisfied that the tenant has not paid or tendered the rent within 15 days after the expiry of the time fixed in the Agreement of tenancy or in the absence of any such Agreement, by the last date of the month next following that for which the rent is payable, he (tenant) undoubtedly commits a default.
Two factors mentioned in section 10 (2) (i) seem to give a clear notice to a tenant as to the mode of payment as also the last date by which he is legally supposed to pay the rent.
This, however, does not put the matter beyond controversy because before passing an order of eviction under the proviso, it must also be proved that the default was wilful and if the Controller is of the opinion that the default in the circumstances and facts of the case was not wilful, in the sense that it did not contain any of the qualities or attributes of a wilful default as indicated by us above, he may give the tenant a reasonable time, not exceeding 15 days, to pay the entire rent and if this is complied with, 672 the application for ejectment would stand rejected.
The difficulty, however, is created by the Explanation which says that once a land lord gives a two months ' notice to his tenant for paying the arrears of rent but the tenant continues in default even thereafter, then he is liable to be evicted.
There is a good deal of force in this argument which has its own advantages.
In the first place, it protects the court from going into the intricate question as to what is a wilful default and whether or not the conditions of a wilful default have been satisfied which, if permitted would differ from case to case and court to court.
But the difficulty is that if such a blanket ban is put on the court for not examining the question of wilful default once the conditions laid down in the Explanation are satisfied then it would undoubtedly lead to serious injustice t l the tenant.
A subsidiary consequence of such an interpretation would be that even though the tenant, after receipt of the notice, may be wanting to pay the arrears of rent but is unable to do so because of unforseen circumstances like, death, accident, robbery, etc., which prevent him from paying the arrears, yet under the Explanation he has to be evicted.
Another view which, in our opinion, is a more acceptable one and flows from the actual words used by the proviso is that where the Explanation does not apply in the sense that the landlord has not issued two months ' notice, it will be for the Court to determine in each case whether the default is wilful having regard to the tests laid down by us and if the Court finds that default is wilful then a decree for eviction can be passed without any difficulty.
Another difficulty in accepting the first view, viz., if two months notice is not given, the tenant must not be presumed to be a wilful defaulter, is that in such a case each landlord would have to maintain a separate office so that after every default a two months ' notice should be given and if no notice is given no action can be taken against a tenant.
We are unable to place such an unreasonable restriction on the landlord to give two months ' notice after every default which may or may not be possible in every case.
A correct interpretation, in our opinion, would be that where (1) no notice, as required by the Explanation, is given to the tenant, the Controller or the court can certainly examine the question whether the default has been wilful and to such a case the Explanation would have no application, 673 (2) where the landlord chooses to issue two months ' notice and the rent is not paid then that would be a conclusive proof of the default being wilful unless the tenant proves his incapability of paying the rent due to unavoidable circumstances.
B The argument of the counsel for landlords was that even if a notice under the Explanation is given that does not take away the jurisdiction of the proviso to determine whether or not the default has been wilful if it contains the qualities and attributes referred to above because what the Explanation does is merely to incorporate an instance of a wilful default and is not conclusive on the point and would have to be construed by the court in conjunction with the conditions mentioned in the proviso.
We are, however unable to go to this extreme extent because that will actually thwart the object of the Explanation.
As we read the Explanation, it does not at all take away the mandatory duty cast on the Controller in the proviso to decide if a default is wilful or not.
Indeed, if the landlord chooses to give two months ' notice to his tenant and he does not pay the rent, then, in the absence of substantial and compelling reasons, the controller or the court can certainly presume that the default is wilful and order his eviction straightaway.
We are unable to accept the view that whether two months ' notice for payment of rent is given or not, it will always be open to the Controller under the proviso to determine the question of wilful default because that would render the very object of Explanation otiose and nugatory.
We express our view in the matter in the following terms: (1) Where no notice is given by the landlord in terms of the Explanation, the Controller, having regard to the four conditions spelt out by us has the undoubted discretion to examine the question as to whether or not the default committed by the tenant is wilful.
If he feels that any of the conditions mentioned by us is lacking or that the default was due to some unforeseen circumstances, he may give the tenant a chance of locus paenitentiae by giving a reasonable time, which the statute puts at 15 days, and if within that time the tenant pays the rent, the application for ejectment would have to be rejected.
(2) If the landlord chooses to give two months ' notice to the tenant to clear up the dues and the tenant does not 674 pay the dues within the stipulated time of the notice then the Controller would have no discretion to decide the question of wilful default because such a conduct of the tenant would itself be presumed to be wilful default unless he shows that he was prevented by sufficient cause or circumstances beyond his control in honouring the notice sent by the landlord.
We would, however, refer to some case law on the question of wilful default as interpreted by the Madras High Court because there appear to be three decisions of the Madras High Court taking some what contrary views.
In Rajeswari vs Vasumal Lalchand(1) it was held that non payment of rent amounted to such supine and callous in difference on the part of the tenant as to amount to a wilful default.
However, the learned Judge does not appear to have noticed the effect of the Explanation to section 10 (2) introduced in 1973.
This decision undoubtedly supports the view that a wilful default is not merely a pure and simple default but a default which is per se deliberate and intentional.
In N. Ramaswami Reddiar vs S.N. Periamuthu Nadar,(2) Explanation to the proviso to section 10 (2) of the Act was expressly considered and Ratnam, J. Observed as follows: "A reading of the Explanation indicates that it is not exhaustive of all cases of wilful default, but it specifies only one instance where the default should be construed as wilful.
If a tenant does not pay the rents at all for a considerable time and the landlord files a petition for an order of eviction on the basis that the tenant had committed wilful default without issuing any notice, then, in the absence of any other explanation by the tenant, the default should be construed as wilful, in spite of the fact that the landlord had not chosen to issue a notice to the tenant claiming the rents.
In this view, I hold that counsel for the petitioner cannot be of any assistance to him.
" We feel ourselves in complete agreement with the view taken by the learned Judge On the interpretation of the proviso read with the Explanation.
In the case of Khivraj Chordia vs G. Maniklal Bhattad.(3) Ramamurti, J. has drawn a very apt and clearcut distiction (1) AIR 1983 Madras 97.
(2) [1980] Law Weekly (vol. 93) 577 (3) AIR 1966 Madras 67 675 between a simple default and a wilful default and has pointed out A that in order to be a 'wilful default ' it must be proved that the con duct of the tenant was such as would lead to the inference that his omission was a conscious violation of his obligation to pay the rent.
In this connection, the learned Judge observed thus: "The decisions of this court have reportedly pointed B` out that there is a clear difference in law between default and wilful default and that non payment of rent within the time specified by the Act, though would amount to default, cannot by itself be treated as wilful default, and that if the rent was paid after the expiry of the time in the following month within a short time thereafter, the default cannot be said to be wilful to warrant the punishment of eviction Keeping in mind the main object of the enactment, namely, prevention of unreasonable eviction of tenants, the principle that emerges from the several decisions is that for default to be regarded as wilful default, the conduct of the tenant should be such as to lead to the inference that his omission was a conscious violation of his obligation to pay r the rent or reckless indifference.
If the default was due to accident or inadvertence or erroneous or false sense of security based upon the conduct of the landlord himself, the default cannot be said to be wilful default.
" Having, therefore, enunciated the various principles and tests to be applied by courts in deciding the question of wilful default we now proceed to decide the various appeals filed before us.
The brief facts of each appeal have already been narrated in the opening part of our judgment and we would like to sum up our conclusions flowing from the facts found by, the High Court in each case.
In civil appeal No. 1178 of 1984, it would appear that though the tenant had committed a default but he had paid the entire rent well before the filing of the suit by the landlord.
In fact, the suit for eviction was filed by the landlord not on the ground of pending arrears but to penalise the tenant for having defaulted in the past.
Such a suit cannot be entertained because once the entire dues are paid to the landlord the cause of action for filing of a suit completely vanishes.
Hence, the suit arising out of civil appeal No. 1978 of 1984 must be dismissed as being not maintainable and the order of ejectment passed by the High Court is hereby set aside.
H 676 In civil appeal No. 6211 of 1983, having regard to the tests and the criteria laid down by us there can be no doubt that wilful default in the payment of arrears to the tune of Rs. 900 has been proved and as there is nothing to show that the arrears were not paid or withheld due to circumstances beyond the control of the tenant, the order of eviction passed by the High Court is confirmed, and the appeal is allowed.
In civil appeal No. 1992 of 1982, a somewhat peculiar position seems to have arisen.
It is true that, to begin with, the tenant did not pay the rent for the months of June 1977 to January 1978 which led the landlord to issue a notice on 16.1.78 demanding payment of arrears amounting to Rs. 392.
The tenant within 15 days of receipt of the notice (on 30.1.783 sent a detailed reply to the landlord and enclosed a Bank Draft of Rs. 39.2 which was, however, not encashed by the landlord and returned to the tenant after filing of the eviction petition, for reasons best known to him.
Therefore, since the tenant had already complied with the notice within the stipulated time envisaged by the Explanation to Proviso to section 10 (2) of the Act, by no stretch of imagination could be called guilty of wilful default.
On the other hand, the conduct of the landlord in filing a suit and not encashing the Bank Draft was motivated with a view to get a decree for eviction on false excuse.
Such a state of affairs could not be countenanced by the court.
In these circumstances, we are of the opinion that the arrears having been paid through the Bank Draft, the question of eviction of the tenant did not arise nor did the question of default come into the picture merely because the landlord wanted to harass him by filing an eviction petition.
The High Court was, therefore, clearly in error in passing the decree of ejectment against the tenant.
We, therefore, allow the appeal and set aside the order of the High Court evicting the tenant.
In civil appeal No. 1659 of 1982, as it was clearly a case of wilful default on the part of the tenant we affirm the order of the High Court evicting the tenant and dismiss the appeal.
In civil appeal No. 3668 of 1982, some dispute arose between the parties as to whether the rent was to be deposited in Bank, resulting in the filing of the present suit for eviction on 1.4.80 in the court of the Rent Controller by the landlord after verifying from the Bank that the tenant had not deposited the rent for the months of January and February 1980.
This default, in our opinion, was undoubtedly deliberate, conscious and without any reasonable or rational basis 677 and the High Court was perfectly right in holding that the tenant A was guilty of wilful default and passing a decree for ejectments.
As no notice was given by the landlord, Explanation to proviso to section 10 (2) of the Act does not apply at all.
The appeal is accordingly dismissed.
In civil appeal No. 2246 of 1982, the respondent landladies had let out the premises to the tenant at a monthly rent of Rs. 105.
A petition for eviction was filed by them on 2.11.76 for non payment of rent by the tenant from January 1976 to September 1976, a period of 9 months.
But, we might state here that before filing the eviction petition, the respondents had issued a notice on 6.7.76 asking the tenant to pay the dues, which the tenant paid on 17 7.76, i.e., within 10 days of the receipt of the notice, which was accepted by the landladies without any prejudice.
The Rent Controller held that the default was not wilful as in pursuance of the notice the payment had already been made.
The Appellate Authority reversed the finding of the Rent Controller and held that the default was wilful.
The High Court in revision upheld the order of eviction O n the ground that there was no satisfactory explanation for non payment of rent for the period January to June 1976.
In coming to this finding, the High Court was clearly in error because the tenant had already deposited the entire dues including the rent from January to June, on 17.7.76.
Thus, the question of wilful default could not arise nor could it be said that the default was either conscious or deliberate or international.
Moreover, in view of the Explanation since the tenant had paid the amount within the time of the notice, there could be no question of wilful default.
This fact seems to have been completely overlooked by the High Court.
We, therefore, allow the appeal and set aside the order of the High Court directing eviction of the tenant.
In civil appeal No. 4012 of 1982, the tenant occupied the premises at a monthly rent of Rs. 325.
It appears that the tenant defaulted in payment of tent from June 1976 onwards and after repeated demands, only a sum Or Rs. 1000 was paid by him on 1.4 77.
leaving a substantial balance of arrears unpaid.
The plea of the tenant that he had made payments to the Income Tax Department has not been proved, nor did the tenant have any right under the contract to pay any amount to the Income Tax Department and if he did so on his own, he must he held responsible for his conduct.
Even so, the landlord contended that right from February 1977 to July 1978, the appellant was in arrears without any lawful cause.
This was, therefore, a clear case of wilful default where the tenant did not pay the 678 rent deliberately, consciously and intentionally.
In these circumstances, the High Court was fully justified in holding that the default was wilful and affirming the decree passed by the Appellate court.
The appeal is accordingly dismissed.
The result is that all the appeals are disposed of as indicated above but in the circumstances there will be no order as to costs in any of the appeals.
Civil Appeal No. 5769 of 1983 already stands disposed of in terms of our Order of September 12,1984.
SABYASACHI MUKHARJI, J.
With great respect to my learned brothers, I regret I am unable to agree on the construction put on the expression 'wilful default ' in the Explanation to the Proviso of sub section (2) of section 10 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960.
It may be borne in mind that The Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 hereinafter called the 'Act ' was an Act to amend and consolidate the law relating to the regulation of letting of residential and non residential buildings and the control of rents of such buildings and the prevention of unreasonable eviction of tenants therefrom in the State of Tamil Nadu.
The Act was from time to time amended and was last amended by Act 1 of 1980.
By Act 23 of 1973, an Explanation was added to the Proviso to sub section (2) of section 10 of the Act.
Section 10 of the Act deals with the eviction of tenants.
In order to appreciate the scheme of the section and the meaning of the expression 'wilful ' introduced by the Explanation to the Proviso of sub section (21 of section 10, we have to examine the provisions of section 10 and the various sub sections of the section.
As mentioned hereinbefore section 10 deals with the eviction of tenants and postulates that a tenant shall not be evicted whether in execution of a decree or otherwise except in accordance with the provisions of section 10 or sections 14 to 16.
For these appeals we are not concerned with the provisions of sections 14 to 16.
The first Proviso to sub section (l) of section 10 stipulates that the said sections 14 to 16 would not apply to a tenant whose land lord is the Government The second Proviso also provides that if the tenant denies the title of the landlord or claims right of permanent tenancy, the Controller shall decide whether the denial or claim is bona fide and if he records a finding to that effect, the landlord shall be entitled to sue for eviction of the tenant in a Civil Court and the Court may pass a decree for eviction on any of the grounds 679 mentioned in the said sections, notwithstanding that the Court finds that such denial does not involve forfeiture of the lease or that the claim is unfounded.
Sub section (2) of section 10 of the Act deals with the procedure which a landlord must follow in order to evict his tenant.
It provides that a landlord should apply to the Controller for a direction for eviction if he wants it and, if the Controller, after giving the tenant a reasonable opportunity of showing cause against the application, is satisfied with any of the various conditions which are stipulated in clause (i), (ii), (iii), (iv), (v), (vi) and (vii) then he shall make an order directing the tenant to put the landlord in possession of the building and if the Controller is not satisfied, he shall make an order rejecting the application.
The Proviso to sub section (2) of section 10 is as follows: "Provided that in any case falling under clause (i) if the Controller is satisfied that the tenant 's default to pay or tender rent was not wilful, he may, notwithstanding any thing contained in section 11, give the tenant a reasonable time, not exceeding fifteen days, to pay or tender the rent due by him to the landlord up to the date of such payment or tender and on such payment or tender, the application shall be rejected.
" The Explanation which was added by Act 23 of 1973 to the said Proviso stipulates that for the purpose of this sub section, default to pay or tender rent shall be construed as wilful, if the default by the tenant in the payment or tender of rent continues after the issue of two months ' notice by the landlord claiming the rent.
It is this Explanation that falls for consideration in these appeals.
Clause (i) of sub section (2) of section 10 of the Act requires the Controller to be satisfied that the tenant has not paid or tendered rent due by him in respect of the building within fifteen days after the expiry of the time fixed in the agreement of the tenancy with his landlord or in the absence of any such agreement, by the last day of the month next following that for which the rent is payable.
For the purpose of these appeals, it is not necessary to consider the grounds of eviction mentioned in other clauses of sub section (2) of section 10 of the Act.
If the Controller is satisfied of any of the grounds mentioned in clause (i) to clause (vii) of sub section (2) of section 10, then the shall, so the section stipulates, make an order directing the tenant to put the landlord in possession of the building and if he is not so satisfied, he shall make an order rejecting the application; the Proviso provides that in any case falling under clause (i) which we have noted 680 hereinbefore, if the Controller is satisfied that the tenant 's default to pay or tender rent was not wilful, he may, notwithstanding anything contained in section l l, give the tenant a reasonable time, not exceeding fifteen days, to pay or tender the rent due by him to the landlord upto the date such payment or tender and on such payment or tender, the application shall be rejected.
The Explanation which is the subject matter of interpretation before us and which was added, as noted before, by Act 23 of 1973 by section 10, stipulates that for the purpose of the said sub section, namely sub section (2) of section 10, default to pay or tender rent shall be construed as wilful, if the default by the tenant in the payment or tender of rent continues after the issue of two months ' notice by the landlord claiming the rent.
The question, therefore, is can the default be construed as wilful under any other circumstances apart from default continuing after the issue of two months ' notice by the landlord claiming the rent ? In other words, for the purpose of this section, will the wilful default be only when notice has been given by the landlord and two months have expired and the tenant has not paid the rent ? My learned brethren say that there may be other circumstances constituting wilful default.
With respect, I differ.
I will briefly note the reasons.
As I read the provision, it appears to me that there must be satisfaction of the Controller whether default was wilful and a default will be construed as wilful, in my opinion, only where the landlord has given notice and two months have expired without payment of such rent.
Default has been construed in various ways depending upon the context. 'Default ' would seem to embrace every failure to perform part of one 's contract or bargain.
It is a purely relative term like negligence.
(See in this connection Stroud 's Judicial.
Dictionary Vol. 1, Third Edition, page 757).
It means nothing more, nothing less, than not doing what is reasonable under the circumstances; not doing something which you ought to do, having regard to the transaction.
Similarly, default in payment imports some thing wrongful, the omission to do some act which, as between the parties, ought to have been done by one of them.
It simply means non payment, failure or omission to pay.
(See Prem 's Judicial Dictionary, Vol.
I, 1964 page 483).
Earl Jowitt defines 'default ' as omission of that which a man ought to do.
(See The Dictionary of English Law.
page 597).
The Privy Council in the case of Fakir Chander Dutt and Others 681 vs Ram Kumar Chatterji(1) observed that 'Default ' did not necessarily A mean breach of contractual obligation, but simply non payment of rent by a person capable of protecting his tenure by doing so.
Default happens in payment of rents under various contingencies and situations.
Default is a fact which can be proved by evidence.
Whether the default is willful or not is also a question of fact to be proved from evidence, direct and circumstantial, drawing inferences from certain conduct.
If the Courts are free to decide from varying circumstances whether default was wilful or not, then divergence of conclusions are likely to arise, one judicial authority coming to the conclusion from certain circumstances that the default was wilful, another judicial authority coming to a contrary conclusion from more or less same circumstances.
That creates anomalies.
In order to obviate such anomalies and bring about a uniform standard, the explanation as I read, explains the expression 'wilful ' and according to the Explanation added, a default to pay or tender rent "shall be construed", as wilful if the default by the tenant in the payment of rent continues after issue of two months ' notice by the landlord claiming the rent If that is the position, in a case where the landlord has given notice to the tenant claiming the rent and the tenant has not paid the same for two months, then the same must be construed as wilful default, whatever may be the cause for non payment bereavement on the date of payment in the family of near or dear ones or serious heart attack or other ailment of the tenant or of any person sent by the tenant to pay the rent cannot be excused and cannot be considered to be not wilful because the legislature has chosen to use the expression "shall be construed as wilful" if after a notice by the landlord for two months, failure to pay or tender rent on the part of the tenant continues, and if it is wilful then under sub section (2) clause (i) read p with the proviso as explained by the Explanation, the Controller must be satisfied and give an order for eviction.
The question is whether in other cases, that is to say, in cases where admittedly or by other facts or aliunde the Court comes to the conclusion that the default is wilful, for instance, in a case where there is chronic default, regular defaults or habitual defaults, the two months ' notice is necessary or not.
It was the argument on behalf of the respondents that in those circus stances such notice was not necessary and this is the view which has found acceptance by my learned Brethren: I am unable to agree, (1) Indian Appeals, Vol.
XXXI, p. 195.
682 with respect.
If in cases where there are genuine and bona fide reasons for failure or non payment of rent which cannot be excused after two months ' notice to pay rent, then other causes which lead to inference of wilful default cannot also be construed as 'wilful default ' in the context of the Explanation.
The legislature has provided an absolute and clear definition of 'wilful default '.
Other circumstances cannot be considered as wilful default.
In my opinion, the expression "shall be construed" would have the effect of providing a definition of wilful default in the proviso to sub section (2) of section 10.
If a definition is provided of an expression, then the Courts are not free to construe the expression otherwise unless it is so warranted by the use of the expression such as "except otherwise provided or except if the context otherwise indicates".
There is no such expression in the instant case.
There may be in certain circumstances intrinsic evidence indicating otherwise.
Here there is none.
The whole scheme of section 10 is that in order to be entitled to eviction on the ground of arrears of rent, the ingredients of which the Controller must be satisfied are; (a) default, (b) default was wilful.
Whether in a particular case default is wilful or not, must be considered in accordance with the definition provided in the Explanation to Proviso to sub section (2) of section 10 of the Act.
If it was intended that the Courts would be free to judge whether in a particular set up of facts, the default was wilful or not where no notice has been given, then in such a case there was no necessity of adding this Explanation to the Proviso which is a step to the making of the findings under clause (1 of sub section (2) of section 10 of the Act.
It is well settled that the Legislature does not act without purpose or in futility.
lt was contended on behalf of the landlords that the Legislature has not used the expression default to pay or tender rent shall be construed as wilful only if the default by the tenant in the payment or tender of rent continues after the issue of two months ' notice by the landlord claiming the rent It is true that legislature has not chosen to use language to indicate that in no other cases, the default could be considered to be wilful except one case which has been indicated in the Explanation.
683 As I read the Explanation it is not so necessary because Legislature has defined 'wilful d fault ' by the expression that 'default to pay or tender rent shall be construed ' meaning thereby that it will mean only this and no other.
My learned brethren have given instances of difficulties and hardships, if the other defaults, that is to say, default apart from tenant not paying after the expiry of notice by the landlord are not considered as wilful default.
It is true that there may be hardships and many problems might arise.
I share the apprehension of these problems and hardships but I find no justification to read that these hardships of which Legislature must have been aware, were also intended to be covered by the Explanation.
It appears to me that the meaning is clear about the purpose of introduction of the Explanation, i.e, to obviate the difficulties and divergence of judicial opinions depending upon varying circumstances, the legislature has provided a uniform definition to the concept of 'wilful default '.
It is true that where two constructions are possible, one which avoids anomalies and creates reasonable results should be preferred but where the language is clear and where there is a purpose that can be understood and appreciated for construing in one particular manner, that is to say, avoidance of divergence of judicial opinions in construing wilful default and thereby avoiding anomalies for different tenants, one judge taking a particular view on the same set of facts, another judge taking a different view on the same set of facts, in my opinion, it would not be proper in such a situation to say that this definition of wilful default was only illustrative and not exhaustive.
I cannot construe the expression used in the Explanation to the Proviso to sub section (2) of section 10 as illustrative when the Legislature has chosen to use the expression "shall be construed".
It has been observed that statutory provisions must be so construed, if it is possible, that absurdity and mischief may be avoided.
Where the plain and literal interpretation of statutory provision proviso produces a manifestly absurd and unjust result, the Court might modify the language used by the legislature or even do some violence to it so as to achieve the obvious intention of the legislature and produce rational construction and just results.
(See vs in this connection the observations in the No. 1451 (NCE) of 1984).
Lord Denning in the case of Seaford Court Estates Ltd. vs Asher(l) has observed: "If the makers of the Act had themselves come across this 1. 164(CA) 684 ruck in the texture of it, how would they have straightened i out ? He must then do as they would have done A judge must not alter the material of which it is woven, but he can and should iron out the creases.
" Ironing out the creases is possible but not re writing the language q to serve a notion of public policy held by the judges.
Legislature must have legislated for a purpose by Act 23 of 1973 and used the expression "shall be construed" in Explanation in the manner it did.
The fact that in interpreting the statutory language, judges should avoid policy as an approach was emphasised by Lord Scarman in the decision of the House of Lords in the case of Regina vs Barnet London Borough Council Exparte Nilish Shah.(l) User of policy in interpretation of statutory language, Lord Scarman observed, was an impermissible approach to the interpretation of statutory language.
Judges should not interpret statutes in the light of their own views as to policy.
They may, of course, adopt a purposive interpretation if they can find in the statute read as a whole or in material to which they are permitted by law to refer as aids to interpretation an expression of Parliament 's purpose or policy.
In the case of Carrington and Others vs Therm a Stor Ltd,(2) the Master of the Rolls observed that "If regard is had solely to the apparent mischief and the need for a remedy, it is only too easy for a judge to persuade himself that Parliament must have intended to provide the remedy which he would himself have decreed if he had legislative power.
In fact Parliament may not have taken the same view of what is a mischief, may have decided as a matter of policy not to legislate for a legal remedy or may simply have failed to realise that the situation could ever arise.
This is not to say that statutes are to be construed in blinkers or with narrow and legalistic literalness, but only that effect should given to the intentions of Parliament as expressed in the statute, applying the normal canons of construction for resolving ambiguities or any lack or clarity.
" 1. 1983(2) Weekly Law Reports, 16 at 30.
2. 1983 (1) Weekly Law Reports 138 at 142.
685 In the aforesaid view of the matter, I would construe the expression 'wilful default ' in the Explanation to Proviso to subsection (2) of section 10 of the Act in the manner l have indicated.
In that view of the matter, I would decide the appeals accordingly, that is to say, l would agree with my learned brethren in the order passed in those cases where eviction orders have been passed after two months ' notice had been given and there was continuance of default by the tenant thereof.
Appeals which have been disposed of on the basis of wilful default as understood in the manner indicated in the aforesaid observations of mine, I respectfully agree.
Appeals which have been disposed of on wilful default other than in the manner I have indicated hereinbefore, I respectfully differ.
The individual appeals are disposed of accordingly.
There will be no order as to costs.
M.L.A. Appeals dismissed.
741 fair return on the 'capital employed ' which is to be exempted from A tax under sub section (1) of Section 80J, the owner 's capital alone should be taken into account and borrowed monies should be excluded.
Even in regard to the provisions of the above mentioned four statutes, an argument could well be advanced that borrowed monies are as much part of capital employed in the undertaking as the owner 's capital and when monies are borrowed on payment of interest by way of hire charges, they become part of the owner 's capital originally brought in by the owner and there is no reason why capital partaking of the samd characteristics as the fair return should not be allowed on it.
This has precisely been the argument advanced on behalf of the assesses in support of their contention that 'capital employed ' must include borrowed monies in sub section (1) of Section 80J.
But this argument has not prevailed with the Legislature in the enactment of any of the above mentioned four statutes and despite this argument the Legislature has chosen to exclude borrowed monies in computing the 'capital employed ' or the capital of the company for determining what should be regarded as fair return, so that profits in excess of such fair return may be subjected to additional tax.
The Central Board of Revenue cannot therefore be accused of any irrationality or whimsicality in providing that fair return on the 'capital employed ' eligible for exemption under subsection :1) of Section 80J should be calculated by applying the statutory percentage to the owner 's capital, that is, the paid up share capital and reserves without taking into account long term borrowings or for the matter of that, any borrowed monies and debts.
We cannot appreciate the contention of Mr. Palkhivala that when the Legislature was offering a tax incentive it could not have intended that the tax incentive should be measureable by reference only to the owner 's capital and that borrowed capital should b e left out of account, because that would, in the submission of Mr. Palkhivala, result in favouring the affluent assessees who are able to employ their own capital and discriminate against the indigent who have to borrow funds to finance their undertakings.
Having regard to the legislative practice and usage referred to by us, it is obvious that if the Legislature intended that the capital employed ' must include long term borrowings, the Legislature would not have used the flexible expression 'capital employed ' but would have expressed itself unambiguously by providing that the 'capital employed ' shall include long term borrowings.
It is clear from the language used by the section that the Legislature proceeded on the basis that the expression 'capital employed ' has no fixed definite meaning including or excluding long term borrowings and deliberately chose to leave it to the Central Board of Revenue to prescribe 742 how the 'capital employed ' shall be computed or in other words, what items shall be included and what items excluded in computing the 'capital employed ' and by incorporating Rule 19A with retrospective effect in Section 80J by the Finance (No. , the Legislature clearly expressed its aproval of the manner of computation of the 'capital employed ' prescribed by the Central Board of Revenue by making sub rule (3) of Rule 19A.
The consequence of this interpretation would undoubtedly be that the assessees would get relief only with reference to their own capital and not with reference to any monies which might have been borrowed by them for employment in the undertaking but that is a matter of policy which clearly falls within the province of the Executive and the Courts are not concerned with it.
It is obvious that the Central Board of Revenue intended and having regard to the retrospective amendment of Section 80J by Finance Act (No. 2) of l980 that must also be taken to be the intention of the legislature that the assessees should be given relief only with reference to their own capital and not with reference to any borrowed monies, presumably because the object of giving relief was to encourage assessees to bring out their own monies for starting new industrial undertakings and the intention was not that the assessees should be given relief with reference to monies which did not belong to them but which were borrowed from financial institutions and other parties and which would have to be repaid.
Mr. Palkhivala then contended that if sub section (1) of Section 80J were construed as leaving it to the Central Board of Revenue to prescribe what items shall be included and what items excluded in computation of the 'capital employed ' it would be vulnerable to attack on the ground of excessive delegation of legislative power and would consequently be void.
We do not think there is any substance in this contention, for there is in the present case no question of excessive delegation of legislative power.
The essential legislative policy of allowing relief to an assessee who starts a new industrial undertaking or business of a hotel and declaring the period for which such relief shall be granted, is laid down by the Legislature itself in the various sub sections of Section 80J and all that is left to the Central Board of Revenue to prescribe is the manner of computation of the 'capital employed ' with reference to which the quantum of the relief is to be calculated.
It is only the details relating to the working of the exempting provision contained in Section 80J which are left by the Legislature to be determined by the Central Board of Revenue.
This 743 is clearly permissible without offending the inhibition against excessive delegation of legislative power.
It must be remembered that Section 80J enacts an exemption in a taxing statute and a certain margin of latitude is always allowed to the Executive in working out the details of exemption in a such taxing statute.
It was laid down by this Court as far as back as 1959 in Pt.
Banaarsi Dass Bhanol vs State of Madhy a Pradesh(l).
"Now, the authorities are clear that it is not unconstitutional for the legislature to leave it to the executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be laid, the rates at which it is to be charged in respect of different classes of goods, and the like." So also in Sitaram Bishambardas and Ors.
vs State of U.P. and Ors.(Z) this Court upheld the validity of Section 3D (1) of the U.P. Sales Tax Act 1948 which authorised the levy of a tax on the turnover of first purchases made by dealer or through a deal r acting as a purchasing agent, in respect of such goods or class of goods and at such rates, subject to a maximum, as may from time to time be notified by the State Government and Hegde, J. speaking on behalf of the Court observed: E 'It is true that the power to fix the rate of a tax is a legislative power but if the legislature lays down the legislative policy and provides the necessary guidelines, that power can be delegated to the executive.
Though a tax is levied primarily for the purpose of gathering revenue, in selecting the objects to be taxed and in determining the rate of tax, various economic and social aspects, such as the availability of the goods, administrative convenience, the extent of evasion, the impact of tax levied on the various sections of the society etc have to be considered.
In a modern society taxation is an instrument of planning.
It can be used to achieve the economic and social goals of the State For that reason the power to tax must be a flexible power.
It must be capable of being modulated to meet the exigencies of the situation.
In a Cabinet form of Government, the executive (1) ; (2) ; H 744 is expected to reflect the views of the legislatures.
In fact in most matters it gives the lead to the legislature.
However, much one might deplore the "New Depotism" of the executive, the very complexity of the modern society and the demand it makes on its Government have set in motion forces which ha e made it absolutely necessary for the legislatures to entrust more and more powers to the Executive.
Text book doctrines evolved in the 1 9th century have become out of date.
Present position as regards delegation of legislative power may not be ideal, but in the absence of any better alternative, there is no escape from it.
The legislatures have neither the time, nor the required detailed information nor even the mobility to deal in detail with the innumerable problems arising time and again.
In certain matters they can only lay down the policy and guidelines in as clear a manner as possible.
" The validity of Section 3D of the U.P. Sales Tax Act 1948 was again challenged before this Court in Hiralal Ratan Lal vs State of U.P. and Anr (1) the same ground that it suffered from the vice of legislative power and again, the challenge was negatived by this Court with the following observations: "The only remaining contention is that the delegation made to the executive under section 3D is an excessive delegation.
It is true that the legislature cannot delegate its legislative function, to any other body.
But subject to that qualification, it is permissible for the legislature to delegate the power to select the persons on whom the tax is to be levied or the goods or the transactions on which the tax is to be levied.
In the Act, under section 3 the legislature has sought to impose multi point tax on all sales and purchases.
After having done that it has given power to the executive, a high authority and which is presumed to command the majority support in the legislature; to select for special treatment dealings in certain class of goods.
In the very nature of things, it is impossible for the legislature to ennumerate goods.
dealings in which Sales.
Tax or Purchase tax should be imposed.
It is also impossible for the legislature to select the goods which should be subjected to (1) ; 745 a single point sales or purchase tax.
Before making such selections several aspects such as the impact of the levy on the society, economic consequences and the administrative convenience will have to be considered.
These factors may change from time to time.
Hence in the very nature of things, these details have got to be left to the executive.
" The principles laid down in these observations from the decided cases clearly govern the present case and conclusively repel the contention or Mr. Palkhivala that if sub section (1) of Section 80J were construed in the manner suggested by the learned Attorney General on behalf of the Revenue, it would be rendered void on the ground of excessive delegation of legislative power.
the Legislature having laid down the legislative policy of giving relief to an assessee who is starting a new industrial undertaking or the business of a hotel.
had necessarily to leave it to the Central Board of Revenue to determine what should be the amount of capital employed that should be required to be taken into that account for the purpose of determining the quantum of the relief allowable under the Section.
What should be the quantum of the relief allowable to the assessee would necessarily depend upon diverse t`actors such as the impact of relief on the industry as a whole, the response of the industry to the grant of the relief, the adequacy or inadequacy of the relief granted in promoting the growth of new industrial undertakings, the state of the economy prevailing at the time, whether it is buoyant or depressed and administrative convenience.
These are factors which may change from time to time and hence in the very nature, of thin as, the working out of the mode of computation of the 'capital employed ' for the purpose of determining the quantum of the relief must necessarily be left to the Central Board of Revenue which would be best in a position to consider what should be the quantum of the relief necessary to be given by way of tax incentive in order to promote setting up of new industrial undertakings and hotels and for that purpose, what amount of the 'capital employed ' should form the basis for computation of such relief.
Moreover, it may be noticed that under Section 29(, of the Income Tax 1961 every Rule made under the Act is required to be laid before each House of Parliament so that both Houses of Parliament have an opportunity of knowing what the rule is and considering whether any modification should be made in the rule or the rule should not be made or issued and if both Houses agree in making any modification in the rule or both Houses agree that the H 746 Rule should not be made or issued, then the Rule would thereafter have effect only in such modified form or have no effect at all.
as the case may be.
Parliament has thus not parted with its control over the rule making authority and it exercises strict vigilance and control over the rule making power exercised by the Central Board of Revenue.
This is a strong circumstance which militates against the argument based on excessive delegation of legislative power.
This view receives considerable support from the decision of the Privy Council in Powell vs
Appollo Company Limited(1) where the Judicial Committee, while negativing the challenge to the constitutionality of Section 133 of the Customs Regulation Act of 1879 which conferred power on the Governor to impose tax on certain articles of import, observed as follows: "It is argued that the tax in question has been imposed by the Governor and not by the Legislature who alone had power to impose it.
But the duties levied under the Order in V Council are really levied by the authority of the Act under which the Order is issued.
The Legislature has not parted with its perfect control over the Governor, and has the power, of course, at any moment, of withdrawing or altering the power which they have entrusted to him.
In these circumstances, their Lordships are of opinion that the judgment Of the Supreme Court was wrong in declaring Section 133 of the Customs Regulation Act of 1879 to be beyond the power of the Legislature.
The same approach was adopted by this Court in D. section Grewal vs State of Punjab(2) where upholding the validity of Section 3 of the All India Services Act 1951 which was challenged on the ground of excessive delegation of legislative power, Wanchoo, J. speaking on behalf of the Court said: "Further, by section 3 the Central Government was given the power to frame rules in future which may have the effect of adding to, altering, varying or amending the rules accepted under s.4 as binding.
Seeing that the rules would govern the all lndia services common to the Central Government and the State Government provision was made by s.3 that rules should be framed only after consulting the State (1)11885]10 A.C. 282.
(2)11959] Supp. 1 S.C.R. 792.
747 Governments.
At the same time Parliament took care to A see that these rules were laid on the table of Parliament for fourteen days before they were to come into force and they were subject to modification, whether by way of repeal or amendment on a motion made by Parliament during the session in which they are so laid.
This makes it perfectly clear that Parliament has in no way abdicated its authority, but is keeping strict vigilance and control over its delegate.
It will thus be seen that there is no question of excessive delegation of legislative power in the present case and, even on the view as to interpretation taken by us, sub section (1) of Section 80J cannot be assailed as unconstitutional on the ground of excessive delegation of legislative power.
We must therefore hold that subrule (3) of Rule 19A in so far as it provided for exclusion of borrowed monies and debts and particularly long term borrowings in computation of the 'capital employed ' could not be said to be outside the rule making authority conferred on the Central Board of Revenue under sub section (1) of Section 80J and was a perfectly valid piece of subordinate legislation.
That takes us to the second point urged by Mr. Palkhivala relating to the dimension of time in regard to the expression 'capital employed '.
The argument of Mr. Palkhivala was that the concept of 'capital employed ' in respect of the previous year is a concept which compels attention to the reality of the capital used during the whole year and not merely on the first day of the computation period and therefore Rule 19A in so far as it provided for computation of the 'capital employed ' as on the first day of the computation period was ultra vires the rule making authority of the Central Board of Revenue under sub section (1) of Section.
80J This argument of Mr. Palkhivala is also unsustainable and must be rejected.
It may be noted that when sub section (1) of Section 80J speaks of 'capital employed ' in an industrial undertaking or business of a hotel, it does not refer to 'capital employed ' during the previous year but it uses the expression 'capital employed ' in respect of the previous year, There is a vital difference between the expression "during the previous year" and the expression "In connection with the previous year".
The argument of Mr. Palkhivala would have had great force if the reference in sub section (1) of Section 80J would have been to 'capital employed ' during the previous year Then it could have been contended with considerable plausibility that the 'capital employed ' 11 748 cannot be computed as on the first day of the previous year, but it should be taken to be the average amount of 'capital employed ' during the previous year.
But the expression used by the Legislature in sub section (1) of Section 80J being "capital employed. computed in the prescribed manner in respect of the previous year", the computation has to be in respect of the previous year and it need not take into account the average amount of 'capital employed ' during the previous year but it can legitimately take the first day of the previous year as the point of time at which the 'capital employed ' must be computed.
The 'capital employed ' so computed would clearly fall within the expression "capital employed. computed in the prescribed manner in respect of the previous year".
Mr. Palkhivala relied on the description given in the parenthetical portion at the end of sub section (1) of Section 80J which describes the amount calculated by applying the statutory rate of six per cent to the 'capital employed ' computed in the prescribed manner in respect of the previous year as "the relevant amount of capital employed during the previous year", but that is merely a description given to the amount calculated as provided in the main part of sub section (1) of Section 80J and in the main part, we find the words "in respect of the previous year" and not "during the previous year".
It may be pointed out that the words "in respect of the previous year" were introduced for the first time when Section 80J came to be enacted as a result of the Report of Shri section Boothalingam, where he recommended that the prevailing "base for the calculation of profits, nemely, average 'capital employed ' in the business during each year" was complicated and difficult to establish and it was therefore desirable to adopt the basis of computation of the 'capital employed ' as "at the beginning of the year but ignoring the fresh introduction of capital in the course of the year".
It was following upon the introduction of the words 'in respect of the previous year" in subsection (1) of Section 80J that Rule l9A was made providing for computation of the 'capital employed ' as on the first day of the computation period.
Moreover, if we refer to the definition of 'statutory deduction ' in sub section (8) of Section ' and Rule I of the Second Schedule of the , it would be apparent that.
according to the Legislature, the process of computation of the capital of the company includes also the specification of the point of time as on which the capital of the company shall be computed.
Therefore" even if the words "in respect of the previous year" were absent, it would have been competent to the Central Board of Revenue as the rule making authority to provide for the computation of the 'capital employed as on the 749 first day of the computation period, as was done by the Legislature in the case of the .
The words "in respect of the previous year" are facilitative of the computation of the 'capital employed ' being prescribed as on the first day of the computation period.
We cannot therefore accept the contention of Mr. Palkhivala that Rule l9A in so far as it provided for computation of the 'capital employed ' as on the first day of the computation period was outside the rule making authority of the Central Board of Revenue under sub section (1) of Section 80J.
We are therefore of the view that Rule 19A in so far as it excluded borrowed monies and debts in computation of the 'capital employed ' and provided for computation of the 'capital employed ' as on the first day of the computation period was not ultra vires Section 80J and was a perfectly valid rule within the rule making authority conferred upon the Central Board of Revenue.
So also, for the same reasons, Rule 9A in so far as it provided that the 'capital employed ' in a ship shall be taken to be the written down value of the ship as reduced by the aggregate of the amounts owed by the assessee as on the computation date on account of monies borrowed or debts incurred in acquiring that ship must be held to be valid as being within the rule making authority of the Central Board of Revenue.
Since, on the view taken by us, Rule 19A did not suffer from any infirmity and was valid in its entirety, Finance Act (No.2) of 1980 in so far as it amended Section 80J by incorporating Rule l9A in the Section with retrospective effect from 1st April 1972, was merely clarificatory in nature and must accordingly be held to be valid.
F The writ petitions will therefore stand dismissed but having regard to the importance of the questions involved in the writ petitions, we think it would be fair and just to direct each party to bear its own costs of the writ petitions.
A.N. SEN, J. I have had the benefit of reading the judgment prepared by my learned brother Bhagwati, J.
I regret I cannot pursuade myself to agree.
The material facts have been fully stated in the judgment of my learned brother.
My learned brother in his judgment has set out all the relevant provisions of the Income Tax Act and the Income Tax Rules.
He has also traced the legislative history of S.80J of the 750 Income Tax Act, 1961 and has noted the various amendments effected to that section from time to time.
It does not, therefore, become necessary to reproduce the same at any length in my judgment.
The two questions which fall for determination are : (1) Whether rule 19A of the Income Tax Act Rules insofar as the said rule excludes borrowed capital and fixes the first day of the year in the matter of computation of capital employed for the purpose of relief under section 80J is valid.
(2) Whether the amendment introduced in section 80J by the Finance (No.2) Act of 1980 incorporating in the section the provisions of the rule in relation to the exclusion of borrowed capital and the fixing of the first day of the year for the purpose of computation of the capital employed for granting relief under section 80J with retrospective affect from 1st April, 1972 is valid ? The material provisions Of Rule 19A read as follows: (1) For the purposes of section 80J, the capital employed in an industrial undertaking or the business of a hotel shall be computed in accordance with sub rules (2) to (4), and the capital employed in a ship shall be computed in accordance with sub rule 5).
(2) The aggregate of the amounts representing the values of the assets as on the first day of the computation period, of the undertaking or of the business of the hotel to which the said section 80J applies shall first be ascertained in the following manner: (i) in the case of assets entitled to depreciation, their written down value; (ii) in the case of assets acquired by purchase and not entitled to depreciation, their actual cost to the assessee: (iii) in the Case of assets acquired other wise then by purchase and not entitled to depreciation, the value of the assets when they became assets of the business; 751 (iv) in the case of assets being debts due to the person carrying on the business the nominal amount of those debts; (v) in the case of assets being cash in hand or bank, the amount thereof.
Explanation 1: In this rule, "Computation period" means the period for which profits and gains of the industrial undertaking or business of the hotel are computed under sections 28 to 43A. Explanation 2: The value of any building, machinery or plant or any part there of as is referred to in cl.
(a) or clause (b) of the explanation at the end of sub section (6) of section 80J shall not be taken into n account in computing the capital employed in the industrial undertaking or, as the case may be, the business of the hotel.
Explanation 3: Where the cost of asset has been satisfied other wise than in cash, the then value of the consideration actually given for the asset shall be treated as the actual cost of the asset.
(3) From the aggregate of the amount as ascertained under sub rule (2) shall be deducted the aggregate of the amounts, as on the first day of the computation period, of borrowed moneys and debts due by the assessee (including amount due towards any liability in respect of tax ) Rule l9A forms a part of the Income Tax Rules 1962 which have been framed by virtue of the authority conferred under section 295 of the Income tax Act 1961.
Section 295 lays down: "(1) The Board may subject to the control of the Central Government, by notification in the Gazette of India, make rules for the whole or any part of India for carrying out the purposes of this Act; 752 (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters: xxx x It may be noted that the matters mentioned in sub section (2) do not refer to section 80J of the Act The relevant provisions of section 80J as it stood prior to the impugned amendment by the Finance Act 2 of 1980 material for the purpose of the present proceedings may be set out: "(1).
Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel, to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains (reduced by the aggregate of the deductions, if any.
admissible to the assessee under section 80H and section 80HH) of so much of the amount thereof as does not exceed the amount calculated at the rate of six per cent per annum on the capital employed in the industrial undertaking or ship or business of the hotel as the case may be, computed in the prescribed manner in respect of the previous year relevant to the assessment year (the amount calculated as aforesaid being hereafter, in this section, referred to as the relevant amount of capital employed during the previous year) (2) The deduction specified in sub section (1) shall be allowed in computing the total income in respect of the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or to operate its cold storage plant or plants or the ship is first brought into use or the business of the hotel starts functioning (such assessment year being hereafter, in this section, referred to as the initial assessment year) and each of the four assessment years immediately succeeding the initial assessment year.
x x x (4) This section applies to any industrial undertaking which fulfills all the following conditions, namely: 753 (i) it is not formed by the splitting up, or the reconstruction, of a business already in existence; (ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose; B (iii) it manufactures or produced articles, or operates one or more cold storage plant or plants.
in any part of India, and has begun or begins to manufacture or produce articles or to operate such plant or plants, at any time within the period of (thirty three years) next following the 1st day of April, 1948, or such further period as the Central Government may, by notification in the official Gazette, specify with reference to any particular industrial undertaking; D (iv) in a case where the industrial undertaking manufactures or produces articles, the undertaking employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power: E Provided that the condition in clause (i) shall not apply in respect of any industrial undertaking which is formed as a result of the re establishment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section; Provided further that, where any building or any part thereof previously used for any purpose is transferred to the business of the industrial undertaking, the value of the building or part so transferred shall not be taken in to account in computing the capital employed in the industrial undertaking: Provided also that in the case of an industrial undertaking which manufactures or produces any articles specified in the list in the Eleventh Schedule, the provisions of clause (iii) shall have effect as if for the words 'thirty three years ', the word 'thirty one years ' had been substituted.
" 11 754 I propose to take up first the question of the validity of the Rule.
I consider this will be the proper course to adopt lf the Rule is held to be valid, the question of the amendment with retrospective effect may not require any consideration at all.
If, on the other hand, the Rule is held to be invalid, the question of the validity of the amendment assumes vital importance.
The invalidity of the Rule, on the basis of the arguments advanced, may also have a bearing in deciding the validity or otherwise of the amendment.
The rule must be held to be valid, if the rule is found to be in conformity with and consistent with the section If, however, the rule is found to be inconsistent with and contrary to the provisions of the section, the rule has to be pronounced invalid.
Whether the rule is in conformity with and is consistent with the section or whether the rule is inconsistent with and contrary to the provisions of the section, must necessarily be determined on a proper interpretation of the section.
Principles of construction of any statute or any statutory provision are well settled.
The purpose of interpretation of any statute is to gather the true intention of the Legislature.
It is well settled that "if the words of a statue are clear and unambiguous, they themselves indicate what must be taken to have been the intention of Parliament and there is no need to look elsewhere to discover their intention or their meaning".
(See Halsbury 's Laws of England, 4th Edn.
44 at P. 522).
When the words of a statue are clear, plain or unambiguous, it becomes the duty of the Court to expound those words in their natural and ordinary sense, as the words used themselves best declare the intent of the Legislature If on a fair reading of a section, the words used appear to be plain and unambiguous and are reasonably susceptible to one meaning only, Courts must give effect to that meaning, unless such a meaning makes a non sense of the section or leads to absurdity.
The Court is not concerned with the policy involved or with the results, injurious or otherwise, which may follow from giving effect to the language 0 used.
In Emperor vs Banoari Lal Sarma,(l) Viscount Simon, L.C. Observed at P.55: "Again and again, this Board has insisted that in enacted words we are not concerned with the policy involved (1) A.I.R. 1945 P.C.48.
755 construing or with the results, injurious or otherwise, which A may follow from giving effect to the language used".
In Kanti Lal Sur vs Paramnidhi Sadhukhan,(l) this Court at P. 910 held: "lf the words used are capable of one construction only, then it would not be open to the Courts to adopt any other hypothetical construction on the ground that such hypothetical construction is more consistent with the alleged object and policy of the Act".
If, however, the words of a statute are not clear and are ambiguous; different considerations may apply in interpreting the provisions for gathering the true intention of the law giver.
It is stated in Halsbury 's Laws of England, 4th Edn.
44, in para 858 at P. 523, as follows: "If the words of a statute are ambiguous, the intention of Parliament must be sought first in the statute itself, then in other legislation and contemperaneous circumstances and finally in the general rules laid down long ago, and often approved namely, by ascertaining (1)what was the common law before the making of the Act; (2) what was the mischief and defect for which the common law did not provide; (3) what remedy Parliament resolved and appointed to cure the disease of the commonwealth, and (4) the true reason of the remedy".
As on a fair reading of section 80J, I am satisfied that the section is sufficiently clear and the language used therein suffers from no ambiguity, it does not become necessary for me in the instant case to consider at length the principles of interpretation which are required to be observed in construing an ambiguous statute.
The material provisions of section 80J of the Income tax Act, prior to the impugned amendment by the Finance Act, 1980, have been earlier set out.
The relevant provisions of the said section provide that where the gross total income of an assessee includes profits and gains derived from an industrial undertaking or ship or the business of a hotel to which the section applies, there shall, in accordance with and subject to the provisions of the section, be allowed in (1) A.l.
R. H 756 computing total income of the assessee, a deduction from such profits and gains (reduced by the deduction, if any, admissible to the assessee under section 80HH or section 80HHA) of so much of the amount thereof as does not exceed an amount calculated @, 6 % per annum on the capital employed in the industrial undertaking or ship or business of the hotel as the case may be, computed in the manner prescribed in respect of the previous year relevant to the assessment year (the amount calculated aforesaid being hereinafter, in this connection referred to as the relevant amount of capital employed during the previous year) For qualifying for relief under this section, an assessee must derive profits and gains from an industrial undertaking or ship or the business of a hotel to which the section must be applicable.
It is not in dispute that the assessees who have approached the Court have derived profits and gains from industrial undertaking set up by them and they qualify for relief under this section.
A plain reading of the section with reference to the language used therein clearly postulates that relief as contemplated in the section is to be allowed on the capital employed in the undertaking in the previous year, producing the profits and gains of the under taking in the previous year.
An undertaking might have had capital which might not have been employed in the undertaking in previous year for earning profits and gains which were earned in the previous year.
Such capital, though forming part of the capital of the undertaking, will not be entitled to the benefit of the relief under this section.
Relief is contemplated only on the capital which was employed in the undertaking in the previous year and which produced the previous year the profits and gains of the undertaking which were included in the total income of the assessee in the previous year.
Relief under this section for the undertaking is clearly intended on the capital employed in the undertaking which produced the profits and gains of the undertaking in the previous year.
This intention is made manifestly clear, as relief has to be granted on the basis of the profits and gains earned by the undertaking in the previous year by virtue of employment of capital in the undertaking in the previous year.
The capital employed in the undertaking` which qualifies for relief under this Section clearly refers to and must necessarily be the capital employed in the undertaking in the previous year for the purpose of earning the profits.
If the capital employed in the undertaking is own capital, such capital qualifies for relief.
If capital employed is borrowed capita], such capital will equally 757 qualify for relief.
If capital employed consists of assessee 's own capital and also his borrowed capital, the capital so employed, assessee 's own and borrowed, will both qualify for the relief.
The capital employed in the undertaking in the previous year which qualifies for relief under this section has to be computed in the manner prescribed.
There is nothing in the section to suggest or indicate that in prescribing the manner of computation of the capital employed in the undertaking for the purpose of relief, any part of the capital which was employed in the undertaking for producing the profits and gains can be excluded.
If the Legislature had any such intention for excluding any part of the capital employed in the undertaking producing profits and gains of the undertaking, the Legislature would have and could have easily made suitable provisions.
The Legislature must be presumed to have known that the capital employed in an undertaking may consist of and, in fact, does consist of assessee 's own capital and also capital borrowed by the assessee.
It is common knowledge that most of the undertakings carry on their activities with borrowed capital in addition to own capital employed in the undertakings.
Inspite of the knowledge of the Legislature that undertakings are carried on with borrowed capital, the Legislature in its wisdom has in this section mentioned capital employed in the undertaking for earning profits and gains of the undertaking without making any distinction between own capital and borrowed capital and has provided for relief in respect of the capital employed in the undertaking on the basis of profits and gains of the undertaking earned by virtue of employment of such capital.
It is not disputed and cannot be disputed that profits and gains of the undertaking to be ultimately included in the total income of the assessee are produced by the capital, whether assessee 's own or borrowed, employed in the undertaking in the relevant year and while computing profits and gains of the undertaking the borrowed capital is as important as the assessee 's own capital and both play the same role in earning the profits and gains of the undertaking.
It is the capital employed in the undertaking which qualifies for relief under this section.
irrespective of the nature and source of the capital employed in the undertaking.
It is, however, to be emphasised hat the capital to qualify for relief under this section, whether borrowed or own, must be employed in the undertaking in the previous year for earning profits and gains and any capital of the undertaking, borrowed or assessee 's own which remains idle and is not employed in the undertaking for earning profits and gains dose not qualify for any relief under this section ` H 758 Sub section 4 of section 80J lays down the conditions which have to be fulfilled by an undertaking to qualify for the relief granted under this section.
Even in this sub section there is no indication that any undertaking set up with borrowed capital or with capital part of which may be borrowed will not be entitled to the benefits n of this section.
An industrial undertaking which satisfies all the conditions laid down in sub section 4 will undoubtedly be entitled to the benefits of section 80J.
An undertaking with borrowed capital can also very well satisfy the conditions of sub section (4) and qualify for the relief, as there is nothing in this sub section which prevents an undertaking set up with wholly or partly borrowed capital from fulfilling the conditions laid down in the sub section 4.
An undertaking satisfying all the conditions in sub section (4) and there by qualifying for relief if, however, set up with borrowed capital, will be denied the relief to which the undertaking in terms of the clear provisions of the section is justly entitled, merely on the ground that the rule prescribed for computing the relief excludes the borrowed ` capital in the computation of the capital employed for the purpose of granting the relief under this section.
In other words, an industrial undertaking qualifying for the relief under section 80J by virtue of the clear and unambiguous provisions made in the section will be denied the relief because of the rule, as on computation on the basis of the rule excluding borrowed capital, no relief will be available.
As the sub section in clear and unequivocal terms provides that section 80J will apply to such an undertaking, the benefit intended to be given to the undertaking under this section cannot be denied to such an undertaking by any rule which will clearly have the effect of negativing the clear and unambiguous statutory provisions.
The argument of Mr. Palkhivala that the expression 'capital employed ' is a term of art and is usually understood in business parlance and commercial circles and also in commercial accountancy in the sense that it includes not only owner 's capital but also borrowed capital, particularly if the borrowing is on a long term basis, to my mind, has considerable force.
It may be true that in different context and particularly in the context of return of capital, capital employed may not include borrowed capital.
Unless the content otherwise requires and except in the case of return of capital, the expression 'capital employed ' in its ordinary sense is understood to include borrowed capital.
It refers to the capital, whatever may be the source, which is employed in any undertaking or venture for carrying on the business for the purpose of earning the profits and gains.
759 In the instant case, the words capital employed have to be A understood and interpreted in the context the said words have been used in section 80J.
It is quite clear from the text of the section that the words capital employed have been used in the context of the capital which has been employed in the under taking for producing profits and gains of the undertaking in the relevant year.
If borrowed capital is also employed in the undertaking, capital employed necessarily and clearly includes such borrowed capital which has teen employed in the undertaking and which has contributed to the profits and gains of the undertaking.
To my mind, therefore, on a proper interpretation, section 80J is clear language postulates that capital employed in the undertaking includes own capital and also borrowed capital employed in the undertaking in the relevant year and the section plainly and unequivocally makes this intention of the Parliament manifestly clear.
As the Section is clear and unambiguous it is indeed not proper and necessary to refer to any other consideration for its construction.
It may, however, be pointed out that this interpretation not only makes perfect sense but also clearly promotes the object for which this section was incorporated.
To my mind, the object of section 80J which indeed replaces the earlier section 84 which came in place of section 15C of the earlier Income Tax Act, is to give impetus and encouragement to the setting up of new industrial undertaking by offering tax incentives or tax reliefs.
The object clearly is to encourage persons to set up new industrial undertakings for rapid industrialisation of the country by offering incentives in respect of undertakings covered by this section by way of grant of tax relief on the capital employed in such undertakings.
In the case of Textile Machinery Corporation vs Commissioner of Income tax, West Bengal,(1) this Court while considering the object of a similar provision in section 1 5C observed at page 202: The principal object of section 15C is to encourage setting up of new industrial undertaking by offering tax incentives within a period of 13 years from April 1, 1948.
Section 1 5C provides for a fractional exemption from tax of profits of a newly established undertaking for five assessment years as specified there in.
This section was inserted in the Act in 1949 by section 13 of the Taxation Laws (,Extension to (1) 760 Merged States and Amendment) Act 1949 (Act 67 of '919), extending the benefit to the actual manufacture or production of articles commencing from a prior date, namely, April 1, 1948.
After the country had gained independence in 1947 it was most essential to give fillip to trade and industry from all quarters.
That seems to be the background for insertion of section 15C.
It is also significant that the limit of the number of years for the purpose of claiming exemption has been progressively raised from the initial 3 years in 1949 to 6 years in 1953.
7 years in 1951, 13 years in 1956 and 18 years in 1968.
The incentive introduced in 1949 has been thus stopped up ever since and the only object is that which we have already mentioned.
" In the case of Rajapopalayan Mills Ltd. vs Commissioner of Income Tax Madras,(1) this Court had also held at page 783: "The law of income tax in a modern society is intended to achieve various social and economic objectives.
It is often used as an instrument for accelerating economic growth and development.
section 15C is a provision introduced in the .
Indian I.T. Act, 192, with a view to carrying out this objective and it is calculated to encourage setting up of new industrial undertakings in the country.
" The rapid industrialisation of the country for economic growth in the larger interests of the country is the main object of this section which seeks to afford an incentive or tax relief to new industrial undertakings which satisfy the requirements of the section.
To my mind, the argument of the learned Attorney General that the provision contained in the Section requiring 'the capital employed to be computed in the manner prescribed ' authorises the rule making authority to include or to exclude borrowed capital at its discretion by making appropriate provision in the rules as to exclusion of a part of the capital employed for computation of capital employed for the purpose of granting relief under the section is clearly untenable.
The section only enjoins that capital employed is to be computed in the manner to be prescribed and the (1) 761 manner of computation of the capital employed only authorises A, the rule making authority to deal with the details regarding computation of capital employed for carrying out the provisions of the section and the provision regarding the manner of computation does not empower or authorise the rule making authority to lay down which part of the capital employed or how much of it will have to be included or excluded and to what extent, if any: The question whether there should be any such exclusion or inclusion in the matter of consideration of the grant of relief, is essentially a matter of policy for the Legislature to decide and is not a matter for the rule making authority to prescribe.
The power of the rule making authority in terms of the provision contained in section 295 of the Income tax Act which confers such power is limited to the framing of rules for carrying out the purposes of the Act.
The rule making authority is not competent to prescribe any rule which will be in the nature of a substantive provision of the Act itself and more particularly, which will be in conflict with the substantive provision of the section itself and which will in any way defeat or frustrate the purpose for which any provision in the Act has been enacted.
In the instant case I am clearly of the opinion on a construction of section 80J that the said section unequivocally and in clear terms provides that capital employed for earning the profits of the undertaking is the capital which is entitled to the benefit of the relief.
The exclusion of borrowed capital by the rule making authority in the rules prescribed for computation of the relief under section 80J is inconsistent with and derogatory to the provisions of the statute.
The said rule not only fails to carry out the purpose of the said section but in fact tends to defeat the same and the rule runs clearly contrary to the provisions of the statute.
The rule excluding borrowed capital must, therefore, be held to be bad and invalid.
The argument of Mr. Palkhivala that any such rule framed by the rule making authority including or excluding any part of the capital employed in the undertaking in the absence of any guideline will also be clearly beyond the power of the rule making authority, to my mind.
is sound.
In the section itself or in any other provision of the Act it does not appear that there is any provision laying down any guideline which may entitle the rule making authority to exclude any part of the capital employed, whether it is borrowed capital or own capital.
No such provision or guideline is there in the Act.
To my mind, there could not possibly be any such provision or guideline in the Act, as the section itself clearly provides that the entire amount of capital employed for earning the profits will qualify for 762 the relief.
If it be held that the rule making authority enjoys and such power of excluding any part of the capital employed in the undertaking because of the provision in the section regarding "computation of capital employed in the manner prescribed" it must necessarily be held that the rule making authority enjoys the power of framing a rule contrary to the provision of the section.
It must further be held that the rule making authority at its discretion enjoys the power to exclude the whole or part of owner 's capital and also the whole or part of the borrowed capital.
this interpretation will mean that interpretation the power will be available with the rule making authority which at its discretion and in the absence of any guideline will be entitled to exclude any or every part of the capital employed even to an extent of rendering the section itself nugatory.
This interpretation will have the effect of justifying a delegation of power to the rule making authority to an extent which cannot be permitted.
l have no hesitation in coming to the conclusion that the rule making authority does not enjoy any such power or jurisdiction.
No such power or jurisdiction in the absence of specific provision and clear guideline in the Act could be delegated to the rule making authority.
In the case of Sales Tax Officer vs KS.
Abraham(l) this Court had the occasion to construe the meaning of the phrase "in the prescribed manner" occurring in section 84 of the Central Sales Tax Act, 1956.
In dealing with the vires of rule 6 of the Central Sales Tax (Kerela) Rules, 1967 in so far as the said rule purported to prescribe a time limit within which ' the declaration was to be filed by the registered dealer, this Court held, "In our opinion, the phrase 'in the prescribed manner ' occurring in section 8 (4) of the Act only confers power on the rule making authority to prescribe a rule stating what particulars are to be mentioned in the prescribed form the nature and value of the goods sold, the parties to whom they are sold, and to which authority the form is to be furnished.
But the phrase 'in the prescribed manner ' in section 8 (4) does not take in the time element.
In other words, the section does not authorise the rule making authority to prescribe a time limit within which the declaration is to be filed by the registered dealer.
The view that we have taken is supported by the language of section 13 (4) (g) of the Act (1) ; 763 which states that the State Government may make rules for 'the time within which, the manner in which and the authorities to whom any change in the ownership of any business or in the name, place or nature of any business carried on by any dealer shall be furnished. ' This makes it clear that the Legislature was conscious of the fact that the expression 'in the manner ' would denote only the mode in which an act was to be done, and if any time limit was to be prescribed for the doing of the act, specific words such as 'the time within which ' were also necessary to be put in the statue.
The Privy Council in the case of Utah Construction & Engineering Pvt. Ltd. and Anr.
vs Pataky,(l) observed at pages 653 654: "Their lordships now pass to section 22 (2) (g) (iv) and (v).
Sub paragraph (iv) empowers the Governor to make regulations "relating to the manner of carrying out. excavation work '.
The relevant portion of reg.
9X provides 'Every drive and tunnel shall be securely protected and made safe for persons employed therein '.
The expression 'manner of carrying out ' the work plainly envisages a system of working, and does not in their lordships view justify a regulation imposing an absolute duty of protecting the drive and tunnel or an absolute duty of ensuring the safety of persons employed in the drive or tunnal.
The relevant portion of reg. 98 does not prescribe the manner of doing the work.
Sub paragraph (iv) therefore cannot in their lordships opinion empower the making of the relevant portion of reg. 98. ' F The proposition that the rule making authority does not have any power to encroach upon any substantive provision in the statute appears to be beyond dispute.
By virtue of S 295 (1) of the Income tax Act, the rule making authority is empowered to make rules for carrying out the purposes of the Act and sub section 2 which specifically refers that such rules may provide for all or any of the matters mentioned in the said subsection does not make any reference to section 80J.
In prescribing the manner of computation of capital employed, the rule making authority, in the absence of specific provision in the section itself or in the absence of any statutory provision, cannot exclude any (1) [196513 All.
E.R. 650, 764 part of capital employed in the undertaking at its discretion under the guise of the process of prescribing the manner of computation.
The argument of the learned Attornney General that as an undertaking which employs borrowed capital gets relief because in calculating the profits and gains the interest paid on the borrowed capital is taken into account, the rule making authority in prescribing the manner of computation of capital employed is entitled to exclude borrowed capital to avoid grant of double relief to the undertaking, is without any merit.
Interest paid on borrowed capital by any undertaking, whether it is an undertaking within the meaning of S.80J J or not, is taken into account as business expenditure in calculating the profits and gains of any undertaking.
It is the prescribed mode of calculating the profits and gains of every undertaking and is no special benefit for any undertaking: and, undoubtedly it affords no incentive of special relief to a new undertaking which has necessarily to satisfy the required conditions laid down in S 80J for being entitled to the relief intended to be granted to an undertaking which comes within the purview of S.80J.
In any event, such inclusion or exclusion on any consideration will be a matter of policy to be determined by the Legislature and not a matter for the rule making authority to lay down in prescribing the mode of computation.
The decision of the Calcutta High Court in the case of Century Enka Ltd. vs I.T.0.,(1) the decision of the Madras High Court in the case of Madras Industrial Linings Ltd. vs I.T.0.(2), the decision of the Allahabad High Court in Kota Box Manufacturing Co. vs I.T.0.(3) the decision of the Punjab and Haryana High Court in the case of Ganesh Steel Industries vs I.T.0.(4), the decision of the Andhra Pradesh High Court in the case of Warner Hindustan Ltd. vs I.T.0.(5) holding the rule to the extent it excludes borrowed capital in the computation of capital employed for the purpose of granting relief under section 80J to be invalid, are correct and l have no hesitation in upholding these decisions 'The contrary view expressed .
by the Madhya Pradesh High Court in the case of Commissioner of Income Tax, M.P. Il vs Anand Bahri Steel and Wire Products(n) must necessarily be held to be erroneous.
(1) (2) (3) (4) (5) [1982] 134 lTR .158.
(6) [l982] 765 It may be noticed that the Madhya Pradesh High Court proceeded to hold the rule to be valid mainly on the ground that this rule has been in existence for a long time under S.15C of the earlier Act which subsequently came to be replaced by S.80J and the Parliament must have been aware at the time of enacting S.80J of the existence of the rule framed by the rule making authority which held the field for a long period without any challenge.
The decision proceeds on the basis that the Parliament must have, therefore, accepted the interpretation put by the rule making authority at the time the Parliament enacted S 80J.
This decision does not take into consideration the fact that the interpretation put by the rule making authority has not been the same all throughout and has undergone changes from time to time and the rule making authority has in certain years also permitted certain classes of borrowed capital to be taken into account in computation of capital employed for the purpose of relief.
The decision of the Madhya Pradesh High Court does not also take into consideration the question whether the rule seeking to include or exclude borrowed capital at the discretion of the rule making authority in the absence of any statutory provision or guideline, becomes bad on account of unjustified excessive delegation of authority.
The decision of the Madhya Pradesh High Court has not proceeded to construe S.80J correctly to gather the true intention of the Parliament before deciding the question as to whether the rule excluding borrowed capital is consistent with the intention of Parliament clearly expressed in S.80J.
In my opinion, the mere existence of an invalid rule without any challenge for any length of time does not affect the question of validity of the rule and cannot render a rule otherwise invalid to be valid only on the ground that the rule had remained in existence without any challenge for a number of years.
In the case of Proprietary Articles Trade Association vs Attorney General for Canada(l), the Judicial Committee while considering the vires of a statute namely, Combines Investigation Act R.S. Can.
1927, c. 26 passed by the Parliament of Canada observed at p. 317: "Both the Act and the section have a legislative history, which is relevant to the discussion.
Their Lordships entertain no doubt that time alone will not validate an Act which when challenged is found to be ultra vires; nor will a history of a gradual series of advances till this boundary is finally crossed avail to protect the ultimate encroachment.
" In the case of Campbell College Belfast (Governors) vs Commis (1) 766 sioner of Valuation for Northern Ireland(l), the House of Lords while considering the validity of payment of rates by fee paying public school in Northern Ireland which has continued for over 132 year. despite the terms of section 2 of the Valuation (Ireland) Act Amendment Act, 1954, held at p. 941 to 942 : " my Lords, for my part I am quite unable to apply that principle to a statute although it was passed` over 100 years ago, but its language is plain and unambiguous and it was not misconstrued until the decision in the Alexandra College case 60 years later.
True it is that fee paying schools did always pay rates in accordance with section 2, but until 1914 that was not because it was assumed that section 2 was con trolled by the proviso, and that charitable purposes bore a limited meaning.
It may have been that it was thought that if some of the pupils were free paying, section 16 of the Act of 1852 was not satisfied.
That argument is now untenable n and, as Black L.J. point out at an early part of his judgment, Campbell College is clearly for this purpose a charitable institute.
My Lords, in these circumstances I can attach no weight whatever to this long unquestioned payment when construing section 2.
To my mind, this doctrine can have no application to the circumstances of this case.
It is also well settled that even if the rules have been laid before the Parliament and there is a resolution of the Parliament approving the rules, the validity of the rules has to be declared by the Court and the Court can declare any rule placed before the Parliament and approved by the Parliament to be ultra vires the Act and invalid.
In the case of Kerala State Electricity Board.
vs Indian Aluminium(2).
, this Court held at p.576: "In India many statutes both of Parliament and of State Legislatures provide for subordinate legislation made under the provisions of those statutes to be placed on the table of either the Parliament or the State Legislature and to be subject to such modification, amendment or annulment, as the case may be, as may be made by the Parliament or the State Legislature.
Even so, we do not think that where an executive authority is given power to frame subordinate legislation within stated limits, rules made by such authority (1) [1964] I W.L.R. 912.
(2) [1976] I S.C.R.552.
767 if outside the scope of the rule making power should be deemed to be valid merely because such rules have been placed before the legislature and are subject to such modification, amendment or annulment, as the case may be as the legislature may think fit.
The process of such amendment, modification or annulment is not the same as the process of legislation and in particular it lacks the assent either of the President or the Governor of the State, as the case may be.
We are, therefore, of opinion that the correct view is that notwithstanding the subordinate legislation being laid on the table of the House of Parliament or the State Legislature and being subject to such modification, annulment or amendment as they may make, the subordinate legislation cannot be said to be valid unless it is within the scope of the rule making power provided in the statute." The other impugned provision of the rule, prescribing that capital employed should be computed on the basis of the capital employed on the first day of the year, must on a proper construction of the section be also held to be invalid.
The section clearly provides that the deduction to be allowed is to be computed in the prescribed manner in respect of the previous year relevant to the assessment year.
The deduction to be allowed is on the profits and gains of the undertaking earned in the relevant year in respect of the previous year relevant to the assessment year.
Profits and gains which are to be taken into account are the profits and gains earned in the relevant year and the year must necessarily mean and include the whole of the year and not some days or months of the year.
The capital employed for earning the posts and gains dring the whole year must necessarily be the capital which is entitled to the benefit of the section.
Capital employed on the 1st day of the year does not produce the profits of the entire relevant year, unless the very same amount of capital remains employed throughout the year.
It does not usually happen and in any event it may not happen.
Therefore, by prescribing the 1st day of the year to be the date of .
computation of the capital employed, the capital employed during the whole year is sought to be denied by the rule the benefit to which it is entitled under the section.
This provision, therefore, is clearly contrary to and inconsistent with the specific provision of the statute, as by fixing the 1st day of the year to be the date of computation of the capital employed for the year, the rule making authority is seeking to deny the benefit conferred by the statute.
Andhra Pradesh High Court in the case of Warner Hindustan H 768 Ltd. and Anr.
vs Income tax Officer and Ors.
(supra) in dealing with this question has referred to the decision of the Calcutta High Court in Century Enka Ltd. vs Income tax Officer (supra) on this very point and in agreement with the decisions of the Calcutta High Court, the Andhra Pradesh High Court held at p. 195: "As observed by a learned Judge of the Calcutta High Court in Century Enka Ltd. vs Income tax Officer(l),the main consideration upon which this question has to be resolved is (p. 132), 'whether having regard to the purpose for which provisions of section 80J of the Act was introduced, it was the legislative intent to restrict the capital employed in any manner so as to limit it to the first day of the computation period '.
So far as section 80 J is concerned, it does not give any such indication.
That apart, such computation of capital employed in an industrial undertaking would defeat the very purpose of the undertaking and would lead to incongruous and anomalous results.
While an assessee who has employed the capital in an industrial undertaking on the very first day but has withdrawn it for the major part of the year would be entitled to the full benefit, an assesses who has not employed the capital on the first day but has employed it during the major part of the previous year would be deprived of the benefit.
If the intendment of the Act is to give tax holiday for the new industrial undertaking with a view to help them find their roots and encourage entrepreneur to establish new industrial undertakings and pave the way for rapid industrial growth in the country then the purpose would be not served.
In fact, it would be defeated if the capital employed is computed with reference to the first day of the computation period and not in respect of the previous year relevant to the assessment year".
The Calcutta High Court and Andhra Pradesh High Court have both held this part of the rule fixing the first day of the year for computing the capital employed for the purpose of granting relief under section 80J to be invalid.
I find no difficulty in upholding the decision of the Calcutta High Court and of the Andhra Pradesh High Court on this question.
I know proceed to consider the other question about the validity of the amendment of section 80J introduced by the Finance (1) of 1980.
By the amendment the provisions contained in the A rule excluding borrowed capital and fixing the first day of the year for computation of capital employed for the purpose of relief under section 80J have been incorporated in the section itself with retrospective effect from 1.4.72.
On behalf of some of the assessees the amendment both with; regard to its prospective and retrospective operation has been challenged.
Dr. D. Pal, supported by other learned counsel, addressed us mainly on the aspect of prospective operation, while supplementing and supporting the submissions of Mr. Palkhivala on the aspect of retrospective operation.
Mr. Palkhivala who has been the principal spokesman for the assessees, confined his challenge to the validity of the amendment mainly to the retrospective part, although he made it clear that he was not conceding the validity of the prospective operation.
I propose to consider the submission of Dr. Pal in the first instance.
If the submission of Dr. Pal that the entire amendment is invalid is accepted, the submission of Mr. Palkhivala that the amendment in so far as it is made retrospective is also bad must necessarily succeed.
Dr. Pal has argued that the amendment seeks to make an invidious distinction between own capital and borrowed capital in the matter of granting relief under this section.
It is the argument of Dr. Pal that having regard to the object of the section which is to promote new industries and to give relief on the basis of the capital employed in such new industries by way of incentive, distinction between own capital and borrowed capital is wholly irrelevant , and does not have any nexus with the object sought to be achieved and this distinction between own capital and borrowed capital in the matter of computation of capital employed in the undertaking for the purpose of granting relief results in justified discrimination and is therefore violative of article 14 of the constitution.
To my mind, there is no merit in the submission of Dr. Pal.
It is entirely a matter for the Parliament to decide whether any relief by way of incentive should be allowed and if so to what extent and in what manner.
There is no obligation on the part of the Parliament to make any provision for granting relief to promote new industries.
The Legislature in its wisdom may decide to grant relief and may equally decide not to grant any relief.
It is essentially for the Legislature to decide as to whether any incentive for promoting industrial growth of the country is called for and if the Legislature feels that in the 770 situation prevailing in the country such incentive should be provided it will be again for the Legislature to decide what kind of incentive and in what form and to what extent the same should be provided and to pass appropriate legislation in this regard.
The Parliament would have been legally competent to withdraw the entire relief under section 80J and to abrogate the said section in its entirety, if the Parliament had considered such withdrawal to be necessary.
The Parliament is equally competent to increase or reduce the quantum of relief intended to be given under this section.
In providing that relief intended under section 80J would be allowed only to owner 's own capital and not to any borrowed capital, there can be no infringement of article 14.
No entrepreneur or businessman can claim as a matter of right that relief by way of incentive should be provided to new undertakings to be set up by him.
The Parliament provides for such relief in pursuance of a policy and policy may change from time to time in view of the situation prevailing from time to time.
The Parliament may legitimately feel that borrowing by businessman may not be encouraged and persons should be encouraged to bring their own money for setting up new undertakings and Parliament may provide for appropriate relief by way of incentive to the owner 's capital employed to the exclusion of borrowed capital in the setting up of any new industrial undertaking.
Whether it is prudent to do so is essentially a matter for the Parliament in its wisdom to decide.
It is not for this Court to sit in judgment over the wisdom of the Parliament in the framing of its policy.
The discrimination in the matter of granting relief to own capital to the exclusion of borrowed capital in pursuance of a policy cannot be said to be violative of Art 14, as the two classes of capital, though forming a part of the total capital of the undertaking, are distinct p and they stand on a different footing.
A classification between these two classes of capital for encouraging investment of own capital in setting up new industrial undertakings, cannot be held to be unreasonable and unjustified.
The contention of Dr. Pal that the amendment in discriminating between borrowed capital and owner 's own capital in the enjoyment of relief under section 80J infringes article 14, must therefore, be rejected.
Very properly in challenging the validity of the amendment in so far as it operates prospectively, no grievance in regard to violation of article 19 of the Constitution has been made.
I now pass on to the question of the validity of the amendment with retrospective effect from 1.4 1972.
It has been contended by the learned counsel for the assessees that the retrospective operation of the provision is unreasonable arbitrary and violative of articles 14 and 19 of the Constitution.
The 771 main argument is that the withdrawal of relief granted by the statute A before the present amendment and lawfully enjoyed by the assessee during all these years and thereby imposing on the assessee an unjust, unmerited and accumulated huge financial liability, cannot be considered to be reasonable; and such imposition of accumulated liability will seriously affect the financial stability of the undertakings and will further create various other difficulties which may be almost impossible for the assessees to overcome.
It has been argued that the present amendment has not been necessitated as a result of any provision of the statute being declared ultra vires for any lacuna in the statutory provision and there is no question of any liability being foisted on the Government of refunding any large sun of money collected as tax from the assessees on account of any statutory provision imposing any levy being declared invalid or unconstitutional.
It is submitted that in view of the unequivocal provision of the statute granting relief to borrowed capital which was sought to be negated and denied by an invalid rule which has been struck down, the assessees are legitimately entitled to the relief and they have rightly and justifiably arranged their affairs on the basis of the law as it stood.
The existence of an invalid rule and the tendency of appeals in this Court against the judgment of the various High Courts declaring the rule to be invalid cannot be considered to be relevant factors, particularly when the statutory provision is clear, for guiding the assessee who has to carry on its normal trading activities, in arranging its affairs.
The submission is that the withdrawal or relief lawfully granted and properly enjoyed by the assessees after this long lapse of time, when no serious prejudice is caused or is likely to be caused to the public exchequer and on the other hand a heavy unwarranted financial burden along with other difficulties and problems are created for the assessee, cannot be said to be in public interest and must be held to be unreasonable, arbitrary and violative of article 14 and 19 of the Constitution.
The learned Attorney General has submitted that retrospective operation of the provision does not suffer from any infirmity and is not arbitrary or unreasonable nor is it violative of article 14 and 19 of the Constitution.
He argues that prior to rule 19 A being considered by some of the tribunals and by various High Courts, the said rule excluding borrowed capital in the matter of computation of relief and fixing the 1st day of the year as the relevant date for the computation of relief has remained in force for a number of years.
It is his argument that after the said rule had been struck down, the validity of the decisions has been challenged and was pending appeal in this Court; and the appeal was pending at the time when the present 772 amendment came to b enacted in 1980.
The Learned Attorney General contends that as rule 19 A excluding borrowed capital and fixing the first day of the year as the date for computation of relief had remained in force for a number of years and as the decision striking down the rule is now pending appeal, the assessees were not justified in arranging their affairs on the basis of the said rule being invalid and as prudent men of business they should have so arranged their affairs as to cover every contingency and particularly the contingency of the validity of the rule being upheld by this Court.
The Learned Attorney General has submitted that the amendment has been introduced before the decision of this Court in the pending appeals, as the Parliament wanted to clarify the position in the interest of all concerned and more so in the interest of the assessees to enable the undertakings which qualified for relief under section 80J to enjoy the benefit intended to be conferred by the Section.
It is the submission of the Learned Attorney General that in the absence of any valid rule prescribing the manner of computation of relief to which the assessee may be entitled under section 80J, the benefit cannot be computed and, therefore, no benefit contemplated under section 80J may be at all available to the assessees.
He submits that if the rule is held to be valid by this Court in these appeals, the arguments of the assessee that the assessee has arranged its affairs on the basis of invalidity of the rule will be of no avail; and he further submits that if the invalidity is upheld by this Court in these appeals, the assessee in the absence of any valid rule prescribing the manner of computation of the relief will not be entitled to the benefit of any relief under the section.
It is his submission that in these circumstances the Parliament with the object of seeing that the assessee who is entitled to any relief under section 80J is not denied such relief over these years for lack of provision of a suitable rule prescribing the manner p of computation of such relief, has amended the section itself with retrospective effect from 1972 in the interest of the assessees them selves.
It is the submission of the Attorney General that as the amendment with retrospective effect has been made essentially in the interest of the assessees to enable them to enjoy the relief intended to be given under section 80J, the retrospective effect of the amendment cannot be said to be unreasonable or arbitrary and the retrospective amendment dose not violate either article 14 or 19 of the Constitution, even if the retrospective effect may operate harshly on some assessees.
Before considering the arguments advanced on behalf of the parties, I propose at this stage to refer to some of the decisions cited from the Bar on this aspect. 773 In the case of Epari Chinna Krishna Moorthy, Proprietor Epari A Chinna Moorty and Sons, Berhampur Orissa vs State of Orissa,(l) it was observed at p. 191: "Mr. Sastri also argued that the retrospective operation of the impugned section should be struck down as unconstitutional, because it imposes an unreasonable restriction on the petitioners ' fundamental right under article 19 (1) (g).
It is true that in considering the question as to whether legislative power to pass an Act retrospectively has been reasonably exercised or not, it is relevant to enquire how the retrospective operation operates.
But it would be difficult to accept the argument that because the retrospective operation may operate harshly in some cases.
, therefore, the legislation itself is invalid.
Besides, in the present case, the retrospective operation dose not spread over a very long period either.
Incidentally, it is not clear from the record that the petitioners did not recover sales tax from their customers when they sold the gold ornaments to them".
D In the case of Rai Ram Krishna & Ors.
vs State of Bihar(2).
this Court observed at pp.
914 917: "Mr. Setalvad contends that since it is not disputed that the retrospective operation of a taxing statute is a relevant fact to consider in determining its reasonableness, it may not be unfair to suggest that if the retrospective operation covers a long period like ten years, it should be held to impose a restriction which is unreasonable and as such, must be struck down as being unconstitutional.
In support of this plea, Mr. Setalvad has referred us to the observations made by Sutherland. 'Tax Statute, ' says Sutherland, "nay be retrospective if the legislature clearly so intends.
If the retrospective feature of a law is arbitrary and burdensome, the statute will not be sustained.
The reasonableness of each retrospective tax statute will depend on the circumstances of each case.
A statute retroactively imposing a tax on income earned between the adoption of an amendment making income taxestes legal and the passage of the income tax Act is not unreasonable Likewise an Income tax not retroactive beyond the year of its passage is clearly valid.
The longest (1) ; (2) [1964] I S.C.R.897 774 period of retroactivity yet sustained has been three years.
In general, income taxes are valid although retroactive, if they affect prior but recent transaction. ' Basing himself on these observations Mr. Setalvad contends that since the period covered by the retroactive operation of the Act is between April 1, 1950 and September 25, 1961, it should be held that the restrictions imposed by such retroactive operation are unreasonable, and so, the Act should be struck down in regard to its retrospective operation.
We do not think that such a mechanical test can be applied in deter mining the validity of the retrospective operation of the Act.
It is conceivable that cases may arise in which the retrospective operation of a taxing or other statute may introduce such an element of unreasonableness that the restrictions imposed by it may be open to serious challenge as unconstitutional, but the test of the length of time covered by the retrospective operation cannot, by itself, necessarily be a decisive test.
We may have a statute whose retrospective operation covers a comparatively short period and yet it is possible that the nature of the restriction imposed by it may be of such a character as to introduce a serious infirmity in the retrospective operation.
On the other hand we may get cases where the period covered by the retrospective operation of the statute, though long, will not introduce any such infirmity.
Take the case of a Validating Act.
If a statute passed by the legislature is challenged in proceedings before a Court, and the challenge is ultimately sustained and the statute is struck down, it is not unlikely that the judicial proceedings may occupy a fairly long period and the legislature may well decide to await the final decision in the said proceedings before it p uses its legislative power to cure the alleged infirmity in the earlier Act.
In such a case, if after the final judicial verdict is pronounced in the matter the legislature passes a validating Act, it may well cover a long period taken by the judicial proceedings in Court and yet it would be in appropriate to hold that because the retrospective operation covers a long period, therefore, the restriction imposed by it is unreasonable.
That is why we think the test of the length of time covered by the retrospective operation cannot by itself be treated as a decisive test".
It the case of Jawaharlal vs State of Rajasthan & Ors.(l) this Court held at p. 905: (1) [l966] 1 S.C.R.890.
775 "We have already stated that the power to make laws A involves the power to make them effective prospectively as well as retrospectively, and tax laws are no exception to this rule.
So it would be idle to contend that merely because a taxing statute purports to operate retrospectively, the retrospective operation per se involves contravention of the fundamental right of the citizen taxed under article 19(1)(f) or (g).
It is true that cases may conceivably occur where the Court may have to consider the question as to whether excessive retrospective operation prescribed by a taxing statute amounts to the contravention of the citizens ' fundamental right; and in dealing with such a question, the Court may have to take into account all the relevant and surrounding facts and circumstances in relation to the taxation".
In the case of Assistant Commissioner of Urban Land Tax vs The Buckingham & Carnatic Co. Ltd.l etc.
it was observed at P.287: "It is contended on behalf of the petitioners that the retrospective operation of the law from 1st July, 1963 would make it unreasonable.
We are unable to accept the argument of the petitioners as correct.
It is not right to say as a general proposition that the imposition of tax with retrospective effect per se renders the law unconstitutional.
In E: applying the test of reasonableness to a taxing statute it is of course a relevant consideration that the tax is being enforced with retrospective effect but that is not conclusive in itself".
In the case of M/s. Krishnamurthi & Co. Etc.
vs State of p Madras & Anr.(2j this Court observed at P. 61: "The object of such an enactment is to remove and rectify the defeat in phraseology or lacuna of other nature and also to validate the proceedings, including realisation of tax, which have taken place in pursuance of the earlier enactment which has been found by the Court to be vitiated by an infirmity.
Such an amending and validating Act in the very nature of things has a retrospective operation.
Its aim is to effectuate and carry out the object for which the earlier principal Act had been enacted.
Such an amending (1) [1970] I S.C.R. 268.
(2) 1197312 S.C.R. 54, i 11 776 and validating Act to make small repairs ' is a permissible mode of legislation and is frequently resorted to in fiscal enactments.
" Similar observations have been made by this Court in the case of Hira Lal Rattan Lal etc.
vs State of U.P. & Anr.
etc(l) at P. 511: "A feable attempt was made to show that the retrospective levy made under the Act is violative of article 19(t) (f) and (g).
But we see no substance in that contention.
As seen earlier, the amendment of the Act was necessitated because of the legislature 's failure to bring out clearly in the principal Act its intention to separate the processed or split pulses from the unsplit or unprocessed pulses.
Further the retrospective amendment became necessary as otherwise the State would have to refund large sum of money".
In the case of State of Gujarat vs Ramanalal Keshave Lal Soni(2), this Court observed at p. 62: "The Legislature is undoubtedly competent to legislate y with retrospective effect to take away or impair any vested right acquired under existing laws but since the laws are made under a written Constitution, and have to conform to do 's and don 'ts of the Constitution; neither prospective nor retrospective laws can be made so as to contravene fundamental rights.
The law must satisfy the requirements of the Constitution today taking into account the accrued or acquired rights of the parties today.
The law cannot say 20 years ago the parties had no rights, therefore, the requirements of the Constitution will be satisfied if the law is dated back by 20 years.
We are concerned with today 's rights an i not yesterday 'section A legislature cannot legislate today with reference to a situation that obtained 20 years ago and ignore the march of events and the constitutional rights accrued in the course of the 20 years.
That would be most arbitrary, unreasonable and a negation of history".
The power and competence of the Parliament to amend any (1) ; (2) [1983] 2 S.C.C. 33. 777 statutory provision with retrospective effect cannot be doubted.
Any A retrospective amendment to be valid must, however, be reasonable and not arbitrary and must not be violative of any of the fundamental rights guaranteed under the Constitution.
The mere fact that any statutory provision has been amended with retrospective effect does not by itself make the amendment unreasonable.
Unreasonableness or arbitrariness of any such amendment with retrospective effect has necessarily to be judged on the merits of the amendment in the light of the facts and circumstances under which such amendment is made.
In considering the question as to whether the legislative power to amend a provision with retrospective operation has been reasonably exercised or not, it becomes relevant to enquire as to how the retrospective effect of the amendment operates.
C In the large interest of administration and for promotion of public interest and welfare of the country power has been conferred by the Constitution on the Parliament to mobilize resources and to levy tax.
In view of the complexity of fiscal adjustment of diverse elements the Parliament necessarily enjoys a very wide discretion in the matter of fiscal legislation.
To meet various expenses for proper administration, maintenance of defense and security, for promoting peace and prosperity and for development of social, economic and all round growth of the country, the Government must have resource and sufficient funds at its disposal.
Suitable provisions have necessarily to be made for raising the revenue and for proper realisation of funds to be collected to meet such expenses.
Appropriate legislations including various fiscal laws are enacted for this purpose.
Imposition of any tax by the Parliament is therefore considered to be made in public interest.
It may so happen that any provision of any enactment imposing a particular levy may be challenged in Court and may be challenged successfully; and the particular levy may, for some reason or other, be held to be constitutionally invalid.
If any particular provision of any statute imposing any tax which has been or is being collected, is struck down as unconstitutional, the financial arrangement of the State may become upset and the Government which might have already collected and even utilised the tax, may be called upon to refund taxes so collected.
If such a situation arises the economy of the State may get unbalanced and difficulties may arise for meeting the various commitments and obligations.
Under such circumstances a Validating Act may be passed and is often enacted to remove the infirmities which might have led to the invalidation of the provision imposing the levy.
Validating Acts for meeting such situations have necessarily to be passed with retrospective operation so that the fiscal arrangement of the State and its financial commitments 778 may not in any way be in jeopardy and the State may be relieved of the liability of refunding any tax already collected.
A validating Act validating any fiscal provision with retrospective operation is usually held not to be unreasonable or arbitrary.
In the case of any Validating Act, the intention of the legislature is generally made sufficiently clear in the section or in the Act which is declared invalid on account of some flaw or defect which is within the competence of the Parliament to rectify.
Such Validating Acts, it may be observed, do not in fact have the effect of imposing a fresh tax with retrospective effect and they only legalese the levy already imposed.
There is in effect and substance no imposition of any new tax for the earlier years by virtue of the retrospective operation and the retrospective operation merely validates the levy already imposed and possibly collected.
The present amendment, has been necessitated not as a result of any part of section 80J being declared invalid.
There was no lacuna or defect in section 80J prior to the impugned amendment and the section which was perfectly valid granted relief in clear and unambiguous language to the assessee in respect of capital employed, whether assesses ' own or borrowed, in an undertaking which qualified for relief under the section.
The rule making authority by framing an invalid rule sought to deny the asks the benefit of the relief lawfully and validly granted by the section.
The rule was contrary to the clear provisions of the statute and the invalid rule has been rightly struck down.
By the present amendment the Parliament is seeking to validate not any provision of the State declared invalid because of any flaw or defect, as there was none, but is seeking to validate an invalid rule which had sought to deprive the assessee of the benefit which the Parliament had clearly bestowed on the assessee by the section.
The effect of the present amendment by seeking to incorporate the provisions of the rule declared invalid in the section itself is to withdraw with retrospective effect the relief which had been earlier granted by the Parliament in so far as the relief extends to borrowed capital employed in the undertaking and thereby to impose on the assessee a burden of tax which was not there for all these years.
As a matter of policy it may be open to the Parliament to withdraw the relief granted to borrowed capital by an amendment with prospective effect consequent on any such amendment.
To withdraw with retrospective effect the benefit of relief unequivocally granted by the section to an assessee who qualified for such relief and was lawfully entitled to enjoy the benefit of such relief and has in fact in many cases enjoyed the benefit for all these years, prior to the present amendment with retrospective effect, cannot, in my opinion, be said to on any just and valid grounds and cannot be considered to be reasonable.
If any fiscal statute grants relief to any assessee and the assessee enjoys the benefit of that relief, 779 as the assessee is legally entitled under the statute, the withdrawal of the relief validly and unequivocally granted and enjoyed by any A assessee must necessarily in the absence of proper grounds be held to be unreasonable and arbitrary.
The relief granted under section 80J before the present amendment was not merely a promise on the part of the Government relying on which the assessee might have set up new undertakings, but it was in the nature of a statutory right confer red on any assessee might have set up new undertakings, but it was in the nature of a statutory right conferred on any assessee who qualified for such relief under the section.
The withdrawal with retrospective effect of any relief granted by a valid statutory provision to an assessee, depriving the assessee of the benefit of the relief vested in the assessee, stands on a footing entirely different from the footing which may necessitate the passing of a Validating Act seeking to validate any statutory provision declared unconstitutional.
When Parliament passes an amendment validating any provision which might have been declared invalid for some defect or lacuna, the Parliament seeks to enforce its intention which was already there by removing the defect or lacuna.
The Parliament indeed seems to remedy the situation created as a result of the statutory provision being declared invalid.
As I have earlier observed, this is done in public interest for properly regulating the fiscal structure and to relieve the Government of any financial burden by way of refund of taxes collected for enabling the State to implement its budget by proper collection of revenue expected to be realised.
When the Parliament in any fiscal statute proposes to grant any relief to any assessee the Parliament must be presumed to do so in public interest.
In the instant case section 80J granted relief for the purpose of promoting the industrial growth of the country by affording incentive for the setting up of new undertakings.
As a matter of policy again the Parliament may withdraw such relief or any part thereof or modify the nature, extent and kind of relief, if Parliament may withdraw such relief or any part thereof or modify the nature, extent and kind of relief, if Parliament in its wisdom may consider any such action necessary and proper and any such act done by the Parliament must also be regarded to have been done in public interest.
However, the withdrawal or modification with retrospective effect of the relief properly granted by the statute to an assessee which the assessee has lawfully enjoyed or is entitled to enjoy as his vested statutory right depriving the assessee of the vested statutory right, has the effect of imposing a levy with retrospective effect for the years for which there was no such levy and cannot, unless there be strong and exceptional circumstances justifying such withdrawal or modification, be held to be reasonable or in public interest.
This kind of retrospective amendment, seeking to defeat an accrued statutory right 780 is likely to affect the sanctity of any statuory provision and may A create a state of confusion.
The only circumstance which appears to have led to the present retrospective amendment is the existence of the invalid rule.
The existence of any invalid rule seeking to deny an assessee a benefit clearly and unequivocally granted to an assessee by the Legislature, lawfully and properly enjoyed or to be impugned amendment in 1980 the relief granted by section 80J had been in force and had been legitimately available to the assessee.
In view of the clear provision made in the statute by Parliament itself the Parliament must be presumed to have been aware that the relief as contemplated under section 80J was available to the assessee and the assessee had been enjoying and were entitled to enjoy the benefit of the said relief.
The Parliament must have and in any event must be presumed to have arranged the financial affairs of the State on the footing that the relief allowed to an assessee under section 80J was being enjoyed and would be enjoyed by the assessee In view of the clear provision of the statute which must be held to manifest the true intention of the Parliament it will be idle to contend that Parliament could have intended that the relief so granted would not be available to the assessees who would be liable to pay a larger amount of tax.
The years for which relief had remained in force had already passed out.
It does not appear that as a result of the relief enjoyed by the assessee, the financial position of the state for all these years, had been or could be in any way affected.
The facts and circumstances also do not indicate that there will be any heavy burden on the State to sound taxes collected which may upset the economy of the State.
It appears that in the majority of the cases, the assessees have succeeded and they have been assessed after being allowed the relief and under section 80J in respect of the borrowed capital also.
On the other hand it is quite clear that if the relief granted is to be withdrawn with retrospective operation from 1972 the assessees who have enjoyed the relief for all those years will have to face a very grave situation.
The effect of the withdrawal of the relief with retrospective operation will be to impose on the assessee a huge accumulated financial burden for no fault of the assessee and this is bound to create a serious financial problem for the assessee.
Apart from the heavy financial burden which is likely to upset the economy of the undertaking, the assessee will have to face other serious problems.
On the basis that the relief was legitimately and legally available to the assessee, the assessee had proceeded to act and to arrange its affairs.
If the relief granted is now permitted to be withdrawn with retrospective operation, the assessee may be found guilty of violation provision of other state and may be visited with panel consequen 781 ces.
This position cannot be and is not disputed by the learned A Attorney General who has, however, argued that taking into consideration the peculiar facts and circumstances, penal provisions may not be enforced.
This argument does not impress me.
The assessee has, in any event, to run the risk and for no fault on his part has to place itself at the mercy of the authorities for facing consequences of violation of statutory provisions, which but for the introduction of retrospective amendment, would not have been violated by the assessee.
To establish arbitrariness or unreasonableness it does not become necessary to prove that the undertaking of the assessee will be completely crippled and will have to be closed down in consequence of the withdrawal of the relief with retrospective effect.
There cannot be any doubt about the real possibility of very serious prejudice being caused to the assessee for no fault of the assessee.
In my opinion, the possibility of very grave prejudice to the assessee by the withdrawal of the relief with retrospective effect, in the absence of any justifiable ground and any serious prejudice to the interest of revenue, establishes unreasonableness and arbitrariness of the retrospective amendment is bound to have very serious effect on the assessee and there is reasonable possibility of the business of the assessee being adversely affected and seriously prejudiced.
The retrospective amendment, therefore, is also violative of Art 19 (1) (g) of the Constitution.
The argument of the Attorney General that the amendment had to be made with retrospective effect in the interest of the assessee, as otherwise, the assessee would not be entitled to the benefit of there lief intended to be given under the section because there will be no valid rule for computing the relief, to my mind, is clearly untenable.
I see no reason as to why there should be any difficulty in the computation of relief if the invalid part of the rule is struck down.
It may be noted that the rule in so far it excludes borrowed capital and fixes the first day of the year for computation of the relief had been struck down by various High Courts years ago and the assessing authorities have found no difficulty in computing the relief and in proceeding to complete the assessment by granting the relief legally available to assessee under section 80J even after the invalid part of the rule had been struck down.
It may also be noted that the Parliament had also not considered it necessary to effect this amendment earlier inspite of the decisions of the High Courts, although the Parliament had introduced other amendments into this section.
Before concluding I wish to emphasise that the withdrawal with retrospective effect by amendment of any financial benefit or 782 relief granted by a fiscal statute must ordinarily be held to be unreasonable and arbitrary.
Such withdrawal makes a mockery of beneficial statutory provision and leads to chaos and confusion Such withdrawal in effect results in the imposition of a levy at a future date for past years for which there was no such levy in the relevant years.
The imposition of any fresh tax with retrospective effect for years for which there was no such levy is entitled to arrange and normally arranges his financial affairs on the basis of the law as it exists.
Such retrospective taxation imposes an unjust and unwarranted accumulated burden on the assessee for no fault on his part and the assessee has to face unnecessarily without any just reason very serious financial and other problems.
Imposition of any tax with retrospective effect for years for which no such tax was there, cannot also be considered to be just and reasonable from the point of view of revenue.
The years for which levy is sought to be imposed with retrospective effect had already passed and there cannot be any proper justification for imposition of any fresh tax for those years.
Such retrospective taxation is likely to disturb and unsettle the settled position; and because of such imposition of retrospective levy for the years for which there was no such levy, assessments for those years which might already have been completed and concluded will get upset.
If the State is in need of more funds, the State instead of seeking to levy any tax with retrospective effect can always take appropriate steps to collect any larger amount so required by imposition of higher taxes or by other appropriate methods.
I have already observed that Validating Acts which seek to validate the levy of any tax with retrospective effect do not in effect impose any fresh tax with retrospective effect and Validating Acts stand on an entirely different footing.
T, therefore, hold that the impugned amendment in so far as it is sought to be made retrospective with effect from the 1st day of April 1972 is invalid and unconstitutional, though the amendment in so far as it operates prospectively is valid.
In the result I dismiss the appeals filed by the Union of India against the decisions of the High Courts declaring Rule 19 A to be invalid in so far as the said rule excludes borrowed capital and fixes the first day of the year for computation of the relief to be granted to an assessee under S.80J.
I set aside the judgment of the Madhya Pradesh High Court which upholds the validity of the Rule and I allow the appeal of the assessee against the judgment of the Madhya Pradesh High Court.
I hold and declare that Rule 19 A is so far as it seeks to exclude the borrowed capital and fixes the first day of the year for the computation of relief under section 80J is invalid and unconstitutional and the same has to be struck down and has been struck down 783 by the various High Courts.
I hold and declare that the impugned amendment of 1980 incorporating the provision of the invalid rule l9 A in the section itself, excluding the borrowed capital and fixing the first day of the year for computation of the relief under section 80J is valid in its prospective operation from the date of the amendment and is unconstitutional and invalid insofar as the said amendment is sought to brought into operation retrospectively with effect from 1st B April 1972.
Accordingly, I allow the writ petitions challenging the validity of the amendment only to the extent of its retrospective operation and I dismiss the writ petitions in so far as the amendment in its entirety is sought to be challenged.
I propose to make no order as to costs.
[/INST]To fill in the vacancy arising from the setting aside of the election of the returned candidate from the 59 Taoru Assembly Constituency in Haryana, by the Supreme Court, the appellant Commission sent a message and programme on April 6, 1984 to the Chief Electoral officer for the State of Haryana.
According to that programme, the notification under section 150 of the Representation of the People Act, 1951 was to be issued on April 18, 1984, the last date for filing nominations was April 25, 1984 while the date of poll was May 20, 1984 The Election Commission fixed an identical programme for filling 23 other vacancies in the legislative assemblies of Andhra Pradesh, Karnataka and West Bengal.
On April 7, 1984, the Election Commission was requested by the Haryana Government to hold the proposed by election alongwith the general elections to the Lok Sabha, due later in the year.
On April 11, 1984, the Chief Secretary wrote a letter to the Election Commissioner renewing the request to defer the by election.
On April 12, 1984 the Election Commissioner informed the Chief Election officers by a telex message that it had decided to adhere to the programme of by elections to all the 24 constituencies and copies of notifications to be published on April 18, 1984 were sent to the Chief Electoral officer, Haryana.
A Press not was issued to that effect after informing all the political parties.
The Chief Secretary, Haryana met the Chief Election Commissioner on April 14, 1984 and explained to him personally why it was neither advisable nor possible to hold the by election to the Taoru seat as proposed by the latter.
On April 16, 1984, the Chief Secretary wrote a letter reiterating the view of the Government to the Chief Election Commissioner.
On April 17, 1984, the Chief Commissioner replied to the letter of April 16, 1984 by saying that the Commission had taken the decision to hold the by election after taking the Punjab situation and taking into consideration all factors including the fact of non fact that the political parties were not opposed to the proposed byelection.
On the same day the Government of Haryana filed a writ petition in the High Court of Punjab and Haryana and obtained an ex parte order staying the issuance and publication of the 555 notification by the Election Commission under sections 30, 56 and 150 of the Representation of the People Act, 1951.
Hence the appeal by special leave of the Court.
Allowing the appeal, the Court.
^ HELD : (Per Majority) Per Chandrachud C.J. 1 : 1.
The widely prevalent practice of partices obtaining ex parte orders when they can give prior intimation of the proposed proceedings to the opposite side, without much inconvenience or prejudice has often been disapproved by this Court.
When the public authorities do so it is all the more open to disapprobation.
[561D E] 1 : 2.
The Government of Haryana obtained an ex parte order from the High Court when it could easily have given prior intimation of the intended proceedings to the Election Commission of India.
The letter is constitutionally identifiable, conveniently accessible and easily available for being contacted on the most modern systems of communication.
The Election Commission of India, too rushed to this Court on the 18th without informing the Government of Haryana that it proposes to challenge the order of the High Court and to ask for stay of that order.
The Government of Haryana is also identifiable and accessible with the same amount of case.
Were it not for the fact that this matter brooked no delay the Supreme Court would have hesitated to pass any interim order without the appellant giving prior intimation of its proposed action to the respondent.
[561E G] 1 : 3.
Despite the guideline indicated by the Supreme Court in the West Bengal poll case, A.K.M. Hassan Uzzaman vs Union of India, , regarding the passing of orders by the High Courts in exercise of their writ jurisdiction, the High Court of Punjab & Haryana far from showing any reluctance to interfere with the programme of the proposed election, the High Court has only too readily passed the interim order which would have had the effect of postponing the election indefinitely.
Considering that the election process was just round the corner, the High Court ought not to have interfered with it.
The nonspeaking order passed by it affords no assistance on the question whether there were exceptional circumstances to justify that order.
[562A C] 2.
The Government of Haryana is undoubtedly in the best position to assess the situation of law and order in areas within its jurisdiction and under its control.
But the ultimate decision as to whether it is possible and expedient to hold the elections at any given point of time must rest with the Election Commission Arbitrariness and mala fides destroy the validity and efficacy of all orders passed by public authorities.
It is therefore necessary that on an issue like the present, which concerns a situation of law and order, the Election Commission must consider the views of the State Government and all other concerned bodies of authorities before coming to the conclusion that there is no objection to the holding of the 556 elections at this point of time.
Hence the Election Commission came to its decision after bearing in mind the pros and cons of the whole situation.
It had the data before it.
It cannot be assumed that it turned a blind eye to it.
In these circumstances, it was not in the power of the High Court to decide whether the law and order situation in the State of Punjab and Haryana is such as not to warrant or permit the holding of the by election.
It is precisely in a situation like this that the ratio of the Bengal Poll case would apply in its full rigor.
[562E H, 563A B] 3 : 1.
However, it would be open to the Chief Election Commissioner to review his decision as to the expediency of holding the poll on the notified date.
In fact, not only would it be open to him to reconsider his decision to hold the poll as notified, it is plainly his duty and obligation to keep the situation under constant scrutiny so as to adjust the decision to the realities of the situation.
All the facts and circumstances, past and present, which bear upon the question of the advisability of holding the poll on the notified date have to be taken into account and kept under vigil.
That is to continuing process which can only cease after the poll is shield.
Until then, the Election Commission has the locus, for good reasons to alter its decision The law and order situation in the State, or in any art of it, or in a neighboring State, is a consideration of vital importance for deciding the question of expediency or possibility of holding an election at any particular point of time.
If he considers it necessary, he should held further discussions with the Chief Electoral officer of Haryana and consult, once again, leaders of the various political parties on the question whether it is feasible to hold the poll on the due date.
On an important issue such as the holding of an election, which is of great and immediate concern to the entire political community, there can be no question of any public official standing on prestige, an apprehension which was faintly projected in the State 's arguments.
A sense of realism, objectively and noa alignment must inform the decision of the election Commission on that issue.
[563D H] Mohd.
Yunus Saleem vs Shiv Kumar Shastri.
; @ 743 44; followed.
3 : 2.
Indeed, every citizen of this country who has some degree of political awareness, would have a fair idea of the situation in Punjab and its impact on the even flow of life in the neighbouring State of Haryana.
But the circumstance that the High Court has the knowledge of a fact will not justify the substitution by it of its own opinion for that of an authority duly appointed for a specific purpose by the law and the Constitution.
Different people hold different views on public issues, which are often widely divergent.
Even the Judges.
A Judge is entitled to his views on public issues but he cannot project his personal views on the decision of a question like the situation of law and order in a particular area at a particular period of time and hold that the Election Commission is in error in its appraisal of that situation.
[564D F] Per Thakkar, J. (Contra) : The exact parameters of the decision in Hassan 's case and the true 557 ratio cannot be known till the judgment containing reasons is born.
As on today no one can predict what exactly will be decided by the Court in Hassan 's case when the Judgment eventually comes to be pronounced (who can make a guess about the colour or shade of the eyes of a child which is yet to be born ?).
But it can be reasonably said that Hassan 's case does not enjoin that an interim order of such a nature can never be passed in any situation.
If that were not so, the court would not have said (1) that imminence of electoral process is a factor which must guide and govern the passing of orders (meaning thereby that while such order scan be passed this factor must be accorded due consideration) and (2) that "more imminent such process, the greater ought to be the reluctance of the High Court to do anything or direct anything to be done which will postpone that process indefinitely" (which means it must be done only with reluctance when elections are imminent).
In other words the power must be exercised sparingly (with reluctance) particularly when the order would be to postpone the installation of a democratically elected popular Government.
These observations were made by the Court in Hassan 's case in the context of the expiry of the term of legislature as envisioned by Article 172 of the Constitution of India and consequential general elections for such legislature as is evident from the elusion to "imminence of elections" and "indefinite postponement of elections to legislative bodies which are the essence of democratic functions of the Constitution.
" This must be so because the legislature would stand dissolved on the expiry of the term, and a new legislature has to be elected.
It is in this context (presumably) that a reference is made to "imminence of elections".
[567D E H; 568A F] For a By election like the present one, to fill a single vacancy .
there can be no question of "imminence" or "indefinite postponement of elections" which would stall the installation of a democratically elected government.
It is nobody 's case that the party position was such that the result of the election to this vacant seat would have tilted the majority one way or other.
No oblique motive has even been hinted at.
The High Court was therefore not unjustified in proceeding on the assumption that it had such a power.
[568F G] The High Court cannot be faulted for passing the impugned order faced as it was by an unprecedented situation like the present.
If the High Court had not granted the order and the Election Commission had not chosen to appear on or before April 18, 1984 the High Court would have perhaps become powerless to pass any other order, whatever be the justification for it, as the "electoral process" would have actually commenced.
The High Court was prima facie satisfied that the Election Commission had failed to take into account vital matters, appeared to have acted on non consequential considerations, and had acted arbitrarily in turning down the request of the State Government as also the Chief Election Officer of Haryana.
The High Court was therefore entitled to grant a stay.
[569A B] The Supreme Court in exercise of the jurisdiction under Article 136 of the Constitution of India should not interfere with the ad interim order passed by the High Court in such a fact situation.
On the one hand the Election Commission appeared to have been altogether oblivious to the dimension as regards the bonafide apprehension pertaining to the life and 558 security of the National leaders who might address public meetings, the Candidates the officers engaged in election work, and the voters.
The danger was further aggrevated in the face of open threats held but to the lives of the National leaders of different political parties.
What is more, the Election Commission has shown total unawareness of the circumstance that public meetings were prohibited under section 144 of the Cr. P. C. in the constituency going to the polls.
On the other hand the only consequence of granting a stay would have been to postpone the election programme by a few days in the event of the Election Commission commission not choosing to appear in the Court (to show cause why the ad interim order should no be made absolute) on or before April 18, 1984 which was the scheduled date for issuance of the notification announcing the election programme The Election Commission could have appeared before the High Court and got the stay vacated in time instead of approaching this Court by way of the present appeal by Special Leave.
The Election Commission could not have failed to refraise that no serious consequence would have flowed from the impugned order even if stay was vacated, not immediately, but a few days later, for, it was only a by election to one single seat of no significance which would not have resulted in postponement of the installation of an elected government.
Worse come to worse, the by election could not have been held along with by elections in other states on the 'same day '.
[569B G] More so when the Election Commission has not been able to show what possible detriment would have been suffered if the by election could not have been so held on that particular day.
How and by what process of ratiocination did the Election Commission convinced itself that free elections could be held in a situation where the Candidates would consider it hazardous to contest or to indulge in election propaganda, and even voters would be afraid to vote, even to this court.
[569G H, 570A] It is no doubt true that theoretically the Election Commission can still postpone the polling, if it is so minded.
But the Court should not remain a passive spectator in this extraordinary situation and leave the Nation to the mercy of an individual, however high be his office, when it is evident that he has secluded himself in his ivory tower and has shut his eyes to the realities of the situation and closed his mind to the prognosis of this matter.
The Court can certainly satisfy itself whether the Election Commissioner had kept his eyes, ears and mind open, and whether he was able to show that all relevant factors including the consideration as to what advantage was to be secured as against the risk to be faces, entered into his reckoning.
If this is not shown to have been done, as in the present case, his decision is vitiated and the Court need not feel helpless.
The High Court was therefore fully justified in passing the impugned order, and the Supreme Court should not upture it.
[571B D]
</s>
|
<s>[INST] Summarize the judgementCivil Appeal No. 1774 of 1980 etc.
From the Judgment and Order dated 28.
1978 of the Allahabad High Court in Civil Misc.
Writ No. 495 of 1975.
945 B.R.L. Iyenger, Yogeshwar Prasad, S.P. Gupta, V.P. Sachthey, K.K. Venugopal, O.P. Rana, Dr. Y.S. Chitale, K.G. Bhagat, F.S. Nariman, Soli J. Sorabjee, H.K. Puri, G. Gopalakrishnan, Khaitan & Co., A. Subba Rao, Naunit Lal, K.M.K. Nair, J.B.D. & Co., P.R. Ramasesh, Bishambar Lal, G. Subramanium, Ms. section Dikshit, Ms. A. Subhashini, K.R. Nambiar, R.N. Poddar, B.M. Nagaria, Mrs. Rani Chhabra, R.B. Datar, P.H. Parekh, K.R. Nagaraja, B.D. Sharma, V.J. Francis, section Markendaya, R.N. Sachthey, R. Ramachandran, S.S. Khanduja, Manoj Swarup & Co., P.K. Pillai, Baggar, K.L. Mehta, Swarup John & Co., G.S. Ramarao, C.V. Subba Rao, S.K. Gupta, G.S. Chatterjee, Probir Mittra, Mrs. J. Wad, S.K. Gambhir, Pramod Dayal, R.K. Jain, S.R. Srivastava, K.K. Mohan, Dhantaraj,D.K. Agarwal, S.K. Gupta, Raju Ramachandran, Ravindra Bana,Vinoo Bhagat, K.K. Jain, A.D. Sanger, Girish Chandra, C.K. Sucharita, T.C. Sharma, Mrs. Kitty Kumaramangalam.
A.V. Rangam, R.V. Ratnam and D.M. Popat for the appearing parties.
The Judgment of the Court was delivered by D R.B. MISRA, J.
The present group of appeals directed against the judgment of the High Court of Judicature at Allahabad dated July 28, 1978 raises a common question of law.
These appeals arise out of petitions under Article 226 of the Constitution challenging the two Notifications dated January 25, 1975 issued under section 14 of the U.P. Sugarcane (Purchase Tax) Act, 1961 (hereinafter referred to as the Act for short).
The petitioners also sought a Mandamus directing the State Government to grant remission in purchase tax of 0.51 paise per quintal to all the Sugar factories situated in the State of U.P.
As the pattern of facts is similar in all the cases, we would refer to the facts of Civil Appeal arising out of Writ Petition No. 409 of 1975 filed by M/s. Shri Sitaram Sugar Company Limited, Bhailtapur, District Deoris, against the State of Uttar Pradesh and others to bring out the question for consideration in these appeals.
The petitioner is a Public Limited Company and owns a sugar factory in Deoria known as Shri Sitaram Sugar Company Limited, Bhailtapur, U.P. The Sugar Factory is engaged in the manufacture of sugar by Vacuum Pan Process.
It purchases sugarcane from the reserved area allocated to Lt under the provisions of U.P. (Regulation of Supply and Purchase) Act, 1953 and Sugarcane Control Order.
1966 946 By a Notification dated September 29, 1973 issued under clause 3 of the Sugarcane (Control) Order, 1966, Central Government fixed the price of sugarcane for the factories situated in Uttar Pradesh.
The minimum price fixed by this Notification for the area in which the petitioner 's factory was situated was Rs. 8.38 per quintal.
The cane growers felt agitated as according to them, the price fixed was much too low.
They, therefore, made representation to the U.P. Government and as a result thereof the U.P. Government intervened in the matter and fixed sugarcane price at Rs. 12.25 per quintal for the Sugar Mills situated in the East Zone.
According to the petitioner, however, the price fixed was exorbitant and as the petitioner and other sugar factories were likely to suffer enormous loses, the Sugar Factories approached the State of U.P. and brought to its notice that they were not in a position to pay the higher sugarcane price.
The stand of the appellant petitioner and others is that the Chief Minister was satisfied with the demand made by the sugar factories and he assured them that the State Government would grant remission in purchase tax to all the factories situated in the East Zone.
By a Notification issued under section 14(1) of the Act, the State Government granted remission to the extent of 0.51 paise per quintal to 18 Sugar Factories mentioned in the area.
By another Notification of the same date, two more factories were granted the remission.
As the remission was not granted to the appellant petitioner and to some other factories similarly situated, they filed petitions under Article 226 of the Constitution challenging the aforesaid Notification issued by the State Government.
The State of U.P. resisted the petitions and denied the allegation of promissory estoppel and discrimination set up in the writ petition.
The High Court dismissed those petitions by the impugned judgment.
They have now approached this Court by special leave and raised the same contention before this Court as was raised by them before the High Court.
In order to appreciate the points involved in the case, it would be appropriate at this stage to refer to the relevant provisions of the Act.
Section 3 of the Act lays down that there shall be levied a tax on the purchase of sugarcane by the owner of (a) a factory at the rate of twenty five paise per maund of sugarcane; and (b) a unit at the rate of fifty 947 paise per quintal.
Section 3 A(l) provides that no owner of a factory shall remove, or cause to be removed any sugar produced in the factory either for consumption or for sale, or for manufacture of.
any other commodity in or outside the factory, until he has paid the tax levied under section 3, a sum specified under sub section (2), sub section (3) or sub section (4).
The next relevant section with which we are directly concerned is section 14.
It confers powers on the State Government to grant remission.
As the decision of these appeals hinges upon the interpretation of section 14(1), it would be advisable to read the section in full.
Section 14(1) reads : "Section 14(1).
The State Government, on being satisfied that it is necessary so to do in the public interest, with a view to (a) encourage or regulate the supply of sugarcane to, or its purchase by factories ; or D (b) encourage the establishment of new factories ; or (c) assist factories established after the crushing season 1957 58 and purchasing sugarcane yielding low sugar recovery, May by notification in the Gazette, remit, in whole or in part, the tax payable under this Act, in any assessment year, by every such factory falling under Clause (a) or Clause (b) or Clause (c).
" In the instant case, the Notification remitting the purchase tax was issued by the State Government on being satisfied so to do in the public interest with a view to encourage and regulate the supply of sugarcane to, or its purchase by the factories in the State of Uttar Pradesh during 1973 74 assessment year.
Dr. Chitale, appearing for the appellants with his usual candour and fairness, gave up the plea of promissory estoppel and confined his argument to discrimination made by the State Government in granting remission of tax to some factories and 948 not to the appellants.
According to him the encouragement and regulation as contemplated by clause (a) of section 14(1) of the Act was necessary to all the factories in the eastern zone and not only to a fortunate few.
But the U.P. Government has refused to extend the remission to the appellant illegally when clause (a) of section 14(1) contemplates giving benefit to all the factories and there was no justification for singling out the appellants For treating them differently.
The power conferred by clause (a) of section 14(1) of the Act, the counsel contends, could not be confined to Factories purchasing sugarcane yielding low recovery inasmuch as this was a consideration foreign to the purpose contemplated by clause (a) of section 14(1) of the Act.
The three clauses of sub section (1) of section 14 of the Act have different object and purpose.
The purpose of granting the power of remission under clause (a) is "encouragement and regulation" of the supply of sugarcane, the object of clause (b) is to encourage the establishment of new factories, and that of clause (c) is to assist factories established after the crushing season 1957 58 and purchasing sugarcane yielding low recovery.
Section 14(1) confers a discretionary power on the State Government.
Reading section 14 as a whole, it cannot be said that it was obligatory on the part of the State to grant exemption or remission to all the factories.
The discretion has been left to the State Government to decide whether any particular factory should be granted remission or not guided by the purpose set out in the relevant clause.
Neither in clause (a) nor in any other clause of section 14(1) of the Act, there is anything to indicate that the State Government must grant remission to all sugar Factories for encouraging or regulating the supply of sugarcane.
The reason is obvious.
It may be that a factory situated in one area or falling In one category is in need of this remission while those which are not either situated in that area or do not fall In that category may not need it.
It is true that the power conferred by clause (a) is to be exercised For the purpose of encouraging and regulating the supply of sugarcane but in exercising this power, the State Government may legitimately take the view that this purpose necessitates the grant of remission only to the sugar factories purchasing 949 sugarcane yielding low recovery.
By granting the remission only to sugar factories purchasing sugarcane of low recovery, the State Government in our opinion has not violated Article 14 of the Constitution.
Nor Is there any contravention of the provisions of clause (a) of section 14.
The question of contravention would arise if the grant of remission were founded on a ground extraneous to the provisions of section 14.
The Notifications issued by the State Government clearly show that the remission was granted with the sole object of encouraging and regulating the supply of sugarcane to these factories.
The exercise of the power by the State Government was in accordance with the provisions of clause (a), sub section (1) of section 14 and that by granting the remission to a few sugar factories it did not frustrate the purpose of the aforesaid provision.
The use of expression "encourage or regulate" clearly indicates that the factories which really need encouragement or regulation should get the benefit of the remission under clause (a) of sub section (1) of section 14.
The word "encourage" suggests that the State Government is required to exercise the power where it feels that the sugar factory requires the help for the purpose of making purchases of sugarcane.
Similarly, the word "regulate" also shows that the said power can be exercised with a view to take measures to promote the sale of sugarcane.
If the power conferred by clause (a) of sub section (1) of section 14 has been exercised for the purpose of granting remission to only those sugar factories which purchase sugarcane of low recovery, there is nothing wrong in so doing.
It was next contended by Dr. Chitale that the factories which had recovery of 8.5 or less had been granted the remission.
Some of the appellants were also in similar position and they have been refused unjustifiably and the State Government had discriminated between the factories falling in the same group and thus the Notification issued on January 25, 1975 suffered from the vice of Article 14 of the Constitution on that account also.
This argument losses sight of the other clauses of the section, viz, clauses (b) and (c) of sub section (1) of section 14.
Clause (b) provides for encouraging the establishment of new factories and clause (c) contemplates assistance to factories established after crushing season 1957 58 and purchasing sugarcane yielding low sugar recovery.
If the State Government had chosen to give 950 remission to these factories because they fall under clause (c), some argument could have been advanced against the validity of the Notification on that basis.
Under clause (c), remission is granted by way of support or aid to newly established factories to lesson the cost so that they could profitably compete in the market.
The remission under clause (c) has to be confined to new factories which is a different category of sugar factories.
The considerations needed for exercising the power under clause (c) are different from those under clause (a) or (b).
Considered from this aspect there is no discrimination at all.
Article 14 of the Constitution forbids class legislation but permits reasonable classification.
It however must fulfil the twin requirements: (1) it must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group, and (2) that the intelligible differentia must have a relationship to the object sought to be achieved by the Statute.
If authority be needed, we may refer to Anant Mills Co. Ltd. vs State of Gujarat & Ors., The remission was granted only to the factories where the recovery from the sugarcane was low to enable the factories to make timely payments towards the cost of sugarcane and non payment of the cane prices affecting the supply of cane to factories.
It was in these circumstances that the Government granted remission to the factories which needed the help.
The immediate factor affecting the economy is the recovery of sugar from sugarcane and the sugar content in the cane produced goes a long way to determine the cost of sugar.
Thus the sugar factories which were purchasing sugarcane yielding low recovery are distinguishable as a class separately from those which did not fall in it and there was a reasonable basis to classify those left out of that group.
For the foregoing discussion, the appeals must fail.
must are accordingly dismissed.
In the circumstances of the case, however, the parties shall bear their own costs.
All matters pending in this Court challenging the constitutional validity of the two Notifications dated January 25, 1975, will stand disposed of in terms of this judgment.
P.S.S. Appeals dismissed.
[/INST]Section 3(1)(a) of the U.P. Sugarcane (Purchase Tax) Act, 1961 provides for imposition of tax on the purchase of sugarcane by the owners of sugar factories.
Section 14(1) of the Act empowers the State Government to grant remission in whole or in part of the tax payable in the public interest, with a view to (a) encourage or regulate the supply of sugarcane to, or its purchase by the factories, or (b) encourage the establishment of new factories, or (c) assist factories established after the crushing season 1957 58 and purchasing sugarcane yielding low sugar recovery.
The Central Government by a notification dated September 29, 1973 issued under cl. (3) of the Sugarcane (Control) Order, 1966, fixed the minimum price of sugarcane for factories situated in eastern U.P. at Rs. 8.38 per quintal.
To meet the growers demand for a higher price the Government of U.P. refixed the sugarcane price at Rs.12.25 per quintal for the sugar mills situated in the east zone.
The sugar factories not being in a position to pay the higher price approached the State Government who by two notifications dated January 25, 1975 issued under s.14(1)(a) of the Act granted remission in purchase tax to the extent of Re. 0.51 per quintal to twenty sugar factories in the area for the assessment year 1973 74.
The appellants and some other factories having been denied any remission in purchase tax, challenged the notifications by filing petitions under article 226 of the Constitution which were dismissed by the High Court.
943 In these appeals by special leave, it was contended for the appellants that the State Government in refusing to extend the remission to the appellants had discriminated against them by singling them out for treating differently as the encouragement and regulation contemplated by cl.(a) of s.14(1) of the Act was necessary to all the factories in the eastern zone and not to a fortunate few, and that the impugned notifications suffered from the vice of article 14 of the Constitution in as much as the Government had discriminated between the factories falling in the same group as those which had a recovery of 8.5 or less had been granted remission, while the appellants who were also in similar position had been left out.
Dismissing the appeals, the Court, ^ HELD: 1.
Article 14 of the Constitution forbids class legislation but permits reasonable classification.
It, however, must fulfil the twin requirements: (1) it must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group, and (2) that the intelligible differentia must have a relationship to the object sought to be achieved by the statute.
[950 C D] 2.
Section 14(1) of the Act confers a discretionary power on the State Government.
It has been left entirely to the State to decide whether any particular factory should be granted remission or not, guided by the purpose set out in the relevant clause.
Neither in cl.
(a) nor in any other clause of section 14(1) there is anything to indicate that the State Government must grant remission to all sugar factories for encouraging or regulating the supply of sugarcane.
[948 E F] 3.
The three clauses of sub section
(1) of s.14 of the Act have different object and purpose.
The purpose of granting the power of remission under cl.
(a) is encouragement and regulation of the supply of sugarcane, the object of cl.(b) is to encourage the establishment of new factories, and that of cl.(c) is to assist factories established after the crushing season 1957 58 and purchasing sugarcane yielding low recovery factory situated in one area or falling in one category may be in need of remission, while those which were not either 944 situated in that area or did not fall in that category may not need it.
Though the power conferred by cl.(a) is to be exercised for the purpose of encouraging and regulating the supply of sugarcane, in exercising this power the State Government may legitimately take the view that this purpose necessitates the grant of remission only to the sugar factories purchasing sugarcane yielding low recovery.
[948 C E] 4.
The word 'encourage ' in cl.(a) of s.14(1) suggests that the State Government is required to exercise the power where it feels that the sugar factory requires the help for the purpose of making purchases of sugarcane.
The word 'regulate ' contemplates that the said power can be exercised with a view to take measures to promote the sale of sugarcane.
If the power conferred by cl.(a) of s.14(1) has been exercised for the purpose of granting remission to only those sugar factories which purchase sugarcane of low recovery, there is nothing wrong in so doing.
[949 D E] 5.
In the instant case by granting the remission only to sugar factories purchasing sugarcane of low recovery, the State Government has not violated article 14 of the Constitution.
Nor was there any contravention of the provisions of cl.(a) of s.14(1).
Such a question would have arisen if the grant of remission were founded on a ground extraneous to the provisions of section 14(1).
[949 A B] 6.
The immediate factor affecting the economy is the recovery of sugar from sugarcane and the sugar content in the cane produced goes a long way to determine the cost of sugar.
Thus, the sugar factories which were purchasing sugarcane yielding low recovery are distinguishable as a class separately from those which did not fall in it and there was a reasonable basis to classify those left out of that group.
[950 F G] Anant Mills Co. Ltd. vs State of Gujarat & Ors., , referred to.
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<s>[INST] Summarize the judgementAppeals Nos. 2007 and 2008 of 1966.
Appeals by special leave from the judgment and order dated September 28, 1965 of the Kerala High Court in O.P. Nos. 219 and 223 of 1964.
83 D.R. Prem, R. N. Sachthey and section P. Nayar, for the appel lants (in both the appeals).
S.T. Desai and R. Gopalakrishnan, for the respondent (in both the appeals).
The Judgment of the Court was delivered by Sikri, J.
These appeals, by special leave, are directed against the judgment of the High Court of Kerala allowing two petitions filed by the respondent, M/s. A. section Bava, under article 226 of the Constitution.
The High Court, by this judgment, quashed two orders dated February 4, 1964, and directed the Collector of Customs, & Central Excise, Cochin, to hear the appeals preferred by M/s. A. section Bava.
The relevant facts are as follows: M / section A. section Bava.
hereinafter referred to as the petitioner, is a firm of dealers in Tobacco.
By two orders of adjudication dated March 31, 1963, the Assistant Collector of Customs demanded the payment of duty under Rule 40 of the Central Excise and Salt Rules, 1944.
The petitioner filed appeals against these orders on or about July 4, 1963, to the Collector of Customs & Central Excise.
The petitioner made a representation on October 3, 1963, requesting that it may not be required to deposit.
the duty demanded pending appeal.
The Collector, by letter dated January 9, 1964, rejected the representation and requested the petitioner to deposit the duty within 15 days of the receipt of the letter.
On the petitioner failing to deposit the amount, the appeals were dismissed on December 4, 1964.
Thereupon, as already stated, the petitioner filed two petitions under article 226 and the petitions having been allowed, and the appellant having obtained special leave, the appeals are now before us.
The High Court allowed the petitions on the ground that the notification No. 68/63 dated May 4, 1963, issued under section 12 of the Excise and Salt Act, 1944, hereinafter referred to as the Excise Act, declaring that section 129 of the , relating to matters specified therein shall be applicable in regard to like matters in respect of the duties imposed by section 3 of the Excise Act was in excess of the powers conferred under section 12 of the Excise Act.
The High Court also rejected the argument of the Collector of Customs and Central Excise that the petitioner having invoked section 129 of the , in the appeals preferred by it by praying for the dispensation of deposit, was precluded from proceeding under article 226 of the Constitution.
The learned counsel for the appellants has raised three points before us: (1)The petitions under article 226 were not maintainable as the petitioner did not avail himself of the remedy of revision provided by section 36 'of the Excise Act.
p(N)1SCI 7(a) 84 (2)The petitioner having availed of the remedy under section 12( of the was debarred from challenging the impugned notification, dated May 4, 1963.
(3)The impugned notification applying section 129 of the Custom: Act was good.
There is no force in the first point.
First, the point was no taken in the High Court.
Secondly, it is settled that the existence of a remedy by way of revision does not bar the jurisdiction of the High Court to entertain a petition under article 226.
Moreover the petitioner had alleged that the Collector had no jurisdiction to demand the deposit or duty pending the appeals as the notification dated May 4, 1963, was bad insofar as it applied section 129 of the .
In these circumstances it was not necessary for the petitioner to have filed revisions.
There is equally no force in the second point.
If the petitioner had not applied for dispensation of the deposit of the duty, the appellants would have contended that the petitions under article 226 were not maintainable.
Moreover, as already stated, the petitions raised a question of jurisdiction.
To appreciate the third point, it is necessary to extract the relevant statutory provisions.
Section 12 of the Excise Act authorises the Central Government to apply provisions of the , now replaced by the , in the following terms: "12.
The Central Government may, by notification in the Official Gazette, declare that any of the provisions of the , relating to the levy of an exemption from customs duties, drawback of duty, such modifications and alterations as it may consider necessary or desirable to adapt them to the circumstances, be applicable in regard to like matters in respect of the duties imposed by section 3".
The relevant part of the impugned notification dated May 4, 1963, reads as follows: " In exercise of the powers conferred by Sec. 12 of the Central Excise & Salt Act, 1944 (1 of 1944) the Central Government declares that the provisions of Section 129 of the , relating to matters specified herein shall be applicable in regard to like matters in respect of the duties imposed by Sec. 3 of the first mentioned Act. " Section 129 of the reads thus: "129.
(1) Where the decision or order appealed against relates to any duty demanded in respect of goods 85 which are not under the control of customs authorities or any penalty levied under this Act, any person desirous of appealing against such decision or order shall, pending the appeal, deposit with the proper officer the duty demanded or the penalty levied: Provided that where in any particular case the appellate authority is of opinion that the deposit of duty demanded or penalty levied will cause undue, hardship to the appellant, it may in its discretion dispense with such deposit, either unconditionally or subject to such conditions as it may deem fit.
(2)If upon any such appeal it is decided that the whole or any portion of such duty or penalty was not leviable, the proper officer shall return to the appellant such amount of duty or penalty as was not leviable.
" It will be noticed that section 129 requires an appellant to deposit the duty or penalty levied pending an appeal.
In other words, before an appeal can be heard the appellant must deposit the duty or penalty levied.
But under section 35 of the Excise Act, a person ,Aggrieved byany decision or order has an unfettered right to appeal.
Thequestion that arises in these appeals is whether the provisions ofs.
129 of the can be said to be provisions relating to procedure. relating to appeals ' within section 12 of the Excise Act.
As we have already said, the appeals are filed under section 35 of the Excise Act.
Section 129 of the debars the hearing of them unless the duty or penalty is paid.
This, it seems to us, is not procedure relating to appeals.
This Court in Hoosein Kasam Dada (India) Ltd., vs The State of Madhya Pradesh(1) had to consider a similar provision in section 22 of the Central Provinces and Berar Sales Tax Act, 1947.
Section 22(1), as originally enacted, read thus: " 22.
(1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order: Provided that no appeal against an order of assessment, with or without penalty, shall be entertained by the said authority unless it is satisfied that such amount of tax or penalty or both as the appellant may admit to be due from him, has been paid." (1) [1953]987;4 S.T.C 114, 86 It was amended thus: "22.
(1) Any dealer aggrieved by an order under this Act May, in the prescribed manner, appeal to the prescribed authority against the order: Provided that no appeal against an order or assessment, with or without penalty shall be admitted by the said authority unless such appeal is accompanied by a satisfactory proof of the payment of the tax, with penalty, if any, in respect of which the appeal has been preferred.
S.R. Das, J., as he then was, repelled the argument of the learned) Advocate that 'the requirement as to the deposit of the amount of the assessed tax does not affect the right of appeal itself, which still remains intact, but only introduces a new matter of procedure ', and observed: "There can be no doubt that the new requirement 'touches ' the substantive right of appeal vested in the appellant.
Nor can it be overlooked that such a requirement is calculated to interfere with or fetter, if not to impair or imperil, the substantive right.
The right that the amended section gives is certainly less than the right which was available before.
A provision which is calcu lated to deprive the appellant of the unfettered right of appeal cannot be regarded as a mere alteration in procedure.
Indeed the new requirement cannot be said merely to regulate the exercise of the appellant 's pre existing right but in truth whittles down the right itself and cannot be regarded as a mere rule of procedure.
" These observations are fully applicable in the present case.
1 Section 35 of the Excise Act gave a right of appeal, but section 129 of the whittles down the substantive right of appeal and accordingly it cannot be regarded as "procedure relating to appeals" within section 12 of the Excise Act.
The appeals accordingly fail and are dismissed with costs.
One hearing fee.
V P S Appeals dismissed.
[/INST]The Mysore Recruitment of Gazetted Probationers ' Rules 1959, make provision for direct recruitment to several cadres in the State Services on the basis of the result of a competitive examination.
Under the first part of r. 9(2), the candidates are required to indicate in their applications their preferences for the cadres they wished to join.
After the examination, the list of successful cardi dates in order of merit is published.
and, subject to certain reservations for Scheduled castes and tribes and Backward classes, the successful candidates have preferential claim in the order of merit to appointment in the cadres for which they indicated their preference.
The latter part of r. 9(2), however, reserves to the Government the right of appointing to any particular cadre any candi date whom it considers more suitable for such cadre.
In the present case an open competitive examination was '.held for recruitment to the posts of Assist ant Commissioners in the Mysore Administrative Service and of Assistant Controllers in the Mysore State Accounts Service.
Though both are Class I cadres the post of Assistant Commissioner had better prospects.
There were 20 vacancies in the posts of Assistant Commissioners.
The respondent indicated his preference for the post of Assistant Com missioner.
Though his rank was fourth, the Public Service Commission recommended that he and some others should be appointed as Assistant Controllers while those who ranked after the respondent were recommended for appointment as Assistant Commissioners.
The State Government accepted the recommendation.
The respondent thereupon filed a writ petition in the High Court asking for an order directing the State to appoint him as Assistant Commissioner.
The High Court held that the Government had under the latter part of r. 9(2) the power to decide to which post or cadre the respondent should be appointed.
but that the Government should itself make up its mind without consulting the Public Service Commission, and directed the Government to decide accordingly.
The State appealed to this Court Held: The latter part of r. 9(2) was violative of articles 14 and 16(1) of the Constitution and therefore the State Government had no power to withhold the post of Assistant Commissioner from the respondent who bad a right to be appointed to that post having regard to his rank in order of merit.
The High Court should, therefore, have directed the Government to appoint the respondent to the post.
[354B C] L/S5SCI 350 The Rules are silent on the question as to how the Government was to find out the suitability of a candidate for a particular cadre, nor do the Rules give the Public Service Commission the power to test the suitability of a candidate for a particular cadre or to recommend that he is more suitable for it.
Further, there is no provision in the Rules under which the Government can test the suitability of a candidate for any cadre after the result of the examination is published.
Therefore, the latter part of r. 9(2) gives the,Government an arbitrary power of ignoring the just claims of successful candidates, for recruitment to offices under the State, and thus, subvert '$ the basic objectives of ensuring equality of opportunity in the matter of employment by open competition.
[352H: 353B C; 354A B]
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<s>[INST] Summarize the judgementAppeal No. 233 of 1954.
Appeal from the judgment and decree dated August 22, 1950, of the Bombay High Court in Appeal No. 80 of 1946 from original decree, arising out of the judgment and decree dated October 19, 1945, of the Court of Civil Judge, Senior Division, Dharwar, in Special Suit No. 64 of 1943.
A. V. Viswanatha Sastri and M. section K. Sastri, for the appellants.
A. section R. Chari, Bawa Shivcharan Singh and Govindsaran Singh, for respondents Nos. 2 4. 1958.
September 24.
The judgment of Imam and Kapur JJ. was delivered by Kapur J. Sinha J. agreed to the order proposed.
KAPUR J. This is an appeal against the judgment and decree of the High Court of Bombay varying the decree of the trial Court decreeing the plaintiff 's suit for possession by partition of joint family property.
The facts of the case lie in a narrow compass.
M. B. Jakati, defendant No. 1, was the Managing Director of Dharwar Urban Co operative Bank Limited which went into liquidation, and in that capacity he was receiving a yearly remuneration of Rs. 1,000.
As a result of certain proceedings taken against defendant No. 1, M. B. Jakati, by the liquidator of the Bank, a payment order for Rs. 15,100 was made by the Deputy Registrar of Co operative Societies on April 21, 1942.
In execution of this payment order a bungalow belonging to M. B. Jakati, defendant No. 1, was attached by the Collector under the Bombay Land Revenue Code on July 27, 1942.
Notice for sale was issued on November 24, 1942, and the proclamation on December 24, 1942.
The sale was fixed for February 2, 1943.
On January 16, 1943, M. B. Jakati defendant No. 1 applied for postponing the sale which was rejected.
The auction sale was held on February 2, 1943, and was confirmed on June 23, 1943, the purchaser was section N. Borkar, defendant No. 7, now respondent No. 1.
On February 10, 1944, respondent No. 1 sold the property to defendants 8 to 10 who are respondents 2 to 4.
1387 The following pedigree table will assist in understanding the case: Madhavarao Balakrishan Jakati Deft. 1 Bhimabai 2 Krishnaji Shriniwas Shantibai Indumati Plff.
1 Plff.
1(a) daughter daughter Deft.
No. 3 Deft.
No. 4 On January 15, 1943, Krishnaji a son of defendant No. 1 brought a suit for partition of the joint family property and possession of his separate share alleging inter alia that the purchase by respondent No. 1 of the bungalow was not binding on the joint family as "it was not liable to be sold for the illegal and immoral acts on the part of defendant No. 1 which were characterised as misfeasance "; that the auction sale was under section 155 of the Bombay Land Revenue Code under which only " the right, title and interest of the defaulter " could be sold and therefore the right, title and interest of only the father, defendant No. 1 was sold and not that of the other members.
The plaintiff claimed 1/4 share of the property and also alleged that he was not on good terms with his father who had neglected his interest; that he was staying with his mother 's sister and was not being maintained by his father and mother.
On January 12, 1944, appellant No. 1 filed his written statement supporting the claim for partition and claiming his own share.
He supported the claim of the then plaintiff that the sale in favour of respondent No. 1 was not binding on the joint family.
Defendant No. 2, now appellant No. 2, the mother, also supported the plaintiff 's claim and on the death of Krishnaji, she claimed his i share as his heir.
After the death of the original plaintiff Krishnaji, Shriniwas appellant No. 1 was substituted as plaintiff on June 28, 1944.
The suit was mainly contested by respondents 1 to 4.
Respondent No. 1 pleaded that plaintiff 's suit for partition was collusive having been brought at the instance of the defendant No. 1, M. B. Jakati, and it was not bona fide; that defendant No. 1 was made 1388 liable at the instance of the liquidator of the Dharwar Urban Co operative Bank Ltd., for misfeasance because he acted negligently in the discharge of his duties as managing director of the Bank; that the debt was binding on the family as defendant No. 1, M. B. Jakati, had been receiving a yearly remuneration from the Bank and the properties were sold in payment of a debt binding on the family and therefore the sale in execution of the payment order could not be challenged as the sons were under a pious obligation under the Hindu law to discharge the debts of their father; that the sale could only be challenged on proof of the debt of defendant No. 1 being for an " immoral or illegal purpose.
These pleadings gave rise to several issues.
The learned Civil Judge, held that the suit was collusive; that the liability which defendant No. 1 incurred was avyavaharika and was therefore not binding on the sons and thus appellant No. 1 would have 1/3 share in the joint family property, defendant NO.
1 1/3 and appellant No. 2 also 1/3.
He therefore declared the shares as above in the whole of the joint family property including the bungalow which is the only property in which the respondents are interested and which is in dispute in this appeal.
On appeal the High Court held that the debt was not avyavaharika as there was no evidence to support the finding of the trial Court, the order of the Deputy Registrar being in the nature of a judgment to which neither the sons nor the auction purchasers were parties and therefore it was not " evidence of anything except the historical fact that it was delivered".
In regard to the question as to what interest passed to the auction purchaser on a sale under section 155 of the Bombay Land Revenue Code, it held that the whole estate including the share of the sons was sold in execution of the payment order and therefore qua that property the sons had no interest left.
The High Court varied the decree to this extent and the plaintiffs have come up in appeal to this Court by certificate of the High Court of Bombay.
The case of the appellants is (1) that the debt was avyavaharika and therefore in an auction sale the S.C.R. SUPREME COURT REPORTS 1389 interest of the sons and other members of the joint family did not pass to the auction purchaser; (2) that even if the debt was not avyavaharika the institution of the suit for partition operated as severance of status between the members of the family and therefore the father 's power of disposition over the son 's share had come to an end and consequently in the auction sale the share of the sons did not pass to the auction purchaser; and (3) that what could legally be sold under section 155 of the Bombay Land Revenue Code was the right, title and interest of the defaulter i. e. of the father alone which could not include the share of the other members of the joint family.
The first question for decision is whether the debt of the father was avyavaharika.
This term has been variously translated as being that which is not lawful or what is not just or what is not admissible under the law or under normal conditions.
Colebrooke translated it as " a debt for a cause repugnant to good morals ".
There is another track of decision which has translated it as meaning " a debt which is not supported as valid by legal arguments ".
The Judicial Committee of the Privy Council in Hem Raj alias Babu Lal vs Khem Chand (1) held that the translation of the term as given by Colebrooke makes the nearest approach to the true conception of the term used in the Smrithis texts and may well be taken to represent its correct meaning and that it did not admit of a more precise definition.
In Toshanpal Singh vs District Judge of Agra (2) the Judicial Committee held that drawings of monies for unauthorised purposes, which amounted to criminal breach of trust under section 405 of the Indian Penal Code, were not binding on the sons, but a civil debt arising on account of the receipt of monies by the father which were not accounted for could not be termed avyavaharika.
In the case now before us the appellants have empted to prove that the debt fell within the term avyavaharika by relying upon the payment order and (1)(1943) L.R. 70 I.A. 171, 176.
(2) (1934) L.R. 61 I.A. 350.
1390 the findings given by the Deputy Registrar in thepayment order where the liabity was inter alia based on a breach of trust.
Any opinion given in the order of the Deputy Registrar as to the nature of the liability of defendant No.1, M. B. Jakati, cannot be used as evidence in the present case to determine whether the debt was avyavaharika or otherwise.
The order is not admissible to prove the truth of the facts therein stated and except that it may be relevant to prove the existence of the judgment itself, it will not be admissible in evidence.
Section 43 of the Indian Evidence Act, the principle of which is, that judgments excepting those upon questions of public and general interest, judgment in rem or when necessary to prove the existence of a judgment, order or decree, which may be a fact in issue, are irrelevant.
It was then submitted that the pleadings of respondent No. 1 himself show that the debt was of an immoral or illegal nature.
In his written statement, respondent No. 1 had pleaded that the liquidator of the Bank had charged defendant No. 1 with misfeasance because he was grossly negligent in the discharge of his duty and responsibility as managing director and that after a thorough enquiry the Deputy Registrar held misfeasance proved and ordered a contribution of Rs. 15,100 by him.
As we have said above the translation given by Colebrooke of the term avyavaharika is the nearest approach to its true concept i. e. " any debt for a cause repugnant to good morals ".
The managing director of a Bank of the position of defendant No. 1 who should have been more vigilant in investing the monies of the Bank cannot be said to have incurred the liability for a cause " repugnant to good morals ".
We are unable to subscribe to the proposition that in the modern age with its complex institutions of Banks and Joint Stock Companies governed by many technicalities and complex system of laws the liability such as has arisen in the present case could be called avyavaharika.
The debt was therefore binding on the sons.
The effect of severance of status brought aboutthe filing of the suit on January 25, 1943, made the basis of the argument that only the share of the father could be seized in execution of the payment order made against him.
This would necessitate an examination into the rights and liabilities of Hindu sons in a Mitakshara coparcenary family where the father is the karta.
In Hindu law there are two mutually destructive principles, one the principle of independent coparceiiary rights in the sons which is an incident of birth, giving to the sons vested right in the coparcenary property, and the other the pious duty of the sons to discharge their father 's debts not tainted with immorality or illegality, which lays open the whole estate to be seized for the payment of such debts.
According to the Hindu law givers this pious duty to pay off the ancestors ' debts and to relieve him of the death torments consequent on nonpayment was irrespective of their inheriting any property, but the courts rejected this liability arising irrespective of inheriting any property and gave to this religious duty a legal character.
Masit Ullah vs Damodar Prasad (1).
For the payment of his debts it is open to, the father to alienate the whole coparconary estate including the share of the sons and it is equally open to his creditors to proceed against it; but this is subject to the sons having a right to challenge the alienation or protest against a creditor proceeding against their shares on proof of illegal or immoral purpose of the debt.
These propositions are well settled and are not within the realm of controversy.
(Panna Lal vs Mst.
Naraini (2); Girdharee Lal vs Kantoo Lal and Mudhan Thakoor vs Kantoo Lal (3) ; Suraj Bansi Koer vs Sheo Prasad Singh (4); Brij Narain vs Mangla Prasad (5).
In the last mentioned case the Privy Council said: " Nothing clearer could be said than what was said by Lord Hobhouse delivering the judgment of the Board in Nanomi Babusin vs Modun Mohan (6) already quoted: " Destructive as it may be of the principle of (1) (1926) L.R. 53 I.A. 204.
(2) ; , 552, 553, 556, 5 59.
(3) (1874) L.R. 1 I.A. 321, 333.
(4) (1878) L.R. 6 I.A. 88, 101.
(5) (1923) L.R. 51 I.A. 129, 136.
(6) (1885) L.R. 13 I.A. 1, 17, 18.
177 1392 independent coparcenary rights in the sons, the decisions have for sometime established the principle that the sons cannot set up their rights against their father 's alienation for an antecedent debt, or against his creditor 's remedies for their debts, if not tainted with immorality.
On this important question of the liability of the joint estate, their Lordships think that there is no conflict of authority ".
There is no discrepancy of judicial opinion as to the pious duty of Hindu sons.
In Panna Lal vs Mst.
Naraini (1) this Court approved the following dictum of Suleman A. C. J. in Bankeylal vs Durga Prasad (2): The Hindu Law texts based the liability on the pious obligation itself and not on the father 's power to sell the sons ' share ".
So great was the importance attached to the payment of debts that Hindu law givers gave the non payment of a debt the status of sinfulness and such non payment was wholly repugnant to Hindu concept of son 's rights and liabilities.
In Bankeylal vs Durga Prasad (2) Lal Gopal Mukherji J. said at p. 896: " A perusal of text books of Smriti dealing with debts will show that under the Hindu Law the nonpayment of a just debt was regarded as a very heinous sill.
" The liability of the Hindu son based on his pious obligation again received the approval of this Court in Sudheshwar Mukherji vs Bhubneshwar Prasad Narain Singh (3), where the following observation made in Panna Lal 's case (1) (at p. 184): " The father 's power of alienating the family property for payment of his just debts may be one of the consequences of the pious obligation which the Hindu law imposed upon the sons; or it may be one of the means of enforcing it, but it is certainly not the measure of the entire obligation was reiterated.
And again at p. 183 Mukherjea J. (as he then was) said:., " It is a special liability created on purely religious (1) ; , 552, 553, 556, 559.
(2) All. 868, 896.
(3) ; , 183, 184.
1393 grounds and can be enforced only against the sons of the father and no other coparcener.
The liability, therefore, has its basis entirely on the relationship between the father and the son ".
Therefore unless the son succeeds in proving that the decree was based on a debt which was for an immoral or illegal purpose the creditor 's right of seizing in execution of his decree the whole coparcenary property including the son 's share remains unaffected because except where the debt is for an illegal or immoral purpose it is open to the execution creditor to sell the whole estate in satisfaction of the judgment obtained against the father alone.
Sripat Singh vs Tagore (1).
The necessary corollary which flows from the pious obligation imposed on Hindu sons is that it is not ended by the partition of the family estate unless a provision has been made for the payment of the just debts of the father.
This again is supported by the authority, of this Court in Pannatal 's case (2) where Mukherjea J. said at p. 559: " Thus, in our opinion, a son is liable, even after partition for the pre partition debts of his father which are not immoral or illegal and for the payment of which no arrangement was made at the date of the partition ".
The liability of the sons is thus unaffected by partition because the pious duty of the sons to pay the debt of the father, unless it is for an immoral or illegal purpose, continues till the debt is paid off and the pious obligation incumbent on the sons to see that their father 's debts are paid, prevents the sons from asserting that the family estate so far as their interest is concerned is not liable to purge that debt.
Therefore even though the father 's power to discharge his debt by selling the share of his sons in the property may no longer exist as a result of partition ' the right of the judgment creditor to seize the erstwhile coparcenary property remains unaffected and undiminished because of the pious obligation of the sons.
There does not seem to be any divergence of judicial opinion in regard (1) (1916) L.R. 44 I.A.1.
(2) ; , 552, 553, 556, 559. 1394 to the Hindu son 's liability to pay the debts of his father after partition, and by the mere device of entering into partition with their father, the sons cannot get rid of this pious obligation.
It has received the approval of this Court in Panna Lal vs Mst.
Naraini (1) and Sidheshwar Mukherji vs Bubneshwar Prasad Narain Singh (2) where Mukherjea J. observed in the latter case at p. 184: " It is settled law that even after partition the sons could be made liable for the pre partition debts of the father if there was no proper arrangement for the payment of such debts at the time when the partition was effected, although the father could have no longer any right of alienation in regard to the separated share of the sons The question then arises how the liability of the sons is to be enforced.
Another principle of Hindu law is that in a coparcenary family the decree obtained against the father is binding on the sons as they would be deemed to have been represented by the father in the suit: Kishan Sarup vs Brijraj Singh (3).
As was pointed out in Sidheshwar Mukherji 's case (2), the sons are not necessary parties to a money suit against the father who is the karta, but they may be joined as defendants.
The result of the partition in a joint family is nothing more than a change in the mode of enjoyment and what was held jointly is by the partition held in severalty and therefore attachment of the whole coparcenary estate would not be affected by the change in the mode of enjoyment, because the liability of the share which the sons got on partition remains unaffected as also the attachment itself which is not ended by partition (section 64 C. P. C. is a useful guide in such circumstances.
Dealing with the question as to how the interest of the sons in joint family property can be attached and sold, Mukherjea J. as he then was, observed at p. 185 in Sidheshwar Mukherji 's case (2): Be that as it may, the money decree passed against the father certainly created a debt payable by (1) ; , 552, 553, 556, 559.
(2) ; , 183, i84.
(3) All. 932.
1395 him.
If the debt was not tainted with immorality, it was open to the creditor to realise the dues by attachment and sale of the sons ' coparcenary interest in the joint property on the principles discussed above.
As has been laid down by the Judicial Committee in a series of cases, of which the case of Nanomi Babuasin vs Modun Mohun (1) may be taken as a type, the creditor has an option in such cases.
He can, if he likes, proceed against the father 's interest alone but he can, if he so chooses, put up to sale the sons ' interest also and it is a question of fact to be determined with reference to the circumstances of each individual case whether the smaller or the larger interest was actually sold in execution ".
But it has contended that a partition after the decree but before the auction sale limited the efficacy of the sale to the share of the father even though the sale in fact was of the whole estate, including the interest of the sons, because after the partition the father no longer possessed the right of alienation of the whole coparcenary estate to discharge his debts.
But this contention ignores the doctrine of pious obligation of the sons.
The right of the pre partition creditor to seize the property of the erstwhile joint family in execution of his decree is not dependent upon the father 's power to alienate the share of his sons but on the principle of pious obligation on the part of the sons to discharge the debt of the father.
The pious obligation continues to exist even though the power of the father to alienate may come to an end as a result of partition.
The consequence is that as between the sons ' right to take a vested interest ' jointly with their father in their ancestral estate and the remedy of the father 's creditor to seize the whole of the estate for payment of his debt not contracted for immoral or illegal purpose, the latter will prevail and the sons are precluded from setting tip their right and this will apply even to the divided property which, under the doctrine of pious obligation continues to be liable.
for the debts of the father.
Therefore where the joint ancestral property including the share of the sons has (1) (1885) L.R. 13 I. A. 1, 17, 18.
1396 passed out of the family in execution of the decree on the father 's debt the remedy of the sons would be to prove in appropriate proceedings taken by them the illegal or immoral purpose of the debt and in the absence of any such proof the sale will be screened from the sons ' attack, because even after the partition their share remains liable.
Girdhareelal vs Kantoolal (1), Suraj Bansi Koer vs Sheo Prasad Narain Singh(2) Mussamat Nanomi Babuasin vs Modwn Mohun (3) Chandra Deo Singh vs Mata Prasad (4) which was approved by the Privy Council in Sahu Ram Chander vs Bhup Singh (5), Pannalal vs Naraini (6) and Sidheshwar Mukherji 's case (7).
Our attention was drawn to two decisions, one by the High Court of Bombay in Ganpatrao vs Bhimrao (8) that in order to make the share of the sons liable after partition they should be brought on the record and the other of the Madras High Court in Kameshwaramma vs Venkatasubba Row(9) that the creditor has to bring another suit against the sons, obtain a decree against them limited to the shares allotted to them on partition and then attach and sell their share unless the partition was not bona fide in which case the decree could be executed against the joint family property.
But the decision in these cases must be confined to their own facts.
It is true that the right of the father to alienate for payment of personal debt is ended by the partition, but as we have said above, it does not affect the pious duty of the sons to discharge the debt of their father.
Therefore where after attachment and a proper notice of sale the whole estate including the sons ' share, which was attached, is sold and the purchaser buys it intending it to be the whole coparcenary estate, the presence of the sons eonomine is not necessary because they still have the right to challenge the sale on showing the immoral or illegal purpose of the debt.
In our opinion where the pious obligation exists and partition takes place after the decree and (1) (1874) L.R. i I.A. 321.
(2) (1878) L.R. 6 I.A. 88, 101.
(3) (1885) L.R. 13 I.A. Y. (4) All. 176, 196.
(5) (1916) L.R. 44 I.A. 1.
(6) ; , 552, 553, 556, 559.
(7) ; , 183, Bom.
(9) Mad.
1397 pending execution proceedings as in the present case, the sale of the whole estate in execution of the decree cannot be challenged except on proof by the sons of the immoral or illegal purpose of the debt and partition cannot relieve the sons of their pious obligation or their shares of their liability to be sold or be a means of reducing the efficacy of tile attachment or impair the rights of the creditor.
Reliance is placed on the judgment in Khiarajmal vs Daim (1) where the Privy Council held that the sale cannot be treated as void on the ground of mere irregularity but the Court has no jurisdiction to sell the property of persons " not parties to the proceedings or properly represented on the record ".
There two such persons were Alibux and Naurex.
As against Alibux there was no decree.
He was not a party to the suit, and it was held by the Privy Council that his interest in the property " seems to have been ignored altogether ".
He was not even mentioned as a debtor in the award on the basis of which the decree, which was executed was made.
Similarly Naurez was not represented in either of the suits and therefore there was no decree against him and the sale of his property also was therefore without jurisdiction and null and void.
This case cannot apply to sons in a joint Hindu family where a father represents the family and the decree is executable against the shares of the sons while the coparcenary continues and the liability of their shares continues after partition.
Sat Narain vs Das (2) is equally inapplicable to the present case.
There the Privy Council was dealing with the father 's power of disposal of property before and after partition which power vests in the Official Assignee on his bankruptcy, the question of the right of the judgment creditor to proceed in execution against the divided shares of sons which had been attached before partition was not a point in controversy.
There was no decision on the powers of an executing court to proceed against the shares of the sons but the question related to voluntary alienations by a father for payment of his debts not incurred for an immoral or illegal purpose.
(1) (1904) L.R. 32 I.A. 23.
(2) (1936) L.R. 63 I.A. 384.
1398 In cases where the sons do not challenge the liability of their interest in the execution of the decree against the father and the Court after attachment and proper notice of sale sells the whole estate and the auction purchaser purchases and pays for the whole estate, the mere fact that the sons were eo nomine not brought on the record would not be sufficient to defeat the rights of the auction purchaser or put an end to the pious obligation of the sons.
As was pointed out by Lord Hobhouse in Malkarjun Bin Shidramappa Pasare vs Narhari Bin Shivappa (1): " Their Lordships agree with the view of the learned Chief Justice that a purchaser cannot possibly judge of such matters, even if lie knows the facts; and that if he is to be held bound to enquire into the accuracy of the Court 's conduct of its own business, no purchaser at a Court sale would be safe.
Strancers to a suit are justified in believing that the Court has done that which by the directions of the Court it ought to do.
" In Mussamat Nanomi Babuasia vs Modun Mohun Lord Hobhouse said at p. 18: " But if the fact be that the purchaser has bargained and paid for the entirely, he may clearly defend his title to it upon any ground which would have justified a sale if the sons had been brought in to oppose the executing proceedings.
" The question which assumes importance in an auction sale of this kind therefore is what did the court intend to sell and did sell and what did the auction purchaser purport to buy and did buy and what did he pay for.
One track of decision of which Shambu Nath Pandey vs Golab Singh(3) is an instance, shows when the father 's share alone passes.
In that case the father alone was made a party to the proceedings.
The mortgage, the suit of the creditor and the decree and the sale certificate all purported to affect the rights of the father and his interest alone.
It was therefore held that whatever the nature of the debt, only the father 's (1) (1900) L.R. 27 I.A. 216, 225.
(2) (1885) L.R. 13 I.A. i. (3) (1887) L.R. 14 I.A. 77.
1399 right and interest was intended to pass to the auction purchaser.
In Meenakshi Naidu vs Immudi Kanaka Rammaya Kounden(1) which represents the other track of decision, the Privy Council held that upon the documents the court intended to sell and did sell the whole of the coparcenary interest and not any partial interest.
The query in decided cases has been as to what was put up for sale and was sold and what the purchaser had reason to think he was buying in execution of the decree.
Mussamat Nanomi Babuasin vs Modun Mohun (2) (supra), Bhagbut Persad vs Mussamat Girja Koer (3), Meenakshi Naidu vs Immudi Rammaya Kounden (1) and Rai Babu Mahabir Persad vs Rai Markunda Nath Sahai (4) and Daulat Ram vs Mehr Chand (5).
In the present case the payment order was made by the Deputy Registrar on April 21, 1942, and after the order had been sent to the Collector for recovery, the property was attached on April 24, 1942, and notice of sale was issued on November 24, 1942, and was published under sections 165 and 166 of the Bombay Land Revenue Code.
The proclamation of sale was dated December 12, 1942.
The property put up for sale was plot No. 36 D measuring 6 acres and one guntha and its value was specified as 13,000 rupees.
There was a note added : " No guarantee is given of the title of the said defendant or of the validity of any of the rights, charges or interests claimed by third parties ".
The order confirming the sale also shows that the whole bungalow was sold.
It was valued at Rs. 16,000 and there was a mortgage of Rs. 2,000 against it and what was sold and confirmed by this order was the whole bungalow.
The sale certificate was in regard to the whole bungalow i. e. City Survey No. 67 D measuring 6 acres and one guntha the sale price being Rs. 13,025.
There is little doubt therefore that what was put up for auction sale was the whole bungalow 2,0.6 (1) (1888) L.R. 16 I.A. i. (3) (1888) L.R. 15 I.A. 99.
(5) (1889) L.R. 14 I.A. 187.
178 (2) (1885) L.R. 13 I.A. i. (4) (1889) L.R. 17 I.A. 11, 16.
1400 and what the auction purchaser purported to buy and paid for was also the whole bungalow and not any fractional share in it.
It is a case where not only was the payment order passed before the partition but the attachment was made and the sale proclamation was issued before the suit for partition was filed and the sale took place of the whole property without any protest or challenge by the sons and without any notice to the Collector or the judgment creditor of the filing of the suit for partition.
In such a case respondent No. 1 is entitled to defend his title upon the grounds which would have justified the sale had the appellants been brought on record in execution proceedings.
The binding nature of the decree passed on the father 's debts not tainted with immorality or illegality, and the pious obligation imposed on the sons under the Mitakshara law would be sufficient to sustain the sale and defeat the sons ' suit in the same way and on the same grounds as in the case of execution proceedings.
Nanomi Babuasin vs Modun Mohun (1).
Consequently whether the sons were made parties to the execution proceedings or brought a suit challenging the sale of their shares the points for decision are the same the nature of the debts and liability of the sons under Hindu law, and these are the determining factors in both the cases i.e. the sons being parties to the execution proceedings or their suit challenging the sale of their shares.
The effect of attachment on the severance of status by the filing of a suit by one of the members of the coparcenary whose share was liable in execution of the decree has not been debated at the bar and how exactly it would affect the rights of the parties need not therefore be decided in this case.
As a consequence it would not be necessary to discuss the pronouncements of the Privy Council in Suraj Bansi Koer vs Sheo Prasad Singh (2) ; Moti Lal vs Karrabuldin (3) Ragunath Das vs Sundar Das Khetri (4); Ananta Padmanabha Swami vs Official Receiver, Secunderabad (5).
(1) (1885) L.R. 13 I.A. i. (3) (1897) L.R. 24 I.A. 170.
(2) (1878) L.R. 6 I.A. 88, 101.
(4) (1914) L.R. 41 I.A. 251.
(5) (1933) L.R. 60 I.A. 167, 174 5.
1401 The argument based on the interpretation of the words I right, title and interest of the defaulter ' in section 155 of the Bombay Land Revenue Code was that it was only the share of the defaulter himself which was and could be put up for auction sale.
That the whole of the property was put up for sale, was sold and was purchased as such is shown by the documents to which reference has already been made viz., the notice of November 24, 1942, proclamation of sale of Decem ber 24, 1,942, the order of confirmation of sale dated June 28, 1943, and the sale certificate issued by the Collector.
The Civil Procedure Code at the time of the enactment of the Bombay Land Revenue Code required that the property sold in execution should be described as " right, title and interest of the judgment debtor " and the same words have been used in section 155 of the Bombay Land Revenue Code.
It is a question of fact in each case as to what was sold in execution of the decree.
In Rai Babu Mahabir Prasad vs Markunda Nath Sahai (1) Lord Hobhouse observed as follows at p. 16 : " It is a question of fact in each case, and in this case their Lordships think that the transactions of the 4th and 5th of January, 1875, and the description of the property in the sale certificate, are conclusive to shew that the entire corpus of the estate was sold.
" Similarly in Meenakshi Naidu vs Immudi Kanaka Rammaya Kounden (2) the whole interest of the coparcenary was held to be sold taking into consideration the evidence which had been placed on the record.
Lord FitzGerald at p. 5 pointed out the difference where only the father 's interest was intended to pass: "In Hurdey Narain 's case" (Hurdey Narain vs Rooder Perkash (3)) " all the documents shewed that the Court intended to sell and that it did sell nothing but the father 's share the share and interest that he would take on partition, and nothing beyond it and this tribunal in that case puts it entirely upon the ground (1) (1889) L.R. 17 I.A. 11, 16.
(2) (1888) L.R. 16 I.A. i. (3) (1883) L. R. 11 I. A. 26, 29. 1402 that everything shewed that the thing sold was "whatever rights and interests, the said judgment debtor had in the property " and nothing else ".
In Sripat Singh vs Tagore (1) the "right, title and interest of the judgment debtor" were sold and there also it was held to convey the whole coparcenary estate and it was remarked that it was of the utmost importance that the substance and not merely the technicality of the transaction should be regarded.
What is to be seen is what was put up for sale what the court intended to sell and what the purchaser was intending to buy and what he purported to buy.
Counsel for the appellants relied on Shambu Nath Panday vs Golab Singh(2) where it was held that right and interest of the father meant personal interest but in that case as we have pointed out, the documents produced all showed that the father 's interest alone was intended to pass.
In Mulgund Co operative Credit Society vs Shidlingappa Ishwarappa (3) it was held that the sale under the Bombay Land Revenue Code has the same effect as the sale by the Civil Court.
The language used in the Bombay Land Revenue Code and the then existing Civil Procedure Code is similar i.e. " the right, title and interest of the defaulter " in one case and " of the judgment debtor " in the other.
This is supported by the observation of the Privy Council in Rai Babu Mahabir Prasad vs Markunda Nath Sahai (4) and as to what passed under the sale does not become any different merely because the sale is held under section 155 of the Bombay Land Revenue Code rather than the Code of Civil Procedure.
The effect in both cases is the same.
We hold therefore (1) that the liability of the sons to discharge the debts of the father which are not tainted with immorality or illegality is based on the pious obligation of the sons which continues to exist in the lifetime and after the death of the father and which does not come to an end as a result of partition of the joint family property.
All that results from partition is that the right of the father to make an (i) (1916) L.R. 44 I.A. i. (3) A.I.R. 194i Bom.
(2) (1887) L.R. 14 I.A. 77.
(4) (1880) L.R. 17 I.A. 11, 16.
1403 alienation comes to an end.
(2) Where the right, title and interest of a judgment debtor are set up for sale as to what passes to the auction purchaser is a question of fact in each case dependent upon what was the estate put up for sale, what the Court intended to sell and what the purchaser intended to buy and did buy and what he paid for.
(3) The words di right, title and interest " occurring in section 155 of the Bombay Land Revenue Code have the same connotation as they had in the corresponding words used in the Code of Civil Procedure existing at the time the Bombay Land Revenue Code was enacted.
(4) In execution proceedings it is not necessary to implead the sons or to bring another suit if severance of status takes place pending the execution proceedings because the pious duty of the sons continues and consequently there is merely a difference in the mode of enjoyment of the property.
(5) The liability of a father, who is a managing director and who draws a salary or a remuneration, incurred as a result of negligence in the discharge of his duties is not an avyavaharika debt as it cannot be termed as " repugnant to good morals ".
In the result the appeal fails and is dismissed with costs.
SINHA J.
I agree to the order proposed.
Appeal dismissed.
[/INST]The respondent Delhi Cloth Mills has a complex over an area of 63 acres at Bara Hindu Rao and Kishan Gnaj, Delhi, which is a nonconforming area and the industry of the kind in which the mill is engaged in was required to be shifted consequent upon the enforcement of Master Plan prepared by Delhi Development Authority under the Delhi Development Act, 1966, which plan amongst other things was to assign land use.
The Delhi Cloth Mills in September 1982, approached the DDA and put forth a proposal for shifting the mill and for redeveloping the Mill area for group housing and flatted factories.
The DDA by Resolution No. 26 agreed to the scheme to be implemented in phases but it took care to examine the matter further from Delhi 's economics point of view.
In September 1983, the DDA turned down the request of the respondent for allotment of an alternate site in a conform ing area for shifting the mill.
Thereupon the Mill applied to the Secretary, Labour/Labour Commissioner, Delhi Adminis tration for permission to close down the Mill under Sec.
25(D) of the Industrial Disputes Act, on the ground that the Mill could not be kept located in a non coforming area as otherwise penal consequences would follow.
On April 15, 1985, the request of the Mill was turned down by the Secre tary, Labour/Labour Commissioner.
Thereupon the Delhi Mill filed a writ petition before the High Court for direction that the DDA be directed to implement its resolution No. 26 dated Feb. 1, 1983.
It may be mentioned here that during the pendency of the writ petition before the High Court, DDA had reviewed the situation and passed a fresh resolution No. 3 dated August 1, 1986 reviewing the earlier resolution dated Feb. 1, 1983 recalling the grant of approval with regard to the scheme propounded by the DCM.
Thereafter DDA reiterated its Resolution of August 1, 1986 by another resolution dated November 3, 1986.
952 The High Court quashed the two later resolutions and re stored the resolution dated February 1, 1983.
It took the view that the Mill could not be kept working in a non con forming area as otherwise it would attract penal action under the law after the lapse of three years from Jan. 18, 1986.
Both Union of India and DDA have filed appeals in this Court by special leave against the High Court 's order.
In the meantime DCM filed a writ petition in the High Court which was allowed by a Full Bench of the High Court on March 1, 1989 ordering closure of the Mill.
Delhi Adminis tration filed special leave petition in this Court against the said order and the Mill filed another special leave petition against the order of the High Court dated 3.3.1989 extending time for grant of permission by the Lt. Governor for Closure of the factory till March 30, 1989.
When these matters reached hearing in this Court, DCM and its employees had reached an agreement in the matter of closure of the factory.
The Special Leave Petitions were therefore dis missed by this Court; and on the file of this Court remained these two appeals.
Dismissing the appeals with a direction, this Court, HELD: The factory has been ordered to be closed and the employer and the employees have entered a settlement.
The supposed basis for reviewing or recalling resolution dated February 1, 1983 on the basis of its affectation to the industry and economy of Delhi as also to the workmen has vanished.
On this footing and on the events which have come by, the challenge to the judgment and order of the High Court loses rigour.
[956F G] Resolution No. 26 dated February 1, 1983, approving the scheme is given by the DCM provided that the scheme had taken all necessary safeguards and controls which would help triggering re development and rehabilitation in the congest ed areas of the central core of the capital.[956G] Appeals dismissed conveying a direction that the DDA shall grant the DCM conditional approval subject to removal of the enumerated objections raised or such of them as are valid and tenable in law after DCM is heard by the Municipal Corporation of Delhi.
The matter be formalised forthwith by the DDA and other authorities connected therewith within eight weeks so that the settlement between the workers and the DCM and other matters connected do not stagnate and move to the benefit of all concerned.
[960G H] 953
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<s>[INST] Summarize the judgementCriminal Appeal No. 250 of 1964.
Appeal from the judgment, and order dated March 14, 1963 of the Gujarat High Court in Criminal Revision Application No. 124 of 1961.
R. Ganapathy Iyer and S.P. Nayar, for the appellant.
M.V. Goswami and C.C. Patel, for the respondent.
The Judgment of the Court was delivered by Hidayatullah, J.
In this appeal by certificate under article 134( 1 ) (c) of the Constitution the State of Gujarat appeals against 178 the judgment, March 14, 1963, of the High Court of the State acquitting the respondents of diverse offences under the Forward Contracts (Regulation) Act, 1952.
Originally 31 persons were charged before the Judicial Magistrate, Ahmedabad, who acquitted 14 and convicted the rest.
The present respondents, who are 11 in number (accused 1 to 9, 11 and 12), were convicted under section 20(1)(c) of the Act and fined Rs. 51/ (15 days ' S.1.
in default).
They were also convicted under section 21(b) of the Act but no separate sentence was imposed.
Nine of them (accused 1 to 9) were further convicted under section 21(c) of the Act and fined Rs. 25/ (one week 's S.1.
in default).
The remaining accused were convicted under section 21 (b).
All appealed to the Court of Sessions Judge.
The conviction of accused 1 to 9, 11 and 12 was maintained but conviction under section 20(1)(b) was substituted for that under section 20(1)(c).
The other accused ' were convicted of all the charges.
The High Court was then moved in revision.
All the accused were acquitted of all the charges.
The State Government now appeals.
All respondents are members of the Ghee and Tel Brokers Association Ltd., Ahmedabad.
Nine of them are Directors and two of these are President and Secretary of the Association.
The accused, who are not before us, were brokers and servants of the Association or of the brokers.
The prosecution case is this: The Association has an office where the members and brokers used to enter into contracts for the sale and purchase of groundnut oil.
These contracts were largely speculative.
A large number of contracts used to be entered into but were not performed by actual delivery and payment of price.
They were adjusted on a due date after the expiry of a fixed period.
This period was generally from the 5th of one calendar month to the 25th of the following month and the latter was the due date.
On each Saturday during the period the Association exhibited the prevailing rate and according to that rate cross transactions entered earlier were adjusted and the persons in loss deposited money representing their particular losses with the Association.
On the due date all outstanding.transactions were finally adjusted by cancelling sales against purchases and delivery used to be ordered in respect of the balance which had to be completed by the end of the month of the due date.
During the stated period extensive trading through sales and purchases took place without any delivery.
Each member could enter into as many transactions of either kind as he liked provided that each transaction was in multiple of 50 Bengali Maunds.
Between March 5 and April 25, 1957 the total transactions put through totalled 4,33,600 Bengali Maunds but the actual delivery on the due date was about 5,500 Bengali Maunds only, that is to say, just over 11/4 per cent.
The share of the several operators in these deliveries was insignificant and the deals were really forward 180 any such member, becomes illegal, and the contract itself becomes void, except in the case of a person who has no knowledge that the transaction is prohibited.
We are not concerned with sections 16 and 17 and may omit them from consideration.
Then comes section 18, sub section (1) whereof provides: "18.
Special provisions respecting certain kinds of forward contracts. (1) Nothing contained in Chapter III or Chapter IV shall apply to non transferable specific delivery contracts for the sale or purchase of any goods: Provided that no person shall organise or assist in organising or be a member of any association in any area to which the provisions of section 15 have been made applicable (other than a recognised association) which provides facilities.
for the performance of any non transferable specific delivery contracts by any party thereto without having to make or to receive actual delivery to or from the other party to the contract or to or from any other party named in the contract.
" This sub section read with sections 20 and 21 is at the foundation of :the charge and as section 19 is irrelevant here, we may proceed to read them at once.
We are concerned only with cls.
(b) and (c) of sub section
(1) of section 20 and (b) and (c) of section 21 and will, therefore.
omit the other clauses: "20.
Penalty for contravention of certain provisions of Chapter IV. (1) Any person who (a) (b) organises, or assists in organising, or is a member of, any association in contravention of the provisions contained in the proviso to sub section (1) of section 18; or (c) enters into any forward contract or any option in goods in contravention of any of the provisions contained in sub section (1) of section 15, section 17 or section 19, shall, on conviction, be punishable with imprisonment for a term which may extend to one 'year, or with fine, or with both.
179 transactions in which there was no intention to take or give delivery.
The prosecution, therefore, submitted that these were forward contracts prohibited under the Act and as the Association was not recognised the offences charged were committed.
The High Court having acquitted all the accused the State ' contends now that the acquittal recorded by.
the High Court is wrong and proceeds on a misapprehension of the provisions of the Act and of the facts on which the charges rested.
To consider the submissions of the parties the relevant provisions of 'the Act, which has been passed, among other things, to regulate forward contracts, will have to be seen.
Before we do so we may first glance at some definitions leaving out those attributes of the terms defined in which we are not interested.
"Forward contract" under the Act means a contract which is not a ready delivery contract but a contract for future delivery (section 2(c) ).
A "ready delivery contract" is one in which there is delivery and payment of price either immediately or within a period which is not to exceed 11 days even by consent of parties or otherwise (section 2(1) ).
The expressions "transferable specific delivery contract" and "non transferable specific delivery contract" are defined ' with reference to the latter expression which means a specific delivery contract, the rights or liabilities under which are not transferable (section 2 (f)) and "specific delivery contract ' means a forward delivery contract which provides for actual delivery of specific qualities or types of goods either immediately or during a period not exceeding 11 days at a price fixed thereby or to be fixed in the manner thereby agreed and in which the names of both the buyers 'and sellers are mentioned (section 2(m) ).
The effect of these definitions is clearly to distinguish, firstly, forward contracts from ready delivery contracts by limiting the time in which ready delivery contracts must be completed by delivery and payment of price; secondly, to distinguish between transferable and non transferable specific delivery contracts; and finally to distinguish forward contracts in which there is either no provision for actual delivery or the parties are not named, from a specific delivery contract.
The Act then proceeds to lay down in Chapter III the conditions of recognition of Associations.
Since this Association was admittedly not recognised it is unnecessary to review the provisions of that Chapter.
Chapter IV then makes certain provisions regarding forward contracts and option in goods.
Chapter V then provides for penalties.
The relevant provisions of these two Chapters need to be carefully considered.
Section 15(1) declares illegal forward contracts in notified goods and on the notification so issuing every forward contract in notified goods otherwise than between members of a recognised association or through or with 181 "21.
Penalty for owning or keeping place used for entering into forward contracts in goods.
Any person who (b) without the permission of the Central Government, organises, or assists in organising, or becomes a member of, any association, other than a recognised association, for the purpose of assisting in, entering into or making or performing, whether wholly or in part, any forward contracts in contravention of any of the provisions of this Act, or (c) manages, controls or assists in keeping any place other than that of a recognised association, which is used for the purpose of entering into or making or performing, whether wholly or in part, any forward contracts in contravention of any of the provisions of this Act or at which such forward contracts are recorded or adjusted, or rights or liabilities arising out of such forward ' contracts are adjusted, regulated or enforced in any manner whatsoever, or shall, on contravention, be punishable with imprisonment which may extend to two years, with fine, or with both.
" The respondents were charged under sections 20 (1) (b).
, 20 (1) (c) and 21(a), (b), (c) and (f).
As the State does not press its case under section 21 (a) and (f) they have been left out.
Before we analyse the penalty sections it is necessary to see whether the case fails within section 18 (1) of the Act.
It is established in the case that the Association was unregistered.
It is also clear that the contracts, although they appeared to be non transferable specific delivery contracts were not intended to be completed by delivery immediately or within a period of 11 days from the date of the. contract.
In fact week after week contracts were cancelled by cross transactions and there was no delivery.
Instead of payment of price losses resulting from the cross transactions were deposited by the operators in loss with the Association.
Further, on the due date also, there was no delivery but adjustment of all contracts of sales against all contracts of purchase between the same parties and delivery was of the outstanding balance.
Even this delivery was often avoided by entering into fresh contract at the 182 rate prevailing on the due date, as part of the transactions in the next period.
There is evidence also to establish this.
In other words, the transactions on paper did seem to comply with the regulations but in point of fact they did not and the Association arranged for settlement of the entire transactions (barring an insignificant portion if at all) without delivery.
Turning now to the provisions of sub section
(1) of the 18th section it is clear that the provisions of Chapters III and IV would not have applied to the respondents if their transactions were true non transferable specific delivery contracts.
They would have been so if the nature of the transaction, not on paper, but in actuality was such as the Act contemplates.
This is why the proviso to section 18 has been added to prohibit certain things.
The proviso enacts that no person shall organise or assist in organising or be a member of an association (except a recognised association) which provides facilities for the performance of any specific delivery contract without having to make or to receive actual delivery.
The Legislature contemplates that the first sub section of section 18 might be complied with in the documents evidencing the contract but in actuality the contract might be differently performed and has, therefore, provided for 'the. identical situation which, arises in this case.
Now the difference between the Magistrate and the Sessions Judge arose on the application of the first sub section of section 18 with its proviso.
The Magistrate felt that the transactions were not non transferable specific delivery contracts and the matter fell within the proviso.
Having found this, it is not a little surprising that he did not apply section 20(1)(b), which was clearly attracted.
His reasoning on this point is difficult to appreciate.
He seems to think that as the first sub section of the eighteenth section dealt with non transferable specific delivery contracts, it had no application here.
Therefore, the charge of being members of an association in contravention of the proviso thereto did not survive and hence no offence under section 20(1)(b) was disclosed.
In this the Magistrate was clearly in error.
Section 18( 1 ) speaks of true non transferable specific delivery contracts but the proviso at the same time makes it illegal for an unrecognised association to so arrange matters that non transferable specific delivery contracts will be worked out without actual delivery.
The Magistrate should have seen that the conduct of the members of this unrecognised association was precisely this and was, therefore, prohibited by the proviso and directly punishable under section 20(1 )(b).
An offence under that clause of section 20(1) and also under el.
(c) of that section read with section 15 was made out.
There was no question of considering the matter first under the main part of the first subsection and 'then to put the proviso out of the way because the first sub section did not apply.
The Magistrate, however, con 183 victed the members under section 21 (b) for organising an unrecognised association for the purpose of assisting in or entering into or making or performing, whether wholly or in part, any forward contracts in contravention of the provisions of the Act and further under section 21 (c) for managing, controlling or assisting in keeping a place other than that of a recognised association where forward contracts in contravention of the Act or at which forward contracts are recorded or adjusted or rights or liabilities arising out of such forward contracts are adjusted, regulated or enforced in any manner whatsoever.
When the respondents.
appealed to the Sessions Judge, the conviction under section 21 (b) and (c) was confirmed and the other conviction was altered from section 20(1)(c) to section 20(1)(b).
The Sessions Judge rightly pointed out that the so called non transferable specific delivery contracts were so arranged that they could be resolved after the period of eleven days and without actual delivery.
The Sessions Judge was of the opinion that the respondents had acted in breach of the proviso to section 18 (1 ) and were clearly guilty of the offence.
In a precise and clear judgment the Additional Sessions Judge explained the pertinent sections and rightly held the proviso to section 18(1) and section 20(1)(b) applicable.
The High Court then in revision held that it was not open to the Sessions Judge to alter the conviction from section 20(1)(c) to section 20( 1 )(b) as the acquittal under the latter section by the Magistrate was not appealed against and in an appeal from a conviction there could be no change of finding to convert art acquittal into conviction.
The High Court also held that no offence under section 21 (b) or (c) was made out.
In a fairly long judgment the High Court pointed out that the decision of this Court in The State of Andhra Pradesh vs Thadi Narayana(1) prohibited the alteration of the finding.
The High Court then went further to hold that there could not be a conviction under section 20( 1 ) (c) as the Sessions Judge had acquitted the appellants and there was again no appeal against that acquittal.
The High Court also set aside the conviction under section 21 (b) and (c).
The High Court reached its conclusion on the 'basis of the finding of the Sessions Judge that the contracts entered into were non transferable specific delivery contracts and the appellants were, therefore, not guilty of the offence under section 20(1)(c) of the Act.
The High Court then proceeded to reason that as no part of the Act prohibited performance of non transferable specific delivery contracts otherwise than by making or receiving actual delivery, the acts of the appellants were not offences under the Act.
The learned Judge while dealing with section 18 ( 1 ) proviso observed: (1) 184 "The performance of a non transferable specific delivery contract by a mode other than giving and taking of actual delivery would be contrary to law only if there is some provision of law which prohibits it.
But unfortunately for the prosecution, the Legislature has not chosen to enact any such provision.
The only nearest approximation I could find was the proviso to sub section(1) of section 18 but that proviso does not prescribe that a non transferable specific delivery contract shall be performed by making and receiving actual delivery and that the parties to such a contract shall not perform it otherwise than 'by making and receiving actual delivery.
All that it enacts is that no person shall organise or assist in organising or be a member of any association in any area to which the provisions of section 15 have been made applicable (other than a recognised association) which provides facilities for the performance of any non transferable specific delivery contract by any party thereto without having to make or receive actual delivery to or from the other party to the contract or to or from any other party named in the contract.
What this proviso seeks to achieve is to secure that no Association other than a recognized Association shall provide facilities for performance of a non transferable specific delivery contract by the parties thereto without having to make or receive actual delivery.
But it is a long step in the argument to conclude from the proviso that performance of a non transferable specific delivery contract otherwise than by making and receiving actual delivery is prohibited.
The language of the proviso cannot bear any such extended artificial construction. . " The learned Judge was clearly in error and misunderstood the connection between the first sub section and its proviso.
Distinction is made in the proviso between recognised and unrecognised associations.
Persons can organise and assist in organising or be member of an association which is recognised even if the association provides for performance of non transferable specific delivery contracts without actual delivery.
The prohibition is against persons arranging for avoidance of delivery through an unrecognised association and read with the penalty sections, it is clear that such.
acts are rendered illegal.
If the acts are illegal then non transferable specific delivery contracts by members of unrecognised associations become illegal also.
They are forward contracts and being entered into otherwise than between members of a recognised association or through or with any such member are rendered illegal by section 15. 185 Thus there is no doubt whatever in the case that offences under section 21(b) and (c) were committed.
It is enough to read these clauses to see that they fit the acts of nine respondents (accused 1 9) and their position vis a vis the unrecognised association of which they were directors makes them liable to penalty under section 21 ( 'b) and (c) but the remaining two respondents (accused 11 and 12) being only members are liable to penalty under section 21 (b) only.
As regards the other offences under section 20(1)(b) and (c) we are clear that these offences were also committed.
But as the Sessions Judge acquitted them under cl.
(c) and there was no appeal to the High Court we say nothing about it.
As regards the offence under section 20(1)(b) the Magistrate did not clearly record a finding of acquittal.
However, his reasoning seems to be in favour of holding that the clause did not cover the case as the contracts were not non transferable specific delivery contracts.
His finding was the reverse of the finding of the Sessions Judge.
The question thus remains whether the Sessions Judge could alter the finding in an appeal from a conviction (and the High Court too if it so chose) when it was a question of choosing between two clauses of a penalty section depending on whether the true nature of the contracts was as held by the Magistrate.
The ruling of this Court cited earlier was invoked to suggest that such a course was not possible for the Sessions Judge or the High Court.
We do not pause to consider whether the ruling prohibits such a course and if it does whether it does not seek to go beyond the words and intendment of section 423(1)(b) of the Code of Criminal Procedure.
This is hardly a case in which to consider such an important point.
We, therefore, express no opinion upon it.
It is sufficient to express our dissent from the High Court on the interpretation of the Act and hold the respondents guilty of infractions where the ruling does not stand in the way.
We accordingly set aside the acquittal of the respondent under cls.
(b) and (c) of section 21 and restore their conviction under those clauses as confirmed by the Sessions Judge.
We sentence all the respondents to a fine of Rs. 25 (or one week 's simple imprisonment in default) under section 21(b).
No separate sentence under section 21 (c) is imposed on the respondents who were original accused Nos.
The appeal shall be allowed to the extent indicated.
in this paragraph.
Y.P. Appeal allowed in part.
[/INST]The respondent municipal Corporation increased the rateable value of a building assessed the actual rent recovered by Appellant owner, by adding the income derived by the owner under an agreement entitling a Company to display an advertisement on the roof of the building.
The owner successfully filed a complaint against the increase which was upheld by the Small Cause Court to the High Court, and its confirmed the enhancement In appeal, this Court: HELD: The High Court was right in confirming the enhancement of the annual rent.
If a building or a part of it yields an extra income over and above the actual rent derived from it, such income on the terms of, section 154 (i) of the Bombay Municipal Corporation Act, can legitimately be taken into consideration by the assessing authority while determining the annual rent on the ground that a hypothetical tenant would take such extra income into account while considering what rent he can afford to offer for such building.
[553B] The hypothetical tenant includes all persons who might possibly take the property including the persons actually in occupation, even though he happens to be the owner of the property.
The rent is that which he will pay in the "higgling of the market", taking into account all existing circumstances and any relevant future trends.
Therefore, the mere fact that the income from the agreement is not rent but licence fee does not justify on any principle of rating ,or any construction of section 154 of the Act, disregard of it, while estimating the rent which the property would be expected to fetch.
[549B; C; 550G H] Though the owner of the building could not charge rent over and above that which was permissible under the provisions of the Rent Act, there was nothing in that Act which prohibited him from charging an amount from an advertiser in consideration of displaying his advertisement.
[551D] Mahad Municipality vs Bombay S.R.T. Corporation, LXIII Bom bay Law Reporter, 174; Cartwright vs Sculoates Union, ; Robinson Bros. vs Houghton and Chester le Street Assessment Committee, , Taylore vs Overseers of Pandleton, , Wilson vs Tavender , Corporation of Calcutta vs Anil Prakash Basu A.I.R. 1958 Cal. 423, referred to.
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<s>[INST] Summarize the judgementN: Civil Appeal No. 130 of 1959.
Appeal by special leave from the Award dated September 5, 1958, of the Industrial Tribunal, Bombay, in Reference (I.T.) No. 187 of 1958.
C. K. Daphtary, Solicitor General of India, G. B. Pai and Sardar Bahadur, for the appellants.
H. R. Gokhale, section B. Naik and K. R. Chaudhury, for respondent No. 1. 1960.
April 6.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal by special leave in an industrial matter.
The appellant is The Standard Vacuum Refining Company of India Limited (hereinafter called the company).
A dispute was raised by the workmen of the company (hereinafter called the respondents) with respect to contract labour employed by the company for cleaning maintenance of the refinery, (plant and premises) belonging to the company.
The system in force in the company is that this work is given to contractors for a period of one year from October 1 to September 30.
At the time when the reference was made the contract.
was with Ramji Gordhan and Company for the period from October 1, 1957, to September 30, 1958.
On April 27, 1957, the respondents made a demand for abolition of the contract system that prevailed in the company and for absorbing the workmen employed through the contractors into the regular service of the company with retrospective effect from the date of their employment in the company through the contractors.
The case of the respondents was that the contractor used to change sometimes from year to year with the 468 result that the workmen employed by the previous contractor were thrown out of employment.
As an instance, it was said that previous to October 1, 1957, the contract was with Gowri Construction Company.
That company employed 67 workmen to do the work.
But when the contract was given to Ramji Gordhan and Company, all these 67 workmen were thrown out of employment, though 40 of them were subsequently re employed as fresh employees by Ramji Gordhan and Company.
The result of the system therefore was that there was no security of service to the workmen who were in effect doing the work of the company.
Besides the contractors were paying much less to the workmen than the amount paid by the company to its unskilled regular workmen.
Further, the workmen of the contractors were not entitled to other benefits and amenities such as provident fund, gratuity, bonus, privilege leave, medical facilities and subsidised food and housing to which the regular workmen of the company were entitled.
The work was of a permanent nature, but the contract system was introduced to deny the workmen the rights and benefits which the company gave to its own workmen.
The dispute was taken to the conciliation officer.
When conciliation failed, the Government of Bombay made the following reference on May 13, 1958.
" The contract system for cleaning the premises and plant should be abolished and workers working in the refinery through the Ramji Gordhan and Company should be treated as workers of the Standard Vacuum Refining Company of India Limited, Bombay, and wage scales, conditions of service, etc., that are applicable to the workers of the refinery be made applicable to them.
Past service of these workers should be counted and they should be treated as continuously in the service of the Stanvac refinery from the date of their entertainment.
" The company resisted the claim and raised two main contentions.
In the first place it was contended that the reference under section 10 of the , No. 14 of 1947 (hereinafter called the Act), was incompetent.
In the second place it was contended 469 that the work done by the contractor 's workmen was not germane to the manufacturing process and was therefore entrusted to the contractor.
If the workmen of the contractor were not satisfied with the conditions of service, they could take up the, matter with the contractor and the company had nothing to do with it.
As to the difference between the wages and benefits and amenities of the regular workmen of the company and the contractor 's workmen, it was said that the work of the two sets of workmen was very different and that in any case this was a matter between the contractor and its workmen.
The contractor was an independent employer and it was incorrect to say that the real employer was the company.
It was for the company to decide what was the best method of carrying on its business and the industrial tribunal should not interfere with that function of the management.
The tribunal held that the reference was competent.
On the merits it was of opinion that the work which was being done through the contractor was necessary for the company and had to be done daily, though it was not a part of the manufacturing process.
It further held that doing of this work through annual contracts resulted in the deprivation of security of service and other benefits, privileges, leave, etc., for the workmen of the contractor.
Therefore considering the nature of the case it was of opinion that this was a proper case where a direction should be given to the company to abolish the contract system with respect to this work.
In the result the company was directed with effect from November 1, 1958, to discontinue the practice of getting this work done through contractors and to have it done through workmen engaged by itself.
The other part of the demand, namely, that all the workmen of the contractor should be taken over by the company and their past services should be counted and that they should be given the same wage scale and conditions of service, etc., which were applicable to the regular workmen of the company was rejected.
The company was further directed to engage regular workmen for this work and in so doing it was to give preference to the workmen employed by Ramji 60 470 Gordhan and Company.
Wage scale and other benefits to be given to these workmen were left to the company to be determined by it.
Learned.
Solicitor General appearing for the company raised two contentions before us, namely, (i) is this dispute an industrial dispute and therefore the reference was competent ? and (ii) is the tribunal justified in interfering with the management function as to how it should get its work done ? Re.
(i) : The contention under this head is that there is no dispute between the company and the respondents and that it was not open to the respondents to raise a dispute with respect to the workmen of some other employer (in this case, Ramji Gordhan and Company).
Reliance in this connection was placed on the definition of " industrial dispute " in section 2 (k) of the Act and the judgment of this Court in Workmen of Dimakuchi Tea Estate vs The Management of Dimakuchi Tea Estate (1).
The definition of " industrial dispute " in section 2 (k) requires three things (i) There should be a dispute or difference; (ii) The dispute or difference should be between employers and employers, or between employers and workmen or between workmen and workmen; (iii) The dispute or difference must be connected with the employment or non employment or the terms of employment or with the conditions of labour, of any person.
The first part thus refers to the factum of a real and substantial dispute, the second part to the parties to the dispute and the third to the subject matter of the dispute.
The contention of the learned Solicitor General is two fold in this connection, namely, (i) that there is no real or substantial dispute between the company and the respondents, and (ii) that the subject matter of the dispute is such that it cannot come within the terms of the definition in section 2 (k).
The first submission can be disposed of shortly.
There is undoubtedly a real and substantial dispute between the company and the respondents on the question of the employment of contract labour for the (1) ; 471 work of the company.
The fact that the respondents who have raised this dispute are not employed on contract basis will not make the dispute any the less a real or substantial dispute between them and the company as to the manner in which the work of the company should be carried on.
The dispute in this case is that the company should employ workmen directly and not through contractors in carrying on its work and this dispute is undoubtedly real and substan tial even though the regular workmen (i.e., the respondents) who have raised it are not employed on contract labour.
In Dimakuchi case (1) to which reference has been made, the dispute was relating to an employee of the tea estate who was not a workman.
It was nevertheless held that this was a real and substantial dispute between the workmen and the company.
How the work should be carried on is certainly a matter of some importance to the workmen and in the circumstances it cannot be said that this is not a real and substantial dispute between the company and its workmen.
Thus out of the three ingredients of section 2(k) the first is satisfied; the second also is ,satisfied because the dispute is between the company and the respondents ; it is the third ingredient which really calls for determination in the light of the decision in Dimakuchi case (1).
Section 2(k), as it is worded, would allow workmen of a particular employer to raise a dispute connected with the employment or non employment, or the terms of employment or with the conditions of labour of any person.
It was this aspect of the matter which was considered in Dimakuchi case (1) and it was held that the words " any person " used in section 2(k) would not justify the workmen of a particular employer to raise a dispute about any one in the world, though the words " any person " in that provision may not be equated with the words " any workman ".
The test therefore to be applied in determining the scope of the words " any person " in section 2(k) was stated in the following words at pp.
1174 75: " If, therefore, the dispute is a collective dispute, the party raising the dispute must have either a direct interest in the subject matter of dispute or a (1) ; 472 substantial interest therein in the sense that the class to which the aggrieved party belongs is substantially affected thereby.
It is the community of interest of the class as a whole class of employers or class of workmen which furnishes the real nexus between the dispute and the parties to the dispute.
We see no insuperable difficulty in the practical application of this test.
In a case where the party to a dispute is composed of aggrieved workmen themselves and the subject matter of the dispute relates to them or any of them, they clearly have a direct interest in the dispute.
Where, however, the party to the dispute also composed of workmen espouse the cause of another person whose employment or non employment, etc., may prejudicially affect their interest, the workmen have a substantial interest in the subject matter of dispute.
In both such cases the dispute is an industrial dispute.
" We have therefore to see whether the respondents who have raised this dispute have a direct interest in the subject matter of the dispute or a substantial interest therein in the sense that the class to which the respondents belong is substantially affected thereby and whether there is community of interest between the respondents and those whose cause they have espoused.
There can be no doubt that there is (community of interest in this case between the respondents and the workmen of Ramji Gordhan and Company.
They belong to the same class and they do the work of the same employer and it is possible for the company to give the relief which the respondents are claiming.
The respondents have in our opinion also a substantial interest in the subject matter of the dispute, namely, the abolition of the contract system in doing work of this kind.
The learned Solicitor General particularly emphasised that there was no question of the interest of the respondents being prejudicially affected by the employment or nonemployment or the terms of service or conditions of labour of the workmen of Ramji Gordhan and Company and placed reliance on the words " may prejudicially affect their interest " appearing in the observations quoted above.
We may, however, mention that 473 the test laid down is that the workmen espousing the cause should have a substantial interest in the subjectmatter of the dispute, and it was only when illustrating the practical application of the test that this Court used the words "may prejudicially affect their interest ".
Besides it is contended by Mr. Gokhale for the respondents that even if prejudicial effect on the interest of the workmen espousing the cause is necessary, this is a, case where the respondents ' interest may be prejudicially affected in future in case the contract system of work is allowed to prevail in this branch of the work of the company.
He submits that if the company can carry on this part of the work by contract system it may introduce the same system in other branches of its work which are now being done by its regular workmen.
We do not think it necessary to go into this aspect of the matter as we have already indicated that prejudicial effect is only one of the illustrations of the practical application of the test laid down in Dimakuchi case (1), viz., substantial interest in the sense that the class to which the aggrieved party belongs is substantially affected thereby.
It seems to us therefore that the respondents have a community of interest with the workmen of Ramji Gordhan and Company who are in effect working for the same employer.
They have also a substantial interest in the subject matter of the dispute in the sense that the class to which they belong (namely, workmen) is substantially affected thereby.
Finally the company can give relief in the matter.
We are therefore of opinion that all the ingredients of section 2(k) as interpreted in Dimakuchi case(1) are present in this case and the dispute between the parties is an industrial dispute and the reference was competent.
(ii) : We now come to the question whether the tribunal was justified in giving the direction for the abolition of the contract system in the manner in which it has done so.
In dealing with this question it may be relevant to bear in mind that industrial adjudication generally does not encourage the employment of contract labour in modern times.
As has been observed by the Royal Commission on Labour " whatever the merits of the system (1) ; 474 in primitive times, it is now desirable, if the management is to discharge completely the complex responsibility laid upon it by law and by equity, that the manager should have full control over the selection, hours of work and payment of the workers ".
The same opinion has been expressed by several Labour Enquiry Committees appointed in different States.
We agree that whenever a dispute is raised by workmen in regard to the employment of contract labour by any employer it would be necessary for the tribunal to examine the merits of the dispute apart from the general consideration that contract labour should not be encouraged, and that in a given case the decision should rest not merely on theoretical or abstract objections to contract labour but also on the terms and conditions on which contract labour is employed and the grievance made by the employees in respect thereof.
As in other matters of industrial adjudication so in the case of contract labour theoretical or academic considerations may be relevant but their importance should not be overestimated.
Let us then consider the contract labour system in the present case.
The contract in this case related to four matters.
But the reference is confined to one only, viz., cleaning maintenance work at the refinery including premises and plant and we shall deal with that only.
So far as ' this work is concerned, it is incidental to the manufacturing process and is necessary for it and of a perennial nature which must be done every day.
Such work is generally done by workmen in the regular employ of the employer and there should be no difficulty in having regular workmen for this kind of work.
The matter would be different if the work was of intermittent or temporary nature or was so little that it would not be possible to employ full time workmen for the purpose.
Under the circumstances the order of the tribunal appears to be just and there are no good reasons for interfering with it.
Our attention in this connection was drawn to D. Macropollo And Co. (P) Ltd. vs D. Macropollo And Co. (P) Ltd. Employees ' Union (1) and it was urged that the tribunal should not have interfered with the (1) A.I.R. 1958 S.C. 1012.
475 management 's manner of having its work done in the most economical and convenient way that it thought proper.
It was pointed out that this was not a case where the contract system was a camouflage and the workmen of the contractor were really the workmen of the company.
It may be accepted that the contractor in the present case is an independent person and the system is genuine and there is no question of the company carrying on this work itself and camouflaging it as if it was done through contractors in order to pay less to the workmen.
But the fact that the contract in this case is a bona fide contract would not necessarily mean that it should not be touched by the industrial tribunals.
If the contract had been mala fide and a cloak for suppressing the fact that the workmen were really the workmen of the company, the tribunal would have been justified in ordering the company to take over the entire body of workmen and treat it as its own workmen.
But because the contract in this case was bona fide the tribunal has not ordered the company to take over the entire body of workmen.
It has left to it to decide for itself how many workmen it should employ and on what terms and has merely directed that when selection is being made preference should be given to the workmen employed by the present contractor.
In Macropollo case (1), this Court held that the reorganisation had been adopted by the employer for reasons of economy and conveni ence and was bona fide.
In that case the main business of the concern was the selling agency of various cigarette manufacturing concerns.
Before 1946 the concern used to employ distributors for the purpose and these distributors used to employ salesmen.
In 1946 there were communal riots in Calcutta and therefore the concern took over the salesmen in its direct employment in order to reorganise them on communal basis in the then prevailing circumstances.
In 1954 the concern decided to close down its own outdoor sales department and revert to the distributor system.
It was in that context that certain workmen had to be retrenched, and this Court held that the reorganisation scheme adopted in 1954 for reasons of economy and convenience was bona fide (1) A.I.R. 1958 S.C. 1012.
476 and if it resulted in retrenchment that was inevitable.
These facts would show that in that case there was reorganisation of the business resulting in retrenchment.
In the present case no such thing arises and the only question for decision is whether the work which is perennial and must go on from day to day and which is incidental and necessary for the work of the refinery and which is sufficient to employ a considerable number of wholetime workmen and which is being done in most concerns through regular workmen should be allowed to be done by contractors.
Considering the nature of the work and the conditions of service in the present case we are of opinion that the tribunal 's decision is right and no interference is called for, except that the date ;should now be changed, for such a direction cannot be put into force with retrospective effect from November 1, 1958.
It appears that a few months remain before the present contract will come to an end.
We think that for these few months the present system may continue.
We therefore dismiss the appeal with this modification that the order of the tribunal will be carried into effect from such date on which the present contract in force in the company comes to an end.
The respondents will get their costs from the company.
Appeal dismissed subject to modification.
[/INST]The appellant 's manager was violently attacked by its workmen as a result of which he sustained serious injuries.
The workers in the lower division also threatened the appellant 's staff working in that division that they would murder them if they worked there.
The appellant was therefore compelled to notify that the division would be closed until further notice.
Subsequently as a result of conciliation before the labour officer, the division was opened again.
The workers made a claim for lay off compensation under section 25C of the , for the period during which the lower division was closed on the footing that the management for their own reasons did not choose to run the division during that period.
The appellant 's answer was, inter alia, that the closure of the division amounted to a lock out which under the circumstances was perfectly justified and as such the workers were not entitled to claim any lay off compensation: Held ; (1) that the concept of a lock out is essentially different from that of a lay off and where the closure of business amounts to a lock out under section 2(1) of the , 372 it would be impossible to bring it within the scope of a lay off under section 2 (kkk) of the Act.
(2)that the expression " any other reason " in section 2 (kkk) means any reason which is allied or analogous to reasons already specified in that section.
J. K. Hosiery Factory vs Labour Appellate Tribunal of India Anr, A.I.R. 1956 All. 498, approved.
(3) that the lock out which was justified on the facts of the case, was not a lay off and therefore the workmen were not entitled to claim any lay off compensation.
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<s>[INST] Summarize the judgementAppeal No. 463/76.
(Appeal by Special Leave from the Judgment and Order dated 11/12 11 1975 of the Gujarat High Court in L.P.A. No. 113/74).
D.V. Patel, P.H. Parekh and Miss Manju Jetley for the Appellants.
M.C. Bhandare, S.P. Nayar and M.N. Shroff, for the, State of Gujarat.
R. K, Garg and S.C. Agarwala, for Respondents Nos.
5 6 and 8 11.
M.N. Shroff, for the State of Maharashtra.
The Judgment of the Court was delivered by KRISHNA IYER, J.
This is a typical 'service ' appeal, by special leave, which prompts the topical question: Is lit Wiser national policy to process disputes regarding seniori ty, promotion, termination and allied matters affecting the public services, through the docket bound, formalised, methodology of the judicature adopting its traditional, time consuming, tier upon tier system and handicapped by absence of administrative expertise, accessibility to criti cal information and other limitations on the mode and extent of relief, or, alternatively, through built in, high pow ered, but credibility wise less commanding, agencies of composite skills and processes and flexible remedial juris dictions ? 'Justice and Reform ' is a recurrent interroga tion.
Our civil services, if only the static and stratified system were transformed and the men properly oriented and activated, may well prove equal to the dynamic challenges of our times but for the pathetic phenomenon of numbers of officials being locked in long forensic battles.
This litigative pathology of the members of the public services deplorably diverts the undivided energies, sensitive under standing and people based disposition demanded of them for the fulfilment of the Nation 's Tryst with Destiny through implementation of massive 1040 and multiform developmental plans.
Hopefully, constructive thinking on impregnable, competent and quick acting (but not derobed or devalued) intra structures and procedures for improving and accelerating the system of justice to the public services is currently under way.
Now to the merits.
The briefs are big and the arguments long, but the factual matrix and the legal conflicts lend themselves to be condensed without detriment.
The competi tion between two categories of members borne on the cadre of Deputy Collectors of the State of Gujarat viz., direct recruits and in service promotees, on the issue of seniority inter se, with its futuristic career overtones, is the crunch question in this civil appeal.
The grey area of 'service jurisprudence ' covered before us encompasses sever al decisions and if 'by good disputing shall the law be well known ', there has been so much disputation of learned length at the bar that the legal points should have been more pellucid than the precedents read and re read made us feel. 'The aid of the purifying ordeal of skilled argument ' when too lapidary and finical reaches a point of no return, despite Megarry J to the contrary in Cordell vs Second Clanfield Properties Lid. (1).
Seven Deputy Collectors, arriving by direct recruitment in, and after 1963, claim to be ahead, in the gradation list, of their more numerous counterparts former mamlatdars, whose promotional incarnation as Deputy Collectors, dates back to the years 1960 63.
The title of these younger incum bents to be eider in the Civil List is primarily founded on a basic Resolution of Government of July 30, 1959 regulating recruitment to the Deputy Collectors ' cadre by the 'then Bombay State adopting a quota basis.
The Gujarat State, carved out of Bombay and formed on May 1, 1960, continued the system; and so, simplistically presented, the fate of the 'seniority ' struggle critically turns on the construc tion the Bombay Resolution of 1959 bears, the rival versions having been alternately frowned upon or favoured at the original and appellate docks of the High Court.
There are other matters of moment debated at the bar and we will pass on some of them at later stages.
In administrative and legal terms, this case is the projection of the common rivalry for promotional positions between fresh, young recruits and old, seasoned promotees, between alleged excel lence of talented youth and tasted experience of mellowed age.
Sympathies may sway either way and reasons often spring from sympathies.
To be captiously wise in retrospect may itself border on vice.
Even so, we are constrained to observe that when government orders, as here, have the flavour of law and impact upon the fundamental rights and equal opportunities of citizens, they have to be drafted with the case that legal orders deserves lest avoidable litigation should thrive for no better reason than that administrative orders or subsidiary legislation have been drawn up with a casual ness that betrays the skills of insoucience.
Law must be precise, simple, clear, comprehensive and (1) [1968] 3 All E.R. Ch.
1041 there is a duty on the law maker at every level not to injure the community by tengled webs of rules, orders and notifications whose meaning is revealed only through tran scendental meditation or constant litigation.
in a social istic pattern of society there is hardly any part of nation al life or personal life which is not affected by some legal rule or other.
When men have to look to the law from the cradle to the grave, making of even subsidiary laws demands greatest attention.
To begin with the legal beginning is best done with the Bombay Government Resolution of 1959 after giving a thumb nail sketch of the relevant service structure and other minimal particulars.
The composite Bombay State, for purposes of Revenue Administration, had been divided into Divisions which were separate units for promotional prospects, liability to transfer etc., of deputy collectors.
The routine source of recruitment to these posts used to be mamlatdars who were transferred as deputy collectors by promotion.
As early as 1939, a different recruitment policy had been evolved for picking suitable hands from the open market by direct nomi nation.
The inevitable concomitant of a plurality of recruitment categories is the evolution of a workable rule of inter se seniority.
So, by an order of 1941, the mode of determining seniority between 'nominees ' and 'promotees ' was settled.
Service, for seniority purposes, so far as direct recruits were concerned, was to run from the date of their appointment on probation and, in the case of promotee offi cers, such service was to begin with promotion in substan tive vacancies, if continued without break.
For reasons obscure, the direct recruitment scheme of infusion of fresh blood to use the usual validating vascular metaphor to invigorate the Administration, hibernated from 1950 until 1959.
However, the crucial government decision of July 30, 1959 not merely re activated the mode of direct recruitment but fixed the promotion in which recruitment from the two sources was to be made, referred to conveniently as the quota system.
The heart of the debate before us is whether a quota prescription, willy nilly, does postulate ex necessitate a rota process in practice.
We may here read the resolution itself: Deputy Collector: Recruitment of probationers GOVERNMENT OF BOMBAY REVENUE DEPARTMENT Resolution No. RTC.
1157/99153 D Sachivalaya, Bombay, 30th July 1959 Read Government Resolution No. 9313/45, dated the 6th Febru ary 1950.
Government Resolution No. 9313/45, dated the 24th July 1951.
1042 RESOLUTION: Government had for sometime under consideration the question of reviving the system of direct recruitment to the cadre of Deputy Collectors.
It has now been decided that in the interest of administration, the revival of .that system is quite necessary.
Government is accordingly pleased to cancel the orders contained in Government Resolution No. 9313/45, dated 6th February 1950 and those in Government Resolution No. 9313/45, dated the 24th July 1951, in so far as they relate to the recruitment of Bombay Civil Service Executive Branch Deputy Collectors (Upper Division) and to direct that, as far as practicable, 50 per cent of the substantive vacancies occurring in the cadre with effect from 1st January 1959 should be filled in by nomination of candidates to be selected in accordance with the Rules appended herewith.
x x x x x By order and in the name of the Governor of Bombay, G.L. Sheth Secretary to Government" We may also extract the portion from the ' annexed rules of recruitment pertinent to our purpose: "Appointment to the posts of Deputy Collector shall be made either by nomination or by promotion of suitable Mamlatdars: Provided that the ratio of appointment by nomination and by promotion shall, as far as practicable, be 50: 50." The raw materials government proceedings needed for our discussion will be complete if the 1941 Resolution also were read at this stage: "GOVERNMENT OF BOMBAY Political & Services Department Resolution No. 3283/34 Bombay Castle, 21st November, 1941.
x x x RESOLUTION: Government is pleased to direct that the following principles should be observed in determining the seniority of direct recruits and promoted Officers in the provincial services (except the Bombay services of Engineers, Class I) (i) In the case of direct recruits appointed substantively on probation, the seniority should be determined with reference to the date of their appointment on probation.
(ii) In the case of officers promoted to substantive vacancies, the seniority should be determined with reference to the (1 ) Date of their promotion to the (2) substantive vacan cies (3) provided there has 1043 been no break in service prior to their con firmation in those vacancies.
By order and in the name of the Governor of Bombay G.F.S. Collins Chief Secretary to the Govt.
of Bombay Political and Services Department" Flowing out of the fixation of the ratio between the two species of recruits and having a bearing on the issue of seniority is another Resolution of the Bombay Government (continued during the relevant period in Gujarat also by virtue of an omnibus circular of May 1, 1960) of February 3, 1960.
This step became primarily necessary on account of the Reorganisation of States and the abolition of Divisions.
The legal fiction of 'deemed dates of commencement of serv ice ' for the purpose of inter se seniority of personnel drawn from different pre Reorganisation States and from the Divisions within the State on conversion of the deputy collectors ' cadre into a State wide one has been crystal lised in this rule of February 1960.
One more clarificatory proceeding of Government, dated May 27, 1960 has loomed large in Shri Patel 's submissions, especially the Explanation portion thereof and, in a sense, it lends some push to the problematic conclusion.
We there fore read the relevant Government Circular right here: No. GSF 1060 F Government of Gujarat General Administration Department Sachivalaya, Ahmedabad, 27th May 1960 CIRCULAR Read: Government Circular No. GSF 1060, dated the 1st May 1960.
Doubts have arisen as respects the directions given under Government Circular No. GSF 1060 dated the 1st May, 1960 .
To remove any doubt in that behalf, therefore, Government is pleased to direct that the following Explanation shall be and shah be deemed always to have been added to the said circular, namely Explanation : Nothing herein shall apply to appointments of officers, authorities or persons or to the constitution of tribunals or other bodies which may be made by Government on or after the 1st May, 1960 and the condi tions of service of the officers, authorities or persons appointed or the members of the Tribunals or bodies so constituted.
By order and in the name of the Governor of Gujarat.
Sd/ V. Isvaran Chief Secretary to the Government.
" Reliance has been placed on the Explanation quoted above to emancipate Government from compliance with the Bombay rules 1044 regarding appointments of officers or their conditions of service, an aspect we will expand, if needed.
Prima facie, while we agree that the new State is not bound by adminis trative directions of the parent State and may free itself from it by appropriate steps, an unguided power is suspect and a carte blanche in doing what Government fancies with any of its servants is subversive of ordered societies.
We have no further probe to make into this Resolution in the present case and leave it at that.
The fact of the matter is that during 1959 62, no direct recruitments were made but many promotions were effected.
Afterwards, i.e., in 1963 and later, direct recruits were appointed who, contrary to their legal aspira tion, were not assigned seniority over earlier promotees of 1960 63 vintage, having regard to the factual position.
The further hope that for post 1963 recruits, dates of appoint ment, and running of service with effect therefrom, on the basis of a quota allocation and rota system telescoped into it, proved a plain dupe in the seniority list prepared by government.
The doubly chagrined direct recruits moved the High Court for relief, as stated earlier.
The anatomy, in outline, of the deputy collector 's cadre in the Gujarat Government and the grievances of the writ petitioners (respondents before us) thus emerge.
On a 50:50 basis the vacancies in the cadre are filled from two sources viz., direct recruitment and promotion from among mamlat dars.
Once appointed, their seniority gains saliency and turns on length of service, and though no specific provision to count commencement of service is made in the 1959 Resolu tion, it has been understood as set out in the 1941 Resolu tion earlier mentioned.
The contesting respondents plead for pushing down promotees, based on the strict roster system of 1: 1 going by each vacancy and demur to taking the year as a unit for adjustment of ratio.
Which view should prevail? Force, there may be, in the rival versions, indi vidual injustice there can be whichever view were accepted and precedential pushes and pressures may also be brought into play by either side if we surrender to scriptural literality of decisions of this Court and miss the thrust of the ratio therein.
In a liner sense, and within the frame of reference of leading precedents, each case has an individu ality and is a law unto itself.
Strictly speaking, the primary problem is one of fair interpretation of the basic government Resolution of 1959, illumined by the purposes and motivations of good government and unravelling the implications embedded therein, against the background of the administrative structure, service pattern and seniority principles, prevalent contemporane ously, as gleaned from the records of the case.
The milieu aids the meaning although lawyer 's law leans heavily, even lop sidedly, on judicialized lexicography.
Counsel natural ly took us through rulings bearing on the meanings of words and canons of construction which merely re stated time honoured principles and dictionary culls and did not make us any the wiser in coming nearer to a resolution of the conflict here.
Likewise, arguments galore on the connota tion of the quota system of recruitment, with abstractions, propositions and illustrations based on decided cases, were addressed to us, although we 'came out by the same door as in we went ' Common 1045 sense is the first aid in the art of interpretation.
The only sure approach that judges make when confronted by complexity in construction and necessity for rationalisation is on the lines justice Cardozo frankly stated :(1) "We may figure the task of the judge, if we please, as the task of a translator, the reading of signs and symbols given from without.
None the less, we will not set man to such a task, unless they have absorbed the spirit, and have filled themselves with a love, of the language they must read." Two groups, the promotees who came from the lesser stations of life and the direct recruits who have had better advan tages of higher education, fight for berths in the musical chair.
In such situations, while construing rules, sub conscious forces have to be excluded and objectification must be attempted.
Even so, the beautiful candour of Benjamin Cardozo whispers to us that we judges "are . ever and always listening to the still small voice of the herd, and are ever ready to defend and justify its instructions and warnings, and accept them as the nature results of our own reasoning.
This was written, not of judges specially, but of men and women of all classes.
The training of the judge, if coupled with what is styled the judicial temperament, will help in some degree to emancipate him from the suggestive power of individual dislikes and prepossessions .
" ( 2 ) Our effort in unlocking the meaning of the controversial Government Resolution of July 1959 and of other official notifications may inarticulately, minimally and unwittingly, be moulded by these broad under currents.
Other facts relevant for discussion of specific points urged and other legal issues germane to the grounds of attack and defense formulated by counsel may be filled in as and when those points are taken up by us, instead of inartistically clut tering up or en massee lugging together many government proceedings, sequences of events and clarification of difficulties following on the division of Bombay into Gujarat and Maharashtra, even at this preliminary stage.
The pivotal questions one an interpretative exercise and the other a facet of the fundamental right of equal opportunity around which revolve the other arguments may first be set out: (1) If the Gujarat Government has, by an administrative guideline or statutory rule directed that open market recruits and in service promotees will be ap pointed on a 50: 50 basis with the qualification that this principle shall be adhered to, as far as practicable, is Government free to ignore such a rule of conduct as if it were no inflexible directive, violation of which spells illegality on the appointments made, or does this clause obligate the State flatly to try and comply, but if surprise circumstances or insurmountable exigencies arise which make recourse to the rule impracticable, deviate from it without the risk of court branding such deviant appointments void? In short, how far can (1) Benjamin N. Cardozo: The Nature of the Judicial Proc ess: Yale University Press, P. 174.
(2) Cardozo (supra) pP. 175 176.
1046 administrative pragmatics influence, without invalidation, the recruitment mechanics where a narrow rider providing for imponderable exigencies written into the rule, provides for departure ? (2) Assuming there has to be a proportion of 50 50 as above indicated, how is it to be worked out ? On a rotational basis of the direct recruits inexorably getting the first, the third, the fifth and such like vacancies or as an entitlement to half the total number of vacancies arising in the cadre in a particular year or other conven tional period ? Again, does it further imply an imperative obligation on the part of Government to keep untilled all vacancies allocable to direct recruits so that they may be available to be filled up in later years with retroactive repercussions and, if such ear marked posts are, for admin istrative exigencies, filled regularly, not ad hoc, in sub stantive vacancies, not ex cadre posts by selection and promotion, they must be treated as provisional nationally filled by direct recruits who may arrive long later? And consequentially, in counting seniority, reckon their (i.e., direct recruits) deemed dates of entry as prior to those actually officiating promotee deputy collectors by importing a sort of legal fiction that the direct recruits must be allowed to count service from the date when the entitled vacancy for direct recruits arose? May be a diffusive, digressive discussion can be obviated and the focus turned on specific issues if we start with a formulation of the major points urged by Sri D. V. Patel, counsel for the appellant, hotly controverted, of course, by shri R.K. Garg for the contesting respondents.
Elimination of the minor clears the ring for the major bouts.
The appellants represent the group of promotee deputy collectors and the contestants are deputy collectors di rectly recruited.
The Gujarat State lines up with the former, more or less.
We now set out sequentially the six point propositional formulation made by Shri Patel, for the appellants, although salience suggests the third item as first and, if .we anticipate our conclusion, the last in importance.
The cornerstone of the case, as noted earlier, is the Bombay Government 's Resolution of 1959 fixing the proportion between direct recruits and promoted candidates, with an emergency escape route to jump out of the fixed ratio.
Shri Patel 's first point is that once the new State of Gujarat was formed, mere administration proceedings of he former government of Bombay State ceased to be in force proprio vigore unless Gujarat adopted or continued or otherwise modified them.
subject to statutory regulations and consti tutional limitations.
The State of Gujarat had plenary executive power, granted by the Constitution, to fill up administrative posts in any manner it chose.
The clarifi catory government Resolution of May 27, 1960 issued by the Gujarat Government becomes significant in this context as it contains in explanation which specifically provides that the adoption of the Bombay Government Resolution of 1959 does not, in any way, fetter the Gujarat Government in making appointments of officers on or after May 1, 1960 nor does the said 1959 Resolution in any manner restrict the condi tions of service of such officers.
Therefore, it is per fectly oven to the Gujarat Government to make fresh appoint ments to the posts of Deputy Collectors untremmelled by the ratio or other 1047 restrictive conditions which may be read into the Bombay Government Resolution of 1959.
In this view his clients cannot suffer even if the Bombay Resolution has been breached.
(2) Assuming that point No. 1 has no force, Shri Patel submits that the various government Resolutions of the Bombay and Gujarat Governments referred to by the parties are purely administrative directions and cannot have the binding status of statutory rules.
Therefore, no rights can be derived therefrom by the direct recruits or potential direct appointees and breach of such directives or rules cannot invalidate appointments made.
(3) On the further assumption that point No. (2) above is bereft of substance and the Government Resolutions referred to have statutory character, the very terms of the 1959 Government Resolution provide a sensible safely value, wisely anticipatory when we remember the pragmatic considerations and administrative exigencies that the slow moving apparatus of the Government of a newly formed State has to face or be puzzled with.
The 1959 Resolution which is the 'rounding document ' of the rights of the direct recruits itself states that the propor tion between the two categories is to be applied 'as far as practicable '.
Therefore, the rule is neither exception proof nor abstractly absolute but realistic and flexible true to life.
Rigidly to read the rule is surely to misread it.
Since it contemplates special situations of impracticability it is but right for the Court so to construe the Resolution, in the light of the explanation offered by the State for non recruitment directly until 1963, as to make it adminis tratively viable and reasonably workable If such an imagina tive and informed judicial insight plays upon the rule, the difficulties in making immediate recruitments from the open market by the Public Service Commission may sufficiently absolve the State from the supposed violation of Government Resolution of 1959 So viewed, the orders of promotion of the appellants are in order and unassailable.
(4) & (5) The mandate of equality ensconced in Arts 14 and 16 cannot handcuff justice by pushing down the promotees if the Sen iority List in the face of their actual service and legal appointment.
The attack based on article 16 that the roster method of filling up posts is integral to the quota system is baseless.
Quota without rotate is also reasonable and constitutional as much as quota plus rota.
The choice, both being permissible and fair, is left to the Administration, the Court not ferretting or dissecting to detect deadly traces of discrimination or unreasonableness.
(6) The assignment of "deemed dates ' of commencement of service is not unreasonable but is often adopted by Governments when integrating into a common cadre officers drawn from differ ent States or Departments or divisions.
Novel compulsions demand novel solutions and law accepts life 's expediency save where the public Vower has been obliquely exercised or unreasonableness is writ large on the face of the process.
Such a stigma being absent, the promotees cannot be dis lodged from their notches in the ladder.
We are mercifully absolved from making the discussional journey over a long mileage covering the poly pointed formu lation since two essential issues may virtually be decisive of the case.
Both sides have agreed to this abbreviation and the other grounds have dropped out of effective contest in the long course of arguments.
Enough upto the day! 1048 It is fair to state even at this stage that be the Bombay G.O. of 1959 merely administrative or really statuto ry, both the learned Single Judge and the Division Bench have head the Gujarat State bound by it.
The rule of law is tile enemy of arbitrary absolutism and the discretion to disobey is a doctrine of despotism and cannot be subscribed to by a Court merely because the state chooses to label a rule or conduct anecting the rights of others an administra tive regulation.
In a constitutional order governed by the rule of law, whim or humour, even if benignly motivated, masquerading as executive discretion is anathema to law.
When power is vested under the Constitution or other statute in the State to promulgate rules of conduct attracting oth ers, such rules must ordinarily govern the State and subject alike.
When there are service rules affecting the public services, they may either be in exercise of the executive power of the State under article 162 or rules with legislative colour framed under the proviso to article 309 of the Constitu tion.
It is fair for the Administration in a democratic system employing expanding armies of government servants, whose lot in life and career prospects will be governed by recruitment, conduct and disciplinary rules, to respect, beyond suspicion, the rule of law by exercising statutory power as distinguished from executive power, even where it has an option.
Of course, in exceptional situations, or sudden exigencies and for new experiments to be tried, the framing of statutory rules under article 309, proviso, may be postponed and executive orders immediately promulgated.
The best judge is the State Government exercising its power justly and efficiently.
For the art of government is beset with the perils of a journey through life 's jungle and textbook prescriptions can prove ruinous.
We may point to another problem.
It has often been difficult to discover whether a particular set of rules is framed under the provi so to article 309 or, in mere exercise of article 162, although it is desirable that the State makes it explicit.
We are, however, not called upon to investigate this perplexing aspect because, as stated earlier, the High Court has held that the State is bound by the Bombay G.O. of 1959.
Counsel for the appellants, Shri Patel, and counsel for the State, Shri Bhandare, have rightly acquiesed in that posi tion and proceeded with their arguments on that footing.
This point (which is the first) therefore, does not need our pronouncement.
The other points, pedentically capable of being sepa rately dealt with, highlight what we have earlier indicated as the two telling questions of law that settle the outcome of the appeal.
We will seek the tight of common sense to solve them and later test the conclusions with reference to binding rulings of this Court.
The first question that falls for considerations, there fore, is as to whether the 50:50 ratio 'as between direct recruits and promoted hands is subject to the saving clause 'as far as practicable '.
Can Government vary the ratio ? Ordinarily No. Is it permissible at all ? Probably, yes, given proof of the government 's case that it was not practicable for the State to recruit from the open market qualified persons through the specialised agency of the Public Service Commission.
The factual basis for this plea of extenuation will be examined presently but, according to Shri R.K. Garg, appearing for the contestants, 1049 even if the alibi of the State were true, it furnished no legal justification for deviation from the application of the rule.
He interpreted, 'as far as practicable ' occurring in the Government Resolution, in a very different way and submitted that to adopt the appellant 's view on this aspect was to subvert the substance and nullify the conscience of the binding Bombay Resolution of 1959.
Shri Garg argued that the language of the critical G.O. was peremptory, that for the high purpose of improving administrative efficiency a balanced mix of old experience (gained by long service) and young abilities (proved by competitive selection) was hit upon as half and half from each category and the Court could not fall for any construc tion of the words 'as far as practicable ' which would frus trate this goal of overall efficiency unless the semantic search left no other option.
Far from there being no alternative interpretation, the benignant purpose of the Resolution pressed forward to a reasonable meaning that 'as far as practicable ' related not to the tampering with the proportion of the mix but in permitting provisional varia tions or ad hoc solutions or emergency arrangements to meet a difficulty of the Administration without making formal or regular 'appointments ' to the posts meddling irrevocably with the proportion in the prescription.
Later, when direct recruits were secured, they would be entitled to their quota vacancies and commencement of seniority from the date of their appointment.
Logomachic exercises are the favourite of the forensic system but too barren to fascinate the Court and too luxuri ous, in our penury of time to indulge.
Should we chase decisions and dictionaries and finer verbal nuances with explorative industry ? The sense of the setting, the 'why ' the author whispers through his words and the warning 'not this.
not this ' that the objective understanding of the totality of the socially relevant scheme instils these light up the interpretative track alone the criss cross woods of case law and lexicons.
Led by that lodestar, we will eye the situation afresh.
In doing so, we must first set down the meaning Shri Patel suggests, and Shri Bhandare supports, and the manner in which these appellants claim that their appointments and seniority are sequestered by the saving words 'as far as practicable '.
What does 'as far as practicable ' or like expression mean, in simple anglo saxon ? Practicable, feasible, possi ble, performable, are more or less interchangeable.
A skiagraph of the 1959 Resolution reveals that the revival of the direct recruitment, method was motivated by 'the inter est of administration ' an overriding object which must cast the benefit of doubt if two meanings with equal persuasive ness contend.
Secondly, going by the text, 50% of the substantive vacancies occurring in the cadre should be filled in by selection in accordance With appended Rules. 'As far as practicable ' finds a place in the Resolution and the Rule.
In the context what does it qualify ? As far as possible 50% ? That is to say, if 50% is not readily forth coming, then less ? Within what period should be imprac ticabilitv to felt ? What is the content of impracticabi litv ' in the given administrative 'setting ? Contrariwise, can you not contend that impracticability is 1050 not a license to deviate, a discretion to disobey or a liberty with the ratio ? Administrative tone is too impor tant to be neglected but if sufficient numbers to fill the direct recruits ' quota are not readily available, substan tive vacancies may be left intact to be filled up when direct recruits are available.
Since the exigencies of administration cannot wait, expediency has a limited role through the use of the words 'as far as practicable '.
Thereby Government is authorised to make ad hoc appointments by promotion or by creation of ex cadre posts to be filled up by promotees, to be absorbed in the 50% portion falling to the promotional category in later years.
In short 'as far as practicable means, not interfering with the ratio which fulfils the interest of administration, but flexible provision clothing government with powers to meet special situations where the normal process of the government Reso lution cannot flow smooth.
It is a matter of accent and import which affords the final test in the choice between the two parallel interpretations.
We have given close thought to the competing contentions and are inclined to the view that the former is the better.
Certainly, Shri Garg is right that the primary purpose of the quota system is to improve administrative efficiency.
After all, the Indian administration is run for the service of the people and not for opportunities for promotion to a few persons.
But theories of public administration and experiments in achieving efficiency are matters of govern mental policy and business management.
Apparently, the State, having given due consideration to these factors, thought that a blended brew would serve best.
Even so, it could not 'have been the intention of government to create artificial situations, import legal fictions and complicate the composition of the cadre by deviating from the natural course.
The State probably intended to bring in fresh talent to the extent reasonably available but not at the sacrifice of sufficiency of hands at a given time nor at the cost of creating a vacuum by keeping substantive vacancies unfilled for long.
The straight forward answer seems to us to be that the State, in tune with the mandate of the rule, must make serious effort to secure hands to fill half the number of vacancies from the open market.
If it does not succeed, despite honest and serious effort, it qualifies for depar ture from the rule.
If it has become non feasible, imprac ticable and procrastinatory to get the requisite quota of direct recruits, having done all that if could, it was free to fill the posts by promotion of suitable hands if the filling up of the vacancies was administratively necessary and could not wait.
Impracticable cannot be equated with 'impossible ' nor with unplatable and we cannot agree with the learned judges of the High Court in construing it as colossally incapable of compliance.
The short test,there fore, is to find out whether the government, in the present case, has made effective efforts, doing all that it reasona bly can, to recruit from the open market necessary numbers of qualified hands.
We do not agree that the compulsion of the rule goes to the extreme extent of making government keep the vacancies in the quota of the direct recruits open and to meet the urgent needs of administration by creating ex cadre posts or making ad hoc appointments or resorting to other out of the way expedients.
The sense of the rule is that as far as possible the quota system must be kept up and, if not prac 1051 ticable, promotees in the place of direct recruits or direct recruits in the place of promotees may be inducted applying the regular procedures, without suffering the seats to lie indefinitely vacant.
The next question then is as to whether government has satisfied the Court that efforts had been made to secure direct recruits and failure to secure such hands is the explanation for resort to.
promotions of mamlatdars.
The reason for delay in making appointments of direct recruits during the year 1960, 1961 and 1962 has been set out by the State before us.
It appears that a requisition for 12 posts of deputy collectors was sent to the Gujarat Public Service Commission on October 31, 1960 but the Commission raised some linguistic queries 'regarding the requirement of ade quate knowledge of Marathi and Gujarati by the candidates.
Anyway, various points were raised from time to time in the correspondence between the Commission and Government and, eventually, the 'former held a competitive examination for the posts of deputy collectors in July 1962, declared the results in January 1963 and sent up ,its recommendations in the following February.
Government issued orders for ap pointment of the candidates so selected by the Public Serv ice Commission in May 1963.
This is a working explanation, prima facie good and not rebutted as got up.
If it is not necessary for the State Government to have recourse to recondite processes of ad hoc appointments and creation of ex cadre posts and if government has taken active steps in the direction of direct recruitment, the exception to the Government Resolution comes into operation.
Direct recruit ment ordinarily involves processing by the Public Service Commission, an independent body which functions at its own pace.
If Government had excluded the posts of Deputy Col lectors from the purview of the Public Service Commission with a view to achieve expeditious recruitment, it might have been exposed to the criticism that the normal method was being by passed with oblique motives.
Having looked at the matter from a pragmatic angle, we are ,convinced that the government did what it could and need not have done what it ordinarily should not have done.
Therefore the con clusion is inevitable although Shri Garg 's argument to the contrary is ingenious that the State had tried, as far as practicable, to fill 50% of the substantive vacancies from the open market, but failed during the years 1960 62 and that therefore it was within its powers under the relevant rule to promote mamlatdars who, otherwise, complied with the requirements of efficiency.
Now we move on to the more thorny question of quota and rota.
Shri Garg urges that the rotational mechanics is implicit in the quota system and the two cannot be delinked.
To shore up this submission he relies on what he propounds as the correct command of the rule of 'quota '.
In his view, 1: 1 simply means one direct recruit or promotee followed, vacancy by vacancy, by the other.
To maintain 'the propor tion in compliance with the quota fixture, Government must go by each post as it falls vacant and cannot circumvient this necessity by year war reckoning of vacancies and keep ing up the ratio.
The counter view put forward by Shri Parekh, for the appellant, is that 338SC1/76 1052 quota and rota are not indissolubly wedded and are separate and separable.
In the present case, according to him it is an error to import 'rota ' where the rule has spelt out only 'quota ' as a governing principle.
The Usual practice, sanctioned by rulings of this Court,is to go by the year as a unit for working out the quota.
Here a again we are not disposed to hold, having special regard to the recent decisions of this Court cited before us that 'quota ' is so the recent decisions of this where the former is expressly prescribed, interlocked with 'rota, that where the former is expressly prescribed, the latter is impliedly inscribed.
Let us logicise a little.
A quota necessarily postulates more than one source of recruitment.
But does it demand the manner in which each source is to be provided for after recruitment, especially in the matter of seniority ? Cannot quota stand independent of rota ? You may fix a quota for leach category but that fixes the entry.
The quota methodology may itself take many forms vacancy wise ratio, cadre composition wise pro portion period wise or numberwise regulation.
Myriad ways can be conceived of Rotational or roster system is a com monly adopted and easily understood method of figuring out the placement of officers on entry.
It is not the only mode in the code and cannot be read as an inevitable consequence.
If that much is logical, then what has been done here is legal.
Of course, Shri Garg 's criticism iS that mere 'qu ota ' is not viable without provision for seniority and, if nothing more is found in the rule, the quota itself must be understood to apply to each post as and when it falls to be filled.
If exigencies of administration demand quick post ing in the vacancy and one source (here, direct recruit ment) has gone dry for a while, then the proper course is to wait for a direct recruit and give him notional date of entry as of the quota vacancy and manage to keep the wheels of government moving through improvised promotions, express ly stripping such ad hocist of rights flowing from temporary occupancy.
We have earlier dealt with the same submission in a slightly different form and rejected it.
Nothing more remains to be said about it.
What follows and matters on entry into service is seniori ty which often settles the promotional destiny of the var ious brands of incumbents.
Naturally, the inter se struggle turns how best to bend the rules to one 's good account.
Shri Garg criticised the thoughtways apparent in the argu ment, backed by some rulings, that, quota being delinked from rota, annual intake is the unit for adjusting the seniority among candidates from the two sources.
This is an innovation dehors the rule, he says.
We do not think so.
The question is not whether the year being taken as the unit is the only course but whether there is anything in the rule prescribing Government taking it as the unit or prescribing some other specific unit.
It is obvious that the Resolution of 1959 is silent on how to allocate or reckon the quota as also on how to compute 'seniority and Government has a good alibi for taking the year as the unit and length of continu ous service as determining seniority.
The first is evident from the .reading of the 1959 Resolution in the light of some ruling of this Court and the second from the 1941 Resolution.
Moreover, there is nothing in the Resolution of 1959 preventing Government from treating a year as the unit.
1053 We therefore reach the following conclusions: 1.
The promotions of mamlatdars made by Government between 1960 and 1962 are saved by the 'as far as practicable ' proviso and therefore valid, Here it falls to be noticed that in 1966 regular rules have been flamed for promotees and direct recruits flowing into the pool of Deputy Collectors on the same quota basis but with a basic difference.
The saving provision 'as far as practicable ' has been deleted in the 1966 rules.
The conse quence bears upon seniority even if the year is treated as the unit for quota adjustment.
If any promotions have been made in excess of the quota set apart for the mamlatdars after rules in 1966 were made, the direct recruits have a legitimate right to claim that the appointees in excess of the allocable ratio from among mamlatdars will have to be pushed down to later years when their promo tions can be regularised by being absorbed in their lawful quota for those years.
To sim plify, by illustration, if 10 deputy collec tors ' substantive vacancies exist in 1967 but 8 promotees were appointed and two direct recruits alone were secured, there is a clear transgression of the 50: 50 rule.
The redun dancy of 3 hands from among promotees cannot claim to be regularly appointed on a permanent basis.
For the time being they occupy the posts and the only official grade that can be extended to them is to absorb them in the subsequent vacancies allocable to promotees.
This will have to be worked out down the line wherever there has been excessive representa tion of promotees in the annual intake.
Shri Parekh, Counsel for the appellants has fairly conceded this position.
The quota rule does not, inevitably, invoke the application of the rota rule.
The impact of this position is that if sufficient number of direct recruits have not been forthcoming in the years since 1960 to fill in the ratio due to them and those deficient vacancies have. been filled up by promotees, later direct recruits cannot claim 'deemed ' dates of appointment for seniority in service with effect from the time, according to the rota or 'turn, the direct recruits ' vacancy arose.
Seniority will depend on the length of contin uous officiating service and cannot be upset by later arrivals from the open market save to the extent to which any excess promotees may have to be pushed down as indicated earlier.
These formulations based on the commonsense understand ing of the Resolution of 1959 have to be tested in the light of decided cases.
After all, we live in a judicial system where earlier curial wisdom, unless competently over ruled, binds the Court.
The decisions cited 1054 before us start with the leading case in Mervyn Coutindo & Ors.
vs Collector of Customs, Bombay(1) and closes with the last pronouncement in Badami vs State of Mysore & Ors.
This time span has seen dicta go zigzag but we see no diffi culty in tracing a common thread of reasoning.
However, there are divergencies in the ratiocination between Mervyn Coutindo (Supra) and Govind Dattaray Kelkar & Ors.
vs Chief Controller of Imports and Exports & Ors.(3) on the one hand and S.G. Jaisinghani vs Union of India(4) .Bishan
Sarup Gupta vs Union of India,(5) Union of India & Ors.
vs Bishan Sarup Gupta(6) and A.K. Subbraman & Ors.
vs 'Union of India(7) on the other, especially on the rota system and the year being regarded as a unit, that this Court may one day have to harmonize the discordance unless Government wakes up to the need for properly drafting its service rules so as to eliminate litigative waste of its servants ' energies.
In Mervyn Coutindo the validity of the rotational system as applied in fixing the seniority inter se between promo tees and direct recruits fell for decision in the context of the specific rule applicable to Customs ' appraisers.
One of the principles in the circular which contained the rules related to the comparative seniority of the two categories. 'It provides ', says the Court in summarizing the rule, "that relative seniority of direct re cruits and promotees shah be determined ac cording to the rotation of vacancies between direct recruits and promotees which shall be based on the quota of reservation for direct recruitment and promotion respectively in the recruitment rules.
It was further explained that a roster should be maintained based on the reservation for direct recruitment and promotion in the recruitment rules.
Where, for example, the reservation for each method is 50 per cent, the roster will run as fol lows(1) promotion, (2) direct recruitment, (3) promotion, (4) direct recruitment, and so on.
Appointments should be made in accordance with this roster and seniority determined accordingly.
A question has been raised whether the circular of 1940 to which we have already referred survived after this circular of 1959; but in our opinion it is unnecessary to decide that question, for the circular of 1959 itself lays down that seniority shall be determined accordingly, i.e. in accordance with the rotational system, depending upon the quota reserved for direct recruitment and promotion respectively.
It is this circular which, according to the respondent, has been followed in determining the seniority of Appraisers in 1963".
, In the face of such a plain directive in the relevant rule regarding relative seniority for the solution of the problem that arises before us where such a seniority provision is absent and the relevant seniority (1) ; (2) [1976] 1 SCR 815.
(3) [1967] 2 SCR 29.
(4) ; (5) [1975] Supp.
SCR 491.
(6) ; (7) [1975] 2 SCR 979.
1055 provision is different, Mervyn Coutindo (supra) cannot be of any assistance.
That case is authority for the proposition it decides in the matrix of the special facts and rule therein.
In view of the words of the Circular 'that senior ity as between direct recruits and promotees should be determined in accordance with the roster which has also been specified . the inextricable interlinking between quota and rota springs from the specific provision rather than by way of any general proposition.
Mervyn Coutindo (Supra) cannot therefore rescue the respondents.
Nor does the refer ence to a 'service ' being divided into two parts, derived from two sources of recruitment, help Shri Garg 's clients.
The rule of 'carry forward ' struck down in T. Devadasan vs Union of India & Anr.(1) has no relevance ,to a situation where the whole cadre of a particular service is divided into two parts.
Apart from the fact that it is doubtful whether Devadasan 's case survives State of Kerala vs
N.M. Thomas & Ors.
(2) there is no application of the 'carry forward ' rule at all in fact situations where two sources of recruitment are designated in a certain proportion and shortfalls occur in the one or the other category.
In such a case, what is needed is conformity to the prescription of the proportion and No. question of carrying anything forward strictly arises.
It is true that Mervyn (Supra) does not support the year by year intake as the yardstick; but the reason is obvious the rule is specific.
Kelkar (Supra) also dealt with the ratio prescribed as between direct recruits and promotees.
Many grounds of attack were levelled there, one of which was that the rota tional system would itself violate the principle of equal opportunity enshrined in the Constitution (article 16(1) ).
The Court repelled this contention.
Of course, promotions made on an ad hoc basis confer no rights to the posts on the appointees, as was clearly pointed out in that decision.
In the instant case it is common ground that the appointments are not on a purely ad hoc basis but have been regularly made in accordance with the rules to fill substantive vacan cies except that the promotees have exceeded their quota, direct recruits being unavailable.
Kelkar (supra) stands on a different footing, and hardly advances the position advanced by Shri Garg.
Jaisinghani (Supra) which has had a die hard survival through Bishan Sarup Gupta vs Union of India(3) and Union of India & Ors.
vs Bishan Sarup Gupta(4) (if one may refer to.
the two cases flowing out of Jaisinghani (supra) in that fashion), has been referred to by both sides at the bar.
It was relied on by Mr. Garg for the strong observation of Ramaswami, J. that the absence of arbitrary power is the first essential of the rule of law upon which our constitu tional system is based.
He has also drawn attention .to the suggestion made in that decision 'to the ' government that for future years the roster system should be adopted by framing an appropriate rule for working out the quota be tween direct recruits and the promotees . '.
We may straightway state that our Constitutional system is very allergic to arbitrary power but there is nothing arbitrary made out in the present case against the government.
The second observation in (1) ; (2) ; (3) [1975] Supp.
SCR 491.
(4) ; 1056 Jaisinghani (Supra) is of a suggestion that for future years the roster system linking up quota with rota, may well be adopted by government.
It is not the interpretation of any existing rule nor laying down of a rule of law, so much so we cannot have any guideline therefrom to apply to the present case.
The Government could no doubt, if it so thought expedient, frame a specific rule incorporating the roster system so as to regulate seniority.
But we should not forget that seniority is the manifestation of official experience, the process of metabolism of service, over the years, of civil servants, by the Administration and, there fore, it is appropriate that as far as possible he who has actually served longer benefits better in the future.
More over, the search for excellence receives a jolt from the rule of equality and the State is hard put to it in striking a happy balance between the two criteria without impairment of administrative efficiency.
Broadly speaking, the Court has to be liberal and circumspect where the area is trickly or sensitive, since administration by court writ may well run haywire.
Moving on, we may start off with the statement that the last case Badami (Supra) lays down the incontrovertibly harmless principle that quotas that are fixed are inaltera ble according to governmental exigencies.
But there, unlike here, no saving provision 'as far as practicable ' existed and here post 1966 promotees have to suffer a push down where their appointments are in .excess of.
the promotee quota.
Nothing directly bearing on our controversy could be discerned by us in that decision.
Gupta I (Supra) an off shoot of Jaisinghani (Supra), proceeds on the assumption that the quota is for .a year.
Whether the rule stated so or not, that was probably the practice and there was nothing unreasonable in it.
Even if the rule as such had expired, it could, according to that decision, be followed as a guideline.
Government had to follow some guiding principle and not be led by its fancy, as each occasion arose.
Palekar, J. expressed the view of the Court thus: "When the rule is followed as a guideline and appointments made, a slight deviation from the quota would not be material.
But if there is an enormous deviation, other considerations may arise.
" In the present case, prior to 1963, there was departure from the quota system and that was sanctioned by the rule itself because of special circumstances.
For subsequent periods, if by taking the year as a unit there have been surplus promotees beyond their allocation even after taking into account impracticability of getting direct recruits upto 1966 when new statutory rules were enacted, then such spill overs, could and should, as indicated by this Court, be set off and absorbed in the later allocable vacancies, the pro tempore illegal appointments being thus regularised.
Of course, appointees on an ad hoc basis are never clothed with any rights and have to quit when the exit time arrives but here there are none.
In Gupta II(Supra) the Court ruled: 1057 "If there were promotion in any year in excess of the quota those promotions were merely invalid for that year but they were not invalid for all time.
They can be regularised by being absorbed in the quota for the later years.
That is the reason why this Court advisedly used the expression 'and onwards ' just to enable the Government to push down excess promotions to later years so that these promotions can be absorbed in the lawful quota for those years.
" Such is the essence of the two Gupta cases (Supra).
Law conceptualises anew every time life inseminates it with new needs and we have in Gupta the innovation of temporary invalidity of an appointment clinically dead but later resuscitated ? Jurisprudence burgeons from the left neces sities of society.
A.K. Subbaraman (Supra) relying on .Gupta 11 (Supra) and going further, has silenced the direct recruits with reference to the precise contention now urged by Shri Garg that rota being imbedded in the womb of the quota system their co existence could not be snapped.
While quota and rota may constitutionally co exist their separation is also constitutionally permissible, if some 'reasonable ' way, not arbitrary whim, were resorted to.
Even what is 'reasona ble ' springs from sort of reflexes manifesting social sub consciousness, as it were.
Nothing absolutely valid exists and rationality and justice themselves are relative.
Within these great mental limitations, the Court 'S observations in Subbaraman (Supra) have to be decided.
This brief and quick survey of decided cases, and the submissions considered by us in the judicial crucible, yield the following conclusions, leaving aside the question of 'confirmation ' in service which, in the Gujarat set up, leaves our controversy untouched: (a) The quota system does not necessitate the adoption of the rotational rule in practi cal application.
Many ways of working out 'quota ' prescription can be devised of which rota is certainly one.
(b) While laying down a quota when fill ing up vacancies in a cadre from more than one source, it is open to Government, subject to tests under article 16, to choose 'a year ' or other period or the vacancy by vacancy basis to work out the quota among the sources.
But once the Court is satisfied, examining for constitutionality the method proposed, that there is no invalidity, administrative tech nology may have free play in choosing one or other of the familiar processes of implement ing the quota rule.
We, as Judges, cannot strike down the particular scheme because it is unpalatable to forensic taste.
(c) Seniority, normally.
is measured by length of continuous, officiating service the actual is easily accepted as the legal.
This does not preclude a different prescription, constitutionally tests being satisfied.
1058 (d) A periodisation is needed in the case to settle rightly the relative claims of promotees and direct recruits.
1960 62 forms period A and 1962 onwards forms period.
B. Promotees regularly appointed during period A in excess of their quota, for want of direct recruits (reasonably sought but not secured and because tarrying longer would injure the administration) can claim their whole length of service for seniority even against direct recruits 'who may turn up in succeeding peri ods.
(e) Promotees who have been fitted into vacancies beyond their quota during the period B the year being regarded as the unit must suffer survival as invalid appointees acquir ing new life when vacancies in their quota fall to be filled up.
To that extent they will step down, rather be pushed down as against direct recruits who were later but regularly appointed within their quota.
On this basis, the judgment of the High Court stands substantially modified, but preparation of a new seniority list becomes necessitous.
We set aside the judgment under appeal but direct the State Government to draw up de novo a gradation list showing inter se seniority ' on the lines this judgment directs.
The subject has been pending so long that very expeditious administrative finalisation is part of justice.
Officials live in the short run even if Administra tions live in the long run.
We direct the State to act quickly.
Lack of adequate articulation of simple points regarding rotation and seniority, and the amber light shed by case law on the questions raised, warrant the direction that parties shall bear their costs throughout.
The unlovely impact of these protracted and legalistic proceedings makes us epilogue, an unusual step in a judg ment, but pathetically necessitous for the renovation of the judicial process.
Law is not a 'brooding omnipotence in the sky ' nor a sort of secretariat asoterica known only to higher officialdom.
But lengthy legal process, where administrative immediacy is the desideratum, is a remedy worse than the malady.
The fact that the present case has taken around 5 working days for oral arguments is a sad commentary on the system, which compels litigents to seek extra curial forums.
Judge Brian Mokenna was right (and the Indian judicial process needs systemic change 'since his wise words apply also to our judicature) when he said: "The fault is that the rules of our procedure which by their discouragement of written argument make possible extensively protracted hearings in open court.
Those re sponsible might think more of changing them.
In civil cases a written argument supplemented by a short oral discussion, would sometime 's save a great deal of time." To streamline and to modernise court management is a Cinderella subject in India, as elsewhere.
We conclude, by repeating what Chief 1059 Justice Warran Burger of the U.S. Supreme Court said, in 1970, in his address to the American Bar Association: "In the final third of the century we are still trying to operate the courts with fundamentally the same basic methods, the same procedures and the same machinery, Roscoe Pound said were not good enough in 1906.
In the super market age we are trying to operate the courts with craker barrel corner grocer methods and equipment vintage 1900.
" We too have miles to go for law and justice to meet.
P.H.P. Appeal allowed.
[/INST]The respondent firm was assessed to sales tax under the Uttar Pradesh Sales Tax Act 1948 for the assessment year 1958 59.
On an appeal filed by the respondent the quantum of tax was reduced.
On a revision filed by the respondent made various payments towards the amount of tax found due from time to time. 'the Revenue initiated proceedings for recovering the balance of the tax and realising interest at the rate of 18 per cent.
The Revenue did not issue any fresh notice of demand after the tax was reduced but origi nally demand notice for the entire sum for which the re spondent was assessed was issued.
In a Writ Petition filed by the assessee the High Court quashed the recovery proceedings on the ground that a fresh notice of demand should have been issued to the respondent in respect of the amount as reduced in appeal and the revi sion.
Allowing the appeal by special leave, HELD: (1) Section 8 of the Act was amended by adding sub section (9) thereto by U.P. Sales Tax Amendment Act (3 of 1971).
The said sub section provides that notwithstand ing any judgment, decree etc.
where any notice of assessment and demand in respect of any tax or other dues is served upon a dealer by an Assessing Authority and where as a result of appeal or revision filed by the assessee the amount of tax is reduced it shall not be necessary for the Assessing Authority to serve upon the dealer a fresh notice.
The High Court judgment was, therefore, erroneous.
[135F, H, 136 A E] Firm Parshuram Rameshwar Lal vs State of U.P. 33, STC 540 approved.
(2) Section 8(1A) of the Act provides for payment of interest at the rate of 18 per cent on the tax amount re maining due from the expiry of the time specified in the notice of demand, till the.
date of payment.
The court in Haji Lal Mohammad vs State of U.P. has held that the li ability to pay the interest under section 8(IA) is automatic and arises by operation of law and that it is not necessary to mention the amount of interest in the recovery certifi cate.
[134 E H, 135 A E] Haji Lal Mohd. Biri Works vs State of U.P., 32 STC 496 followed.
</s>
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<s>[INST] Summarize the judgementAppeal No. 503 of 1963.
Appeal from the judgment and order dated January 31, 1962, of the Punjab High Court in I.T.R. No. 28 of 1960.
B. N. Kripal and A. N. Kripal, for the appellant.
Gopal Singh and R. N. Sachthey, for the respondent.
April 9, 1964.
The judgment of the Court was delivered by SUBBA RAO, J.
This appeal by certificate granted by the High Court of Punjab raises the question whether interest paid under section 34 of the Land Acquisition Act, 1894, herein after called the Act, is of the nature 'of a capital receipt or of a revenue receipt.
The relevant facts are not in dispute and they may be briefly stated.
The appellant, Dr. Shamlal Narula, is the Manager of a Hindu undivided family, which owned, inter alia, 40 bighas and 11 biswas of land in the town of Patiala.
The Patiala State Government initiated land acquisition proceedings for acquiring the said land under Regulation then prevailing in the Patiala State.
It is common case that the State Regulations are in pari materia with the provisions of the Act.
The State of Patiala first merged into the Union of Pepsu and later the Union of Pepsu merged into the State of Punjab.
It is also common case that there was a Land Acquisition Act in the Union of Pepsu containing provisions similar to those obtaining in the Act.
On October 6, 1953, the Act was extended to the Union of Pepsu.
On September 30, 1955, the Collector of Patiala made an award under the Act ,as a result of which the appellant received on December 1, 1955, a sum of Rs. 2,81,822/ , which included a sum of 48,660/ as interest up to the date of the award.
For the year 1956 57, the Income tax Officer included the said interest in the income of the Hindu undivided family of which the appellant is the manager, and assessed the same to income tax, after overruling the appellant 's contention that the said interest was a capital receipt and, therefore, not liable to tax.
On June 14, 1957, the Appellate Assistant Commissioner confirmed the order of the Income tax Officer.
The Appellant preferred an appeal to the Income tax Appellate Tribunal.
The said Tribunal by its order dated July 9, 1957, held that 670 the said amount representing the interest was a capital re ceipt and on that finding the said amount was excluded from the total income of the assessee.
At the instance of the Commissioner of Income tax the said Tribunal referred the following question to the High Court of Punjab under section 66 (1) of the Income tax Act, 1922: "Whether on a true interpretation of section 34 of the Land Acquisition Act and the Award given by the Collector 'of Pepsu on the 30th September, 1955, the sum of Rs. 48,660/ , was captital receipt not liable to tax under the Indian Income tax Act?" The said reference was heard by a Division Bench of the High Court and it held that the said amount was not a capital but a revenue receipt and as such liable to tax under the Indian Income tax Act.
Hence the present appeal.
Learned counsel for the appellant raised before us two contentions, namely, (i) the sum of Rs. 4.8,660/ received by the appellant under the award was compensation for deprivinl,7 him of his right to possession of his property and was therefore, a capital receipt not liable to tax; and (ii) whatever may be the character of the amount awarded under section 34 of the Act by way of interest in a case where possession of the land has been taken by the State after the award, in a case where possession of the land acquired has been taken before the award, it would be a capital receipt, for it is said that in the latter the interest necessarily takes the character of compensation for depriving the owner of the land his, right to possession.
On behalf of the Revenue the order of the High Court is sought to be sustained for the reasons stated therein.
The question raised turns upon the true meaning of the provisions of section 34 of the Act.
It reads: "When the amount of such compensation is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest thereon at the rate 'of six per ~centum per ~annum from the time of so ~takin possession until it should have been so paid or deposited".
The section itself makes a distinction between the amount awarded as compensation and the interest payable on the, amount so awarded.
The interest shall be paid on the amount awarded from the time the Collector takes possession until the amount is paid or deposited.
To appreciate the scope of the section it is necessary to notice briefly the scope of an award and the manner in which possession is taken under the Act.
After the statutory notifications are issued and the 671 requisite notice is given to the persons interested in the land so acquired, the Collector, after holding the necessary enquiry, makes an award, inter alia, determining the amount of compensation payable for the land so acquired.
Section 15 in of the Act says that in determining the amount of compensation the Collector shall be guided by the provisions contained in sections 23 and 24.
Section 23 provides for the matters to be considered in determining compensation; section 24 describes the matters to be neglected in determining the compensation.
A perusal of the provisions of section 23 shows that interest is not an item included in the compensation for any of the matters mentioned therein; nor is it mentioned as a consideration for the acquisition of the land.
Under cl.
(2) of section 23, the Legislature in express terms states that in addition to the market value of the land the court shall in every case award a sum of 15 per cent.
of such market value in consideration of the compulsory nature of the acquisition.
If interest on the amount of compensation determined under section 23 is considered to be a part of the compensation or given consideration of the compulsory nature of the acquisition, the Legislature would have provided for it in section 23 itself.
But instead, payment of interest is provided for separately under section 24 in Part V of the Act under the heading "Payment".
It is so ,done, because interest pertains to the domain of payment after the compensation has been ascertained.
It is a consideration paid either for the use of the money or forbearance from demanding it after it has fallen due.
Therefore, the Act itself makes a clear distinction between the compensation payable for the land acquired and the interest payable on the compensation awarded.
Another approach to the problem leads to the same result.
Under section 16 of the Act when the Collector has made an award under section 11 he may take possession of the land which shall thereupon vest absolutely in the Government free from all encumbrances.
Under section 17 thereof: "In cases of urgency, whenever the appropriate Government so directs, the Collector, though no such award has been made, may, on the expiration of fifteen days from the publication of the notice mentioned in section 9, sub section (1), take possession of any waste land or arable land needed for public purposes or for a Company.
Such land shall thereupon vest absolutely in the Government, free from all encumbrances".
Under both the sections the land acquired vests absolutely in the Government after the Collector has taken possession in one case after the making of the award and in the other, even 672 before the making of the award.
In either case, some time may lapse between the taking of possession of the acquired land by the Collector and the payment or deposit of the com pensation to the person interested in the land acquired.
As the land acquired vests absolutely in the Government only after the Collector has taken possession of it, no interest therein will be outstanding in the claimant after the taking of such possession: he is divested of his title to the land and his right to possession thereof, and both of them vest thereafter in the Government.
Thereafter he will be entitled only to be paid compensation that has been or will be awarded to him.
He will be entitled to compensation, though the ascertainment thereof may be postponed, from the date his title to the land and the right to possession thereof have been divested and vested in the Government.
It is as it were that from that date the Government withheld the compensation amount which the claimant would be entitled to under the provisions of the Act.
Therefore, a statutory liability has been imposed upon the Collector to pay interest on the amount awarded from the time of the taking possession until the amount is paid or deposited.
This amount is not, therefore, compensation for the land acquired or for deprivin the claimant of his right to possession, but is that paid to the claimant for the use of his money by the State.
In this view there cannot be any difference in the legal position between a case where possession has been taken before and that where possession has been taken after the award, for in either case the title vests in the Government only after possession has been taken.
The Legislature expressly used the word "interest" with its well konwn connotation under section 34 of the Act.
It is, therefore, reasonable to give that expression the natural meaning it bears.
There is an illuminating exposition of the expression "interest" by the House of Lords in Westminster Batik, Ltd. vs Riches(1).
The question there was whettier where in an action for recovery of any debt or damages the court exercises its discretionary power under a statute and orders that there shall be included in the sum for which the judgment is given interest on the debt or damages, the sum of interest so included is taxable under the Income tax Acts.
If the said amount was "interest of money" within Schedule D and the General Rule 21 of the All Schedules Rules of the Income Tax Act, 1918, income tax was payable thereon.
that context it was contended that money awarded as damages for the detention of money was not interest and bad not the quality of interest.
Lord Wright observed: "The general idea is that he is entitled to compensation for the deprivation.
From that point of view (1) , 189.
673 it would seem immaterial whether the money was due to him under a contract express or implied, or a statute, or whether the money was due for any other reason in law.
In either case the money was due to him and was not paid or, in other words, was withheld from him by the debtor after the time when payment should have been made, in breach of his legal rights, and interest was a compensation, whether the compensation was liquidated under an agreement or statute, as for instance under section 57 of the Bills of Exchange Act, 1882, or was unliquidated and claimable under the Act as in the present case.
The essential quality of the claim for compensation is the same, and the compensation is properly des cribed as interest".
This passage indicates that interest, whether it is statutory or contractual, represents the profit the creditor might have made if he had the use of the money or the loss he suffered, because he had not that use.
It is something in addition to the capital amount, though it arises 'out of it.
Under section 34 of the Act when the Legislature designedly used the word "interest" in contradistinction to the amount awarded, we do not see any reason why the expression should not be given the natural meaning it bears.
The scheme of the Act and the express provisions there,of establish that the statutory interest payable under section 34 is not compensation paid to the owner for depriving him of his right to possession of the land acquired, but that given to him for the deprivation of the use of the money representing the compensation for the land acquired.
We shall now proceed to consider the case law cited at the Bar.
Where a Tribunal directed the Improvement Trust, under the provisions of section 28 of the Land Acquisition Act, to pay interest to the assessee from the date of taking possession ,of the property to the date of payment, a Division Bench of the Allahabad High Court held, in Behari Lal Bhargava vs Commissioner of Income tax, C. P. and U. P. (1), that the interest so awarded was in the nature of compensation for the loss of the assessee 's right to retain possession of the property acquired and, therefore, was no income liable to tax.
The reason for the said conclusion is stated thus: "It is not the "fruit of a tree" to borrow the simile used in Shaw Wallace 's case (2) but was compensation or damages for loss of the right to re (1) , 24.
(2) A.I.R. 1932 P.C. 138.
LP(D)lSC 22 .
674 tain possession; and it seems to us that Section 28 was designed as a convenient method of measuring such damages in terms of interest".
As we have pointed out earlier, as soon as the Collector has taken possession of the land either before or after the award the title absolutely vests in the Government and thereafter owner of the land so acquired ceases to have any title or right of possession to the land acquired.
Under the award he gets compensation for both the rights.
Therefore, the interest awarded under section 28 of the Act, just like under section 34 thereof, cannot be a compensation or damages for the loss of the right to retain possession but only compensation payable by the State for keeping back the amount payable to the owner.
Adverting to the said decision a Division Bench of the Madras High Court in Commissioner of Income tax, Madras vs CT.
N. Narayanan Chettiar(1) observed: ". . . with great respect we find ourselves unable to follow the reasoning.
Certainly we are not prepared to accept the judgment as a guide to the decision in the present case".
So was the interest granted to an assesse under section 18A of the Income tax Act on the advance payment of tax by him under the provision of that section held to be income taxable in his hand: see Commissioner of Income tax, Bihar and Orissa vs Maharajadhiraj Sir Kameshwar Singh(2).
There when the decision of the Allahabad High Court in Behari Lal Bhargava 's case(3) was relied upon, the learned Judges,.
refusing to follow it, observed thus: "It is not a matter of discussion for the Central Government but the duty to pay interest is imposed by statute.
Apart from this I think (with great respect) that the Allahabad decision is of doubtful authority.
The decision is not consistent with the principle laid down in Schulze vs Bensted(1) and Commissioners of Inland Revenue vs Barnato(5).
The Madras High Court expressly declined to follow the Allahabad case in Commissioner of Income tax vs Narayanan Chettiar(1).
" The Kerala High Court in P. V. Kurien vs Commissioner of Income tax, Kerala(6) held that interest paid on the enhanc ed amount of compensation directed to be paid by an appellate (1) , 477.
(2) , 225.
(3) (4) (5) (6) 675 court in an appeal against an award of compensation for compulsory acquisition of land under the Land Acquisition Act represented capital and was not income liable to be taxed under the Indian Income tax Act.
It was argued there, sum estimated in terms of interest.
In coming to the conclusion which they did, the learned Judges relied upon the decision of the Judicial Committee in Inglewood Pulp and Paper Co., Ltd. vs New Burnswick Electric Power Commission(1) and that of the Madras High Court in Revenue Divisional Officer, Trichinopoly vs Venkatarama Ayyar(2).
In the former, the Judicial Committee directed the purchaser who had taken delivery and possession of the property he had purchased before the sale to pay interest to the vendor on the purchase money from the date he had taken possession on the ground that "the right to receive interest takes the place of the right to retain possession and is within the rule"; and in the latter, though it arose under the Land Acquisition Act, possession was taken by the Government under circumstances falling outside the scope of sections 16 and 17 of the said Act.
In both the cases the title did not pass to the vendee in one case and to the State in the other when possession was taken by them and, therefore, it may be said that the owner was given interest in place of his right to retain possession of the property.
But in a case where title passes to the State, the statutory interest provided thereafter can only be regarded either as representing the profit which owner 'of the land might have made if he had the use of the money or the loss he suffered because he had not that use.
In no sense of the term can it be described as damages or compensation for the owner 's right to retain possession, for he has no right to retain possession after possession was taken under section 16 or section 17 of the Act.
We, therefore, hold that the statutory interest paid under section 34 of the Act is interest paid for the delayed payment of the compensation amount and, therefore, is a revenue receipt liable to tax under the Income tax Act.
The order of the High Court is, therefore, correct.
In the result, the appeal fails and is dismissed with costs.
Appeal dismissed.
(1) (2) L/ P(D) ISCI 22(a) .
[/INST]By a notification issued in 1937 the respondent State of Madras had made Ch.
VI A of the Hindu Religious Endowments Act, 1926, applicable to the Thiyagarajaswami temple at Tiruvarur.
In 1956 the aforesaid notification was extended for a period of five years beginning on September 30, 1956.
This was done in exercise of powers under section 64(4) of the Madras Hindu Religious and Charitable Endowments Act, 1951.
The appellant challenged the issue of the notification under section 64(4) in a writ petition before the High Court.
At the hearing it was urged that the impugned notification was invalid as it had been passed without giving a reasonable opportunity to the appellant to show cause against it.
The High Court while accepting this contention, nevertheless refused to issue.
the writ prayed for because: (1) the said plea had not been taken in the writ petition and (2) the period for which the notification had been extended was shortly due to expire.
The appellant came to the Supreme Court with certificate of fitness.
It was contended on behalf of the appellant that the two reasons given by the High Court for not issuing a writ were wrong.
The respondent State on the other hand contended that no quasi judicial enquiry was necessary for extending an existing notification under section 64(4) although such an enquiry was necessary before issuing a notification for the first time under section 64(3).
HELD: (i) ' Whether f,or issuing a notification under 64(3) or for extending an existing notification under section 64(4) the process of dec.ision is the same.
In either case the Government had to satisfy itself whether supervision by the Executive Officer under the notification is required for public good.
The Government cannot legitimately and satisfactorily consider the question as to whether the notification should be cancelled without hearing the party asking for cancellation; nor can it legitimately and reasonably decide to extend the notification without hearing the trustee.
Circumstances could arise after the issue of the first notification which would help the Trustee to claim that the notification should either be cancelled or should not be extended.
The nature of the order which can be passed under section 64(4) and its effect on the rights of the Trustee are exactly similar to the order which can be passed under section 64(3).
[25 A E] The High Court was therefore right in holding that it was obligatory on the respondent State as a matter of natural justice to give, notice to the appellant before the impugned notication was passed by it.
[25E] Shri Radeshyam Khare & Ant.
vs State of Madhya Pradesh and Ors.
, distinguished.
18 (ii) Although the plea of denial of natural justice had not been taken by the appellant in his writ petition, it had been taken in the rejoinder, and the respondent thereafter had full notice of the said plea.
Therefore the first reason given by the High Court for refusing the writ was wrong.
[25G H] (ii) The High Court ignored the fact that before it delivered its judgment a new Act had come into force, namely, Madras Act XXII of 1959, whereby the life of the impugned notification had been extended.
Therefore the second reason which weighed with the High Court in not issuing a writ in favour of the appellant, that the impugned notification would remain in operation for a very short period after it delivered its judgment, was also wrong.
[26C E]
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<s>[INST] Summarize the judgement[4] S.C. 164), and the same orders/directions as given in that case, be passed in this case.
Accordingly, respondents directed to pay wage.
to the workmen employed as contingent paid staff of the Income tax Department throughout India, doing the work of class IV employees at the rates equivalent to the minimum pay in the pay scale of the regularly employed workers in the corresponding cadres, without any increments with effect from December 1, 1986.
Such workmen are also entitled to corresponding dearness allowance and additional dearness allowance payable thereon.
Whatever other benefits are now being enjoyed by the said workmen shall continue to be extended to them.
The respondents shall prepare a scheme on a rational basis for absorbing as far as possible the contingent paid staff of the Income tax Department, who have been continuously working for more than one year as Class lV employees in the Income tax Department.
[l7lH; 172H; 173A C] 171 & ORIGINAL JURISDICTION: Writ Petition (Civil) No. 1670 of 1986.
(Under Article 32 of the Constitution of India).
R.C. Kaushik for the Petitioner.
V.C. Mahajan, Ms. A. Subhashini and Girish Chandra for the Respondents.
The following order of the Court was delivered O R D E R This is a petition under Article 32 of the Constitution of India.
The petitioner in this case is the U.P. Income tax Department Contingent Paid Staff Welfare Association.
The members of the said association, as the name of the Association itself suggests, are the contingent paid staff in the Income tax Department.
Their complaint is that even though they have been rendering the service as Class IV employees in the Income tax Department for a large number of years, the Income tax Department has not taken steps to regularise their services and to absorb them as members of the Class IV services and that they are being paid wages as daily rated labourers lower than the salary and allowances which the Class IV employees of the Department have been drawing.
They pray for the issue of a writ in the nature of mandamus to the respondents to pay them the same salary and allowances which are paid to the employees of the Department in corresponding posts and also for regularising their service.
A counter affidavit has been filed on behalf of the respondents.
The respondents do not deny that the contingent paid staff are being paid daily wages lower than what is being paid to regular employees.
It also refers to certain Government order providing for regularisation under certain terms and conditions.
When this petition came up for admission the Court directed that this case should be listed after the disposal of the Writ Petitions No. 373 and 302 of 1986 instituted by the daily rated casual labour employed in the Posts and Telegraph Department, since the questions involved in this case and in those two writ petitions were almost the same.
By its judgment dated 27.10.1987 in Daily Rated Casual Labour employed under P & T Department 172 though Bhartiya Dak Tar Mazdoor Manch vs Union of lndia & Ors., (JT. , this Court has issued the following directions as regards the claim of the daily rated workmen involved therein for higher wages: "We accordingly direct the Union of India and the other respondents to pay wages to the workmen who are employed as casual labourers belonging to the several categories of employees referred to above in the Posts & Telegraph Department at the rates equivalent to the minimum pay in the pay scales of the regularly employed workers in the corresponding cadres but without any increments with effect from 5th February, 1986 on which date the first of the above two petitions, namely, Writ Petition No. 302 of 1986 was filed.
The petitioners are entitled to corresponding Dearness Allowance and Additional Dearness Allowance? if any, payable thereon.
Whatever other benefits which are now being enjoyed by the casual labourers shall continue to be extended to them.
" On the claim for regularisation of the services of the workmen involved in the above mentioned case, this Court issued the following direction: "We, therefore, direct all the respondents to prepare a scheme on a rational basis for absorbing as far as possible the casual labourers who have been continuously working for more than one year in the Posts and Telegraph Department.
" The facts and circumstances of the present case are similar to the facts and circumstances of the case relating to the daily rated labour in the Posts and Telegraph Department.
We have carefully considered the pleas in the counter affidavit.
The Government orders providing for the absorption of the contingent paid staff are hedged in by a number of conditions.
We also find that many such employees have been working on daily wages for nearly eight years and more.
We are not satisfied with the scheme which is now in force.
We are, therefore, of the view that in this case also we should issue the same directions as in the above decision for the reasons given by the Court in the above decision.
We accordingly allow this Writ Petition and direct the respondents to pay wages to the workmen who are employed as the contingent paid staff of the Income tax Department 173 throughout India, doing the work of Class IV employees at the A rates equivalent to the minimum pay in the pay scale of the regularly employed workers in the corresponding cadres, without any increments with effect from 1st December, 1986.
Such workmen are also entitled to corresponding Dearness Allowance and Additional Dearness Allowance payable thereon.
Whatever other benefits which are now being enjoyed by the said workman shall continue to be extended to them.
We further direct the respondents to prepare a scheme on a rational basis for absorbing as far as possible the contingent paid staff of the Income tax Department who have been continuously working for more than one year as Class IV employees in the Income tax Department.
This petition is accordingly disposed of with no order as to costs.
S.L. Petition allowed.
[/INST]% The Assam Taxation (on Goods Carried by Road or Inland Water ways) Act,1954 was struck down as ultra vires the Constitution in Atiabari Tea Co. Lld.
vs State of Assam, ; A new Act was thereafter passed which received the President 's assent on April 6, 1961.
The High Court declared the said Act to be ultra vires on August 1, 1963.
The State and other respondents preferred appeals before Supreme Court against the decision.
In the meantime, in Khyerbari Tea Co. Ltd. & Anr.
vs State of Assam, ; the Court held the Act to be intra vires on December 13, 1963.
Following the decision in Khyerbari case the appeals filed by the State and others were allowed by this Court on April 1, 1968.
After this decision the respondents required the appellants by notices under section 7(2) of the Act issued on July 8, 1968 to submit return for the period ending June 30, 1961, September 30, 1961, December 31, 1961 and March 31, 1962.
Due to the penal consequences mentioned in the said notices the appellants filed returns on July 11, 1968.
The assessment orders were passed under section 9(3) of the Act.
The tax was duly paid.
In November 1973 the appellants filed writ petitions before the High Court seeking direction for refund of the tax paid under mistake relying on the High Court 's Judgment in Loong Soong Tea Estate (Civil Rule No. 1005 of 1969) dated July lO, 1973 declaring the assessment as without jurisdiction.
475 The High Court set aside the orders and notices of demand but refused claim of refund on the ground of delay and laches.
It took the view that it was possible for the appellants to know about the legality of the tax sought to be imposed as early as 1963, when the Act in question was declared ultra vires.
The taxes having been paid in 1968 the claim in November 1973 was belated.
It, however, held that the claim for refund was a consequential relief.
In the appeals to this Court it was contended for the appellants that they had paid the tax under a mistake of law and were entitled to seek refund thereof, and a writ petition seeking refund of tax realised without the authority of law cannot be rejected on the ground of limitation or delay unless such delay can be said to amount to laches or has caused some irreparable prejudice to the opposite party.
Allowing the appeals, ^ HELD: By the Court: (Per Sabyasachi Mukharji & Ranganathan, JJ.) The money was refundable to the appellants.
The writ petitions were within time.
[4X4H] Per Mukharji, J. 1.
No State has the right to receive or to retain taxes or monies realised from citizens without the authority of law.
There is in such cases concomitant duty to refund the realisation as a corollary of the constitutional inhibition that should be respected unless it causes injustice or loss in any specific case or violates any specific provision of law.
[480H; 485E F] In the instant case, tax was collected without the authority of law.
The notices were without jurisdiction.
So was the assessment made under section 9(3) of the Act.
The respondents, therefore, had no authority to retain the money so collected, and as such the money was liable to refund.
[480D] 2.1 In an application under Article 226 of the Constitution the Court has power to direct the refund unless there has been avoidable laches on the part of the petitioner which indicate either the abandonment of his claims or which is of such nature for which there is no probable explanation or which will cause an injury either to respondent or any third party.
[484C D] 476 2.2 Courts have, however, made a distinction between those cases where a claimant approaches a High Court seeking relief of obtaining refund only and those where refund is sought as a consequential relief after striking down of the order of assessment etc.
A petition of the former nature is not ordinarily maintainable for the simple reason that a claim for such a refund can always be made in a suit wherein it is open to the State to raise all possible defences to the claim, defences which cannot in most cases be appropriately raised and considered in the exercise of writ jurisdiction.
[480F H; 48;B] In the instant case, s.23 of the Assam Act provided for refund to a producer or a dealer any sum paid or realised in excess of the sum due from him under that Act.
The section thus applies only in a case where money is paid under the Act.
If there is no provision for realisation of the money under the Act, the act of payment was ultra vires, the money had not been paid under the Act.
In that view of the matter the case did not come within section 23 of the Act.
The High Court having found that the claim for refund was a consequential relief, it could have directed the State to refund the amount in question.
[483 G H;484A B] 2.3 Exercise of every discretion must be fair and equitable.
The period of limitation prescribed for recovery of money paid by mistake under the was three years from the date when the mistake was known.
In the instant case, knowledge is attributable from the date of judgment in Loong Soong 's case on 10th July, 1973.
There being a statement that the appellants came to know of that fact in October 1973 and there being no denial by the averment made on this ground, the High Court was in error in presuming that there was a triable issue on this ground and refusing to grant refund.
Within a month in November 1973 the present petitions were filed.
There was no unexplained delay.
The appellants had proceeded diligently.
There is nothing to indicate that had they been more diligent, the appellants could have discovered the constitutional inhibition earlier.
The position is not clear even if there is a triable issue.
The position becomes clearer only after the decision in Loong Soong 's case.
It could not, therefore, be said that the appellants had abandoned their claims.
[487B D] Suganmal vs State of Madhya Pradesh and others.
, AIR 1965 SC 1740; Tilokchand Motichand & Ors.
vs H.B. Munshi & Anr., ; Kantilal Babulal vs H.C. Patel 21 S.T.C. 174; Chandra Bhushan & Anr.
vs Deputy Director of Consolidation (Regional), U.P. & Ors., ; ; R.L. Kapur vs State of Madras, ; ; State of Madhya Pradesh vs Bhailal Bhai & Ors.
J [1964] 6 477 SCR. 261; Ramchandra Shankar Deodhar & ors.
vs The State of Maharashtra & Ors., ; ; A.V. Venkateswaran, Collector of Customs, Bombay vs Ramchand Sobhraj Wadhwani and another; , ; Shiv Shankar Dal Mills etc.
vs State of Haryana & Ors. etc.
; , and State of Madhya Pradesh and others etc.
vs Nandlal Jaiswal and others etc.
; , referred to.
It is only on the delivery of the judgment in Loong Soong 's case in 1973, the appellants realised the right to claim the relief of refund as a consequential relief, setting aside the assessment and the assessment was set aside by the very order itself.
That right has been granted by the High Court.
The High Court has not refused the setting aside on the ground of delay.
It would be inconsistent for the High Court to refuse to grant consequential relief after setting aside the assessment.
If the realisation was without the authority of law and that was declined by the High Court by the judgment in the instant case, which claimed also the consequential relief, that relief must automatically follow.
Refunding the amount as a consequence of declaring the assessment to be bad and recovery to be illegal will be in consonance with justice, equity and good conscience.
[489F H] 4.
The challenge to the assessment on the ground that the assessment was bad could not be made in an appeal under the Act because the right to appeal being a creature of the Act, if the Act is ultra vires that right would not ensure to the benefit of the appellant.
Section 16 of the Act under which an appeal lay within thirty days from the date of service of an assessment order therefore had no application.
Similarly, rule 55 of the Rules framed under the Act barring claims of refund unless made within one year from the date of the original order of assessment being unconstitutional had no application.
[485H; 486A B; 487H] 1.
The assessments on the appellants were illegal.
The taxes demanded on the basis thereof had been collected without the authority of law.
The High Court, therefore, while allowing the appellant 's prayer for quashing the assessment should also have allowed the refund of the illegally collected taxes.
[490D] Superintendent of Taxes vs Onkarmal Nathmal Trust, [1975] Supp.
SCR 365, applied.
478 The petitions filed in November, 1973 were within the period of limitation prescribed in Article 113 of the read with section 23 of the Assam Act.
The appellants ' averment that they realised their mistake only when they came to know about the decision of Loong Soong Tea Estate case in July, 1973 stands uncontroverted.
There is nothing on record to show that the appellants had realised their mistake earlier[491D f] State of M. P. vs Bhailal Bhai [1964]6 SCR 261 referred to.
It was considered unnecessary therefore to consider the larger question whether the bar of limitation would be fatal to a writ petition for refund.
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<s>[INST] Summarize the judgementCivil Appeals Nos.159 and 160 of 1958.
Appeals by special leave from the Award dated September 4, 1958, of the Industrial Tribunal, Bombay, in Reference (IT) Nos. 138 and 35 of 1958.
N. A. Palkhivala, section N. Andley, J. B. Dadachanji and Rameshwar Nath, for the appellant.
C. L. Dudhia and K. L. Hathi, for respondents No. 1 and 2. 1959.
October 16.
The Judgment of the Court was delivered by WANCHOO J.
These two appeals by special leave arise out of two references made by the Government of Bombay in connection with a dispute between the appellant company and two sets of its workmen, namely, clerical staff and staff other than clerical.
The clerical staff had raised four questions which were referred to the Industrial Tribunal, Bombay for adjudication.
of these, only two points survive in the present appeal, namely, retirement age and gratuity.
The non clerical staff had raised two questions of which only one relating to gratuity arises before us.
It appears that the appellant company is an all India concern but the major part of its business is concentrated in Calcutta.
The number of non clerical staff outside Calcutta is very small as compared to the 53 non clerical staff in Calcutta while the clerical staff outside Calcutta is much less than the clerical staff in Culcutta.
The company had a gratuity scheme in force which applied to both clerical and non clerical staff, though there were differences in the scale of payment depending upon whether the basic salary drawn by workmen other than operatives was more than Rs. 100 or less.
In case of operatives, there was a uniform scale equal to the scale for workmen other than operatives drawing less than Rs. 100 per mensem.
The clerical and non clerical staff in Bombay raised disputes and their main contention was that the scale fixed by the scheme in force was low and should be raised.
As for the retirement age, the clerical staff claimed that it should be raised from 55 years to 60.
The case of the appellant company before the tribunal was that as the large majority of the staff both clerical and non clerical was in Calcutta and as the gratuity scheme and the retirement age were enforced by virtue of an agreement arrived at between the appellant company and its workmen both clerical and others in Calcutta who are a large majority of its total workmen, they should not be changed at the instance of a small minority of workmen both clerical and others in Bombay.
The tribunal did not accept this contention and raised the age of retirement from 55 years to 60.
It also made changes in the gratuity scheme by which the scale was raised and made uniform both for clerical staff and others.
Thereupon the appellant applied for and obtained special leave from this Court; and that is how the matter has come up before us.
Shri Palkhivala appearing for the appellant has raised only two points before us, relating to the raising of the retirement age and the change in the scale of gratuity, and we shall confine ourselves to these two points only.
It is conceded by him that the Industrial Tribunal has jurisdiction to order the changes which it has ordered.
But his contention is that though the jurisdiction may be there, the tribunal should take into account the special position of an all India concern and should not make changes particularly at the 54 instance of a small minority of workmen as that would lead to industrial unrest elsewhere.
He further contends that the scale of gratuity and the age of retirement are matters which are independent of local conditions and therefore should be uniform thought India in concerns which have an all India character.
He points out that the conditions of service in the appellant company are uniform throughout India and were arrived at by agreement with the unions of workmen at Calcutta where the large majority of the workmen are employed, and in these special circumstances, the tribunal at Bombay should not have made any changes in the retiring age or in the gratuity scheme at the instance of the small minority of workmen in Bombay.
There is no doubt that in the case of an all India concern it would be advisable to have uniform conditions of service throughout India and if uniform conditions prevail in any such concern they should not be lightly changed.
At the same time it cannot be forgotten that industrial adjudication is based, in this country at least, on what is known as industry cumregion basis and cases may arise where it may be necessary in following this principle to make changes even where the conditions of service of an all India concern are uniform.
Besides, however desirable uniformity may be in the case of all India concerns, the tribunal cannot abstain from seeing that fair conditions of service prevail in the industry with which it is concerned.
If therefore any scheme, which may be uniformity in force throughout India in the case of an all India concern, appears to be unfair and not in accord with the prevailing conditions in such matters, it would be the duty of the tribunal to make changes in the scheme to make it fair and bring it into line with the prevailing conditions in such matters, particularly in the region in which the tribunal is functioning irrespective of the fact that the demand is made by only a small minority of the workmen employed in one place out of the many where the all India concern carries on business.
Before we come to consider the two questions raised before us, we may as well point out that the 55 scale of gratuity and the retirement age were originally fixed by an agreement arrived at in 1956, between the appellant company and its workmen in Calcutta who form a large majority.
That agreement was for a period of two years ending with December, 31, 1957.
Thereafter it was replaced by another agreement also for two years beginning from 1st January, 1958.
In that agreement it was specifically provided that no further major issues would be raised excepting those relating to medical aid, retirement age, and retirement benefits.
It is clear therefore that even the workmen in Calcutta had reserved the right to raise a dispute with respect to retirement age and gratuity, if necessary.
The reason for this is that the references out of which those appeals have arisen were pending before the tribunal in Bombay and the unions in Calcutta wished to await the decision of the Bombay tribunal before finally agreeing to continue the rules relating to retirement age and gratuity.
The appellant company also agreed to make this reservation in the said agreement arrived at between it and the unions in Calcutta.
Therefore, strictly speaking, it cannot be said in this case that there was a final agreement in force with respect to these two matters between the appellant and large majority of its workmen in September, 1958 when the Bombay Tribunal gave its award.
In any case the Bombay Tribunal was bound to go into the merits of the matter with respect to these two items, namely, retirement age and gratuity, keeping in mind the all India character of the concern and the previous agreement of 1956, and this is what the tribunal has actually done.
We shall first take the question of retirement age.
The tribunal found that retirement age was fixed between 55 years and 60 in various concerns in Bombay.
It was also of opinion that 55 years was too low an age to be fixed for retirement for the clerical staff and that the trend in all the awards had in recent times been to fix it at 60 years.
It, therefore, ordered that so far as the clerical staff was concerned retirement age should be fixed at 60 years instead 56 of 55.
We may in this connection refer to a recent decision of this Court in Guest Keen, Williams (Private) Limited, Calcutta vs P. J. Sterling and Others (1), where the age of superannuation of employees in service before the Standing Orders came into force, in that concern was fixed at 60 years.
In these circumstances if the tribunal thought that it would be fair to fix 60 years as the age of retirement for clerical staff in spite of the fact that in the agreement of 1956 the retirement age was fixed at 55 years, it cannot be said that the tribunal 's order was not in accord with the prevailing conditions in many concerns in that region.
In these circumstances we are of opinion that no interference is called for in this matter.
We now come to the question of gratuity.
The gratuity scheme in force in the appellant company on the basis of the agreement of 1956, provided for threequarters of one month 's average basic salary for each completed year of continuous service for staff other than operatives drawing up to Rs. 100 per menses and thereafter half a month 's average basic salary for each year.
It also provided three weeks ' average basic wages for each completed year of continuous service for operatives.
Three years service was the minimum period for eligibility to gratuity under special circumstances like death, physical and mental incapacity and 15 years service in all other cases.
There was also a provision for "deducting some amount in lieu of provident fund credited by the company in 1941 in respect of service prior to 1st July, 1941.
The tribunal was of the opinion that the scheme was not adequate and contained features which were not usual in other prosperous concerns it pointed out that the scale of gratuity for clerks was on a lower basis than for operatives and that this was against the general conditions of things prevailing in that region.
It further pointed out that the clerical and the supervisory staff had a higher standard of living, and had to meet heavier expenses of education of their children who get employment at a late age as compared to operatives.
It was, therefore, of opinion that a uniform scale of gratuity should be fixed for all (1) ; 57 including those getting wages above Rs. 100 per menses.
It also pointed out that the requirement of a minimum service of three years in case of death and physical and mental incapacity was another unusual feature of this scheme and held that it should be changed.
It was further of opinion that the usual provision in such schemes was a scale of one month 's basic salary for each completed year of continuous service in case of death, physical and mental incapacity and after 15 years ' continuous service and that some gratuity at a lower scale was provided usually even in case of termination of service before the completion of 15 years ' service.
It therefore provided for half a month 's basic salary for each completed year of continuous service after 5 years but upto ten years and three fourths of basic monthly salary for each year of completed service after ten years but less than fifteen years continuous service and one month 's basic salary for each year for the rest.
Finally, it took into account the fact that there was a supplementary gratuity scheme in force in the company with respect to the employees in the employ of the company from before September 1, 1946, and with respect to them it provided that those employees should either opt for the scheme as framed by it or continue in the gratuity scheme of the company along with the supplementary gratuity scheme.
It appears therefore from the gratuity scheme finally sanctioned by the tribunal that it removed those features from the scheme in force in the appellant company which were unusual and unfair and not in consonance with the prevailing conditions for such schemes in that region.
In these circumstances we are of opinion that the tribunal was not bound merely because this is an all India concern to refrain from altering the gratuity scheme which in its opinion had certain unusual features and was not in accord with the prevailing conditions in that region.
The appellant 's contention therefore on this head also fails.
The appeals are hereby dismissed with one set of costs.
[/INST]In his return of agricultural income for the assessment year I944 45 the appellant showed a sum of Rs. 2,82,192, which he had paid to the Tekari Rai for two lease hold properties taken on Zarpeshgi lease, as one of the items of the total amount of deduction claimed by him as capital receipt.
The Agricultural Income tax Officer accepted his claim and exempted the amount from Payment of agricultural income tax.
The Assistant Commissioner of Agricultural Income tax affirmed the decision.
A demand notice was issued and the assessee paid two instalments.
Thereafter, the Agricultural Income tax Officer served on the assessee a notice under section 26 of the Bihar Agricultural , to the effect that income from the said Zarpeshgi lease had escaped assessment and after he appeared, passed a 333 supplementary assessment order and assessed Rs. 39,5I2 6 o as tax.
The assessee appealed.
The Commissioner of Agricultural Income tax reversed the said decision.
The Province of Bihar moved the Board of Revenue and the two questions it referred to the High Court under section 25(1) Of the Act were, (1) whether in the facts and circumstances of the case, the Agricultural Income tax Officer had jurisdiction to revise his own order under section 26 of the Act and (2) if so, whether the income from the Zarpeshgi lease was taxable under the Act.
The High Court answered both the questions in favour of the State of Bihar.
Hence this appeal by the assessee by special leave.
Held, that under section 26 of the Bihar Agricultural , the Agricultural Income tax Officer had the power to revise his own order and assess an item of income which, even though shown in the return, he had earlier omitted to tax under a misapprehension that it was not taxable.
The use of the words " any reason " in section 26 of the Act made the section wider than section 34 Of the Indian by dispensing with the conditions which circumscribed the section.
Kamal Singh vs Commissioner of Income tax, Bihar & Orissa, ; , applied.
Messrs. Chatturam Hoyilyam Ltd. vs Commissioner of Income tax, Bihar and Orissa, ; , distinguished.
Case law discussed.
Since the appellant had failed to prove his case that the income in question was income from his money lending business or that the payment made to the lessor was not by way of premium but as a loan, the income from the lease hold property which was admittedly agricultural in character, must be held to be liable to tax under the Act, irrespective of the character of the recipient.
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<s>[INST] Summarize the judgementAppeal No. 717 of 1961.
Appeal by special leave from the judgment and order dated April 10, 1961 of the Assam High Court in Civil Revision No. 10 of 1961.
D. R. Prem, P. D. Menon for R. N. Sachthey, for the appellants.
The respondent did not appear.
626 1963.
May 7.
The judgment of the Court was delivered by RAGHUBAR DAYAL J.
This appeal, by special leave, is directed against the order of the High Court of Assam rejecting the revision application, under section 115 of the Code of Civil Procedure, hereinafter called the Code, of the appellants against the order of the Additional Subordinate, Judge, Gauhati, in a money suit to the effect that he had jurisdiction to try the suit.
The contention of the appellants is that this view of the Subordinate judge, confirmed by the High Court, is wrong.
To appreciate the contention for the appellants, the facts of the case may be stated.
The suit was instituted by the plaintiff respondent against the Union of India and the Northern Frontier Railway represented by the General Manager, having its headquarters at Pandu.
It related to a claim for recovery of a sum of Rs. 8,250/ on account of nondelivery of the goods which had been consigned to the plaintiff 's firm run tinder the name and style of M/s. Ladu Lal Jain.
The consignment consisted of 134 bags of rice and was booked from Kalyanganj station of defendant No. 2 for carriage to Kanki station of the same defendant on April 13, 1958.
The goods consigned were no, delivered to the plaintiff and hence the suit, after serving a notice under section 77 of the Indian Railways Act on the defendant railway and also serving a notice tinder section 80 of the Code.
It was alleged in the plaint that the cause of action arose at Pandu within the jurisdiction of the Court at Gauhati, the place where notice under section 80 of the Code was duly served upon the defendant railway and that the suit was filed in the Court within the jurisdiction of which the defendant railway had 627 its principal place of business by virtue of its held quarters being at Pandu.
The two defendants filed a joint written statement.
Kalyanganj is in West Bengal and Kanki is in the State of Bihar.
Gauhati is in the State of Assam.
It was contended inter alia that Gauhati Court had no territorial jurisdiction to try the suit as neither of the aforesaid railway stations was within its jurisdiction and that the consignment never travelled within any part of the State of Assam and therefore the cause of action could not arise within the jurisdiction of any Court in Assam It was further contended that mere service of notice, which was not admitted, on the defendants at a place within the jurisdiction of the Court, could not vest territorial jurisdiction on it and that defendant No. 1, the Union of India, had no principal place of business at Pandu or any other place within the jurisdiction of the Court, its head quarters office being at New Delhi.
It was also stated that defendant No. 2 is owned and managed by defendant No. 1, that the office of defendant No. 2 at Pandu was also owned and controlled by defendant No. 1 and that the office at Pandu was a branch office of the Union of India which was controlled by defendant No. I from New Delhi.
Relying on the case reported as P.C. Biswas vs Union of India (1), the Trial Court decided the preliminary issue about jurisdiction against the defendants holding that the principal place from which the railway administrator in a particular area is carried on is the principal place of business for the purpose of section 20 of the (ode.
The single judge of the High Court rejected the revision also on the basis of the same decision of his Court.
The territorial jurisdiction of a Court is in general determined by the provisions of section 20 of the Code which reads : "Subject to the limitations aforesaid, ever suit 628 shall be instituted in a Court within the local limits of whose jurisdiction (a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain or (b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides,.
or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry on business, or personally work for gain, as aforesaid, acquiesce in such institution ; or (c) the cause of action, wholly or in part, arises.
Explanation I : Where a person has a permanent dwelling at one place and also temporary residence at another place, he shall be deemed to reside at both places in respect of any cause of action arising at the place where he hag such temporary residence.
Explanation 11 : A corporation shall be deemed to carry on business at its sole or principal office in India or in respect of any cause of action arising at any place where it has also a subordinate office, at such place.
" The principle behind the provisions of clauses (a) and (b) of section 20 is that the suit be instituted at a place 629 where the defendant be able to defend the suit without undue trouble.
The expression 'voluntarily resides or personally works for gain ' cannot be appropriately applied to the case of the Government.
The Government can however carry on business.
The mere fact that the expression 'carries on business ' is used along with the other expressions, does not mean that it would apply only to such persons to whom the other two expires ions regarding residence or of personally working for gain would apply.
The sole contention raised for the appellants in this Court is that the running of railways by the Union of India cannot be said to amount to its carrying on business and that therefore the fact that the headquarters of the Northern Frontier Railway Administration is at Pandu within the jurisdiction of the Court at Gauhati does not give the Court jurisdiction under section 20 of the Code.
The contention is based on the reasoning that any undertaking run by the Government, even if it amounts to the carrying on of a business when run by a private individual, would not be the carrying on of business by the Government if there was no element of profit making in it.
There is no allegation in the written statement that the Government is not running railways for profit.
No issue was framed about it.
The Court below recorded no decision on the point.
It cannot be presumed that the Government is not making a profit from its running the railways in the country or is not running it with a profit motive.
The fact that the Government runs the railways for providing quick and cheap transport for people and goods and for strategic reasons will not convert what amounts to the carrying on of a business into an activity of the State as a sovereign body.
630 Article 298 of the Constitution provides that the executive power of the Union and of each State shall extend to the carrying on of any trade or business and cl.
(6) of article 19 provides that nothing in sub cl.
section (g) of cl.
(1) of that Article shall prevent the State from making any law relating to the carrying on by the State or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise.
These provisions clearly indicate that the State can carry on business and can even exclude citizens completely or partially from carrying on that business.
Running of railways is a business.
that is not denied.
Private companies and individuals carried on the business of running railways, prior to the State taking them over.
The only question then is whether the running of railways ,ceases to be a business when they are run by Government.
There appears to be no good reason to hold that it is so.
It is the nature of the activity which defines its character.
Running of railways is such an activity which comes within the expression 'business '.
The fact as to who runs it and with what motive cannot affect it.
This Court bad occasions to detemine the nature of certain activities of Government.
The rationale of those cases is a good guide for determining the point before us.
In State of Bombay vs The Hospital Mozdoor Sabha(1) ' the question was whether the relevant provisions of the , applied to the group of hospitals run by the State of Bombay and whether they are 'industry ' within the meaning of that Act.
The decision of the question depended on the interpretation of the definition of 'industry ' prescribed by section 2 (j) of the Act.
This section provides that industry means any business, trade, undertaking etc., of employers.
In considering the question it became necessary to enquire whether that activity, i.e., the running of the (1) 631 hospitals, would be an undertaking if it is carried on by a private citizen or a group of private citizens.
It was field that if a hospital is run by private citizens for profit, it would be an undertaking very much like the trade or business in their conventional sense.
It was observed at p. 878 : "Thus the character of the activity involved in running a hospital brings the institution of the hospital within section 2.(j).
Does it make any difference that the hospital is run by the Government in the interpretation of the word undertaking ' in section 2 (j) ? In our opinion, the answer to this question must be in the negative.
It is the character of the activity which decides the question as to whether the activity in question attracts the provision of section 2(j); who conducts the activity and whether it is conducted for profit or not do not make a material difference " To similar effect were the observations in The Corporation of the City of Nagpur vs Its employees where it was said : "If a service rendered by an individual or a private person would be an industry, it would equally be an industry in the hands of a corporation.
" It was earlier said at p. 960 "Monetary considerations for service is, therefore, not an essential characteristic of industry in a modern State." "Barring the regal functions of a municipality, if such other activities of it, if undertaken by an individual, would be industry, then they would equally be industry in the hands of a municipality, (1) [1960] a S.C.R. 942, 962, 632 Lastly, in Satya Narain vs District Engineer, P.W.D. (1), the question for determination was whether plying motor buses by the Government by way of commercial activity amounts to its running it on a public service.
In determining this question, this Court observed at p. 1163: "It is undoubtedly not easy to define what is "Public service ' and each activity has to be considered by itself for deciding whether it is carried on as a public service or not.
Certain activities will undoubtedly be regarded as public services, as for instance, those undertaken in the exercise of the sovereign power of the State or of governmental functions.
About these there can be no doubt.
Similarly a pure business undertaking though run by the Government cannot be classified as public service.
But where a particular activity concerns a public utility a question may arise whether it falls in the first or the second category.
The mere fact that that activity may be useful to the public would not necessarily render it public service.
An activity however beneficial to the people and however useful cannot, in our opinion, be reasonably regarded as public service if it is of a type which may be carried on by private individuals and is carried on by government with a distinct profit motive.
It may be that plying stage carriage buses even though for hire is an activity undertaken by the Government for ensuring the people a cheap, regular and reliable mode of transport and is in that sense beneficial to the public.
It does not, however, cease to be a commercial activity if it is run with profit motive.
Indeed even private operators in order to attract custom are also interested in providing the same facilities to the public as the Government undertaking provides.
Since that is so, it is difficult (1) A, I, R. 633 to see what difference there is between the activity carried on by private individuals and that carried on by Government.
By reason of the fact that a commercial undertaking is owned and run by the State it does not ipso facto become a "public service '.
" This case simply held that commercial activity carried on with profit motive cannot be held to be 'public service '.
It does not hold that such activity carried on by Government will not be "business ' if conducted without profit motive.
We are of opinion that 'profit element ' is not a necessary ingredient of carrying on business, though usually business is carried on for profit.
It is to be presumed that the Railways are run on a profit basis, though it may be that occasionally they are run at a loss.
The case reported as Director of Rationing & Distribution vs The Corporation of Calcutta (1), relied on for the appellants is really of no help to them.
It was in connection with the sovereign activities of the State that it was said that the State was not bound by any statute unless the statute provided to that effect in express terms or by necessary implication.
The contention that the Government could not get the benefit of this law in connection with its business activities was neither repelled nor considered.
It was held to have no foundation as there was nothing on the record that the Food Department of the Government of West Bengal by undertaking rationing and distribution of food on a rational basis had embarked upon any trade or business and, in the absence of any such indication, it appeared that the department was discharging the elementary duty of a sovereign to ensure proper and equitable distribution of available foodstuffs with a view to maintaining peace and good government.
(1) [1961] I. &.C.
A? 158, 634 In view of what we have said above, we hold that the, Union of India carries on the business of running railways and can be sued in the Court of the Subordinate Judge of Gauhati within whose territorial jurisdiction the headquarters of one of the railways run by the Union is situated.
We accor dingly dismiss the appeal with costs.
Appeal dismissed.
[/INST]Nine persons including K instituted a suit for ejectment and recovery of rent against two defendants and obtained a decree, but on appeal, the District judge set aside the decree against defendant No. 2.
The plaintiffs then filed a second appeal in the High Court on February 29, 1952, and while the appeal was pending K died on September 8, 1955.
No application for bringing his legal representatives on the record was, however, made within the prescribed time, and the appeal abated so far as K was concerned.
When the appeal of the appellants other than K came up for hearing on September 1, 1958, a preliminary objection was taken for the respondents that the entire appeal had abated on the ground that the interest of the surviving appellants and the deceased appellant were joint and indivisible and that in the event of the success of the appeal there would be two inconsistent and contradictory decrees.
The appellants claimed that the appeal was maint.
ainable on the grounds that the surviving appellants could have filed the appeal against the entire decree in view of the provisions of O. 41, r. 4, of the Code of Civil Procedure, that they were, therefore, competent to continue the appeal even after the death of K and the abatement of the appeal so far as he was concerned, and that the Court could have reversed or varied the whole decree in favour of all the original plaintiffs and could have granted relief with respect to the rights and interests of K as well.
Held (1) that the provisions of r. 4 of 0.
41 of the Code of Civil Procedure were not applicable, since the second appeal in the High Court was not filed by anyone or by even some of the plaintiffs as an appeal against the whole decree, but was filed by all the plaintiffs jointly, and the surviving appel 550 lants could not be said to have filed the appeal as representing K. (2) that an appellate court had no power to proceed with the appeal and to reverse and vary the decree in favour of all the plaintiffs or defendants under O. 41, r. 4, of the Code of Civil Procedure, when the decree proceeded on a ground comm.
on to all the plaintiffs or defendants, if all the plaintiffs or the defendants appealed from the decree and any of them died and the appeal abated so far as he was concerned under O. 22, r. 3.
Ramphal Sahu vs Babu Satdeo Jha, I.L.R. 19 Pat. 870; Amin Chand vs Baldeo Sahai Ganga Sahai, I.L.R. ; Baij Nath vs Ram Bharose, I.L.R. 1953 (2) All. 434; Nanak vs Ahmad Ali, A.I.R. 1946 Lah. 399; Pyarelal vs Sikhar, Chand, I.L.R. 1957 M.P. 21; Raghu Sutar vs Narusingha Nath, A.I.R. 1959 Orissa 148 ; Venkata Ran Rao vs Narayana, A. I.R. and Sonahar Ali vs Mukbul Ali, A.I.R. 1956 Assam 164, approved.
Shripad Balwant vs Nagu Kusheba, I.L.R. ; Satula Bhattachariya vs Asiruddin Shaikh, I.L.R. and Somasundaram Chettiar vs Vaithilinga Mudaliar, I.L.R. , disapproved.
(3) that the provisions of O. 41, r. 33 were 'not applicable since the appeal by the surviving appellants was not competent in the circumstances of the case.
Mohomed KhaleeJ Shirazi & Sons vs Lee Tanneries 53 I.A. 84, relied on.
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<s>[INST] Summarize the judgementAppeals Nos.
1194, 11 96, 1197 & 1250 of 1967.
400 Appeals by certificate from the judgment and order dated November 22, 23 and 24, 1966 of the Bombay High Court in Special Civil Applications Nos.
1476 and 1424 of 1966.
G. L. Sanghi, C. K. Ratnaparkhi and A. G. Ratnaparkhi, for the appellant (in C.A. No. 1194/67).
B. N. Lokur, C. K. Ratnaparkhi, A. G. Ratnaparkhi and B. M. Srivastava, for the appellant (in C.A. No. 1196/67).
M. C. Bhandare, B. D. Sharma, for the appellants (in C.As.
1197 and 1250/67 and Respondent No. 2 (in C.As.
1194 and 1196/67).
Sharad Manohar and B. P. Maheshwari, for respondent No. 1 (in C. As.
1194 and 1197 of 1967).
M. N. Phadke, Sharad Manohar and B. P. Maheshwari, for respondent No. 1 (in C.As.
1196 & 1250/67).
B. N. Lokur, G. L. Sanghi, C. K. Ratnaparkhi, A. G. Ratna parkhi and B. M. Srivastava, for respondent No. 2 (in C.As.
1197 & 1250/67).
The Judgment of the Court was delivered by MATHEW, J.
The respondents in these appeals filed writ peti tions in the Bombay High Court challenging the validity of the Borough Municipalities (Validation of Certain Taxes on Buildings and Lands) Act, 1965 (Maharashtra Act No. 111 of 1966), hereinafter called the "Validating Act", on the ground that the provisions of the Act violated their fundamental rights under article 14 of the Constitution and for restraining the appellants from levying house tax on the mills, factories and buildings connected therewith of the respondents or collecting the same from them.
A Division Bench of the High Court held that sections 3(b), 4(1), 4(2) and 5 of the Validating Act were invalid as they contravened article 14 and granted the prayer for restraining the appellant Municipality from levying and collecting the tax.
These appeals, by certificate, are directed against the judgment of the Division Bench.
Till the year 1947, the appellant Municipality used to levy house tax on the mills, factories and buildings connected therewith of the respondents in these appeals on the basis of their annual letting value and the annual letting value for this purpose was ascertained in the normal way, that is, by ascertaining the amount at which the buildings might reasonably be expected to let from year to year.
In 1947, the appellant Municipality made fresh rules for levy of house tax and rule 2 (c) of the new rules ran as follows 401 "2(c) In the case of mills and factories and buildings connected therewith, house tax on buildings shall be levied at the usual rate on the annual rental value fixed at Rs. 40/ for every 100 square feet or portions thereof for each sterey, floor or cellar.
"Explanation : The expression "building connected therewith" means and includes warehouses, godowns, millshops, etc.
which are within the compound of mill premises but does not include residential buildings, such as bungalows, out houses.
"Note : Buildings which are not taxed under Rule 2(c) shall be taxed under the ordinary rules.
" Under this rule, the annual rental value of all the buildings of mills and factories other than residential buildings was fixed at a uniform rate of Rs. 40/ for every square foot of floor area irrespective of the actual rental value of the premises.
One of the respondents, namely, Lokamanya Mills.
Barsi, Limited, claimed refund of amounts paid by them on the basis that Rule 2(c) was ultra vires the Boroughs Act and they filed 4 suits for the same.
Against the decrees dismissing the suits, appeals were preferred to this Court and they were finally disposed of by this Court in Lokamanya Mills, Barsi Ltd. vs Barsi Borough Municipality(1).
This Court, after referring to the provisions of section 78 and the explanation to section 75 of the Boroughs Act, held that the Municipality could levy a rate on lands and buildings on the basis of their capital or annual letting value and that in framing rule 2(c), the Municipality had adopted a mode of valuation different from the one sanctioned by the Boroughs Act.
The Court also observed : "The vice of the rule lies in an assumed uniformity of return per square foot which structures of different classes which are in their nature not similar, may reasonably fetch if let out to tenants and in the virtual deprivation to the rate payer of his statutory right to object to the valuation." Accordingly, the Court allowed the appeals and decreed the suits.
The main objects of the Validatting Act were to enable the municipalities governed by the Boroughs Act to levy house tax on mill 's factories and buildings connected therewith on the basis of rule 2(c) and to validate the levy and collection of the tax with retrospective effect.
Section 3 of ,the, Validating Act (1) ; 402 brings about certain amendments in the Boroughs Act.
In section 3 of the Boroughs Act, a clause is inserted which lays down that " rate on buildings or lands" includes any tax imposed on buildings or lands.
Another amendment introduced in the Boroughs Act is with reference to Explanation to section 75.
Prior to the amendment, the explanation to section 75 was as follows : "In the case of lands the basis of valuation may be either capital or annual letting value.
" This explanation was substituted by the Validating Act by an explanation which reads "Explanation : For the purposes of a rate on buildings or lands, the basis of valuation may be (i) the annual letting value.
(ii) the annual value; (iii) the floor area, in the case of mills, factories buildings and lands connected therewith; (iv) the capital value in the case of vacant lands".
Both these amendments were given retrospective effect from the commencement of the Boroughs Act.
Sections 4 and 5 of the Validating Act are designed to validate with retrospective effect, the levy and collection of tax notwithstanding the decision of this Court.
Sub section (1) and (2) of section 4 provide "4(1) Any house tax and any water tax levied or purported to be levied and collected in respect of any mills, factories and buildings and lands connected therewith or in respect of any vacant lands, under the Boroughs Act and rules made thereunder, at any time before the commencement of this Act shall be deemed to have been levied and collected by or under the Boroughs Act as amended by this Act; and accordingly notwithstanding anything in any judgment, decree or order of any Court any such house tax or water tax levied and collected shall, for all purposes be deemed to be, and always to have been, validity levied and collected, and shall not be called in question merely on the ground that the tax was not levied on the basis of the annual letting value, or was levied on the basis of a uniform rate on the floor area, or that it was levied on the basis 403 of capital value or a percentage on such value, or on the ground that any proceeding laid down in the Boroughs Act or in the rules was not followed." "4(2) anything done or any action taken, by or on behalf of any Borough Municipality or any officer of such Municipality, acting or purporting to act under the provisions of the Boroughs Act or any rules made thereunder for or in connection with the levy or collection of the said taxes, shall be deemed for all purposes to have been validly done or taken; and no suit or other legal proceedings whatsoever shall be entertained or continued in any Court on any or all of the grounds mentioned in sub section (1).
" Section 5 provides, among other things, for recovery of tax by the municipal authority concerned and the period within which it should be recovered, etc.
The two points which arise for consideration in these appeals are, whether rule, 2(c) was available to the appellant Municipality for imposing house tax on mills, factories and buildings connected therewith of the respondents and whether the rule can be deemed to have been in operation in order that the levy and collection of house tax might be validated with retrospective effect It may be recalled that rule, 2 (c) was struck down by this Court in Lokamanya Mills, Barsi Ltd. vs Barsi Borough Muni cipality (1) on the, basis that the Boroughs Act authorized levy of house tax only on the basis of annual letting value or capital value of the land or building as the case may be, and that rule 2(c) as it purported to levy house tax on the basis of the floor area was ultra vires the Act.
When the rule was struck down by this Court, the effect was, that the rule could never be deemed to have been passed.
Apart from rule 2(c), there was no charging provision similar to rule 2(c) either in the Boroughs Act, or in the Validating Act for levying house tax on mills, factories and buildings connected therewith.
After rule 2(c) was struck down, the Municipality did not frame any rule under the provision of section 75 of the Boroughs Act for imposing house tax on mills factories or buildings connected therewith.
The Validating Act has not also revived or resurrected rule 2(c).
Therefore, the position was ,that there was no charging provision for imposition of house tax on the mills, factories or buildings connected therewith.
It is only if there was a charging provision for imposing house tax on the mills, factories or buildings connected therewith that any house tax could be imposed upon the mills, factories or buildings connected therewith of the respondents.
All that the explanation to section 75 substituted by the Validating Act did was (1) ; 404 to enact that, for imposing house tax, floor area will be the basis of valuation in the case of mills, factories or buildings connected therewith.
The consequence is that (there could be no levy of house tax on the mills, factories or buildings connected therewith of the respondents nor could any demand be made on the respondents on the basis of any levy.
The High Court was, therefore, right in restraining the appellant Municipality from levying house tax on the mills, factories or buildings connected therewith of the respondents and in quashing the demand notice issued.
Section 4 did not resurrect rule 2(c) with retrospective effect in order that it might be said that there was, in the eye of law, a provision for charging house tax on mills, factories or buildings connected therewith so that the tax levied and collected might be validated.
Even if section 4 had resurrected rule 2(c) and said that it shall be deemed to have been passed under the Validating Act with retrospective effect, that might not have cured invalidity on account of its being violative of article 14 of the Constitution as it imposed a flat rate on the floor area without making any classification of the area on the basis of income, productivity.
or age of building, etc.
But we do not think it necessary to pass upon this hypothetical question as section 4 did not revive or resurrect rule 2(c), much less, give it retrospective operation.
In this view, we have no occasion to reach ?the constitutional question as regards the validity of the impugned sections of the Validating Act and we express no opinion upon it.
We think that it was not necessary for the High Court to have struck down the provisions of sections 3(2), 4(1), 4(2) and 5 of the Validating Act.
When rule 2(c) was held to be inoperative by virtue of the decision of this Court, all the reliefs claimed by the respondents in the writ petitions could have been given to them without striking down these provisions.
It is a wise tradition with Courts not to decide a constitutional question if the case can be disposed of on other grounds.
We dismiss the appeals but, in the circumstances, make no order as to costs.
S.B.W. Appeals dismissed.
[/INST]The Supreme Court, in Lokmanya Mills, Barsi Led.
vs Barsi Borough Municipality ; struck down Rule 2(c) as being violative of article 14 of the Constitution of India, for the vice of assumed uniformity of return per sq.
from structures of different classes which are in their nature not similar.
The Maharashtra Legislature passed Borough Municipalities (validation of certain taxes on buildings and lands) Act 1965, to validate the levy and collection of the tax with retrospective effect and to enable the municipalities to levy house tax on mills factories and buildings on the basis of Rule 2(c).
Explanation to Sec.
75 of the Act was substituted by the new explanation, by the Validating Act.
Ss. 4 and 5 are designed to validate the levy and collection of tax with retrospective effect.
On challenge through a Writ Petition, the Division Bench of the Bombay High Court struck down Sections 3(b), 4(1), 4(2) and 5 of the Validating Act for their contravention of article 14.
The appeal filed by the State and the Barsi Municipal Council before this Court among other things, raised a question as to whether the Validating Act has resurrected the provisions of Rule 2(c) and levy and collection were validated as required by law.
Dismissing the appeal, HELD : When the rule was struck down by this Court, the effect was that the Rule could never be deemed to have been passed.
Apart from Rule 2(c), there was no charging provision 'similar to Rule 2(c) either in the Boroughs Act or in the Validating Act for levying house tax on mills, factories and buildings connected therewith.
After Rule 2(c) was struck down, the Municipality did not frame any rule under the provisions of Section 75 of the Boroughs Act for imposing tax on mills, factories or buildings connected therewith.
Section 4 of the Validating Act does not revive or resurrect Rule 2(c).
Since the charging section is not revived, there was no authority under law to collect tax on the said categories of properties.
Since in the eye of law there was no charging provision, there could be no validation of any levy or collection.
[403G] Held further, that the above holding was enough to grant all reliefs claimed by the respondent in the Writ Petition and there was no need to express an opinion on the validity of the impugned sections of the Validating Act.
[404F]
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<s>[INST] Summarize the judgementtition Nos. 116, 186 189/77, 3935 63/78 3922 24/78, 1221/77, 3821 27/78, 3828 31/78, 44 50/77, 4237/78,4400/78, 92 97/77.
(Under Article 32 of the Constitution) F. section Nariman, R. N. Banerjee, J. B. Dadachanji and K. J. John, for the Petitioners in W.P. No. 116/77.
R. M. Poddar for Respondent No. 1 in W.P. No. 116/77.
678 Lal Narain Sinha Attorney Genl., P. K. Pillai and T. P. Soundara Rajan, for Respondents 2 3 in W.P. No. 116/77.
N. M. Abdul Khader, M. A. Feroze and K. M. K. Nair, for the Respondent.
R. N. Banerjee, J. B. Dadachanji and K. J. John, for the Petitioners in W.P. Nos. 186 189/77.
Lal Narain Sinha Att Genl.
and R. M. Poddar, for Respondent No. 1 in W.P. Nos.
186 189/77.
P.K. Pillai and T. P. Soundra Rajan, for Respondents 2 3 in W.P. Nos.
186 1 89/77.
N. M. Abdul Khader, M. A. Feroze and K. M. K. Nair, for the State.
F. section Nariman, R. N. Banerjee, J. B. Dadachanji and K. J. John, for the Petitioners in W.P. Nos.
3935 63/78.
N. M. Abdul Khader, M. A. Feroze and K. M. K. Nair, for Respondent No. 1 in W.P. Nos.
3935 63/78.
A. section Nambiar and P. Parameswaran, for Respondents 2 3 in W.P. Nos.
3935 63/78.
P. Govindan Nair and K. Sukumaran, for the Petitioners in W.P. Nos.
3922 24/78.
K. M. K. Nair, for the Respondent in W.P. Nos.
3922 24/78.
R. N. Banerjee, J. B. Dadachanji and K. J. John, for the Petitioner in W.P. No. 1221/77.
K. M. K. Nair for Respondent No. 1.
A. section Nambiyar for Respondent No. 2.
Miss A. Subhashini for Respondent No.5.
P. Govindan Nair and K. Sukumaran for the Petitioners in W.P. Nos.3821 27/78.
K. M. K. Nair for Respondent No. 1 in W.P. Nos.
3821 27/78.
A. section Nambiar and P. Parameswaran for Respondents 2 3 in W.P. Nos.
3821 27/78.
P. Govindan Nair and K. Sukumaran for the Petitioner in W. P. Nos.
3828 31/78.
K. M. K. Nair for Respondent No. 1 in W.P. Nos.
3828 31/78.
679 A. section Nambiar and P. Parameswaran for Respondent No. 2 in W.P. Nos.
3828 31/78.
R. N. Banerjee, J. B. Dadachanji and K. J. John for the Petitioners in W.P. Nos.
44 50/77.
Miss A. Subhashini for Respondent No. 1 in W.P. Nos.
44 50/77.
K.M.K. Nair for Respondent No. 2 in W.P. Nos.
44 50/77.
P. Govindan Nair, Mrs. Baby Krishnan and Mrs. V. D. Khanna, for the Petitioners in W.P. Nos.
4237/78.
K. M. K. Nair for the Respondent in W.P. No. 4237/78.
D. Govindan Nair and Mrs. Baby Krishnan for the Petitioners in W.P. No. 4400/78.
K. M. K. Nair for the Respondent in W.P. No. 4400/78.
R. N. Banerjee, J. B. Dadachanji and K. J. John for the Petitioners in W.P. Nos.
92 97/77.
Miss A. Subhashini for Respondent No. 1 in W.P. Nos.
92 97/77.
K. M. K. Nair for Respondent No. 2 in W.P. Nos.
92 97/77.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The common question which arise for consideration in the above writ petitions under Article 32 of the Constitution of India relates to the validity of the declaration made by the State Government of Kerala on March 20, 1976 declaring that raw cashewnut was an essential article, in exercise of the power under clause (a) of section 2 of the Kerala Essential Articles Control (Temporary Powers) Act, 1961 (Act 3 of 1962) (hereinafter referred to as 'the Kerala Act ') and the Kerala Raw Cashewnuts (Procurement and Distribution) Order, 1977 (hereinafter referred to as 'the Order ') made by the State Government of Kerala in exercise of the powers conferred by section 3 of the Kerala Act regulating the procurement and distribution of raw cashewnuts grown in the State of Kerala.
The petitioners are persons engaged in the cashewnut processing industry in the State of Kerala.
Since the impugned declaration and the Order seriously interfered with the right of the petitioners to purchase sufficient quantities of raw cashewnuts for processing in their factories and imposed several other restrictions on them, they have filed the above petitions.
Although the validity of several other orders was also questioned in the present petitions, the petitioners confined their challenge only to the impugned declaration and the 680 Order in the course of the arguments since according to them it was not necessary to urge their contentions as against those orders.
The recital in the preamble to the Order states that it was being made in order to ensure the maintenance of supplies of raw cashewnuts which was considered to be essential for the continued employment of a large number of workmen in the State of Kerala and for their equitable distribution and availability at fair prices.
It is further recited that the Order was being made as the State Government felt a doubt about the question whether the Kerala Raw Cashewnuts (Marketing and Distribution) Order 1976 issued under the Defence and Internal Security of India Rules, 1971, for the very same purpose would continue to remain in force.
The main provisions of the Order broadly related to the prohibition of sale of raw cashewnuts to any person other than an agent authorised to purchase by clause 3 thereof, appointment of Co operative Societies as subagents, imposition of restrictions on processing or conversion of raw cashewnuts and their distribution amongst the occupiers of cashewnut processing factories, appointment and powers of Cashew Special Officer and other incidental and ancillary matters.
The explanatory note attached to the Order stated that it was intended to regulate the procurement and distribution of raw cashwnuts by the State Government.
The Order is issued by the State Government of Kerala under section 3 of the Kerala Act, the object of which is to provide, in the interest of the general public, for the control of the production, supply and distribution of, and trade and commerce in certain articles which, is the title of the Act indicates, are considered to be essential for the community.
The Kerala Act as originally enacted was intended to be in force for a period of five years from the date of its commencement.
By successive amendments, its life is extended to twenty years from the commencement of the Act.
Although it makes provision for conferring power on the State Government to make appropriate orders regarding regulation of production, supply and distribution of essential articles substantially on the lines on which the (Act 10 of 1955) (hereinafter referred to as the Central Act ') passed by the Parliament provides for the regulation of production, supply and distribution of essential commodities as defined in the Central Act.
the Kerela Act does not itself specify any article as an essential article.
But the expression 'essential article ' is defined by section 2(a) of the Kerala Act thus : 681 "2.
Definition.
In this Act, unless the context otherwise requires, (a) "essential article" means any article (not being an essential commodity as defined in the ) which may be declared by the Government by notified order to be an essential article.
" From the above definition it is clear that the State Government can declare as an essential article under the Kerala Act only an article which is not an essential commodity as defined in the Central Act.
When such a declaration is made in respect of any article, the State Government acquires the power to make an order under section 3 thereof in respect of such article.
The State Government is, however, precluded from declaring any article which is an essential commodity under the Central Act as an essential article and from making an order for the purpose of controlling its production, supply and distribution.
This is obvious from the words in the parenthesis in section 2(a) of the Kerala Act defining the word 'essential article '.
That the object of the Kerala Act is only to provide for regulation of production, supply and distribution of an article which is not an essential commodity as defined under the Central Act is also clear from what is stated by the Kerala Government in the letter dated December 5, 1961 addressed by the Law Secretary, Government of Kerala to the Central Government seeking the assent of the President to the Bill passed by the Kerala Legislature.
The relevant part of the letter reads: ". . . . . . .
Sub: The Kerala Essential Articles Control (Temporary Powers) Bill 1960.
I am to forward herewith two copies of the Kerala Essential Articles Control (Temporary Powers) Bill, 1960, as passed by the Legislative Assembly and reserved by the Governor for the consideration of the President.
The Madras Essential Articles Control and Requisitioning (Temporary Powers) Act, 1949, as amended by the Kerala Acts 24 of 1958 and 3 of 1959, was in force in the Kerala State till 25 1 1960 when it expired by efflux of time.
The (Central Act 10 of 1955) applies only in the case of essential commodities specified in that Act.
At present there is no law in the State to control the production, supply and distribution of, and trade and commerce in, essential articles required for industrial 682 and other purposes, which do not fall within the ambit of the Central Act.
For the implementation of the scheme under the programme of industrialisation during the Third Five Year Plan it may become necessary to control the production, supply and distribution of, and trade and commerce in, articles which are not essential commodities and unless the Govt.
have such powers, difficulties are likely to arise.
The object of the present legislation is to take power for the control of essential articles which are not essential commodities within the meaning of the Central Act.
It empowers Govt.
to declare any article, not being an essential commodities within the meaning of , to be an "essential article" and to control, by notified order, the production, supply and distribution of, and trade and commerce in, any such article.
This is an enabling measure and is modelled on the Central .
It is intended to be in force only for a period of five years.
The subject matter of the legislation falls within the scope of entries 26 and 27 of the State List in the Seventh Schedule to the Constitution, namely: 26.
Trade and commerce within the State subject to the provisions of entry 33 of List III.
Production, supply and distribution of goods subject to the provisions of entry 33 of List III.
Hence the State Legislature is competent to enact the measure.
The provisions of the Bill may attract Articles 301 and 304(b) of the Constitution as imposing a reasonable restriction on the freedom of trade and commerce.
Accordingly the previous sanction of the President for the introduction of the Bill in the State Legislature has been obtained as required by the proviso to article 304(b) in the letter of the Ministry of Commerce and Industry referred to as third paper above".
One of the grounds urged on behalf of the petitioners in support of these petitions is that raw cashewnut being a foodstuff (which is an essential commodity under the Central Act), the State Government of Kerala could not make a declaration to the effect that it was an essential article under section 2(a) of the Kerala Act and consequently the impugned Order was outside the scope of the Kerala Act.
On 683 behalf of the State Government, it is contended that raw cashewnut is not a foodstuff and even if it is held to be a foodstuff having regard to the nature and object of the Order, it should be treated as being within the competence of the State Government.
The relevant part of section 2(a) of the Central Act containing the definition of the expression 'essential commodity ' read thus: "2.
In this Act, unless the context otherwise requires, (a) "essential commodity" means any of the following classes of commodities: (i) cattle fodder, including oilcakes and other concentrates; (v) foodstuffs, including edible oilseeds and oils; Since it is argued on behalf of the State Government that foodstuffs ' only mean those articles which can be directly consumed without any kind of processing and that raw cashewnuts which are intended to be used as industrial raw material cannot, therefore, be called as 'foodstuffs ' in the strict sense, it is necessary to examine the history of legislation relating to the trade and commerce within a State and production, supply and distribution of goods in India.
Under the Government of India Act, 1935, entries 27 and 29 of List II in the Seventh Schedule read as follows: "27.
Trade and commerce within the Province; markets and fairs; money lending and money lenders.
Production, supply and distribution of goods; development of industries, subject to the provisions of List I with respect to the development of certain industries under Federal control.
" Entry 34 of List I read as: "34.
Development of industries where development, under a Federal control is declared by Federal law to be expedient in the public interest.
" From the above entries it is clear that the subject of trade and commerce within the Province and subject to entry 34 of List I, the subject of production, supply and distribution of goods were within the competence of the Provincial Government.
As a result of the emergency proclaimed by the Governor General under section 102 of 684 the Government of India Act, 1935 on the outbreak of the Second World War the Federal Legislature acquired the power to make laws on all the subjects in the Provincial List.
The laws made by the Federal Legislature on the provincial subjects after the Proclamation of Emergency were to cease to have effect on the expiration of a period of six months after the Proclamation of Emergency had ceased to operate except as respects things done or omitted to be done before the expiration of the said period.
The Proclamation of Emergency was revoked on April 1, 1946.
Consequently all laws made by the Federal Legislature on the subjects in the Provincial List were to cease to have effect after the expiry of September 30, 1946.
During the period of emergency the Federal Legislature had passed a law enabling the Federal Government to issue Orders with respect to trade and commerce within the Provinces and the production, supply and distribution of several commodities which were considered to be essential and those Orders were also to cease to have effect on the expiry of September 30, 1946.
Since it was felt that the Federal Legislature should continue to have power to make laws on the subject of production, supply and distribution of certain essential commodities, on March 26, 1946 the British Parliament passed the India (Central Government and Legislature) Act, 1946 (9 & 10 Geo.
6, Chapter 39) amending, among others, sub section (4) of section 102 of the Government of India Act, 1935 as to the effect of laws passed by virtue of the Proclamation of Emergency.
The relevant part of that Act read: "2.
(1) Notwithstanding anything in the Government of India Act, 1935, the Indian Legislature shall during the period mentioned in section four of this Act have power to make laws with respect to the following matters (a) trade and commerce (whether or not within a Province) in, and the production, supply and distribution of cotton and woollen textiles, papers (including newsprint).
foodstuffs (including edible oil seeds and oils) petroleum and petroleum products, spare parts of mechanically propelled vehicles, coal, iron, steel and mica; and (b) . . . . . . (c) . . . . . . but any law made by the Indian Legislature which that Legislature would not but for the provisions of this section, have been competent to make shall, to the extent of the incompetency, cease to have effect on the expiration of the 685 said period except as respects things done or omitted to be done before the expiration thereof.
" Section 4 of that Act specified the duration of the legislative power conferred on the Federal Legislature by section 2 and section 5 prescribed the duration of laws passed by virtue of a Proclamation of Emergency.
It is seen from section 2(1)(a) of the above British Act that for the first time, the subject of foodstuffs (including edible oil seeds and oils) was dealt with separately in a constitutional document.
The Governor General in exercise of the extended legislative power granted by the British Act promptly issued within the specified period the Essential Supplies (Temporary Powers) Ordinance 1946) (XVIII of 1946) extending the controls in respect of certain essential commodities including foodstuffs beyond the first day of October, 1946 and the said Ordinance was repealed and replaced by the Essential Supplies (Temporary Powers) Act, 1946 (Act No. XXIV of 1946) enacted by the Federal Legislature in November, 1946.
Section 2(a) of that Act defined the expression 'essential commodity ' as meaning 'foodstuffs ' and certain other articles mentioned therein.
Section 2(e) defined 'foodstuffs ' as including edible oil seeds and oils.
The operation of the said Act was extended by competent legislative acts upto March 31, 1950.
Since by Entries 26 and 27 of List II of the Seventh Schedule to the Constitution, the subject of trade and commerce within the State subject to the provisions of Entry 33 of List III and the subject to production, supply and distribution of goods subject to the provisions of Entry 33 of List III had been assigned to the States and Entry 33 of List III only dealt with trade and commerce in, and the production, supply and distribution of the products of industries where the control of such industries by the Union was declared by Parliament by law to be expedient in the public interest, having regard to the then existing conditions, Article 369 was enacted as a temporary and transitional measure conferring legislative power on the Parliament during a period of five years from the commencement of the Constitution to make laws with respect to the following matters as if they were enumerated in the Concurrent List, namely: (a) trade and commerce within a State in, and the production, supply and distribution of, cotton and woollen textiles, raw cotton (including ginned cotton and unginned cotton or kapas), cotton seed, paper (including newsprint), foodstuffs (including edible oilseeds and oil), cattle fodder (including oil cakes and other concentrates), coal (including coke and derivatives of coal), iron, steel and mica; 686 (b) offences against laws with respect to any of the matters mentioned in clause (a), jurisdiction and powers of all courts except the Supreme Court with respect to any of those matters, and fees in respect of any of those matters but not including fees taken in any court.
It was provided that any law made by Parliament which Parliament would not but for the provisions of Article 369 of the Constitution have been competency to make would, to the extent of the incompetency, cease to have effect on the expiration of the period of five years from the commencement of the Constitution except as respects things done or omitted to be done before the expiration thereof.
It may be noticed that clause (a) of Article 369 of the Constitution specifically referred to foodstuffs (including oilseeds and oil) and cattle fodder (including oil cakes and other concentrates).
By virtue of the power under Article 369, the Parliament extended the life of the Essential Supplies (Temporary Powers) Act, 1946 till January 26, 1955.
As the subjects referred to in Article 369 of the Constitution were of national importance and it was thought that it was desirable that the Parliament should also have concurrent power to make laws with respect to them, the Constitution (Third Amendment) Act, 1954 was enacted on February 22, 1955 substituting Entry 33 of List III by the following new Entry: "33.
Trade and commerce in, and the production, supply and distribution of, (a) the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products; (b) foodstuffs, including edible oilseeds and oils; (c) cattle fodder, including oilcakes and other concentrates; (d) raw cotton, whether ginned or unginned, and cotton seed; and (e) raw jute.
" It was pursuant to the new Entry 33 of List III of the Seventh Schedule to the Constitution that Parliament enacted the Central Act (i.e. the ).
It is not disputed by the State Government that if raw cashewnut is foodstuff within the meaning of the Central Act, it cannot be declared as an essential article under the Kerala Act.
What is, however, 687 urged is that since the Order regulates only procurement and distribution of raw cashewnut as industrial raw material for processing in the factories it is not being dealt with as foodstuff.
Hence it should not be treated as an essential commodity under the Central Act.
There are at least two good reasons to reject this contention advanced on behalf of the State Government first, the language used in section 2(a) (v) of the Central Act and secondly the purpose of the Central Act.
Section 2(a) (v) of the Central Act reads: 'foodstuffs.
including edible oilseeds and oils '.
It is a well known rule of interpretation that associated words take their meaning from one another and that is the meaning of the rule of statutory construction, noscitur a sociis.
When 'foodstuffs ' are associated with edible oilseeds which have to be processed before the oil in them can be consumed, it is appropriate to interpret 'foodstuffs ' in the wider sense as including all articles of food which may be consumed by human beings after processing.
It is in this wider sense that the said term has been understood by Indian courts as can be seen from some of the decisions to which we shall presently refer.
Secondly, having regard to the history of legislation relating to foodstuffs dealt with above and the object of the Central Act which regulates the production, supply and distribution of essential commodities amongst the poverty stricken Indian people, the expression 'foodstuffs ' should be given a wider meaning as including even raw materials which ultimately result in edible articles.
Any interpretation that may be given in this case should not be governed by its consequence on the impugned Order but in the light of the importance of the Central Act in the context of the national economy.
A narrow interpretation may result in the exclusion of several articles from the purview of the Central Act although nobody has entertained any doubt so far about their being essential commodities.
We shall now see what cashewnut means.
Cashewnut is an edible seed or nut belonging to the family of anacardiaceae and grows mostly in tropical and sub tropical regions where humidity is great.
It is generally grown in the States of Kerala, Karnataka and Tamil Nadu, in India, in East Africa and in the tropics of Central and South America.
Cashewnut is shaped like a kidney or a large thick bean. 'It appears as though one of its ends had been forcibly sunk into the calyx end of a fleshy pear shaped fruit, called the cashew apple which is about three times as large as the nut and of reddish or yellow colour.
The cashew apple is much used where the tree grows, in beverages, jams and jellies but is unimportant commercially.
The nut has two walls or shells, the outer of which is smooth and glass like over the surface thin and somewhat elastic but stout and of olive green 688 colour until mature when it becomes strawberry roan.
The inner shell is considerably harder and must be cracked like the shells of other nuts. .
The fruits are picked by hand and the nuts are first detached, then thoroughly dried in the sun. .By improved methods of roasting, the nuts pass through large revolving cylinders of sheet iron with perforated sides, which are made to revolve above well controlled flames.
The oil drains into containers below and is salvaged.
Later, the inner shells are broken open by hand labour and the kernels given further heating treatment by which the skins are removed and the kernels made ready for consumption '.
(Vide Encyclopaedia Britannica 1962 Edn.
4, pp. 958 959).
It is not disputed that the raw cashewnut with which we are now concerned is used by the petitioners for processing in their factories in order to make it fit for human consumption.
It is also stated that even the raw cashewnut kernel is eaten by human beings.
It is well known that the food eaten by human beings consists of cereals like wheat, rice or other coerce grains, pulses, oilseeds, vegetables, sugar, fruits and nuts, animal foodstuffs and sea food like meat, beaf, mutton and fish and dairy products like milk, butter, eggs etc.
According to Webster 's Third New International Dictionary, the word 'food ' means 'fodder ' also.
One of the meanings of the word 'food ' given in that Dictionary is 'material consisting of carbohydrates, fats, proteins and supplementary substances (as minerals vitamins) that is taken or absorbed into the body of an organism in order to sustain growth, repair, and all vital processes and to furnish energy for all activity of the organism '.
In the same Dictionary 'foodstuff ' is defined as 'a substance with food value ' and 'the raw material of food before or after processing '.
One of the usages of the said word is given as 'a bountiful crop of cereal foodstuffs '.
Therefore, 'foodstuff ' need not necessarily mean only the final food product which is consumed.
It also includes raw food articles which may after processing be used as food by human beings.
The earliest of the Indian cases cited before us on the interpretation of the expression 'foodstuffs ' is Shriniwas Pannalal Chockhani & Ors.
vs The Crown.
In that case the conviction of the appellant of an offence punishable under section 7 of the Essential Supplies (Temporary Powers) Act, 1946 had been challenged.
The charge of which the appellant had been found guilty by the judgment under appeal was that he had transported 'bharda ' or 'chuni bharda ' which was a foodstuff without the required permit.
The contention of the appellant was that it was just cattle feed which was not fit for human consump 689 tion and therefore it could not be said that he had violated the law on the footing that the material transported was 'tur dal ' a foodstuff the transport of which alone without a permit was an offence.
The said argument was rejected by the Nagpur High Court with the following observations: "The learned counsel for the appellants further contended that as the Essential Supplies (Temporary Powers) Ordinance, 1946 [XVIII (18 of 1946)] and the Essential Supplies (Temporary Powers) Act, 1946 [XXIV (24) of 1946], dealt with "foodstuffs" and not "cattle feed" export of chuni, a cattle feed was not prohibited under the Food grains Export Restrictions Order, 1943.
The term "foodstuff" has not been defined either in the Ordinance or in the Act.
In common parlance, foodstuffs mean "materials used as food".
The term is not used only for material which is immediately fit for human consumption but it also applies to material which can be used as food after subjecting it to processes like grinding, cleaning etc.
For instance, paddy as such is not fit for human consumption but rice in it is, and yet paddy is called foodstuff.
So also tur.
There is no reason to suppose that the word "food stuffs" is not used, in these laws, in this usual sense but is used in the restricted sense of material which is fit for human consumption immediately without subjecting it to any process.
If such a restricted meaning is accepted, it would lead to evasion of the Law in question by mixing some foreign matter with the stuff that is immediately fit for human consumption.
The test is not whether it can be immediately used for human consumption but whether it can be so used after subjecting it to the usual processes.
The uncleaned tur dal (ie.
tur dal without separating from it wastage and foreign matter) which was being exported on 26 12 1946 in this case was such a foodstuff and comes within the provisions of the Essential Supplies (Temporary Powers) Ordinance 1946, and the Essential Supplies (Temporary Powers) Act, 1946".
In the State of Bombay vs Virkumar Gulabchand Shah this Court was called upon to decide whether 'turmeric ' was 'foodstuff ' in a case arising under the Essential Supplies (Temporary Powers) Act, 1946.
Vivian Bose, J. who delivered the judgment after observing: 690 "So far as "food" is concerned it can be used in a wide as well as a narrow sense and, in my opinion, much must depend upon the context and background.
Even in a popular sense, when one asks another, "Have you had your food", one means the composite preparations which normally go to constitute meal curry and rice, sweetmeats, pudding, cooked vegetables and so forth.
One does not usually think separately of the different preparations which enter into their making of the various condiments and spices and vitamins, any more than one would think of separating in his mind the purely nutritive elements of what is eaten from their non nutritive adjuncts.
So also, looked at from another point of view, the various adjuncts of what I may term food proper which enter into its preparation for human consumption in order to make it palatable and nutritive, can hardly be separated from the purely nutritive elements if the effect of their absence would be to render the particular commodity in its finished state unsavoury and indigestible to a whole class of persons whose stomachs are accustomed to a more spicely prepared product".
held: "As we have seen, turmeric falls within the wider definition of 'food ' and 'foodstuffs ' given in a dictionary of international standing as well as in several English decisions.
It is, I think, as much a "foodstuff", in its wider meaning, as sausage skins and baking powder and tea.
In the face of all that I would find it difficult to hold that an article like turmeric cannot fall within the wider meaning of the term "foodstuffs".
Following the above decision of this Court, the High Court of Calcutta held in Atulya Kumar De & Ors.
vs The Director of Procurement and Supply & Ors.
that paddy was foodstuff within the meaning of that expression used in the Essential Supplies (Temporary Powers) Act, 1946 even though paddy could not be consumed without further processing.
The relevant part of the decision runs thus: "The first point taken is that the power conferred by the Act (read with the notification) upon the State of West Bengal is only in relation to foodstuffs and that paddy is not foodstuff.
It is stated that the description of paddy at "Rice in 691 the "husk" is a colourable attempt to avoid this difficulty.
In 'The State of Bombay vs Virkumar Gulabchand Shah ' (AIR , it was held that turmeric is "foodstuff" within the meaning of the Spices (Forward Contract Prohibition) Order 1944" read with section 2(a) of the Act.
It was held that the term "foodstuff" is ambiguous and may have a vide meaning or a narrow one.
Whether the term is used in a particular Statute in its wider or narrower sense cannot be answered in the abstract but must be answered with due regard the background and context.
Thus in 'James vs Jones ' [(1894) 1 Q.B. 304], baking powder was held to be an article of food while in 'Hinde vs Allmond ' , it was held that tea was not.
Now the act had been passed to control the production and distribution of essential commodities.
What can be looked upon more of an essential commodity than both rice and paddy ? In West Bengal, the two things most essential for the sustenance of human life are rice and paddy.
Mr. Mukherjee admits that rice is an essential commodity & a foodstuff, but he says that paddy is not because nobody can eat paddy.
But that is a very narrow view to take.
Paddy is only a stage in the production of rice and the one cannot be food without the other being food as well.
Nobody eats the husk in paddy; but nobody eats the skin of mango or the shell of a egg and yet they are unquestionably articles of food.
In my opinion paddy is 'foodstuff ' within the meaning of that expression as used in the Act and the notification.
" To the same effect is the decision of the Calcutta High Court in Nathuni Lal Gupta & Ors.
vs The State & Ors.
in which wheat and wheat products were held to be foodstuffs.
The High Court of Punjab and Haryana in Sujan Singh Matu Ram vs The State of Haryana and the High Court of Orissa in Bijoy Kumar Routrai & Ors.
vs State of Orissa & Ors.
also lay down the same principle.
In Tika Ramji & Ors.
vs The State of Uttar Pradesh & Ors.
this Court observed: "The essential commodities therein comprised inter alia foodstuffs which would include sugar as well as sugarcane 692 and both sugar and sugarcane therefore came within the jurisdiction of the Centre.
" The above observation makes it manifest that even a raw material like sugarcane used in the manufacture of sugar is a 'foodstuff '.
Younus vs Sub Inspector of Police is a case in which the question whether raw cashewnut was foodstuff or not directly arose for consideration.
The learned Judge who decided the case held: "The reasoning adopted for holding that wheat and paddy are foodstuffs applies with equal force in the case of cashewnuts.
There is no scope for doubt that cashew kernel is an eatable commodity both in its raw form and also when fried.
It is taken in as part of the food and is also used in the preparation of food.
That its kernel should be separated from the shell or outer covering or that it should be processed before use does not make raw cashewnuts any the less "foodstuff.
" It is also significant that 'raw cashewnut ' is included in the group of edible fruits in Chapter 8 of section II dealing with vegetable products of the First Schedule to the .
It was, however, urged that even though cashewnut was an article which could be eaten, it was an article which was eaten by very few persons on rare occasions and hence it is difficult to conceive cashewnut as an essential commodity.
It is no doubt true that cashewnut having become expensive, it is now more of a luxury.
Due to export of cashewnut on a large scale, it is a commodity which is in short supply in the country and therefore the price at which it sells is beyond the reach of the common man.
But nevertheless it is an article of food.
It is eaten in raw form and after it is fried.
It is also commonly used in various preparations of food like pulav, sweets etc.
There is no basis for the assertion that it is a rare commodity outside the State where it is grown.
It is eaten not only in Kerala but also in other parts of the country.
When cashewnut is exported, it is exported as a foodstuff.
Now it cannot be that cashewnut eaten abroad is a foodstuff, and whatever is consumed within the country is not a foodstuff.
It is therefore, a foodstuff and must be classified as an essential commodity.
Its importance as a foodstuff can also be seen from the statements filed in these cases in which is stated that in the State of Kerala in the year 1976 77 the total quantity of raw cashewnut procured was in the order of 60,000 tonnes, the number of workers 693 engaged in the cashewnut processing industry was about 1,20,000 and that there were 269 cashew factories.
It was next urged that cashewnut could be treated as an essential article only for the purpose of export and not an essential commodity under the Central Act.
This again is not correct.
The Central Government can make an Order under the Central Act even when an essential commodity is used for industrial purpose or for purposes of export.
Essential commodities do not cease to be essential commodities under the Central Act merely because they are exported after they are processed in India.
Foodgrains (Prohibition of Use in Manufacture of Starch) Order, 1971, The Fruit Products Order, 1955, The Gur (Regulation of Use) Order, 1978, Pulses, Edible Oilseeds and Edible Oils (Storage Control) Order, 1977, Rice (Prohibition of Use in Wheat Products) Order, 1971.
Vegetable Oil (Standards of Quality) Order, 1972, Vegetable Oil Product Producers (Regulation of Refined Oil Manufacture) Order, 1973 and the Essential Commodities (Regulation of Production and Distribution for purposes of Export) Order, 1966 demonstrate the diverse purposes for which an Order can be made under the Central Act.
It was next urged that as long as the Central Government had not passed an order in respect of the same matter, it was open to the Government of Kerala to pass the impugned Order.
Reliance was also placed on the decision of this Court in Tika Ramji 's case (supra), in which U.P. Sugarcane Regulation of Supply and Purchase Order, 1954 was upheld even though sugarcane was an essential commodity under the Central Act.
In that case this Court was concerned with the question whether there was any repugnancy between a Central law and a State law.
We are not concerned here with such a question.
If a question of application of Article 254 of the Constitution had arisen, it would have been open to consider whether there was any repugnancy at all between the two laws having regard to the scope and extent of the field occupied by the Central law and the State law.
But the real question which now arises for decision in these petitions is whether the Kerala Legislature ever intended to treat any article which comes within the scope of the Central Act as an essential article.
The language of section 2(a) of the Kerala Act steers clear of all essential commodities under the Central Act by excluding them from the operation of the Kerala Act.
The power of the Central Government to make an order under the Central Act in respect of raw cashewnut which is a foodstuff cannot be doubted.
If that is so the Kerala Act cannot apply to it.
The argument that as long as the Central Government had not made an Order in respect of raw cashew 694 nut, the Kerala Government can pass an Order is not available in the circumstances by reason of the definition of the 'essential article ' in the Kerala Act.
It might have been open to consideration if the said definition had not contained the words in the parenthesis.
On a careful consideration of the matter, we are satisfied that raw cashewnut is a foodstuff falling under section 2(a) (v) of the Central Act and hence cannot be declared as an essential article under section 2(a) of the Kerala Act.
It follows that no Order can be made by the Government of Kerala under section 3 thereof in respect of raw cashewnut.
The action of the Kerala Government is beyond the power conferred on it by the Kerala Legislature.
In the result, we hold that the declaration made by the Government of Kerala to the effect that raw cashewnut is an essential article under the Kerala Act and the impugned Order made thereunder are liable to be quashed and they are accordingly quashed.
All the other contentions including those relating to the alleged infringement of the fundamental rights of the petitioners raised in these petitions are left open.
Before concluding, we propose to advert to the last submission made before us on behalf of the State Government.
It was submitted that the cashewnut industry in Kerala was a labour oriented industry and if the declaration and the Order were struck down, a number of workmen would be adversely affected.
It was also submitted that the entire economy of the State of Kerala which largely depended on the export trade in cashewnuts would be disrupted.
If any such serious problem arises, it can always be set right by the competent Legislature or the appropriate Government taking needful remedial action in the light of Entry 33 of List III of the Seventh Schedule to the Constitution.
The petitions are accordingly allowed.
In the circumstances of the case, there shall be no order as to costs.
P.B.R. Petitions allowed.
[/INST]The Maharashtra Medical Practitioners Act 1961, contains provisions for registration and enlistment of medical practitioners.
Clause (ii) of sub section (5) of section 17 of the Act provides that any person not being a person qualified for registration under sub sections (3) or (4) who proves to the satisfaction of the Committee appointed under sub section (6), "that he was on the 4th day of November 1941 regularly practising the Ayurvedic or the Unani System of Medicine in the Bombay area of the State, but his name was not entered in the register maintained under the Bombay Medical Practitioners Act, 1938" shall be entitled to have his name entered in the register on making an application and on payment of the prescribed fee.
The respondent whose name was listed by the Board of Indian Medicine, Uttar Pradesh in the register of Vaids and Hakims practised as a Vaid and as an Ayurvedic Doctor in Agra and Bhopal respectively.
He migrated to Bombay in 1962 where he started practice as an Ayurvedic Doctor.
He applied for registration as a medical practitioner to the Committee of the Medical Board of Unani system of Medicine under sub section (5) of section 17 of the Act.
His application was rejected, and his appeal filed to the Board was also dismissed.
The High Court, however, allowed the respondent 's writ petition, relying on its earlier decision in Rukmani Hoondraj Hingorani vs The Appellate Authority under the Maharashtra Medical Practitioner Act, 1961 (1969) 71 Bom.
L.R. 71 (77), held section 17(5) of the Act as unconstitutional and set aside the orders passed by the Board.
Dismissing the appeal to this Court, ^ HELD: 1.
In Rukmani Hoondraj Hingorani vs The Appellate Authority under the Maharashtra Medical Practitioners Act, 1961 the validity of section 18(2)(b)(ii) fell for consideration and was rightly held to be unconstitutional as it offends the provisions of Article 14.
It was observed in that case that the provision, by restricting the right of enlistment to those medical practitioners 'who have been regularly practising on 4th November, 1951 in the Bombay area of the State ' had no rational nexus with the object of the Legislature which was to allow medical practice by those less qualified persons who were too old to choose alternative means of livelihood, and that while it was clearly open to the Legislature to provide that a person must have been practising for a certain number of years, or from before a particular date, in order that his name may be included in the list, no distinction on the basis of the area in which he had been practising could be made.
[400C H] 399 2.
The provisions of section 18(2)(b)(ii) being in pari materia with subsection (5) of section 17, the observations made in the above case apply also to this sub section.
This sub section is, therefore, violative of Article 14 of the Constitution.
[401G]
</s>
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<s>[INST] Summarize the judgementAppeal No. 119 of 1955.
Appeal from the judgment and order dated June 16, 1953, of the Punjab High Court in Civil Reference No. 1 of 1953.
A. V. Viswanatha Sastri and Naunit Lal, for the appellant.
H. N. Sanyal, Additional Solicitor General of India, R. Gopalakrishnan, R. H. Dhebar and D. Gupta, for the respondent.
November 24.
The Judgment of the Court was delivered by SARKAR, J.
The appellant is a company carrying on business as a distiller of country liquor.
It was incorporated in May 1945 and was in fact a previously existing company called the Amritsar Distillery Co. Ltd. reconstructed under the provisions of the Company 's Act.
The appellant carried on the same business as its predecessor, namely, sale of the produce of its distillery to licensed wholesalers.
The wholesalers in their turn sold the liquor to licensed retailers from whom the actual consumers made their purchases.
The entire trade was largely controlled by Government regulations.
After the war started the demand for country liquor increased but difficulty was felt in finding bottles in which the liquor was to be sold.
In order to relieve the scarcity of bottles the Government devised in 1940 a scheme called the buy back scheme.
The scheme in substance was that a distiller on a sale of liquor became entitled to charge a wholesaler a price for the bottles in which the liquor was supplied at rates fixed by the Government which he was bound to repay to the wholesaler on the latter returning the bottles.
The 685 same arrangement, but with prices calculated at different rates was made for the liquor sold in bottles by a wholesaler to a retailer and by a retailer to the consumers.
Apparently it was conceived that the price fixed under the scheme would be found to be higher than the price which the bottles would fetch in the open market and the arrangement for the refund of the price would therefore encourage the return of the bottles from the consumers through the intermediaries ultimately to the distiller.
The price refundable was later increased perhaps because the previous price did not fully achieve the desired result of the bottles finding their way back to the distillers.
Sometime in 1944, the Amritsar Distillery Co. Ltd. which then was in existence, insisted on the wholesalers paying to it in addition to the price of the bottles fixed under the buy back scheme, certain amounts described as security deposits and calculated at varying rates per bottle according to sizes for the bottles in which the liquor was supplied to them promising to pay back for each bottle returned at the rate ' applicable to it and further promising to pay back the entire amount paid on a transaction when 90 per cent.
of the bottles covered by it had been returned.
The company while it was in existence realised these additional sums and so did the appellant after it took over the business.
The object of demanding and taking these additional sums was obviously to provide additional inducement for the return of the bottles to the distiller so that its trade in selling the produce of its distillery might not be hampered for want of bottles.
No time limit had been fixed within which the bottles had to be returned in order to entitle a wholesaler to the refund, nor does it appear that a refund had ever been refused.
The price of the bottles received by the appellant under the buy back scheme was entered by it in its general trading account while the additional sum received for them was entered in the general ledger under the heading " Empty Bottles Return Security Deposit Account ".
It is not disputed that for the accounting periods with which this case is concerned, the additional amounts had been taken 686 without Government 's sanction and entirely as a condition imposed by the appellant itself for the sale of its liquor.
The appellant was assessed to income tax on the balance of the amounts of these additional sums left after the refunds made there out.
It had also been assessed to business profits tax and excess profits tax on the same balance.
Its appeals against the orders of assessment to these taxes to the Appellate Assistant Commissioner and thereafter to the Tribunal failed.
It then obtained an order referring a certain question arising out of the assessments for decision by the High Court of Punjab.
The question originally suggested was reframed and in its final form reads thus: Whether on the facts and circumstances of the case the collections by the assessee company described in its accounts as " empty bottle return security deposits" were income assessable under section 10 of the Income tax Act? The High Court answered the question in the affirmative.
The present appeal is against that decision which related to all the three varieties of taxes for which the appellant had been made liable.
We are concerned in this appeal only with the additional sums demanded and received by the appellant and described as security deposit and not with the price of bottles which also it took under government sanction.
The question is whether these amounts called security deposits were.
trading receipts.
Now, as already stated, the appellant 's trade consisted in selling in bottles liquor produced in its distillery to wholesalers.
The sale was made on these terms: In each transaction of sale the appellant took from the wholesaler the price of the liquor, a certain sum fixed by the government, as price of the bottles in which the liquor was supplied and a further sum described as security deposit for the return of the bottles.
The moneys taken as price of the bottles were returned as and when the bottles were returned.
The moneys described as security deposit were also returned as and when the bottles were returned with only this difference that in this case the entire sum taken in one 687 transaction was refunded when 90 per cent.
of the bottles covered by it had been returned, though the remaining 10 per cent.
had not been returned.
Such being the nature of the appellant 's trade and the manner in which it was conducted, these additional sums appear to us to be its trading receipts.
Mr. Vishwanatha Sastri appearing on behalf of the appellant first contended that on these facts the amounts could not be regarded as price and that therefore they were not trading receipts.
He said that the price of the bottles was separately fixed and the amount taken as deposit was different from and exclusive of, it.
This contention is founded on the use of the word price in the buy back scheme in connection with the rates which the distiller was entitled to charge a wholesaler for the bottles.
It seems to us that this contention lays undue emphasis on that word.
We think that the High Court took substantially a correct view of the matter when it said that in realising these amounts " the company was really charging an extra price for the bottles ".
It is clear to us that the trade consisted of sale of bottled liquor and the consideration for the sale was constituted by several amounts respectively called, the price of the liquor, the price of the bottles and the security deposit.
Unless all these sums were paid the appellant would not have sold the liquor.
So the amount which was called security deposit was actually a part of the consideration for the sale and therefore part of the price of what was sold.
Nor does it make any difference that the price of the bottles was entered in the general trading account while the so called deposit was entered in a separate ledger termed " empty bottles return deposit account ", for, what was a consideration for the sale cannot cease to be so by being written up in the books in a particular manner.
Again the fact that the money paid as price of the bottles was repaid as and when the bottles were returned while the other moneys were repaid in full when 90 per cent.
of the bottles were returned does not affect the question for ,none of these sums ceased to be parts of the consideration because it had been agreed that they would be 688 refunded in different manners.
It is not contended that the fact that the additional sums might have to be refunded showed that they were not part of the price.
It could not be so contended because what was expressly said to be the price of bottles and admitted to be price was also refundable.
If so, then a slightly different method providing for their refund cannot by itself prevent these additional sums from being Price.
Now, if these additional sums were not part of the price, what were they ? Mr. Sastri said that they were deposits securing the return of the bottles.
According to him if they were such security deposits, they were not trading receipts.
Again we are unable to agree.
There could be no security given for the return of the bottles unless there was a right to their return for if there was no such right, there would be nothing to secure.
Now we find no trace of such a right in the statement of the care.
The wholesalers were clearly under no obligation to return the bottles.
The only thing that Mr. Sastri could point out for establishing such an obligation was the use of the words " security de posit ".
We are unable to hold that these words alone are sufficient to create an obligation in the wholesalers to return the bottles which they had bought.
If it had been intended to impose an obligation on the wholesalers to return the bottles, these would not have been sold to them at all and a bargain would have been expressly made for the return of the bottles and the security deposit would then have been sensible and secured their return.
The fact that there was no time limit fixed for the return of the bottles to obtain the refund also indicates that there was no obligation to return the bottles.
The substance of the bargain clearly was that the appellant having sold the bottles agreed to take them back and repay all the amounts paid in respect of them.
For this part of the case Mr. Sastri relied on Davies vs The Shell Company of China Ltd. (1), but we do not think that case assists at all.
What had happened there was that the Shell Company had appointed a large number of agents in China to sell its products (1) 689 and had taken from each agent a deposit to secure itself against the risk of default by the agent duly to PI account for the sale proceeds.
The deposits were made in Chinese dollars and later converted into sterling.
When the Company closed its business in China it reconverted the deposits into Chinese dollars and refunded to the agents the deposits made by them.
Owing to a favourable exchange for the conversion of sterling into dollars, the Company made a profit and it was sought to assess this profit to income tax.
It was held that the profit could not be taxed, for the deposits out of which it was made were really not trading receipts at all.
Jenkins, L. J., observed at p. 157: " Mr. Grant described the agents ' deposits as part of the Company 's trading structure, not trade receipts but anterior to the stage of trade receipts, and I think that is a fair description of them.
It seems to me that it would be an abuse of language to describe one of these agents, after he had made a deposit, as a trade creditor of the Company; he is a creditor of the Company in respect of the deposit, not on account of any goods supplied or services rendered by him in the course of its trade, but simply by virtue of the fact that he has been appointed an agent of the Company with a view to him trading on its behalf, and as a condition of his appointment has deposited with or, in other words, lent to the company the amount of his stipulated deposit.
" lie also said at p. 156: it If the agent 's deposit had in truth been a payment in advance to be applied by the Company in discharging the sums from time to time due from the agent in respect of petroleum products transferred to the agent and sold by him the case might well be different and might well fall within the ratio deciding of Landes Bros. vs Simpson (1) and Imperial Tobacco Co. vs Kelly (2).
But that is not the character of the deposits here in question.
The intention manifested by the terms of the agreement is that the deposit should be (1) (2) 87 690 retained by the Company, carrying interest for the benefit of the depositor throughout the terms of the agency.
It is to be available during the period of the agency for making good the agent 's defaults in the event of any default by him ; but otherwise it remains, as I see it, simply as a loan owing by the Company to the agent and repayable on the termination of the agency ".
It would therefore appear that the deposits in that case were held not to be trading receipts because they had not been made as part of a trading transaction.
It was held that they had been received anterior to the commencement of the trading transactions and really formed the trading structure of the Company.
The character of the amounts with which we are Concerned is entirely different.
They were parts of the trading transactions themselves and very essential parts: the appellant would not sell liquor unless these amounts were paid and the trade of the appellant was to make profit out of these sales.
The fact that in certain circumstances these amounts had to be repaid did not alter their nature as trading receipts.
We have already said that it is not disputed that what was expressly termed as price of bottles was a trading receipt though these had to be repaid in almost similar circumstances.
We may point out that it had not been said in Shell Company case(1) that the deposits were not trading receipts for the reason that they might have to be refunded; the reason for the decision was otherwise as we have earlier pointed out, namely, that they were no part of the trading transactions.
We therefore think that the deposits dealt with in the Shell Company case were entirely of a different nature and that case does not help.
Mr. Sanyal was prepared to argue that even if the amounts were securities deposited for the return of the bottles, they would still be trading receipts, for they were part of the trading transactions and the return of the bottles was necessary to enable the appellant to carry on its trade, namely, to sell liquor in them.
As we have held that the amounts had not been paid as security for the return of the bottles, we do not (1) 691 consider it necessary to pronounce upon thiscontention.
We might also refer to the observationsmade in Imperial Tobacco Co. vs Kelly(1) mentioned in the Shell Company case (2) and set out below.
There the Company in the course of its trading activity used to purchase tobacco in America and for that purpose had to acquire American dollars.
It so happened that after it had acquired a certain amount of dollars for making the purchases, it was prevented from buying tobacco in America by Government orders passed due to outbreak of war.
While the dollars lay with the Company, they appreciated in value and later the Treasury acquired the dollars and paid the Company for them in sterling at the then current rate of exchange, as a result of which payment the Company made a profit.
It was hold that the profit was a trading receipt of the Company.
Lord Greene said at p. 300: " The purchase of the dollars was the first step in carrying out an intended commercial transaction, namely, the purchase of tobacco leaf.
The dollars were bought in contemplation of that and nothing else ".
He also observed that the dollars " were an essential part of a contemplated commercial operation ".
It seems to us that the amounts with which this case is concerned, were paid and were refundable as an integral part of a commercial transaction, namely, the sale of liquor in bottles by the appellant to a wholesaler.
The case nearest to the present one is, in our view, that decided by this Court in K. M. section Lakshmanier & Sons vs Commissioner of Income tax and Excess Profits Tax, Madras (3).
There the appellants, who were the assessees, were merchants carrying on business as the sole selling agents for yarn manufactured by the Madura Mills Co. Ltd. They sold the yarn to their constituents and in the relevant accounting period the sales were made under three successive arrangements each of which covered a part of it.
Under each arrangement, the assessees were paid a certain initial (1) (2) (3) ; 692 sum by their customers.
The question was as to the nature of these initial payments.
Under the first arrangement " the appellants had two accounts for each constituent, namely, ' a contract deposit account ' and ' a current yarn account ', crediting the moneys received from the customers in the former account and transferring them to the yarn account in adjustment of the price of the bales supplied then and there, that is, as and when deliveries were made under a contract either in instalment or in full ".
It was held that the amounts received from the customers under this arrangement were taxable as they were merely advance payments of the price and could riot therefore be regarded as borrowed money.
This was clearly so because under this arrangement cash was deposited by a purchaser in respect of a contract of purchase at the time it was made and was to be applied when the goods had been delivered by the appellant under that contract towards the price payable in respect of them, such price not being payable in any other manner.
The arrangement for the second part of the accounting period was that the payment made by a constituent at the time of the making of a contract was taken as " Contracts advance fixed deposit " and it was refunded when the goods under the contract had been supplied and the price in respect thereof paid in full irrespective of the earlier payment.
With respect to the payment initially made under this arrangement Patanjali Sastri, C. J., said at p. 1067 : ". we are of opinion that, having regard to the terms of the arrangement then in force, they partake more of the nature of trading receipts than of security deposits.
It will be seen that the amounts received were treated as advance payments in relation to each " contract number " and though the agreement provided for the payment of the price in full by the customer and for the deposit being returned to him on the completion of delivery under the contract, the transaction is one providing in substance and effect for the adjustment of the mutual obligations on the completion of the contract.
We hold accordingly that 693 the sums received during this period cannot be regarded as borrowed money. .
It seems to us that the amounts involved in the present case were exactly of the nature of the deposits made in the second period in Lakshmanier & Sons ' case (1).
There, as here, as soon as a transaction of sale was made the seller received certain moneys in respect of it.
It is true that in Lakshmanier & Sons ' case the transaction was a contract to sell goods in future whereas in the present case the transaction was a sale completed by delivery of the goods and receipt of the consideration.
But that cannot change the nature of the payment.
In Lakshmanier & Sons ' case, the payment initially made was refundable after the price had been paid; in the present case the contract is to refund the amount on the return of the bottles already sold.
In each case therefore the payment was made as part of a trading transaction and in each case it was refundable on certain events happening.
In each case again the payment was described as a deposit.
As in that case, so in the present case, the payment cannot be taken to have been made by way of a security deposit.
We must therefore on the authority of Laskhmanier & Sons ' case, hold the amounts in the present case to have been trading receipts.
It was Mr. Sastri 's effort to bring the case within the arrangement that prevailed in the third part of the accounting period in Laskhmanier & Sons ' case, the initial payments made during which were held to be loans.
But we think that he has not succeeded in this.
The payments during the third period were made under the following arrangements: " Instead of calling for amounts from you towards 'Security Deposit ' due to bales for which we are entering into forward contracts with you and returning the same to you from the said deposit then and there, as we are doing now, and in order to make it feasible, we have decided to demand from you a certain sum towards Security Deposit and keep the same with us so long as our business connections under forward contracts will continue with you." Under this arrangement a certain (1)[1953] S.C.R. 1057.
694 sum was kept in deposit once and for all and there.
after Lakshmanier & Sons commenced to enter into the trading transactions, namely, forward contracts for sale of yarn with the constituents who deposited the money.
The sum so deposited was to be refunded with interest at three per cent.
per annum at the end of the business connection between the parties, if necessary, after retaining there out any amount due on the contracts made with the constituent which, the latter was at the termination of the business found not to have paid.
Patanjali Sastri, C. J., observed at p. 1063 in regard to the deposits made under this arrangement: "The amount deposited by a customer was no longer to have any relation to the price fixed for the goods to be delivered under a forward contract either in instalments or otherwise.
Such price was to be paid by the customer in full against delivery in respect of each contract without, any adjustment out of the deposit, which was to be held by the appellants as security for the due performance of his contracts by the customer so long as his dealings with the appellants by way of forward contract continued, the appel lants paying interest at 3 per cent.
in the meanwhile, and having, as appears from the course of dealings between the parties ' the use of the money for their own business.
It was only at the end of the " business connection " with the appellants that an adjustment was to be made towards any possible liability arising out of the customer 's default.
Apart from such a contingency arising, the appellants undertook to repay an equivalent amount at the termination of the dealings.
The transaction had thus all the essential elements of a contract of loan, and we accordingly hold that the deposits received under the final arrangement constitute borrowed money ".
Having observed that the description of the payment made by the customer as a deposit made no difference for a deposit included as a loan, the learned Chief Justice further said at p. 1064: " The fact that one of the conditions is that it is to be adjusted against a claim arising out of a possible 695 default of the depositor cannot alter the character of the transaction.
Nor can the fact that the purpose for which the deposit is made is to provide a security for the due performance of a collateral contract invest the deposit with a different character.
It remains a loan of which the repayment in full is conditioned by the due fulfilment of.
the obligations under, the collateral contract ".
In coming to the view that he did with regard to the arrangement prevailing in the third period, the learned Chief Justice referred ' with approval to the case of Davies vs Shell Company of China(1) which we have earlier mentioned.
Now it seems to us that the reasons on which the learned Chief Justice based his conclusion that the deposits during the third period were loans do not apply to the present case.
In the present case, unlike in Lakshmanier & Sons ' case, the amount paid has a relation to the price of the goods sold ; it is part of that price as we have earlier said.
It was a condition of each transaction of sale by the appellant.
It was refundable to the wholesaler as soon as he returned the bottles in which the liquor had been supplied to him in the transaction in respect of which the deposit had been made.
The deposit in the present case was really not a security at all ; it did not secure to the appellant anything.
Unlike Lakshmanier & Sons ' case, in the present case a deposit was made every time a transaction took place and it was refundable under the terms of that transaction independently of other deposits under other transactions.
In Lakshmanier & Sons ' case, the deposit was in the nature of the assee 's trading structure and anterior to the trading operations, as were the deposits considered in Shell Company case(1).
In the case in hand the deposit was part of each trading transaction.
It was re.
fundable under the terms of the contract relating to a trading transaction under which it had been made; it was not made under an independent contract nor was its refund conditioned by a collateral contract, as happened in Lakshmanier & Sons ' case.
(1) 696 We therefore think that the present case is governed by the arrangement covering the second period and: not the third period mentioned in Lakshmanier & Sons case (1), and, come to the conclusion that the amounts with which we are concerned were trading receipts.
Mr. Sastri also referred us to Morley vs Pattersall and contended that the amounts with which we are concerned, were of the same kind as those consideredin that case and were not income.
It seems to us that there is no similarity between the two cases at all.
Tattersall was a firm who sold horses of its constituents on their behalf and received the price which it was liable to pay them.
It so happened that in the course of years various customers did not come and demand the amounts due to them.
Initially Tattersall showed those amounts in its accounts as liabilities which they really were.
Later it thought that it would never have to pay back these amounts and thereupon transferred them to the credit of its partners.
The Revenue sought to tax the amounts so transferred as Tattersall 's income.
The question was whether the amounts upon transfer became Tattersall 's income.
It was never contended that the amounts when received as price of the constituent 's horses sold were Tattersall 's income and the only contention was that they became income upon being transferred to the credit of the partners.
It was held that the amounts had not by being entered on the credit side, become income of the firm.
Sir Wilfrid Greene said at p. 65 : " Mr. Hill 's argument was to the effect that, although they were not trading receipts at the moment of receipt, they had at that moment the potentiality of becoming trading receipts.
That proposition involves a view of Income Tax Law in which I can discover no merit except that of novelty.
" Then again he said: " It seems to me that the quality and nature of a receipt for Income Tax purposes is fixed once and for all when it is received.
What the partners did in (1) ; (2) 697 this case, as I have said, was to decide among themselves that what they had previously regarded as a liability of the firm they would not, for practical reasons, regard as a liability; but that does not mean that at that moment they received something, nor does it mean that at that moment they imprinted upon some existing asset a quality different from what it had possessed before.
There was no existing asset at all at that time.
" All that this case decided was that moneys which were not when received, income and as to this there was no question could never later become income.
With such a case we are not concerned.
The case turned on the fact that the moneys received by Tattersall were never its moneys; they had been received on behalf of others and that receipt only created a liability towards them.
Now it seems to us quite impossible to say that the amounts with which we are concerned were not the appellant 's moneys in the sense that the constituent 's moneys in the hands of Tattersall were not its.
The amounts in this case were not received on account of any one but the appellant.
No doubt these moneys might have to be refunded if certain things happened which however might never happen, but that did not make them the moneys of those who might become entitled to the refund.
Mr. Sastri referred us to the observations of Sir Wilfrid Greene, M. R., in Morley vs Tattersall (1) at p. 65 to the effect that, " The money which was received was money which had not got any profit making quality about it; it was money which, in a business sense, was a client 's money and nobody else 's" and contended that the amounts involved in the presentcase were of the same nature.
We are unable to agree.
If we are right in our view that the amounts were trading receipts, it follows that they must have a profit making quality about them.
Their payment was insisted upon as a condition upon which alone the liquor would be supplied with an agreement that they would.
be repaid oil the return of the bottles.
They (1)(1938) 88 698 were part of the transactions of sale of liquor which produced the profit and therefore they had a profit making quality.
Again, a wholesaler was quite free to return the bottles or not as he liked and if he did not return them, the appellant had no liability to refund.
It would then keep the moneys as its own and they would then certainly be profit.
The moneys when paid were the moneys of the appellant and were thereafter in no sense the moneys of the persons who paid them.
Having given the matter our anxious consideration which the difficulties involved in it require, we think that the correct view to take is that the amounts paid to the appellant and described as " Empty Bottles Return Security Deposit " were trading receipts and therefore income of the appellant assessable to tax.
We agree with the High Court that the question framed for decision in this case, should be answered in the affirmative.
In the result the appeal fails and is dismissed.
The appellant will pay the costs in this Court.
Appeal dismissed.
[/INST]The appellant assessee carried on the business of mining gypsum.
The predecessor in interest of the assessee acquired a lease from the Maharaja of one of the erstwhile princely State on September 29, 1948 for mining of gypsum for a period of 20 years over an area of 4.27 square miles in the State.
The lease was liable to be renewed after the expiry of 20 years.
By a deed of assignment dated December 11, 1948 the rights under the lease were assigned to the assessee company, in which the State Government owned 45% shares.
The assessee entered into an agreement with a Government of India Public Undertaking for the supply of gypsum of minimum of 83.5% quality.
Under the lease, the assessee was conferred the liberties and powers to enter upon the entire leased land and to search for win, work, get, raise, convert and carry away the gypsum for its own benefits in the most economic convenient and beneficial manner and to treat the same by calcination and other processes.
The lease agreement consisted of several parts and each part contained several clauses.
Clause 3 of part Iii prescribed restrictions on mining operation within 100 yards from any railway, reser voir, canal or other public works.
This clause had been incorporated in the lease to protect the railway track and railway station which was situated within the area demised to the lessee.
The assessee exclusively carried on the mining of gypsum in the entire area demised to it.
The Railway Authorities extended the railway area by laying down fresh track, pro viding for railway siding and further constructed quarters in the leased area without the permission of the assessee.
The assessee company filed a civil suit for ejecting the railways from the encroached area but it failed in the suit.
314 As the assessee company on research and survey found that under the railway area a high quality of gypsum was available, which was required as raw material by the Public Sector Company, all the parties (Public Sector Company, the Railway Board and the assessee company) negotiated the matter, the Railway Board agreeing to shift the railway station, track and yards to an alternative area offered by the assessee, the parties equally bearing the cost of the shifting.
Under the aforesaid agreement, the assessee company paid a sum of Rs.3 lakhs as its share towards the cost of shift ing of the Railway Station and other constructions, and claimed deduction of the said sum for the assessment year 1964 65.
The Income Tax Officer rejected the assessee 's claim on the ground that it was a capital expenditure.
The order was confirmed on appeal by the Appellate Assistant Commissioner.
On appeal by the assessee, the Income Tax Appellate Tribunal held that the payment of Rs.3 lakhs by the assessee company was not a capital expenditure, but a revenue expend iture.
The Tribunal referred the question to the High Court under section 256 of the Income Tax Act, 1961, on an appli cation by the revenue, which held that since on payment of Rs.3 lakhs to the Railways the assessee acquired a new asset which was attributable to capital of enduring nature, the sum of Rs.3 lakhs was a capital expenditure and it could not be a revenue expenditure.
In the appeal to this Court on the question whether the payment of Rs.3 lakhs to the Northern Railway was a revenue expenditure and was a deduction allowable under the Income Tax Act, 1961.
Allowing the appeal, this Court, HELD: 1(a) Where the assessee has an existing right to carry on a business, any expenditure made by it during the course of business for the purpose of removal of any re striction or obstruction or disability would be on revenue account, provided the expenditure does not acquire any capital asset.
[326A] (b) Payments made for removal of restriction, obstruc tion or disability may result in acquiring benefits to the business, but that by itself would not acquire any capital asset.
[326B] Gotan Lime Syndicate vs C.I.T., Rajasthan & Delhi, ; M.A. Jabbar vs C.I.T., Andhra Pradesh, Hyderabad, [1968] 315 2 SCR 413 and Commissioner of Inland Revenue vs Carron Company, [1966 69] 45 Tax Cases 18, referred.
Empire Jute Company vs C. I. T., ; , affirmed.
In the instant case, the assessee have been granted mining lease in respect of 4.27 square miles under which he had right to sink, dig, drive, quarry and extract mineral i.e. the gypsum and in that process he had right to dig the surface of the entire area leased out to him.
The payment of Rs.3 lakhs was not made by the assessee for the grant of permission to carry on mining operations within the railway area, instead the payment was made towards the cost of removing the construction which obstructed the mining opera tions.
On the payment made to the Railway Authorities the assessee did not acquire any fresh right to any mineral nor he acquired any capital asset instead, the payment was made by it for shifting the Railway Station and track which operated as hindrance and obstruction to the business of mining in a profitable manner.
[326C E] 2.
There may be circumstances where expenditure, even if incurred for obtaining advantage of enduring benefit would not amount to acquisition of asset.
The facts of each case have to be borne in mind in considering the question having regard to the nature of business, its requirement and the nature of the advantage in commercial sense.
[326F G] 3(a) The test for considering the expenditure for the purposes of bringing into existence an asset or an advantage for the enduring benefit of a trade is not always true and conclusive.
[327B] 3(b) In considering the cases of mining business the nature of the lease the purpose for which expenditure is made, its relation to the carrying on of the business in a profitable manner should be considered.
[326H] In the instant case, existence of Railway Station, yard and buildings on the surface of the demised land operated as an obstruction to the assessee 's business of mining.
The Railway Authorities agreed to shift the Railway establish ment to facilitate the assessee to carry on his business in a profitable manner and for that purpose the assessee paid a sum of Rs.3 lakhs.
The payment made by the assessee was for removal of disability and obstacle and it did not bring into existence any advantage of an enduring nature.
There was therefore.
no acquisition of any capital asset.
[326H; 327A] 316 British Insulated and Helsby.
Cables Ltd. vs Atherton, , explained.
Assam Bengal Cement Co. Ltd. vs The Commissioner of Income Tax, West Bengal, , referred to.
R.B. Seth Moolchand Suganchand vs Commissioner of Income Tax, New Delhi, , distinguished.
The Tribunal rightly allowed the expenditure on revenue account.
The High Court failed to appreciate the true nature of the expenditure.
It committed an error in interfering with the findings recorded by the Income Tax Appellate Tribunal.
[327B C]
</s>
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<s>[INST] Summarize the judgementCivil Appeals Nos.
2221 2225, and 2524 of 1972.
From the Judgment and orders dated the 18 11 71, 29 3 1972 and 5 2 1972 of the Delhi High Court in L.P. No. 53/71 and Civil Writ Petitions Nos. 612, 640, 643 and 649/71, 281/72 and 1052 of 1971 respectively.
A.K. Sen, Sarjoo Prasad Balram Senghal and C. P. Lal for the Appellants in CAs 2221 2225/72 B. Sen, S.P. Nayar and M.N. Shroff for Respondents 2 3, (In CAs.
2221 2225/72) for Respondents 1 4 in.C.A. 1801).
S.V. Gupte, Mrs. Leila Sait and U. K. Kaithan for Interveners (In CAs.2221 2225/72) and Appellants (In CAs.2524/72).
M. C. Bhandare, Sardar Bahadur Saharya, B. N. Kirpal and V. B. Saharya for the Appellant in CA 1801/72.
The Judgment of the Court was delivered by SARKARIA, J.
Whether the Notification No. SRO 2908, dated December 7, 1957 issued by the Central Government in purported exercise of its powers under section 2 of the Union Territories (Laws) , is ultra vires the Central Government is the principal question that arises in these appeals which will be disposed of by a common judgment.
The question has arisen in these circumstances: Section 2 of the Part States (Laws) Act, 1950, empowered the Central Government to extend by notification in the official Gazette to any Part State, or to any part of such State, with such restrictions and modifications as it thinks fit, any enactment which is in force in a Part A State.
In exercise of this power, the Central Government by a Notification No. SRO 615 dated the 28th April 1951, extended to the then Part State of Delhi, the Bengal Finance (Sales Tax) Act, 1941 (for short, the Bengal Act), with, inter alia, these modifications: "In sub section (2) of Section 6, (a)(b) for the words "add to the Schedule", the words "add to or omit or otherwise amend the Schedule" shall be substituted " For the Schedule of the Bengal Act, this Notification substituted a modified Schedule of goods exempted under section 6.
The relevant items in the modified Schedule were as follows: "8.Fruits, fresh and dried (except when sold in sealed containers) Pepper, tamarind and chillies.Turmeric.
Cloth of such description as may from time to time be specified by notification in the Gazette costing less per yard than Rs. 3/ or such other sum as may be specified.
21A. Knitting wool.
" Section 6 of the Bengal Act after its extension to Delhi, as modified by the said Notification, reads thus : "6(1)No tax shall be payable under this Act on the sale of goods specified in the first column of the Schedule subject to the conditions and exceptions if any set out in the corresponding entry in the second column thereof.
(2) The State Government after giving by Notification in the official Gazette not less than 3 months ' notice of its intention so to do may by like notification 790 add to or omit from or otherwise amend the Schedule and thereupon the Schedule shall be deemed to be amended accordingly." (emphasis supplied)
By a Notification, dated 1 1 1951, in sub section (1) of section 6, the words "the first column of" were omitted and for the words "in the corresponding entry in the second column thereof" the word "therein" was substituted.
By a notification country liquor was included in the Schedule as item No. 40 of exempted goods with effect from 19 1 1952.
On 1 11 1956, as a result of the coming into force of the States Reorganization Act, 1956, and the Constitution (Seventh Amendment) Act, 1956, Part States were abolished.
Part State of Delhi became a Union Territory and the Delhi Legislative Assembly, was also abolished.
In 1956, Part State (Laws) Act, 1950 (hereinafter referred to as Laws Act) also became me , with necessary adaptations.
On 1 12 1956, Parliament passed the Bengal Finance (Sales Tax) (Delhi Amendment) Act 1956 which introduced amendments in different sections of the Bengal Act as applicable to Delhi.
It made only two changes in section 6 Firstly, the word 'Schedule ', wherever it occurred, was replaced by the words "Second Schedule".
Secondly the words "Central Government" were substituted for the words "State Government".
On December 7, 1951, in the Gazette of India Extraordinary there appeared a notifications which reads as below: "S.R.O. 3908 In exercise of the powers conferred by section 2 of the (30 of 1950), the Central Government hereby makes the following amendment in the notification of the Government of India in the Ministry of Home Affairs No. S.R.O. 615, dated the 28th April, 1951 (extending to the Union Territory of Delhi and the Bengal Finance (Sales Tax) Act, 1941, subject to certain modifications) namely : In the said notification, in the modifications to the Bengal Act aforesaid, in item 6 (relating to sub section (2) of section (6), after sub item (a), the following sub item shall be inserted, namely : "(aa) for the words "not less than three months ' notice," the words "such previous notice as it considers reasonable" shall be substituted".
The vires of this notification dated 7 12 1957, is me subject of primary challenge in these appeals (hereinafter it will be referred to as the impugned notification).
791 Item 17 in the Second Schedule of the Bengal Act was amended with effect from December 14, 1957 by Notification No. SRO 3958, as under : "17. All varieties of cotton, woollen, rayon or artificial silk fabric but not including real silk fabrics".
"Conditions subject to which tax shall not be payable: In respect of tobacco cotton fabrics, rayon or artificial silk fabrics and woollen fabrics as defined in item 9, 12, 12A, 12B at the First Schedule to the (I of 1944) included in entries (a) and (c) above, no tax under the Bengal Finance (Sales Tax) Act 1941, shall be payable in the Union Territory of Delhi only if additional duties of excise have been levied on them under the Additional Duties of Excise (Goods of Special Importance) Act 1957".
The aforesaid condition was withdrawn by Notification No. GSR 203, dated 1 4 1958.
By Notification No. GSR 202, dated 1 4 1958, the Central Government withdrew the exemption of country liquor from tax by omitting item No. 40 from the Second Schedule.
By Notification No. GSR 1076 dated 19 9 1959, the Central Government withdrew the exemption from tax of Items, 8, 11, 14 and 21A by omitting them from the Second Schedule with effect from 1 10 1959.
On 1 10 1959, the Bengal (Sales Tax Delhi Amendment) Act, 1959 (Act XX of 1959) came into force whereby Parliament made some amendments in different sections of the Bengal Act but left section 6 untouched.
By a Notification No. GSR 964 dated 16 6 1966, notice was given that item 17 of the Second Schedule would be substituted with effect from 1 7 1966, as follows: "Item 17 All varieties, cotton, woollen, nylon, rayon, pure silk or artificial silk fabrics but excluding Durries, Druggets and carpets".
The proposed amendment was given effect to from 1 7 1966, by Notification No. GSR 1061 dated 29 6 66.
One result of this amendment was that exemption of Durries from tax was withdrawn, while, such exemption was among others, extended to 'pure silk '.
By a Notification GSR 1038, dated 14 7 1970, notice was given that item 17 in the Second Schedule would be substituted with effect from 1 8 1970, as follows: "17.All varieties of cotton fabrics, rayon, or artificial silk fabrics and woollen fabrics but not including Durries, Druggets and carpets".
792 Such substitution of item 17 was made with effect from 1 8 70 by Notification GSR 1119 dated 31 7 1970.
one result of this notification was that the exemption of 'pure silk ' from tax was withdrawn.
The appellants in Civil Appeal No. 2221 of 1972 are dealers in durries.
They feel aggrieved by the Notification GSR 1061 dated 29 6 1966 whereby exemption of Durries from sales tax was withdrawn.
The appellants in Civil Appeals 2222, 2223 and 2225 of 1972 deal in knitting wool.
Their cause of action arose when exemption of knitting wool was withdrawn by Notification dated 19 9 1959, w.e.f. 1 10 1959.
The appellants in Civil Appeals 2524 of 1972 deal inter alia in pure silk.
They are aggrieved by Notification, dated 31 7 1970 by which exemption of 'pure silk ' was withdrawn w.e.f. 1 8 1970.
The appellants in Civil Appeal No. 2224 of 1972 is a Kiryana dealer.
He feels aggrieved by the Notification dated 19 9 1959 whereby items 8, 11 and 14 were deleted from the Second Schedule with effect from 1 10 1959.
The appellants in Civil Appeal No. 1801 of 1972 are licensed vendors of country liquor.
They feel adversely affected by Notification GSR 1076, dated 19 9 1959 whereby exemption of country liquor from tax was withdrawn with effect from 1 10 1959.
Several writ petitions were filed in the High Court to question the validity of the Government action withdrawing the exemptions with notice far less than three months.
A learned Judge of the High Court allowed eight of these petitions by a common judgment recorded in Civil Writ 574 D of 1966, Lachmi Narain vs Union of India and others.
Against that judgment, the Revenue carried appeals under Clause 10 of the. , to a Bench of the High Court.
In the meanwhile more writ petitions (C. Ws.593 to 652, 792 to 806 of 1971) were instituted in which the same question was involved.
The Division Bench, by a common judgment, allowed the appeals and dismissed the writ petitions.
The writ petitioners have now come in appeal to this Court on the basis of a certificate granted by the High Court under Article 133 (1) (a) and (c) of the Constitution.
In the High Court the validity of the withdrawal of the exemptions was challenged on these grounds : (I) The power given by section 2 of the Laws Act to the Central Government to extend enactments in force in a State to a Union Territory with such restrictions and modifications as it thinks fit, could be exercised only to make such modifications in the enactment as were necessary in view of the peculiar local conditions.
The modification in section 6(2) of the BengaI Act made by SRO 3908, dated 793 7 10 1957, was not necessitated by this reason.
It was therefore, ultra vires section 2 of the Laws Act; (2) Such a modification could be made only once when the Bengal Act was extended to Delhi in 1951.
No modification could be made after such extension.
(3) The modification could not change the policy of the legislature reflected in the Bengal Act.
The impugned modification was contrary to it, and (4) The modifications giving notice to withdraw the exemptions and the notifications issued pursuant thereto withdrawing the exemptions from sales tax with respect to Durries, Ghee, (and other items relevant to these petitions) were void as the statutory notice of not less than three months as required by section 6(2) prior to its modification by the impugned notification of 7th December, 1957 had not been given.
Finding on all the four grounds in favour of the writ petitioners, lie learned Single Judge declared "that the purported modification of section 6(2) of the Bengal Finance (Sales Tax) Act 1941 by the Government of India 's notification No. SRO 3908, dated 7th December, 1957, was ineffective and section 6(2) continues to be the same as before as if it was not so modified at all."
In consequence he quashed the Government notifications GSR 964, dated 16 6 1966 and GSR 1061 dated 29 6 1966 because they were not in compliance with the requirement of section 6(2) of the Bengal Act.
The contentions canvassed before the learned Single Judge were repeated before the appellate Bench of the High Court.
The Bench did not pointedly examine the scope of the power of modification given to the Central Government by section 2 of the Laws Act with specific reference to the purpose for which it was conferred and its precise limitations.
It did not squarely dispel the reasoning of the learned Single Judge that the power of modification is an integral part of the power of extension and "cannot therefore be exercised except for the purpose of the extension".
It refused to accept that reasoning with the summary remark "from the extracts quoted by the learned Single Judge from the judgment of the Supreme Court in Re: Delhi Laws Act and from the Judgment in Rajnarain Singh vs The Chairman Patna Administration Committee Patna and Anr, the principle deduced by the learned Judge does not appear to follow.
We are therefore not inclined, as at present advised to support the above observations".
The Bench however hastened to add : "However, since the matter was not argued at great length and the appellants ' Counsel rested his submissions on the other aspects of the case, we would not like to express 794 any definite opinion on the question as to whether the power of making any modifications or restrictions in the Act can only be exercised at the time of extending the Act and that it cannot be done subsequently by the Central Government in exercise of its power."
" Seeking support from the observations of this Court in Raza Buland Sugar Co. Ltd. vs Municipal Board, Rampur,(1) the Bench held that what is mandatory in section 6(2) is the requirement as to the giving of reasonable notice of the Government 's intention t(! amend the second Schedule, for the information of the public, and that "no special significance or sanctity is attached to the span of time of three months provided in subsection (2) of section 6."
The Bench found that since the withdrawals of the exemptions in question, had been made after reasonable notice, the same were not invalid.
However, the main ground on which the decision of the Bench rests is that the infirmity, if any, in the impugned notification dated 7 12 1957, had been cured and rectified when "Parliament while enacting the Amendment Act, 1959 (Act No. '70 of 1959) put its seal of approval to the curtailed period of notice.
As such the curtailed period of notice shall be taken to have been provided by Parliament on the ratio of Supreme Court 's decision in Venkatrao Esajirao limberkar 's case".
Apart from the grounds taken in their writ petitions, the learned Counsel for the appellants have tried to raise before us another ground under the garb of what they styled.
as merely an additional argument".
They now seek to challenge the vires of the Notification SRO 615, dated the 28th April, 1951 in so far as it relates to the insertion in sub section (2) of section 6 of that Act, between the words "add to" and "the Schedule", of the words "or omit or otherwise amend".
It is argued that this insertion was beyond the power of modification conferred on the Central Government by section 2 of the Laws Act.
The point sought to be made out is that if the insertion made by the Notification dated 28 4 1951, in sec.6(2) was ineffective and non est in the eye of law, the Central Government would have no power to "omit" anything from the exempted goods itemised in the Schedule.
It is argued that under section 6(2) sans this insertion, the Central Government was empowered only to "add to" and not "omit" from the exempted items enumerated in the Schedule, and consequently, the withdrawal of the exemptions in question was ultra vires the Central Government.
The entertainment of this Plea at this stage is stoutly opposed by Shri B. Sen, learned Counsel for the Revenue.
We are not inclined to permit the appellants to add to the list of impugned Notifications, now in section appeal.
In their writ petitions, the appellants did not challenge the validity of the Notification dated 28 4 51.
They never raised this point before the learned 795 Single Judge.
Of course, before the appellate Bench, an argument was addressed on this point, but it does not appear to have been pressed.
The Bench noted: "In the present appeal, the Bengal Act as extended by SRO 615, dated the 28th April 1951, did not suffer from any infirmity.
It is conceded by the learned Counsel for the respondent that the Central Government at the time it extended e the Bengal Act, was competent to introduce such modification and restrictions as it thought fit.
The certificate under article 133 of the Constitution was neither sought, nor granted on any ground touching the validity of the Notification, dated 28 4 1951.
In the face of all this, it is now too late for the appellants to commit a volte face.
Accordingly, we decline to entertain this new ground of challenge.
The learned Counsel for the parties have, more or less, reiterated the same contentions which they had advanced in the High Court.
On behalf of the appellants, it is contended that the power of modification conferred on the Central Government by section 2 of the Laws Act is not an unfettered power of delegated legislation but a subsidiary power conferred for the limited purpose of extension and application to a Union Territory, an enactment in force in a State.
It is maintained that only such modifications are permissible in the exercise of that power which are necessary to adapt and adjust such enactment to local conditions.
According to Shri Ashok Sen, the power given by section 2 is a power of conditional legislation which is different from the power of delegated legislation.
It is submitted that it is not a recurring power; it exhausts itself on extension, and in no case this power can be used to change the basic scheme and structure of the enactment or the legislative policy ingrained in it.
The submission is that the impugned notification, dated 7 12 1957, is bad because it has been issued more than 61 years after the extension of Bengal Act, and it attempts to change the re rquirement of section 6(2) as to "not less than three months notice" which P is the essence of the whole provision.
Reference has been made to this Court 's opinion in Re: Delhi Laws Act (supra) and the decision in Raj Narain Singh case (supra).
Shri Ashok Sen further submits that by the amending Act 20 of 1959, parliament did not put its seal of approval on the impugned notification or the changes sought to be made by it in section 6 of the Bengal Act.
It is stressed that the amending Act of 1959, did not touch section 6 at all and therefore it could not be said with any stretch of imagination, that Parliament had referentially or impliedly incorporated or approved the purported change made by the impugned notification, in the Bengal Act.
As against the above, Shri B. Sen, the learned Counsel for the Revenue submits that the impugned notification does not change the essential structure or the policy embodied in section 6(2) of the Bengal Act.
796 According to Counsel, the policy underlying section 6(2) is that reasonable notice of the Government 's intention to add to or omit anything from the Second Schedule must be given by publication in the official Gazette.
It is maintained that the requirement as to "not less than three months ' notice" in the section was not a matter of policy but one of detail or expedience; it was only directory, and the modification made by the impugned notification did not go beyond adjusting and adapting it to the local conditions of Delhi.
Bengal, it is pointed out, is a big, far flung State while the Territory of Delhi is a small, compact area and therefore, it would not be necessary or unreasonable to give a notice of less than three months for every amendment of the Schedule.
Reliance has been placed on this Court 's dictum in Raza Buland Sugar Co. 's case (supra).
It is argued that the power to add or omit from the Second Schedule conferred on the Government is in consonance with the accepted practice of the Legislature; that it is usual for the legislature to leave a discretion to the executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be levied or rates at which it is to be charged in respect of different classes of goods and the like.
Reference has been made to the observations of this Court in Pt.Benarsi Das Bhanot vs State of Madhya Pradesh in the context of section 6(2) of the Central Provinces and Berar Sales Tax Act 1947.
Shri B. Sen further contends that the power of modification given by section 2 of the Laws Act, does not exhaust itself on first exercise; it can be exercised even subsequently if through oversight or otherwise, at the time of extension of the enactment the Central Government fails to adapt or modify certain provisions of the extended enactment for bringing it in accord with local conditions.
In this connection support has been sought from the observations of Fazal Ali J. at p. 850 of the Report in Re: Delhi Laws Act (supra).
Our attention has also been invited to section 21 of the General Clauses Act which according to Counsel, gives power to the Central Government to add to, amend, vary or rescind any notification etc if the power to do so does not run counter to the policy of the legislature or affect any change in its essential features.
Learned Counsel has further tried to support the reasoning of the appellate Bench of the High Court, that whatever infirmity may have existed in the impugned notification and the modification made there by in section 6(2), it was rectified and cured by Parliament when it passed the Amendment Act 20 of 1959.
It is urged that the Bengal Act together with the modifications made by notifications, dated 28 4 51, and 7 12 1957, must have been before Parliament when it considered and passed the Amendment Act of 1959.
Our attention has been invited to its preamble which is to the effect: "An Act further to amend the Bengal Finance (Sales Tax) Act, 1941, as in force in the Union Territory of Delhi," and also to the words "as in forcer in the Union Territory of Delhi" in section 2 of the amending Act.
:Reference has been made to this Court 's decisions in Venkatrao Esajirao 's case (supra), and Gwalior Rayon Silk Mfg.(Wvg.) Co. Ltd. The Assistant Commissioner of Sales tax and ors.
797 An alternative argument advanced by Shri B. Sen is that if in section 6(2) the requirement as to "not less than three months ' notice" was mandatory and a matter of legislative policy, then the exemptions from tax granted to Durries, pure silk etc.after the issue o the impugned notification must be treated non est and void ab initio, inasmuch as the amendments of the Second Schedule whereby those exemptions were granted, were made without complying with the requirement of not less than three months ' notice".
It is argued that if this requirement was a sine qua non for amendment of the Second Schedule, it could not be treated mandatory in one situation and directory in another.
If it was mandatory then compliance with it would be absolutely necessary both for granting an exemption and withdrawing an exemption from tax.
In this view of the matter, according to Shri B. Sen, the withdrawal of the exemption through the impugned notification was a mere formality; the notifications simply declared the withdrawal of something which did not exist in the eye of law.
Appellants cannot therefore have any cause of grievance if the invalid and still born exemptions were withdrawn by the questioned notifications.
In reply to this last argument, learned Counsel for the appellants submit that this ground of defence was not pleaded by the Revenue in its affidavit before the learned Single Judge.
This, according to the Counsel, was a question of fact which required evidence for its determination, and was therefore required to be pleaded.
Since the Respondents did not do so, they should not have been allowed to take it for the first time at the time of arguments.
Even otherwise proceeds the argument the Respondents are not competent to take this stand which is violative of the basic canon of natural justice, according to which no party can be allowed to take advantage of its own wrong.
It is stressed that the object of the requirement of not less than three months ' notice, was to afford an opportunity to persons likely to be adversely affected to raise objections against the proposed withdrawal or curtailment of an exemption from tax.
That being the case, only the persons aggrieved could have the necessary locus standi to complain of a non compliance with this requirement.
In Re: Delhi Laws (supra) this Court inter alia examined the constitutional validity of section 2 of the Laws Act in the light of general principles relating to the nature, scope and limits of delegated legislation.
Section 2 as it then stood, was as follows: "The Central Government may, by notification in the official Gazette, extend to any Part State (other than Coorg and the Andaman and Nicobar Islands) or to any part of such State with such restrictions and modifications as it thinks fit any enactment which is in force in a Part A State at the date of the notification and provision may be made in any enactment so extended for the repeal or amendments of any corresponding law (other than a Central Act) which is for the time being applicable to that Part State.
" The Court by a majority held that the first part of this section which empowers the Central Government to extend to any Part State or to any part of such State with such modifications and restrictions as it 798 thinks fit any enactment which is in force in a Part A State, is intra vires, and that the latter part of this section which empowers the Central Government to make provision in any enactment extended to a Part State, for repeal or amendment of any law (other than a Central Act) which is for the time being applicable to that Part State, is ultra vires.
Consequent upon this opinion, the latter part of the section was deleted by section 3 of the Repealing and Amending Act, 195 (Act XLVIlI of 1952) with effect from 2 8 1951.
The majority opinion in upholding the validity of the first portion of section 2 of the Laws Act drew a good deal from the observations of the Privy Council in Queen vs Burah wherein it was said: "If what has been done is legislation within the general scope of the affirmative words which give the power and if it violates no express condition or restrictions by which that power is limited. it is not for any court of justice to enquire further or to enlarge constructively those conditions and restrictions".
"Where plenary powers of legislation exist as to particular subjects, whether in an Imperial or in a Provincial Legislature, they may (in their Lordships judgment) be well exercised, either absolutely or conditionally.
Legislation conditional on the use of particular powers, or on the exercise of a limited discretion, entrusted by the legislature to persons in whom it places confidence, is no uncommon thing; and, in any circumstances it may be highly convenient." (emphasis supplies)
Before proceeding further, it will be proper to say a few words in regard to the argument that the power conferred by section 2 of the Laws Act is a power of conditional legislation and not a power of delegated legislation.
In our opinion, no useful purpose will be served to pursue this line of argument because the distinction propounded between the two categories of legislative powers makes no difference, in principle.
In either case, the person to whom the power is entrusted can do nothing beyond the limits which circumscribe the power; he has to act to use the words of Lord Selborne "within the general scope of the affirmative words which give the power" and without violating any "express conditions or restrictions by which that power is limited".
There is no magic in a name.
Whether you call it the power of "conditional legislation" as Privy Council called it in Burah 's case (supra) or 'ancillary legislation ' as the Federal Court termed it in Choitram vs Commissioner of Income tax, Bihar or 'subsidiary legislation ' as Kania C.J. styled, it or whether you camouflage it under the veiling name of 'administrative or quasi legislative power ' as Professor Cushman and other authorities have done it necessary for 799 bringing into operation and effect an enactment, the fact remains that it has a content, howsoever small and restricted of the law making power itself.
There is ample authority in support of the proposition that the power to extend and carry into operation an enactment with necessary modifications and adaptations is in truth and reality in the nature of a power of delegated legislation.
In Re: Delhi Laws Act (supra) S.R. Das J. said that on strict analysis it was "nothing but a delegation of a fractional legislative power".
Anglin J. in Grays case regarded this what is called conditional legislation ' as "a very common instance of limited delegation.
More or less to the same effect is the view taken by Evatt J. of Australia in Dignams case.
Prof. Kennedy (vide his treatise 'Constitution of Canada ', 2nd Edn.p. 463), is also of opinion that 'conditional legislation ' is "a form of delegation".
We do not want to multiply authorities nor wish to carry this academic discussion to a final conclusion because it is not necessary for solution of the problem in hand.
In the instant case, the precise question with which we are faced is whether the purported substitution of the words "such previous notice as is considers reasonable" for the words "not less than three months notice" in section 6(2) by the impugned notification dated 7th December, 1957, was in excess of the power of 'modification ' conferred on the Central Government by section 2 of the Laws Act.
This question has to be answered in the light of the principles enunciated by this Court in Re: Delhi Laws Act relating to the nature and scope of this power.
Out of the majority who upheld the validity of this provision of section 2 of the Laws Act, with which we are concerned, Fazal Ali J. explained the scope of the words "much modifications as it thinks fit" in section 2, thus: "These are not unfamiliar words and they are often used by careful draftsmen to enable laws which are applicable to one place or object to be so adapted as to apply to another.
The power of introducing necessary restrictions and modifications is incidental to the power to apply or adapt the law, and in the context in which the provision as to modification occurs it cannot bear the sinister sense attributed to it.
The modifications are to be made within the framework of the Act and they cannot be such as to affect its identity or structure or the essential purposes to be served by it.
The power to modify certainly involves a discretion to make suitable changes, but it would be useless to give an authority the power to adapt a law without giving it the power to make suitable changes."
Vivian Bose J. also observed in a similar strain, at p. 1124; 800 "The power to "restrict and modify" does not import the power to make essential changes.
It is confined to alterations of a minor character such as are necessary to make an Act intended for one area applicable to another and to bring it into harmony with laws already in being in the State, or to delete portions which are meant solely for another area.
To alter the essential character of an Act or to change it in material particulars is to legislate, and that, namely, the power to legislate, all authorities are agreed, cannot be delegated by a legislature which is not unfettered."
Mukherjea J. was of the view that the "essential legislative function" which consists in the determination or choosing of the legislative policy and of formally enacting that policy into a "binding rule of conduct" cannot be delegated.
Dealing with the construction of the words "restrictions" and "modification" in the Laws Act, the learned Judge said" at pages 1004 10O6: "The word "restrictions" . connotes limitation imposed on a particular provision so as to restrain its application or limit its scope, it does not by any means involve any change in the principle.
It seems to me that in the context and used alongwith the word "restriction" the word " 'modification" has been employed also in a cognate sense, and it does not involve any material or substantial alteration.
The dictionary meaning of the expression "to modify" is to "tone down" or to "soften true rigidity, of the thing" or "to make partial changes without any radical alteration".
It would be quite reasonable to hold that the word "modification" in section 7 of the Delhi Laws Act (which is almost identical with the present section 2, Laws Act) means and signifies changes of such character as are necessary to make the statute which is sought to be extended able to the local conditions of the province.
I do not think that the executive Government is entitled to change the whole nature or policy underlying any particular Act or to take different portions from different statutes and prepare what has been described before us as "amalgam" of several laws.
these things would be beyond the scope of the section itself." (emphasis supplied).
S.R. Das J. (as he then was) delineated the scope of the power of "modification" given under section 7 of the (for short the Delhi Act) at p. 1089 as follows: "It may well be argued that the intention of section 7 of the was that the permissible modifications were to be such as would, after modification, leave the general character of the enactment intact.
One of the meanings of the word "modify" is given in the oxford Dictionary Vol.I, page 1269 as "to alter without radical transformation".
If this meaning is given to the word "modification" in section 7 of the then the modifications contemplated 801 thereby were nothing more than adaptations which were included in the expressions mutatis mutandis and the "restrictions, limitations or proviso" mentioned in the several instances of conditional legislation referred to by the Privy Council (in Burah 's case).
It is to be noted that the language of s.7 of the Delhi Act was substantially the same as that of the first portion of section 2 of the Part C State Laws Act, as it then stood.
What Das J. said about the scope of "restrictions and modifications" in the context of section 7 of the Delhi Act substantially applies to the ambit and meaning of these words occurring in section 2 of the Laws Act.
Again, in Rajnarainsingh 's case (supra), Vivian Bose J. speaking for the Court, summed up the majority view in regard to the nature and scope of delegated legislation in Re: Delhi Laws (supra), thus: "In our opinion the majority view was that an executive authority can be authorised to modify either existing or future laws but not in any essential feature.
Exactly what constitutes an essential feature cannot be enunciated in general terms, and there was some divergence of view about this in the former case, but this much is clear from the opinions set out above: it cannot include a change of policy".
Bearing in mind the principles and the scope and meaning of the expression "restrictions and modifications" explained in , let us now have a close look at section 2.
It will be clear that the primary power bestowed by the section on the Central Government, is one of extension, that is, bringing into operation and effect, in a Union Territory, an enactment already in force in a State.
The discretion conferred by the Section to make 'restrictions and modifications ' in the enactment sought to be extended, is not a separate and independent power.
It is an integral constituent of the powers of extension.
It cannot be exercised apart from the power of extension.
This is indubitably clear from the preposition "with" which immediately precedes the phrase "such restrictions and modifications" and conjoins it to the principal clause of the section which gives the power of extension.
According to the Shorter Oxford Dictionary, one meaning of the word "with", (which accords here with the context), is "part of the same whole".
The power given by section 2 exhausts itself on extension of the enactment; it cannot be exercised repeatedly or subsequently to such extension.
It can be exercised only once, simultaneously with the extension of the enactment.
This is one dimension of the statutory limits which circumscribe the power.
The second is that the power cannot be used for a purpose other than that of extension.
In the exercise of this power, only such "restrictions and modifications" can be validly engrafted in the enactment sought to be extended, which are necessary to bring it into operation and effect in the Union Territory.
"Modifications" which are not necessary for, or ancillary and subservient to the purpose 802 of extension, are not permissible.
And, only such "modifications" can be legitimately necessary for such purpose as are required to adjust, adapt and make the enactment suitable to the peculiar local conditions of the Union Territory for carrying it into operation and effect.
In the context of the section, the words "restrictions and modifications" do not cover such alterations as involve a change in any essential feature, of the enactment or the legislative policy built into it.
This is the third dimension of the limits that circumscribe the power.
It is true that the word "such restrictions and modifications as it thinks fit", if construed literally and in isolation, appear to give unfettered power of amending and modifying the enactment sought to be extended.
Such a wide construction must be eschewed lest the very validity of the section becomes vulnerable on account of the vice of excessive delegation.
Moreover, such a construction would be repugnant to the context and the content of the section, read as a whole, and the statutory limits and conditions attaching to the exercise of the power.
We must, therefore, confine the scope of the words "restrictions and modifications" to alterations of such a character which keep the inbuilt policy, essence and substance of the enactment sought to be extended, intact, and introduce only such peripheral or insubstantial changes which are appropriate and necessary to adapt and adjust it to the local conditions of the Union Territory.
The impugned notification, dated 7 12 1957, transgresses the limits which circumscribe the scope and exercise of the power conferred by section 2 of the Laws Act, at least, in two respects.
Firstly, the power has not been exercised contemporaneously with the extension or for the purposes of the extension of the Bengal Act to Delhi.
The power given by section 2 of the Laws Act had exhausted itself when the Bengal Act was extended, with some alterations, to Delhi by Notification dated 28 4 1951.
The impugned notification has been issued on 7 12 1957, more than 6 1/2 years after the extension.
There is nothing in the opinion of this Court rendered in Re: (supra) to support Mr. B. Sen 's contention that the power given by section 2 could be validly exercised within one year after the extension.
What appears in the opinion of Fazl Ali J. at page 850, is merely a quotation from the report of the Committee on Minister 's Powers which considered the propriety of the legislative practice of inserting a "Removal of Difficulty Clause" in Acts of British Parliament, empowering the executive to modify the Act itself so far as necessary for bringing it into operation.
This device was adversely commented upon.
While some critics conceded that this device is "partly a draftsman 's insurance policy, in case he has overlooked something" (e.g. Sir Thomas Carr, page 44 of his book "Concerning English Administrative Law"), others frowned upon it, and nicknamed it as "Henry VIII Clause" after the British Monarch who was a notorious personification of absolute despotism.
It was in this perspective that the Committee on Minister 's Powers examined this practice and recommended: 803 ". first, that the adoption of such a clause ought on each occasion when it is, on the initiative of the Minister in charge of the Bill, proposed to Parliament to be justified by him upto the essential.
It can only be essential for the limited purpose of bringing an Act into operation and it should accordingly be in most precise language restricted to those purely machinery arrangements vitally requisite for that purpose; and the clause should always contain a maximum time limit of one year after which the power should lapse".
It may be seen that the time limit of one year within which the power under a Henry VIII Clause should be exercisable, was only a recommendation, and is not an inherent attribute of such power.
In one sense, the power of extension cum modification given under section 2 of the Laws Act and the power of modification and adaptation conferred under a usual 'Henry VIII Clause, ' are kindred powers of fractional legislation, delegated by the legislature within narrow circumscribed limits.
But there is one significant difference between the two.
While the power under section 2 can be exercised only once when the Act is extended, that under a 'Henry VIII Clause ' can be invoked, if there is nothing to the contrary in the clause more than once, on the arising of a difficulty when the Act is operative.
That is to say, the power under such a Clause can be exercised whenever a difficulty arises in the working of the Act after its enforcement, subject of course to the time limit, if any, for its exercise specified in the statute.
Thus, anything said in Re: (supra), in regard to the time limit for the exercise of power under a 'Henry VIII Clause ', does not hold good in the case of the power given by section 2 of the Laws Act.
Fazl Ali J., did not say anything indicating that the power in question can be exercised within one year of the extension.
On the contrary, the learned Judge expressed in unequivocal terms, at page 849: "Once the Act became operative any defect in its provision cannot be removed until amending legislation is passed." Secondly, the alteration sought to be introduced by this Notification (7 12 1957) in section 6(2), goes beyond the scope of the 'restrictions and modifications ' permissible under section 2 of the Laws Act; it purports to change the essential features of sub section
(2) of section 6.
and the legislative policy inherent therein.
Section 6(2), as it stood immediately before the impugned notification, requires the State Government to give by Notification in the Official Gazette "not less than 3 months notice" of its intention to add to or omit from or otherwise amend the Second Schedule.
The primary key to the problem whether a statutory provision is mandatory or directory, is the intention of the law maker as expressed in the law, itself.
The reason behind the provision may be a further aid to the ascertainment of that intention.
If the legislative intent is expressed clearly and strongly in imperative words, such as the use of 'must ' instead of "shall", that will itself be sufficient to hold 804 the provision to be mandatory, and it will not be necessary to pursue the enquiry further.
If the provision is couched in prohibitive or negative language, it can rarely be directory, the use of peremptory language in a negative form is per se indicative of the intent that the provision is to be mandatory (Crawford, the Construction of Statutes pp.523 24).
Here the language of sub section (2) of section 6 is emphatically prohibitive, it commands the Government in unambiguous negative terms that the period of the requisite notice must not be less than three months.
In fixing this period of notice in mandatory terms, the legislature had, it seems taken into consideration several factors.
According to the scheme of the Bengal Act, the tax is quantified and assessed on the quarterly turnover.
The period of not less than three months notice conforms to that scheme and is intended to ensure that imposition of a new burden or exemption from tax causes least dislocation and inconvenience to the dealer in collecting the tax for the Government, keeping accounts and filing a proper return, and to the Revenue in assessing and collecting the same.
Another object of this provision is that the public at large and the purchasers on whom the incidence of the tax really falls, should have adequate notice of taxable items.
The third object seems to be that the dealers and others likely to be affected by an amendment of the Second Schedule may get sufficient time and opportunity for making representations, objections or suggestions in respect of the intended amendment.
The dealers have also been ensured adequate time to arrange their sales adjust their affairs and to get themselves registered or get their licenses amended and brought in accord with the new imposition or exemption.
Taking into consideration all these matters, the legislature has in its judgment solemnly incorporated in the statute, fixed the period of the requisite notice as "not less than three months" and willed this obligation to be absolute.
The span of notice was thus the essence of the legislative mandate.
The necessity of notice and the span of notice both are integral to the scheme of the provision.
The sub section cannot therefore be split up into essential and non essential components, the whole of it being mandatory.
The rule in Raza Buland Sugar Co. 's case (supra) has therefore no application.
Thus section 6(2) embodies a determination of legislative policy and its formulation as an absolute rule of conduct which could be diluted, changed or amended only by the legislature in the exercise of its essential legislative function which could not, as held in Re: (supra) and Rajnarainsingh 's case (supra) be delegated to the Government.
For these reasons we are of opinion that the learned single Judge of the High Court was right in holding that the impugned notification was outside the authority of the Central Government as a delegate under section 2 of the Laws Act.
Before proceeding further, we may mention here in passing that the point for decision in Benarsi Das Bhanot 's case (supra) relied on by the Division Bench of the High Court, was different from the one 805 before us.
There, the constitutional validity of section 6(2) of the Central Provinces and Berar Sales Tax Act, 1947, was questioned on the ground of excessive delegation.
In the instant case the validity of section 6(2) of the Bengal Act, as such is not being impeached.
There is yet another facet of the matter.
By the impugned notification, the Central Government did not directly seek to amend section 6(2).
Perhaps it was not sure of its competence to do so more than 6 1/2 years after the extension of Bengal Act to Delhi.
It therefore chose to amend section 6(2) indirectly through the amendment of its earlier notification dated 28 4 51, which was only a vehicle or instrument meant for extension of the Bengal Act to Delhi.
On such extension, the notification had exhausted its purpose and had spent its force.
It had lost its utility altogether as an instrument for modification of the Bengal Act.
Therefore, the issue of the impugned notification which purported to amend section 6(2) through the medium of a "dead" notification, was an exercise in futility.
In any case, an amendment which was not directly permissible could not be indirectly smuggled in through the back door.
We now turn to the main ground on which the judgment of the appellate Bench of the High Court rests.
The question is, was the invalidity from which the impugned notification, dated 7 12 1957, suffered cured by the Amendment Act of 1959 ? The Bench seems to think that by passing this Amendment Act, Parliament had put its seal of approval on the Bengal Act as it stood extended and amended by the Notifications of 1957 and 1957.
We find no basis for this surmise.
This Amendment Act leaves section 6(2) untouched; it does not even indirectly, refer to the impugned notification or the amendment purportedly made by it in section 6(2).
Nor does it re enact or validate what was sought to be achieved by the impugned Notification.
No indication of referential incorporation or validation of the impugned notification or the amendment sought to be made by it, is available either in the preamble or in any other provision of the Amendment Act.
In Krishna Chandra vs Union of India,(1) relied upon by the learned Counsel for the Respondents, the central issue for consideration was, whether R. 20(2) framed by the Bihar Government under section 15 of the and the second proviso to section 10(2) of the Bihar Land Reforms Act, 1950 were constitutionally valid.
By the combined operation of these statutory provisions, the petitioners therein were called upon to pay certain rent and royalties in respect of mining operations.
Those demands were challenged in Baijnath Kedia vs State of Bihar(2) wherein this Court held that the Bihar legislature had no jurisdiction to enact the second proviso to section 10(2) of the Bihar Act because section 15 of the Central Act, read with section 2 thereof, had appropriated the whole field relating to mining minerals for Parliamentary legislation.
The upshot of that decision was, that the action taken by the 806 Bihar Government in modifying the terms and conditions of the leases which were in existence anterior to the Rules and the levy sought to be made on the strength of the amended Bihar Act and Rule, were unsustainable.
Thereupon the State persuaded Parliament to enact the Validation Act of 1969 with a view to remove the road blocks which resulted in the decision in Kedia 's case (supra).
Section 2 of the Validation Act runs thus: "Validation of certain Bihar State laws and action taken and things done connected therewith.
(1) The laws specified in the Schedule shall be and shall be deemed always to have been, as valid as if the provisions contained therein had been enacted by Parliament.
(2) Notwithstanding any judgment, decree or order of any court, all actions taken, things done, rules made, notification issued or purported to have been taken, done, made or issued and rents or royalties realised under any such laws shall be deemed to have been validly taken, done, made, issued or realised, as the case may be, as if this section had been in force at all material times when such action was taken, things were done, rules were made, notifications were issued, or rents or royalties were realised, and no suit or other proceeding shall be maintained or continued in any court for the refund of rents or royalties realised under any such laws.
(3) For the removal of doubts, it is hereby declared that nothing in sub section (2) shall be construed as preventing any person from claiming refund of any rents or royalties paid by him in excess of the amount due from him under any such laws.
" The precise question before the Court was, whether a statute or a rule earlier declared by the Court to be unconstitutional or otherwise invalid can be retroactive through fresh validating legislation enacted by the competent legislature.
Answering this question in the affirmative, this Court, speaking through Krishna Iyer, J. observed: "where Parliament having power to enact on a topic actually legislates within its competence but, as an abbreviation of drafting, borrows into the statute by reference the words of a State Act not qua State Act but as a convenient shorthand, as against a longhand writing of all the sections into the Central Act, such legislation stands or falls on Parliament 's legislative power, vis a vis the subject viz., mines and minerals.
The distinction between the two legal lines may sometimes be fine but always is real.
807 If Parliament has the power to legislative on the topic, it can make an Act on the topic by any drafting means, including by referential legislation." "Taking a total view of the circumstances of the Validation Act Parliament did more than simply validate an invalid law passed by the Bihar Legislature but did reenact it with retrospective effect in its own right adding an amending Central Act to the statute book.
" The position in the instant case is entirely different.
Here, Parliament despite its presumed awareness of the impugned Notification, has said nothing in the Amending Act of 1959, indicating that it (Parliament) has by 'longhand ' or 'shorthand ' method incorporated, re enacted or validated the impugned notification or the amendment sought to be made thereby, while passing the Amendment Act, 1959.
The appellate Bench was therefore in error in holding that Parliament had validated or re enacted referentially with retrospective effect what was sought to be done by the impugned notification, when it passed the Amending Act, 1959.
The High Court has tried with the aid of this Court 's decision in Venkatrao vs State of Bombay (supra) to spell out the proposition that mere amendment of an Act by a competent legislature, amounts to re enactment of the parent Act.
We find nothing in this Court 's decision in Venkatrao 's case which warrants the enunciation of such a sweeping rule.
All that was decided in Venkatrao 's case was that the assent given by the President to the Amending Act would be deemed to be an assent accorded to the parent Act, also.
The decision in Venkatrao 's case therefore does not advance the case of Shri B. Sen. Shri B. Sen 's alternative argument that the notifications whereby the exemptions from tax have been withdrawn in regard to Durries, pure silk, country liquor etc.
are not assailable because those exemptions were earlier granted without giving three months ' notice, is manifestly unsustainable.
Firstly, so far as fruits, fresh and dried (item 8), Pepper, tamarind and chillies (item 11), Turmeric (item 14), ghee (item 16), and knitting wool, (item 21A) are concerned, they were exempted goods in the Schedule of the Bengal Act, as modified and extended by the Notification, dated 28 4 1951, to Delhi.
No question of giving notice for granting these exemptions therefore arose.
Secondly, the validity of the notifications whereby exemptions were granted to pure silk, liquor etc.after the extension of the Bengal Act to Delhi is not in issue.
This plea was not set up by the Respondents in their affidavits.
Whether or not notice for the requisite period was given before issuing the exemption notifications, was a question of fact depending on evidence.
Thirdly, to allow the Respondents to take their stand on such a plea would be violative of the fundamental principle of natural justice, according to which, a party cannot be allowed to take advantage of its own lapse or wrong.
The statute 808 has imposed a peremptory duty on the Government to issue notice of not less than three months, of its intention to amend the Second Schedule.
It therefore cannot be allowed to urge that since it had disobeyed this mandate on an earlier occasion when it granted the exemptions it can withdraw the exemptions in the same unlawful mode.
Two wrongs never make a right.
Nor could the Respondents derive any authority or validity from section 21 of the General Clauses Act, for the notifications withdrawing the exemptions.
The source from which the power to amend the Second Schedule, comes is section 6(2) of the Bengal Act and not section 21 of the General Clauses Act.
Section 21, as pointed out by this Court in Gopichand vs Delhi Administration(1) embodies only a rule of construction and the nature and extent of its application must be governed by the relevant statute which confers the power to issue the notification.
The power therefore had to be exercised within the limits circumscribed by section 6(2) and for the purpose for which it was conferred.
For all the foregoing reasons, we are of opinion that the impugned notification, dated 7 12 1957, purporting to substitute the words "such previous notice as it considers reasonable" for the words "not less than three months notice" in section 6(2) of the Bengal Act is beyond the powers of the Central Government, conferred on it by section 2 of the Laws Act.
In consequence, the notification dated 1 4 1958, 19 9 1959, 29 6 1966 and 31 7 1970 in so far as they withdrew the exemptions from tax in the case of Durries, pure silk, country liquor, kirayana articles etc.were withdrawn without complying with the mandatory requirement of not less than three months notice enjoined by section 6(2) of the Bengal Act, are also invalid and ineffective.
In the result we allow these appeals, set aside the judgment of the appellate Bench of the High Court and declare the Notification dated 7 12 1957, and the subsequent notifications in so far as they withdrew the exemptions from tax, mentioned above, to be unconstitutional.
In the circumstances of the case, we leave the parties to bear their own costs.
V.P.S. Appeals allowed.
[/INST]Section 2 of the Part States (Laws) Act, 1950, empowered the Central Government to extend by notification in the official gazette, to any Part C State, or to any part of it, with such restrictions and modifications as it thinks fit, any enactment in force in a Part A State.
In 1951, the Central Government, in exercise of this power, extended by a Notification the Bengal Finance (Sales Tax) Act, 1941, to the then Part State of Delhi with certain modifications in section 6.
The section, after such extension with modifications, provided: 6(1) No tax shall be payable under this Act on the sale of goods specified in the first column of the Schedule subject to the conditions etc: and (2) The State Government [Amended as Central Government in 1956] after giving by notification in the official gazette not less than 3 months notice of its intention to do so, may by like notification add to or omit from or otherwise amend the Schedule and thereupon the Schedule shall he amended accordingly A modified Schedule of goods exempted from tax under section 6 was also substituted for the original Schedule in the Bengal Act, by the Notification.
After the passing of the , the Part States (Laws) Act became .
with necessary adaptations.
In 1957, the Central Government issued a Notification in purported exercise of the powers under section 2 of the 1950 Act, amending the 1951 Notification.
By the 1957 Notification an additional modification of section 6 of the Bengal Act was introduced in the 1951 Notification, namely the words "such previous notice as it considers reasonable" were substituted for the words "not less than 3 months ' notice" in section 6(2).
In 1959, Parliament passed the Bengal (Sales Tax) (Delhi Amendment) Act, 1959, making some amendments in various sections of the Bengal Act but left section 6 untouched.
By various notifications, exemption from sales tax was granted to several commodities.
but subsequently, the exemption was withdrawn by other notifications after giving notice of less than 3 months.
Dealers in those commodities, who were aggrieved by the withdrawal of the exemption, challenged the validity of ' the withdrawal.
The High Court dismissed their petitions.
On the main ground that Parliament, while enacting the Amending Act of 1959, had put its seal of approval to the curtailed period of notice in section 6(2) and as such, it should be taken to have keen provided by Parliament itself in the Bengal Act.
786 Allowing the appeals to this Court, ^ HELD: The 1957 Notification purporting to substitute the words "such previous notice as it considers reasonable" for the words 'not less than 3 months ' notice" in section 6(2) of the Bengal Act, is beyond the powers of the Central Government, conferred on it, by section 2 of the ; and in consequence, the various notifications, in so far as they with drew exemptions from tax with respect to the several commodities, are invalid and ineffective, as the exemption was withdrawn without complying with the mandatory requirement of not less than 3 months ' notice enjoined by the section.
[808 D E] (1) (a) The primary power bestowed by section 2 of the , on the Central Government is one of extension, that is, bringing into operation and effect, in a Union Territory, an enactment already in force in a State.
The discretion conferred by the section to make "restrictions and modifications" in the enactment sought to be extended, is not a separate and independent power, which can be exercised apart from the power of extension, but is an integral constituent of the power of extension.
This is made clear by the use of the preposition "with" one meaning of which (which accords with the context) is "part of the same whole".
[801 E F] (b) There are 3 limits on the power given by section 2.
(i) The power exhausts itself on extension of the enactment.
It can be exercised only once, simultaneously with the extension of the enactment, but cannot be exercised repeatedly or subsequently to such extension.
(ii) The power cannot be used for a purpose other than that of extension.
In the exercise of the power, only such restrictions and modifications can be validly engrafted in the enactment sought to be extended, which are necessary to bring it into operation and effect in the Union Territory.
Modifications which are not necessary for, or ancillary and subservient to the purpose of extension, are not permissible.
Only such modifications can be legitimately necessary for such purpose, as are required to adjust, adapt, and make the enactment suitable to the peculiar local conditions of the Union Territory for carrying it into operation and effect.
(iii) The words "restrictions and modifications" do not cover such alterations as involve a change in any essential feature of the enactment or the legislative policy built into it.
[801G H, 802A] (c) If the words "such restrictions and modifications as it thinks fit" are given the wide construction of giving an unfettered power of amending and modifying the enactment sought to be extended, as contended by the respondent, the validity of the section itself becomes vulnerable on account of the vice of excessive delegation.
Moreover.
such a construction would be repugnant to the context and content of the section, read as a whole.
[802 B C] Rajnarain Singh vs The Chairman Patna Administration Committee Patna and Re: Delhi Laws Act; , , referred to.
(2) The 1957 Notification transgresses these limits in two respects : (a) The power has not been exercised contemporaneously with the extension or for the purposes of the extension of the Bengal Act to Delhi but 6.6 years thereafter.
The power of extension with restrictions and modifications had exhausted itself when the Bengal Act was extended to Delhi with some alterations by the 1951 Notification.
[802D E] The power given under section 2 of the 1950 Act, cannot be equated to the "Henry VIII clause" of the Acts of the British Parliament because while the power under section 2 can be exercised only once when the Act is extended, the power under a "Henry VIII clause" can be invoked, if there is nothing contrary in the clause, more than once on the arising of a difficulty when the Act is operative [802F H] Observations of Fazal Ali, J. at p. 850 in Re: Delhi Laws Act case explained.
787 (b) The alteration sought to be introduced in section 6(2) by the 1957 Notification goes beyond the scope of the "restrictions and modifications" permissible under section 2 of the 1950 Act, because, it purports to change the essential features of section 6(2) and the legislative policy inherent therein.
[803F] Section 6(2) before the issue of the 1957 Notification, requiring the Government to give "not less than 3 months ' notice" of its intention to add to or omit from or otherwise amend the Schedule to the 1950 Act, embodies a determination of legislative policy and its formulation as an absolute rule of ' conduct could be diluted, changed or amended only by the legislature, in the exercise of its essential legislative function, which could not be delegated to the Government.
[803G 804E, F, G] (i) The language of the sub section as it stood is emphatically prohibitive and it commands the Government in unambiguous negative terms that the period of the requisite notice must not be less than 3 months, showing that the provision was mandatory and not directory.
[804 A B] (ii) The scheme of the Bengal Act is that the tax is to be quantified and assessed on the quarterly turnover.
and the period of not less than 3 months, notice conforms to the scheme and ensures that the imposition of a new tax of exemption does not cause dislocation or inconvenience either to the dealer or the Revenue.
[804B] (iii) By fixing the period at not less than 3 months, purchasers on whom the incidence of tax really falls have adequate notice of taxable items.
[804 C] (iv) Dealers and others likely to be affected by an amendment of the Schedule get sufficient time to make representations and adjust their affairs.
[804 D] The span of notice was thus the essence of the legislative mandate.
The necessity of notice and the span of notice both are integral to the scheme of the provision and it cannot be split up into essential and non essential components, the whole of it being mandatory.
[804 E F] Raza Buland Sugar Co. Ltd. vs Municipal Board, Rampur, ; , distinguished.
(3)(a) Pt.
Benarsi Das Bhanot vs State of Madhya Pradesh does not assist the respondent.
That was a case where the contention that 5.
6(2) of the C.P. & Bihar Sales Tax Act, 1947, was invalid on the ground of excessive delegation, was rejected, by the Court.
In the present case, it is the validity of a Notification purported to be issued under section 2 of the 1950 Act that is impeached as beyond the powers of modification conferred by the section.
[804H, 805A] (b) In the present case, the Central Government did not directly amend section 6(2).
More than 6 years after the extension of the Act by the 1951 Notification, it amended the sub section indirectly by amending the 1951 Notification.
But on the extension of the Act to Delhi, the 1951 Notification had exhausted its purpose, and the purported amendment, through the medium of such a "dead" Notification is an exercise in utility.
Further, an amendment which was not directly permissible could not be done indirectly.
[805 B, C] (4) The High Court was in error in holding that Parliament had validated or re enacted referentially, with retroactive effect, what was sought to be done by the 1957 Notification when it passed the Amending Act, 1959.
[807C] The Amending Act leaves section 6(2) untouched.
It does not even indirectly refer to the 1957 Notification or the amendment purportedly made by it in section 6(2).
Nor does it re enact or validate what was sought to be achieved by that notification.
No indication of referential incorporation or validation of the 1957 Notification or the amendment sought to be made by it, is available either in the Preamble or in any other provision of the Amending Act.
Parliament despite its presumed awareness of the 1957 Notification, has said nothing in the Amending Act indicating that it has in any manner incorporated, re enacted or 788 validated the 1957 Notification or the amendment sought to be made thereby, while passing the Amending Act, 1959.
[805 E F, 807 B C] Krishna Chandra vs Union of India, A.I.R. 1975 S.C. 1389, referred to, (5) A mere amendment of an Act by a competent legislature does not amount to re enactment of the parent Act.
[807D] Venkatarao Esajirao Limberkar 's case [1970] 1 S.C.R. 317, explained.
(6) The respondent cannot contend that if the withdrawal of exemption without giving 3 months" notice was illegal, then the grant of exemption without giving 3 months ' notice was also void.
[808 A] (a) Some of the goods were granted exemption by the 1951 Notification itself and, hence, there is no question of giving notice for giving those exemptions.
[807 G] (b) The validity of the notifications granting exemptions after the extension of the Act to Delhi is not in issue in the writ petitions.
and whether or not the requisite notice was given before granting exemption is a question of fact depending on evidence.
[807G] (c) To allow the respondent to take such a plea would be violative of the fundamental principle of natural justice, according to which a party cannot be allowed to take advantage of his own lapse or wrong.
[807 H] (7) The respondent cannot also rely on section 21 of the General Clauses Act, because, the source of the power to amend the Schedule to the 1950 Act.
is section 6(2) of the Bengal Act and not section 21 of the General Clauses Act, and the power has to be exercised within the limits of section 6(2) and for the purpose for which it we conferred.
[808 B] Gopichand vs Delhi Administration, [1959] Suppl.
2 S.C.R. 87, referred to.
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<s>[INST] Summarize the judgementiminal Appeal No. 50 of 1962.
Appeal by special leave from the judgment and order dated September 12, 1961, of the Allahabad High Court (Lucknow Bench) at Lucknow in Criminal Appeal No. 494 of 1961.
Nuruddin Ahmed, for the appellant.
G.C. Mathur and 0.
P. Lal, for the respondent.
May 3.
The Judgment of the Court was delivered by S.R. DAS, J.
The learned Sessions Judge of Rae Bareli tried the appellant Prabhu on a charge of murdering his own uncle and found him guilty of the offence and sentenced him to death.
There were an appeal to the High Court and the usual reference for confirmation of the sentence of death.
The High Court dealt with the appeal and reference by one judgment.
It accepted the reference,, dismissed the appeal and confirmed the conviction and sentence.
The appellant then asked for and obtained special leave of this Court to appeal from the judgment and order of the High Court.
The present appeal has come to us in pursuance of the leave granted by this Court.
Shortly stated the case against the appellant was this.
Bhagwan Ahir, step brother of the appellants father Budhai, was a resident of 883 village Bandi in the district of Rae Bareli, The appellant and his father Budhai lived in another village called Gulariya at a distance of about two or three miles from Bandi.
Bhagwan had about four bighas of pasture land and seven bighas of cultivated land.
He had no male issue, He had several daughters who were all married and resided at the places of their respective husbands.
Bhagwan was old, near about 80 years of age according to the evidence of Marka, and had no male member in the family to help him with his cultivation.
Budhai, it appears, did not reside in village Gulariya all the year round, but was engaged in some job at Burdwan in Bengal.
Some four years before the date on, which Bhagwan was said to have been murdered the appellant and his mother came to reside with Bhagwan.
The idea was that the appellant would be able to help Bhagwan with his cultivation.
The appellant did not, however, render much assistance to Bhagwan and the prosecution case, was that after about a year of their stay, Bhagwan turned them out of the house.
The appellant and his mother then went back to village Gulariya.
The prosecution case further was that about a month and a half before the murder of Bhagwan the appellant and his father came to Bhagwan and the appellants father asked Bhagwan to transfer some of his land to the appellant.
Bhagwan said that he had already kept the appellant with him for a year and had found that he was of no assistance.
He, therefore, refused to give any land to the appellant.
Bhagwan, it appears, had some granddaughters and one of them called Kumari Sarju aged about five years was staying with him.
Bhagwan said that he would give his lands to his grand daughter Sarju.
On the night between March 19 and 20 , 1961, Bhagwan was sleeping in front of his house on 884 cot with his grand daughter.
One Naiku (P.W. 1) was sleeping at a short distance from Bhagwan 's house.
Naiku was a neighbour of Bhagwan.
At about midnight Naiku 'heard some noise and called out to Bhagwan.
There was no response.
Naiku then heard the sound of shoes as though somebody was running away from the place.
Naiku called out certain other persons and went near the place where Bhagwan was lying on his cot.
It was found that Bhagwan bad a large number of injuries on the head and neck, most of the injuries being of 'an incised nature.
Bhagwan was already dead.
The little girl Sarju though stained with blood which flowed from the body of Bhagwan was not herself injured.
She was soundly sleeping on the cot and was not awake when Bhagwan was killed.
Naiku gave an information to the police station of what he had heard and seen, the distance of the police station being about eight miles from village Bandi.
The information which Naiku gave did not disclose the name of any accused person because Naiku had not seen who had killed Bhagwan.
On the information given by Naiku the local police started investigation and when the dead body of Bhagwan was brought back to the village after the postmortem examination for cremation, the appellant, it is stated, came to one Brij lal (P. W. 2) of village Bandi.
This was on the third day after the murder.
The appellant made certain enquiries from Brij lal which roused the latter 's suspicion.
The Sub Inspector of Police was then in the village and he was informed of the presence of the appellant.
The appellant was then interrogated and the case of the prosecution was that the appellant made certain statements and produced from his house a kulhari, a shirt and a dhoti.
These were found to be blood stained and subsequent examination by the Chemical 885 Analyst and the Serologist disclosed that they were stained with human blood, This recovery of the blood stained kulhari (axe) and the blood stained shirt and dhoti was made, according to the prosecution case, on March 22, 1961, in the presence of two witnesses, Lal Bahadur Singh and Wali Mohammad, It would appear from what we have stated above that the case against the appellant rested on the evidence relating to motive furnished by what happened, about a month and half before the occurrence when the appellant and his father asked for some land from the deceased, and the recovery of the.
blood stained.
axe and blood stained shirt and dhoti from the house of 'the appellant.
The appellant denied that he and his father had asked for any lands from the deceased a month and a half prior to the occurrence.
The appellant also denied that he had produced any blood stained axe or blood stained shirt and dhoti from his house, or had handed them over to the Sub Inspector of Police.
He denied that the clothes or the axe belonged to him.
His defence was that be was living with his father in Burdwan and came back to the village on March 21,1961.
He said that the case against him was brought out of enmity.
Learned counsel for the appellant has taken us through the evidence in the case and has submitted that apart from raising some suspicion against the appellant and his father, the evidence given by the prosecution does not establish beyond any reasonable doubt that the appellant was the murderer.
He has further submitted that certain statements alleged to have been made by appellant to the Sub Inspector of Police in connection with the recovery of the blood stained axe and blood stained shirt and dhoti were inadmissible and the courts below were wrong in relying on 886 them.
He has contended that if those statements are excluded from consideration, than the evidence which remains is insufficient to support the conviction of the appellant, We think that these contentions are correct and must be upheld.
There can be no doubt that Bhagwan was murdered on the night in question.
The postmortem examination disclosed that he had sustained as many as thirteen injuries, eleven of which were incised on different parts of the body.
The injuries inflicted on the head and face had out through skull bones and the doctor who held the postmortem examination was of the opinion that Bhagwan had died as a result of fractures of the skull bones and hemorrhage and shock.
There can, therefore, be no doubt that Bhagan was murdered.
It is equally clear that nobody saw who ' killed Bhagwan.
The evidence of Naiku (P.W.1) shows clearly enough that neither he nor other persons whom he called saw the appellant.
The grand child who was sleeping with Bhagwan was also fast asleep and did not even awake when the injuries were inflicted on Bhagwan.
Bhagwan might or might not have raised shouts when the injuries were caused to him.
The evidence of Naiku does not disclose that he heard any other sound excepting the sound of movement of steps of a person wearing shoes.
We are satisfied that the evidence as to motive is satisfactory, Both Naiku (P.W.1) and Brij Lal (P.W.2) have stated about the motive.
The appellant and his mother stayed with Bhagwan about four years ago in order to render assistance to Bhagwan in his cultivation.
The appellant did not, however, do any work and was turned out.
This is proved by the evidence of Naiku and Brij Lal.
The evidence of the aforesaid two witnesses also establishes that the appellant and his father came to Bhagwan about a month and a half before the occurrence and asked for some land.
Bhagwan refused to give any land to the appellant.
We 887 think that this motive has been established even though it would influence both the appellant and his father.
The main difficulty in the case is that the evidence regarding the recovery of blood stained axe and blood stained.
shirt and dhoti is not very satisfactory and the courts below were wrong in admitting certain statements alleged to have been made by the appellant in connection with that recovery.
According to the recovery memo the two witnesses who were present when the aforesaid articles were produced by the appellant were Lal Bahadur Singh and Wali Mohamad.
Lal Bahadur Singh was examined as prosecution witness No. 4.
He did give evidence about the production of blood stained articles from his house by the appellant.
The witness said that the appellant produced the articles from a tub on the eastern side of the house.
The witness did not however, say that the appellant made any statements relating to the recovery.
Wali Mohammad was not examined at all.
One other witness Dodi Baksh Singh was examined as prosecution witness No. 3.
This witness said that a little before the recovery the Sub Inspector of Police took the appellant into custody and interrogated him ; then the a appellant gave out that the axe with which the murder had been committed and his blood stained shirt and dhoti were in the house and the appellant was prepared to produce them.
These statements to which Dobi Baksh (P.W.3) deposed were not admissible in evidence.
They were incriminating statements made to a police officer and were hit by ss.25 and 26 of the Indian Evidence Act.
The statement that the axe was one with which the murder had been committed was not a statement which led to any discovery within the meaning of s.27 of the Evidence Act.
Nor was the alleged statement of the appellant that the blood stained shirt and dhoti belonged to him was 888 a statement which led to any discovery within the meaning of s.27.
Section 27 provides that when any fact is deposed to and discovered in consequence of information received from a person accused of any offence, in the custody of a police officer, so much of such information,.whether it amounts to a confession or not, as, relates distinctly to the fact thereby discovery may be proved.
In Pulukuri Kotayya vs King Emperor (1) the Privy Council considered the true interpretation of s.27 and said : "It is fallacious to treat the 'fact discove red ' within the section as equivalent to the object produced ; the fact discovered embraces the place from which the object is produced and the knowledge of the accused as to this, and the information given must relate distinc tly to this fact.
Information as to past user, or the past history, of the object produced is not related to its discovery in the setting in which it is discovered.
Information supplied by a person in custody that 'I will produce a knife concealed in the roof of my house ' does not lead to the discovery of a knife ; knives were discovered many years ago.
It leads to the discovery of the fact that a knife is concealed in the house of the informant to his knowledge, and if the knife is proved to have been used in the commission of the offence, the fact discovered is very relevant.
But if to the statement the words be added 'with which I stabbed A. ', these words are inadmissible since they do not relate to the discovery of the knife in the house of the informant." (p.77) We are, therefore, of the opinion that the courts below were wrong in admitting in evidence the alleged statement of the appellant that the axe had been used to commit murder or the statement that the blood (1) (1947) L.R. 74 I.A 65. 889 stained shirt and dhoti were his.
If these statements are excluded and we think that they must be excluded, then the only evidence which remains is that the appellant produced from the house a blood stained axe and some blood stained clothes.
The prosecution gave no evidence to establish whether the axe belonged to the appellant or the blood stained clothes were his.
Therefore, the question before us is this.
Is the production of the blood stained axe and clothes read in the light of the evidence regarding motive sufficient to lead to the conclusion that the appellant must be the murderer ? It is well settled that circumstantial evidence must be much as to lead to a conclusion which on any reasonable hypothesis in consistent only with the guilt of the accused person and not with his innocence.
The motive alleged in this case would operate not only on the appellant but on his father as well.
From the mere production of the blood stained articles by the appellant one cannot come to the conclusion that the appellant committed the murder.
Even if somebody else had committed the murder and the blood stained articles had been kept in the house, the appellant might produce the blood stained articles when interrogated by the Sub Inspector of Police.
It cannot be said that the fact of production is consistent only with the guilt of the appellant and inconstant with his innocence.
We are of the opinion that the chain of circumstantial evidence is not complete in this case and the prosecution has unfortunately left missing links, probably because the prosecution adopted the shortout of ascribing certain statements to the appellant which were clearly inadmissible.
Learned counsel for the respondent has submitted to us that in State of U. P. vs Deoman Upadhyaya (1) this Court accepted as sufficient evidence (i) ; 890 the production of a blood stained weapon.
We are unable to agree.
The circumstantial chain in that case did not depend merely on the production of the gandasa, but on other circumstance as well.
The Court held in that case that the circumstantial chain was complete and the decision did not proceed merely on the production of a blood stained weapon.
For the reasons given above we would allow the appeal and set aside the conviction and sentence passed against the appellant.
The appellant must now be released forthwith.
Appeal allowed.
[/INST]The dispute between the respondents and the appellants regarding ministries and line jobbers was referred to the Tribunal regarding the increase and standardisation of wages and regarding the designation of workmen doing the work of fancy jobbers and their pay.
The appellant contended that an earlier award of 1951 had not been terminated and that the reference was incompetent.
The Tribunal directed standardisation on the basis of the Bombay Scheme.
The Tribunal 717 acceded to the claim regarding fancy jobbers.
Finally the Tribunal directed that "whereever the said existing wages are higher than those fixed under the Bombay Standardisation Scheme, they shall remain and shall not be lowered" and that regarding operatives who were designated differently from Bombay list, they should be paid what those described by any other name but doing identical work were being paid in Bom bay and that the adjustment of anomalies that might arise in this matter should be decided by A Committee consisting of the representatives of the Management and the Union.
Held, that the agreement following the earlier award %as not a settlement within the meaning of section 19(2) of the Industrial Disputes Act and the reference was Competent.
Held, further, that the Tribunal ought to have considered the applicability of the Bombay Standardisation Scheme to the condition in Delhi by examining evidence and that the Tribunal ought not to have shut out evidence in respect of the working of the Bombay Standardisation Scheme in Delhi and that the Tribunal had not considered the matter carefully and made such modifications as might be necessary.
The Tribunal ought not to have delegated the determination and adjustment of the anomalies in applying the Bombay standardisation scheme to a joint committee by it should have considered and determined those matters itself.
Held, further, that in the event of standardisation it may be necessary if justice demanded it to give some measure of protection to such individual workmen as were getting higher wages than what they would get under standardisation scheme.
But the matter will have to be considered by the Tribunal subject to three conditions: viz., (1) there can be no further rise in wages of those protected by the operation of the standardisation of scheme, (2) if there is an incremental scales fixed by the standardisation scheme and the protected workmen are getting between the minimum and the maximum but are not entitled thereto according to the length of their service, future increments should be adjusted till the protected workmen find their proper place in the scale according to the length of service, and (3) the category of protected workmen should in due course exhaust by the termination of service of such workmen by retirement or otherwise.
Held, that the direction of the Tribunal could be read to mean the protection of existing higher wages generally rather than the higher wages of particular workmen and such a thing was not consistent with the principles of standardisation 718
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<s>[INST] Summarize the judgementAppeal No. 198 of 1954.
Appeal from the judgment and order dated October 16, 1952, of the former Nagpur High Court in Misc.
; No. 1231 of 1951.
M. section K. Sastri, for the appellant.
H. L. Khaskalam, B. K. B. Naidu and I. N. Shroff, for the respondent.
64 502 1960.
November 18.
The Judgment of the Court was delivered by IMAM, J.
This is an appeal from the judgment of the Nagpur High Court dismissing the appellants petition under articles 226 and 227 of the Constitution of India.
The High Court certified under article 132(1) of the Constitution that the case involved a substantial question of law as to the interpretation of the Constitution.
Hence the present appeal.
The appellant was the Ruler of the State of Baster.
After the passing of the Indian Independence Act, 1947, the appellant executed an Instrument of Accession to the Dominion of India on August 14, 1947.
Thereafter, he entered into an agreement with the Dominion of India popularly known as "The Stand Still Agreement".
On December 15, 1947, he entered into an agreement with the Government of India whereby he ceded the State of Baster to the Government of India to be integrated with the Central Provinces and Berar (now the State of Madhya Pradesh) in such manner as the Government of India thought fit.
Con sequently the Governments in India came to have exclusive and plenary authority, jurisdiction and powers over the Baster State with effect from January 1, 1948.
The Legislature of the State of Madhya Pradesh passed the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (Madhya Pradesh Act 1 of 1951), hereinafter referred to as the Act, which received the assent of the President of India on January 22, 1951.
The preamble of the Act stated that it was one to provide for the acquisition of the rights of proprietors in estates, mahals, alienated villages and alienated lands in Madhya Pradesh and to make provisions for other matters connected therewith.
Under section 3 of the Act, vesting of proprietary rights in the State Government takes place on certain conditions,, mentioned in that section, being complied with.
The definition of 'proprietor ' is stated in section 2 cl.
(m) and it is "in relation to 503 (i) the Central Provinces, includes an inferior proprietor, a protected thekadar or other thekadar, or protected headman; (ii) the merged territories, means a maufidar including an ex Ruler of an Indian State merged with Madhya Pradesh, a Zamindar, Ilaquedar, Khorposhdar or Jagirdar within the meaning of wajib ul arz, or any sanad, deed or other instrument, and a gaontia or a thekadar of a village in respect of which by or under the provisions contained in the wajib ul arz applicable to such village the maufidar, the gaontia, or the thekadar, as the case may be, has a right to recover rent or revenue from persons holding land in such village;".
The definition of 'mahal ' is stated in section 2(j) and it is "mahal", in relation to merged territories, means any area other than land in possession of a raiyat which has been separately assessed to land revenue, whether such land revenue be payable or has been released, compounded for or redeemed in whole or in part;".
Before the High Court the appellant contended that he was still a Sovereign Ruler and absolute owner of the villages specified in Schedules A and B of his petition under articles 226 and 227 of the Constitution.
He urged that his rights had been recognized and guaranteed under the agreements entered into by him with the Government of India.
The provisions of the Act, therefore, did not apply to him.
It was further contended that the provisions of the Act did not apply to a Ruler or to the private property of a Ruler which was not assessed to land revenue.
He relied on article 6 of the Instrument of Accession and the first paragraph of article 3 of the Merger Agreement.
The High Court held that if the petitioner 's rights under article 6 of the Instrument of Accession and article 3 of the Merger Agreement had been infringed it was clear from the provisions of article 363 of the Constitution that interference by the courts was barred in disputes arising out of these two instruments.
The High Court was also of the opinion that article 362 of the Constitu tion was of no assistance to the appellant.
504 After referring to the definition of the word 'proprietor ' in the Act, the High Court was of the opinion that the word 'maufidar ' in section 2(m) of the Act had not been used in any narrow or technical sense.
A 'maufidar ' was not only a person to whom a grant of maufi lands had been made but was also one who held land which was exempt from the payment of "rent or tax".
It accordingly rejected the contention on behalf of the appellant that the word 'maufidar ' is necessarily confined to a grantee from the State or Ruler and therefore a Ruler could not conceivably be a maufidar.
The High Court also rejected the contention on behalf of the appellant that as he was a "Ruler" within the meaning of that expression in article 366(22) of the Constitution he did not come within the expression 'ex Ruler ' as contained in the definition of the word 'proprietor ' in the Act.
The expression 'Ruler ' as defined in article 366(22) of the Constitution applied only for interpreting the provisions of the Constitution.
The expression 'ex Ruler ' given in the Act must therefore be given the ordinary dictionary meaning.
According to Shorter Oxford English Dictionary, 'Ruler ' means "one who, or that which, exercises rule, especially of a supreme or sovereign kind.
One who has control, management, or head ship within some limited sphere".
The High Court accordingly took the view that although the appellant did exercise such a rule in the past he ceased to exercise it in his former Domain after the agreements of accession and merger had come into operation.
Accordingly the appellant must be regarded as an ex Ruler and as he was also a maufidar he fell within the definition of the word 'proprietor ' in the Act.
The question whether the villages mentioned in Schedules A and B of the petition under articles 226 and 227 of the Constitution fell in any of the categories, "Estates, Mahals, Alienated lands", was also considered by the High Court.
In its opinion they did not fall within the category of Estates or Alienated lands but they did fall within the category of Mahals.
According to the definition of 'Mahal ' in section 2(j) of the Act the same must be separately assessed to land 505 revenue.
According to the appellant they had not been assessed to land revenue but this was denied on behalf of the State of Madhya Pradesh.
The High Court was of the opinion that in these circumstances it was for the appellant to establish that the villages in question had never been assessed to land revenue but no evidence had been led to this effect.
On the contrary, according to the High Court, it would appear from the documents on the record that the villages known as 'Bhandar villages ' had been assessed to land revenue.
As the rest of the villages in Schedule A and the villages in Schedule B, upto the date of the High Court judgment, had not been recognized as the private property of the appellant by the Government of India as required by the second and third paragraphs of the Merger Agreement, the appellant could not assert his ownership over them.
The High Court, accordingly, dismissed his petition under articles 226 and 227 of the Constitution.
Two questions in the main were urged before us (1) whether the appellant is a proprietor within the meaning of that expression in the Act and (2) whether the villages in question came within the definition of the word 'mahal ' contained in the Act.
On behalf of the appellant it had also been urged that the Act could not defeat the rights of the appellant guaranteed under article 3 of the Merger Agreement.
It seems clear to us, however, that in view of the provisions of article 363(1) of the Constitution any dispute arising out of the Merger Agreement or the Instrument of Accession is beyond the competence of the courts to enquire into.
The High Court rightly decided this point against the appellant.
With reference to the first point we would first consider whether the appellant is an ex Ruler for the purposes of the Act.
That he is so factually cannot be denied, since he ceded his State to the Government of India to be integrated with the Central Provinces and Berar (now the State of Madhya Pradesh) in such manner as the Government of India thought fit.
He further ceded to the Government ' of India full and exclusive authority, jurisdiction and powers in relation 506 to the governance of his State when he agreed that the administration of that State would be transferred to the Government of India as from January 1, 1948.
The question is whether his recognition for the purposes of the Constitution as Ruler by virtue of the provisions of article 366(22) of the Constitution of India continues his status as a Ruler for purposes other than the Constitution.
article 366(22) states: " "Ruler" in relation to an Indian State means the Prince, Chief or other person by whom any such covenant or agreement as is referred to in clause (1) of article 291 was entered into and who for the time being is recognised by the President as the Ruler of the State, and includes any person who for the time being is recognised by the President as the successor of such Ruler".
Article 291 refers to the privy purse payable to Rulers.
It states: "Where under any covenant or agreement entered into by the Ruler of any Indian State before the commencement of this Constitution, the payment of any sums, free of tax, has been guaranteed or assured by the Government of the Dominion of India to any Ruler of such State as privy purse (a) such sums shall be charged on, and paid out of, the Consolidated Fund of India; and (b) the sums so paid to any Ruler shall be exempt from all taxes on income.
" Article 291 refers to any covenant or agreement entered into by the Ruler of any Indian State before the commencement of the Constitution.
The covenant or agreement referred to in this Article certainly includes the Instrument of Accession and the Merger Agreement.
The effect of the Merger Agreement is clearly one by which factually a Ruler of an Indian State ceases to be a Ruler but for the purposes of the Constitution and for the purposes of the privy purse guaranteed, he is a Ruler as defined in article 366(22) of the Constitution.
There is nothing in the provisions of article 366(22) which requires a court to recognise such a person as a Ruler for purposes outside the Constitution.
In our opinion, the High Court rightly held that 507 the appellant was an ex Ruler and that article 366(22) of the Constitution did not make him a Ruler for the purposes of the Act.
As the appellant was an 'ex Ruler ', he was within the class of persons who were by name specifically included in the definition of 'proprietor ' and therefore clearly within the scope of the Act.
That the appellant was not only an ex Ruler but a maufidar appears to us to be clear.
The ordinary dictionary meaning of maufi is "Released, exempted, exempt from the payment of rent or tax, rent free" and maufidar is "A holder of rent free land, a grantee".
It was common ground in the High Court that the villages in question were exempt from the payment of rent or tax.
In our opinion, the High Court rightly took the view that the expression 'maufidar ' was not necessarily confined to a grantee from a State or a Ruler of a State.
A maufidar could be a person who was the holder of land which was exempted from the payment of rent or tax.
In our opinion, the appellant certainly came within the expression 'maufidar ' besides being an ex Ruler ' of an Indian State merged with Madhya Pradesh.
It is, however, contended on behalf of the appellant that the most important part of the definition was the concluding portion where it was stated that in the case of a maufidar he must be a person who by or under the provisions contained in the wajib ul arz applicable to his village, had the right to recover rent or revenue from persons holding land in such village.
It was contended that even if the appellant was a maufidar, there was nothing to show that with reference to any village held by him it was entered in the wajib ul arz, that he had a right to recover rent or revenue from persons holding land in such village.
In the petition under articles 226 and 227 of the Constitution, filed by the appellant in the High Court, it was nowhere asserted that even if he was regarded as a maufidar it was not entered in the wajib ul arz with respect to any of his maufi villages that he had a right to recover rent or revenue from persons holding land in such villages.
From the judgment of the High 508 Court it would appear that no such argument was advanced before it.
In the application for a certificate under article 132(1) of the Constitution we can find no mention of this.
In the statement of the case filed in this Court also there is no mention of this fact.
There is thus no material on the record to establish that the appellant as a maufidar had no right to recover rent or revenue from persons holding land in his villages.
The burden was on the appellant to prove this fact which he never attempted to discharge.
It is impossible therefore to accept this contention on behalf of the appellant raised for the first time before us in the course of the submissions made on behalf of the appellant.
Regarding the second point arising out of the definition of 'Mahal ', the High Court definitely found that the petitioner had given no evidence to establish that the villages in question were not assessed to land revenue.
On the contrary, at least with reference to the Bhandar villages documents on the record showed that these villages had been assessed to land revenue.
Since it was a question of fact whether the villages had been assessed to land revenue, which was denied on behalf of the State of Madhya Pradesh, the High Court rightly held that the contention of the appellant in this respect could not be accepted.
As for the other villages, in Schedules A and B of the petition of the appellant under articles 226 and 227 of the Constitution the High Court, in our opinion, rightly held that the petition was not maintainable as these villages had not yet been recognised by the Government of India as the private property of the appellant.
In our opinion, the appeal accordingly fails and is dismissed with costs.
Appeal dismissed.
[/INST]The appellant was the Ruler of the State of Baster which was later integrated with the State of Madhya Pradesh.
He was recognised by the President as a Ruler under article 366(22) of the Constitution.
The respondent resumed certain lands belonging to the appellant under the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950.
The appellant contended that he was still a Ruler and not an ex Ruler and as such did not come within the definition of "proprietor" given in the Act.
Held, that the appellant was an ex Ruler for the purposes of the Act and was within the class of persons who were by name included in the definition of 'proprietor ' and was within the scope of the Act.
Factually the appellant was an ex Ruler.
He was a Ruler for the purposes of the privy purse guaranteed to him.
There was nothing in article 366(22) which required a court to treat such a person as a Ruler for purposes outside the Constitution.
Further, the appellant was also a maufidar in respect of the lands acquired which were exempt from the payment of rent or tax.
The expression "maufidar" was not necessarily confined to a grantee from a State or a Ruler of a State; he could be the holder of land which was exempted from payment of rent or tax.
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<s>[INST] Summarize the judgementCivil Appeal No. 3677 of 1984.
From the Judgment and Order dated 17.5.1982 of the Delhi High Court in F.A. No. 30 of 1975.
P.P. Malhotra and N.K. Sharma for the Appellant.
O.P. Goyal, Ms. Sunita Vasudeva and R.C. Verma for the Respondents.
The Judgment of the Court was delivered by OJHA, J.
This appeal by special leave has been filed by the National Insurance Company Ltd., New Delhi, against a judgment of the Delhi High Court in an appeal under Section 110 D of the (hereinafter referred to as the 'Act ').
Necessary facts may be stated herein in a nutshell.
Shri Jugal Kishore, Respondent No. 1 was, on 15th June, 1969, driving a threewheeler scooter when he met with an accident with bus No. DLP 913 3699, driven by Shri Rai Singh, Respondent No. 2 and owned by M/s. Delhi Janata Co operative Transport Society Limited, Respondent No. 3, He sustained injuries consequent upon which he made a claim for compensation before the Motor Accident Claims Tribunal, Delhi against Respondent Nos. 2 and 3 and the appellant which was the insurer of the bus aforesaid.
The claim of Respondent No. 1 was contested by the appellant and also by Respondent No. 3 but proceeded ex parte against Respondent No. 2.
The Tribunal awarded compensation in the sum of Rs.10.000 recoverable jointly and severally from the appellant and Respondent No. 3.
Aggrieved by the award of the Tribunal Respondent No. 1 preferred an appeal before the High Court of Delhi and asserted that the amount of compensation awarded by the Tribunal was inadequate.
His appeal was allowed by the High Court and the award was modified.
The High Court awarded a sum of Rs. 1,00,000 as compensation to Respondent No. 1 with interest at 9 per cent per annum from the date of institution of the claim till realisation with costs against the driver as well as the owner of the bus as also against the appellant, Insurance Company.
Before granting special leave this Court required the appellant to deposit Rs. 1,00,000 namely the amount of compensation awarded by the High Court and permitted Respondent No. 1 to withdraw the same.
Special leave was granted on 14th September, 1984 by the following order of this Court.
"Under the orders of this Court the appellant has deposited Rs. One lac, which is the amount of compensation awarded to the claimants.
The claimants have withdrawn the amount without furnishing security.
Special leave granted on condition that in the event of reversal of the decision of the High Court, the said amount shall not be refunded by the claimants.
Stay of further execution of the award confirmed.
" It has been urged by the learned counsel for the appellant that in view of the statutory provision contained in this behalf in clause (b) of sub section (2) of Section 95 of the Act as it stood on the date of accident namely 15th June, 1969 which happens to be prior to 2nd March, 1970, the date of commencement of Amending Act 56 of 1969, no award in excess of Rs.20,000 could have been made against the appellant.
Before dealing with the submission we may point out that the policy under which the bus aforesaid was insured had not been 914 filed either before the Tribunal or before the High Court.
A photostat copy of the policy has, however, been filed in this Court and learned counsel for the respondents did not have objection in the same being admitted in evidence.
Clause (b) of sub section (2) of Section 95 of the Act as it stood at the relevant time reads as under: "95.
(1) . . . (2) Subject to the proviso to sub section (1), a policy of insurance shall cover any liability incurred in respect of any one accident up to the following limits, namely: (a) . . . . (b) Where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, in respect of persons other than passengers carried for hire or reward, a limit of twenty thousand rupees; and in respect of passengers a limit of twenty thousand rupees in all, and four thousand rupees in respect of an individual passenger, if the vehicle is registered to carry not more than six passengers excluding the driver or two thousand rupees in respect of an individual passenger, if the vehicle is registered to carry more than six passengers excluding the driver; (c) . . .
On the plain language of the aforesaid clause (b) which applies to the instant case it is apparent that the liability of the appellant could not be in excess of Rs.20,000.
Learned counsel for the respondents, however, urged that notwithstanding the provision contained in this behalf in clause (b) aforesaid it was open to the insurer to take a policy covering a higher risk than contemplated by the aforesaid clause (b) and consequently the said clause had to be read subject to the terms of the policy which was taken in the instant case.
We find substance in this submission in view of the decision of this Court in Pushpabai Purshottam Udeshi and others vs M/s Ranjit Ginning and Pressing Co. and another, where it was held that the insurer can always take policies covering risks which are not covered by the re 915 quirements of Section 95 of the Act.
We have accordingly perused the photostat copy of the policy to ascertain whether risk for any amount higher than the amount of Rs.20,000 contemplated by clause (b) aforesaid was covered.
Our attention was invited by learned counsel for the respondents to the circumstance that at the right hand corner on the top of page 1 of the policy the words "COMMERCIAL VEHICLE COMPREHENSIVE" were printed.
On this basis and on the basis that the premium paid was higher than the premium of an "act only" policy it was urged by the learned counsel for the respondents that the liability of the appellant was unlimited and not confined to Rs.20,000 only.
We find it difficult to accept this submission.
Even though it is not permissible to use a vehicle unless it is covered at least under an "act only" policy it is not obligatory for the owner of a vehicle to get it comprehensively insured.
In case, however, it is got comprehensively insured a higher premium than for an "act only" policy is payable depending on the estimated value of the vehicle.
Such insurance entitles the owner to claim reimbursement of the entire amount of loss or damage suffered up to the estimated value of the vehicle calculated according to the rules and regulations framed in this behalf.
Comprehensive insurance of the vehicle and payment of higher premium on this score, however, do not mean that the limit of the liability with regard to third party risk becomes unlimited or higher than the statutory liability fixed under sub section (2) of Section 95 of the Act.
For this purpose a specific agreement has to be arrived at between the owner and the insurance company and separate premium has to be paid on the amount of liability undertaken by the insurance company in this behalf.
Likewise, if risk of any other nature for instance, with regard to the driver or passengers etc.
in excess of statutory liability, if any, is sought to be covered it has to be clearly specified in the policy and separate premium paid therefor.
This is the requirement of the tariff regulations framed for the purpose.
Coming to the photostat copy of the policy in the instant case it would be seen that Section II thereof deals with liability to third parties.
Sub section (1) minus the proviso thereto reads as hereunder: "1.
Subject to the Limits of Liability the Company will indemnify the insured against all sums including claimant 's cost and expenses which the insured shall become legally liable to pay in respect of (i) death or bodily injury to any person caused by or 916 arising out of the use (including the loading and/or unloading) of the Motor Vehicle.
(ii) damage to property caused by the use (including the loading and/or unloading) of the Motor Vehicle)".
The Schedule to the policy indicates the limits of liability and the amount of premium paid.
The limits of liability are indicated as hereinbelow: "Limits of Liability: Limit of the amount of the Company 's Such amount as is necessary liability under Section II 1(1) in to meet the requirements of respect of any one accidentthe Motor Vehicle Act, 1939 Limit of the amount of the Company 's liability under Section II 1(11) in respect of any one claim or series of claims arising out of one event Rs.20,000/ The premium paid on the other hand is shown as below: "Premium Rs.415.00 Add 1/2% on I.E.V.
Rs.200.00 Add for 53 Pass, 9 of Rs.2.50 Rs.132.50 Add for Driver & Conductor Rs.10.00 757.50" A perusal of the policy, therefore, indicates that the liability undertaken with regard to the death or bodily injury to any person caused by or arising out of the use (including the loading and or un loading) of the motor vehicle falling under Section II(1)(i) has been confined to "such amount as is necessary to meet the requirements of the Motor Vehicle Act, 1939.
" This liability, as is apparent from clause (b) of sub section (2) of Section 95 of the Act, was at the relevant time Rs.20,000 only.
The details of the premium also indicate that no additional premium with regard to a case falling under Section II(1)(i) was paid by the owner of the vehicle to the insurance company.
It is only the vehicle which was comprehensively insured, the insured 's estimate of value including accessories (I.E.V.) thereof having been shown as Rs.40,000.
In this view of the matter the submission made by learned 917 counsel for the respondents that the appellant had in the instant case undertaken an unlimited liability does not obviously have any substance.
The liability under the policy in the instant case was the same as the statutory liability contemplated by clause (b) of sub section (2) of Section 95 of the Act namely Rs.20,000.
An award against the appellant could not, therefore, have been made in excess of the said statutory liability.
Learned counsel for the appellant then urged relying on the decision of this Court in British India General Insurance Co. Ltd. vs Captain Itbar Singh and Others, AIR 1959 Supreme Court 1331 that in view of the sub section (6) of Section 96 of the Act no insurer to whom the notice referred to in sub section (2) thereof has been given, is entitled "to avoid his liability" to any person entitled to the benefit of any such judgment as is referred to in sub section (1) thereof otherwise than in the manner provided for in sub section (2).
On this basis it was urged that the appellant was not entitled to assert that its liability was confined to Rs.20,000 only inasmuch as this is not one of the defences specified in sub section (2) of Section 96 of the Act.
We find it difficult to agree with this submission either.
Firstly, in paragraph 12 of the report of this very case it has been held that sub section (2) of Section 96 in fact deals with defences other than those based on the conditions of a policy.
Secondly, from the words "to avoid his liability" used in sub section (6) of Section 96 it is apparent that the restrictions placed with regard to defences available to the insurer specified in sub section (2) of Section 96 are applicable to a case where the insurer wants to avoid his liability.
In the instant case the appellant is not seeking to avoid its liability but wants a determination of the extent of its liability which is to be determined, in the absence of any contract to the contrary, in accordance with the statutory provisions contained in this bahalf in clause (b) of sub section (2) of Section 95 of the Act.
In the instant case since as seen above the appellant did not undertake in the policy any liability in excess of the statutory liability the award against it could be only in accordance with the said statutory liability.
Before parting with the case, we consider it necessary to refer to the attitude often adopted by the Insurance Companies, as was adopted even in this case, of not filing a copy of the policy before the Tribunal and even before the High Court in appeal.
In this connection what is of significance is that the claimants for compensation under the Act are invariably not possessed of either the policy or a copy thereof.
This Court has consistently emphasised that it is the duty of the party 918 which is in possession of a document which would be helpful in doing justice in the cause to produce the said document and such party should not be permitted to take shelter behind the abstract doctrine of burden of proof.
This duty is greater in the case of instrumentalities of the State such as the appellant who are under an obligation to act fairly.
In many cases even the owner of the vehicle for reasons known to him does not choose to produce the policy or a copy thereof.
We accordingly wish to emphasise that in all such cases where the Insurance Company concerned wishes to take a defence in a claim petition that its liability is not in excess of the statutory liability it should file a copy of the insurance policy along with its defence.
Even in the instant case had it been done so at the appropriate stage necessity of approaching this Court in Civil Appeal would in all probability have been avoided.
Filing a copy of the policy, therefore, not only cuts short avoidable litigation but also helps the Court in doing justice between the parties.
The obligation on the part of the State or its instrumentalities to act fairly can never be over emphasised.
In the result, this appeal succeeds and is allowed to this extent that the liability of the appellant is fixed at Rs.20,000 together with interest as allowed by the High Court.
In view of the order of this Court dated 14th September, 1984 quoted above, however, it is held that even if the total liability of the appellant falls short of Rs.1,00,000, it shall not be entitled to any refund out of the sum of Rs.1,00,000 which was deposited by it and withdrawn by the claimant respondent in pursuance of the said order.
The decree of the High Court as against the driver and the owner of the vehicle namely Respondents 2 and 3 is, however, maintained and all sums in excess of Rs.1,00,000 which has already been withdrawn by the claimant respondent as aforesaid shall be recoverable by him from Respondents 2 and 3 only.
There shall be no order as to costs.
R.S.S. Appeal allowed.
[/INST]% This Criminal Appeal against the judgment and order of the Gujarat High Court and the connected Special Leave Petitions against the orders of the various Designated Courts in the State constituted under the Terrorist & Disruptive Activities (Prevention) Act, 1987, raised common questions for consideration.
It was enough to set out the facts in the appeal.
There was an armed clash involving the appellants, as a result whereof the police apprehended the appellants and produced them before the Designated Court.
The appellants moved an application for bail which was rejected by the Designated Court.
The appellants moved the High Court under section 439 read with section 482 of the Code.
The High Court rejected the bail application on the ground that it had no jurisdiction to entertain such an application under section 439 of the Code or by recourse to its inherent powers under section 482.
Aggrieved by the decision of the High Court, the appellants appealed to this Court for relief by special leave.
On the view the Court took as to the nature of the function of the Designated Courts in dealing with the bail applications within the constraints of section 20(8), it was not necessary to deal with the facts of the connected special leave petitions directed against the orders of the different Designated Courts, rejecting the bail applications.
Allowing, the appeal and the special leave petitions partly, the Court, ^ HELD: These cases mainly raised two questions of substantial 226 importance.
The first was as to the jurisdiction and powers of the High Court to grant bail under section 439 of the Code of Criminal Procedure, 1973 or by recourse to its inherent powers under section 482 to a person held in custody for an offence under sections 3 and 4 of the Terrorist & Disruptive Activities (Prevention) Act, 1987, and secondly, as to the nature of the restraint placed on the power of the Designated Courts to grant bail to such a person in view of the limitations placed on such power under section 20(8) of the Act.
[246G H] The Act being a special Act must prevail in respect of the jurisdiction and power of the High Court to entertain an application for bail under section 439 of the Code or by recourse to its inherent powers under section 482.
Under the scheme of the Act, there is complete exclusion of the jurisdiction of the High Court in any case involving the arrest of any person for an offence punishable under the Act or any rule made thereunder.
There is contrariety between the provisions of the Act and the Code.
Under the Code, the High Court is invested with the various functions and duties in relation to any judgment or order passed by a criminal court subordinate to it.
The Act creates a new class of offences called terrorist acts and disruptive activities and provides for a special procedure for the trial of such offences.
The jurisdiction and power of a Designated Court are derived from the Act and it is the Act that must primarily be looked to in deciding the question before the Court.
Where an enactment provides for a special procedure for the trial of certain offences, it is that procedure that must be followed and not the one prescribed by the Code.
[239B C; 240A,D] No doubt, the legislature has, by the use of the words 'as if it were ' in section 14(3) of the Act, vested a Designated Court with the status of a Court of Session, but the legal fiction contained therein must be restricted to the procedure to be followed for the trial of an offence under the Act i.e. such trial must be in accordance with the procedure prescribed under the Code for the trial before a Court of Session, in so far as applicable.
[240D F] Though there is no express provision excluding the applicability of section 439 of the Code similar to the one contained in section 20(7) of the Act in relation to a case involving the arrest of any person for an offence punishable under the Act or any rule thereunder, yet that result must, by necessary implication, follow.
The source of power of a Designated Court to grant bail is not section 20(8) of the Act, as it only places limitations on such power, but it does not necessarily follow that the power of a Designated Court to grant bail is relatable to section 439 of the Code.
The 227 Designated Court is a 'court other than the High Court or the Court of Session ' within the meaning of section 437 of the Code.
The exercise of the power to grant bail by a Designated Court is not only subject to the limitations placed by section 20(9) which in terms provides that the limitations on grant of bail specified in section 20(8) are in addition to the limitations under the Code or any other law for the time being in force on the grant of bail.
It, therefore, follows that the power derived by a Designated Court to grant bail to a person for an offence under the Act is derived from the Code and not section 20(8) of the Act.
The controversy as to the power of the High Court to grant bail under section 439 of the Code must also turn on the construction of section 20(8) of the Act.
[241B E] In view of the explicit bar in section 19(2), there is exclusion of the jurisdiction of the High Court.
It interdicts that no appeal or revision shall lie to any court, including the High Court, against any judgment, sentence or order, not being an inter locutory order, of a Designated Court.
While it is true that Chapter XXXIII of the Code is still preserved, as otherwise the Designated Court would have no power to grant bail, still the source of power is not section 439 of the Code but section 437, being a court other than the High Court or the Court of Session.
Any other view would lead to an anomalous situation.
If it were to be held that the power of a Designated Court to grant bail was relatable to section 439, it would imply that not only the High Court but also the Court of Session would be entitled to grant bail.
The power to grant bail under section 439 is unfettered by any conditions and limitations like section 437.
It would run counter to the express prohibition contained in section 20(8) of the Act.
The Court upheld the view of the High Court that it had no jurisdiction to entertain an application for bail under section 439 or under section 482 of the Code.
[243G H; 244A B,D] As regards the approach which a Designated Court has to adopt while granting bail in view of the limitations placed on such power under section 20(8), the sub section in terms places fetters on the power of a Designated Court on the grant of bail and limitations specified therein are in addition to the limitations under the Code.
In view of these more stringent conditions, a Designated Court should carefully examine every case before it for finding out whether the provisions of the Act apply or not.
A prayer for bail ought not to be rejected in a mechanical manner.
[244E G] The Designated Courts had not in these cases carefully considered the facts and circumstances and had rejected the bail applications mechanically.
In the criminal appeal, the facts were already set out.
In 228 the special leave petitions Nos.
2369 and 2469 of 1967, the prosecution had been started at the instance of the management of a textile mill.
The other cases had arisen out of communal riots.
Normally, such cases have to be dealt with under the ordinary procedure prescribed by the Code, unless offences under sections 3 and 4 of the Act are made out.
The Designated Courts are under a duty to examine the circumstances closely from this angle.
That had not been done.
It was, therefore desirable to set aside the orders passed by the various Designated Courts and remit the cases for fresh consideration.
[246D F] The appeal and the special leave petitions partly succeeded.
While upholding the judgment and order of the High Court, dismissing the applications for bail under section 439 of the Code of Criminal Procedure, 1973, the Court granted leave and set aside the impugned orders passed by the various Designated Courts in the State, dismissing the applications for bail, and directed them to consider each particular case on merits as to whether it fell within the purview of section 3 and/or section 4 of the Act, and if so, whether the accused in the facts and circumstances of the case were entitled to bail while keeping in view the limitations on their powers under section 20(8) of the Act.
Where the Designated Courts find that the acts alleged in the police report or complaint of facts under section 14(1) do not fall within the purview of section 3 and/or section 4 of the Act, they shall in exercise of the powers under section 10 of the Act transfer the cases for trial to the ordinary criminal courts.
The accused persons, enlarged on bail by this Court, should continue to remain on bail until their applications for bail were dealt with by the Designated Courts with advertence to the observations made above.
[246F H; 247A B] In Re the Special Courts Bill, 1978, [1979] 2 S.C.R. 476; Balchand Jain vs State of Madhya Pradesh, ; ; Ishwar Chand vs State of Himachal Pradesh, I.L.R. (1975) H.P. 569 and V.C. Shukla vs State through C.B.I., , referred to.
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<s>[INST] Summarize the judgementPrevention of Corruption Act , 1947 , the minimum sentence that can be imposed is imprisonment for One year and the maximum sentence is seven years.
However , the Court , for any special reasons to be recorded in writing.
may impose a sentence of imprisonment of less than one year.
There is no special circumstance in this case justifying the court to take a lenient view.
Corruption has become so rampant in the country and the offence in this particular case cannot be considered trivial at all.
This is not a case of a petty clerk or a peon accepting a small amount as a bribe for doing some little favour.
The Court can lot take a lenient view of the conduct of an Income tax officer , who accepts a large amount as a bribe for causing loss to public revenue.
[742A C] & CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.180 of 1976.
D From the Judgment and Order dt.
17.10.1974 of the Gujarat High Court in Crl.
Appeal No. 750 of 1973.
N. L. Kakar , and R.N. Poddar for the Appellant.
S.K. Dholakia , R.C. Bhatia and P.C. Kapur for the Respondent.
He was tried and convicted by the Additional Special Judge , Ahmedabad of offence under Section 161 , Indian Penal Code and Section 5(2) read with Section 5(1) (d) of the Prevention of Corruption Act.
He was sentenced to undergo rigorous imprisonment for one year and to pay a fine of Rs. 2,000 on each of the two counts.
On appeal , the High Court of Gujarat acquitted the accused of both the offences.
The State of Gujarat has preferred this appeal by special leave of this Court under Article 136 of the Constitution.
The case of the prosecution briefly was as follows: One Shashi Kant Mansukh Lal Sheth (P.W. 2) was the 736 Managing partner of a firm known as M/s Hind Fertilizers , Bhavnagar.
The assessments for the years 1968 69 , 1969 70 , 1970 71 and 1971 72 were pending before the accused income tax Officer.
Between June and October 1971 , there were nine hearings of the case.
On 3.5.72 , Laxmikant Sheth (p.W. 7) the Income tax practioner who was representing the firm , received a notice directing the firm 's representative to attend his office on 14.3.72 with the firm 's books of account and to show cause why sums totaling Rs. 1,94,378 should not be added to their returns of income for the years in question.
The firm felt that the notice was not justified As P.W. 7 would be busy on 14.3.72 , it was decided that they would go to the income tax office with their books of account on 13th itself.
On 10.3.72 , Shashi Kant Sheth (P.W. 2) contacted the income tax officer on the telephone and the latter asked him to meet him at his residence at 2.00 P.M. Shashi Kant went to the house of accused at Bhavnagar that afternoon.
He was told to come again on the evening of 13th.
On the 13th , P.Ws 2 and 7 went to the office and submitted the reply to the show cause notice.
The accused wanted them to meet him again on 14th.
P.W.7 said he was busy on 14th.
The accused then asked P.W. 2 to come alone.
As previously agreed on 10th , Shashi Kant went to the house of the accused on the night of 13th when the accused told him that the clarification given by the firm was not satisfactory and that they would have to pay a sum of about Rs. 12,500 by way of tax unless a sum of Rs. 40,000 was given to him as a bribe.
On P.W. 2 pleading his inability to pay such a large sum , it was settled that a sum of Rs. 12,500 should be paid.
P.W. 2 wanted to consult his partner.
He was told by the accused that he should bring the amount to his house on the evening of 14th March , 1973.
There after , Shashi Kant contacted Shri Judeja , Deputy Superintendent of police , CBI who was camping at Bhavnayar Shashi Kant complained to him about the demand of bribe of Rs. 12,500 by the accused.
Shri Judeja then took the necessary steps for laying a trap.
Two officers of the postal department Shri Parikh , Manager , Postal Store Depot , Ahmedabad (P.W. 3) who was staying in the guest house , and Shri Panchal , an officer of the Postal Department stationed at Bhavnagar itself were requested to serve as panch witnesses.
Shashi Kant was asked to bring currency notes of the value of Rs. 12,500.
The notes were treated with phenol phethelen powder.
Shashi Kant put the notes in his pocket.
He was instructed to go to the house of the accused accompanied by Parikh and to tender 737 the amount to the accused.
On the accused receiving the amount Shri Parikh was to come out of the house and signal the police party to come.
A panchnama stating all these facts was duly prepared at the guest house.
Thereafter , as arranged , the raiding party proceeded towards the house of the accused.
Shahsi Kant and Parikh , P.Ws 2 and 3 , went inside.
Shahsi Kant introduces Parikh to him as a member of his staff.
They chatted generally for some time.
The accused then mentioned about the amount to be paid to him whereupon Shashi Kant handed over the bundle of currency notes him.
The currency notes were received by the accused who carefully put them in a newspaper and folded the newspaper.
Parikh then went out and signalled to the police party.
Judeja , Dy.
Supdt.
Of Police P.W. 9 , the other panch witness Panchal and the rest of the police party rushed inside.
The notes were seized.
The accused was asked to dip his fingers in a solution of bicarbonate.
The solution turned pink Thereafter , the panchnama was prepared.
After the investigation was duly completed , the respondent was charge sheeted for the two offences of which he was ultimately convicted.
The defence of the accused was that the prosecution case was false.
Shashi Kant came to his house with a stranger on the night of 14.3.72.
He was surprised at his visit , but for the sake Of courtesy , he asked him to sit down and asked him the purpose of his visit.
Instead of replying him , Shashi Kant and the stranger started talking about politics to him.
He told him that he was a public servant and he was not interested in politics He also told them that he wanted to go to bed.
He went to the toilet for a few minutes and when he returned , Shahsi Kant and the stranger stood up and went away after shaking hands with him.
A few moments later they returned with the police party.
They must have planted the notes in the newspaper which was lying on the table when he had gone to the toilet.
It is seen from the facts narrated above that meeting of Shashi Kant and Parikh with the accused on the night of 14.3.72 at 8.00P.M. is not disputed.
It is also not disputed that Shashi Kant and Parikh talked to the a accused for quite considerable time , nearly 40 minutes.
It is further not disputed that within a few moments after Shashi Kant and Parikh left the accused , Judeja , Panchal and rest of 738 police party entered the house of the accused and currency notes of the value of Rs. 12,500 were seized from in a fold of a newspaper laying on the table.
The accused was present all the time and there was no protest by him.
That the fingers of the accused were also dipped in some solution is not disputed.
The only question is whether the amount of Rs. 12,500 was received by the accused as a bribe or whether the amount was planted by Shashi Kant and Parikh during the brief visit of the accused to the toilet.
The learned Sessions Judge accepted the evidence of Shashi Kant , Parikh and Judeja and convicted the accused as aforesaid.
The High Court , however , took are markably curious view of the evidence and acquitted the accused.
The High Court narrated several circumstances , one after an other , why the prosecution case should not be accepted.
We have considered every one of the circumstances and we find that there is not a single satisfactory circumstance reasonably justifying the acquittal.
On the other hand we find that everyone of the circumstances is overstated and fanciful.
The most important circumstance which seems to have weighed heavily with the High Court , almost to the point of obsession , was that Parikh and Panchal were not independent witnesses as they were both government servants and as they had some previous acquaintance with Inspector Sharma who was assisting Judeja in the investigation , The High Court was of the view that some other respectable residents of Bhavnagar should have been called as Panch witnesses to be associated with the raid.
We are afraid the High Court has entirely misdirected itself in appreciating the evidence.
In their approach to the evidence , the High Court has done injustice to the witnesses and this has resulted in a grave miscarriage of justice.
In appreciating oral evidence , the question in each case is whether the witness is a truthful witness and whether there is anything to doubt his veracity in any particular matter about which he deposes Where the witness is found to be untruthful on material facts that is an end of the matter.
Where the witness is found to be partly truthful or to spring from tainted sources , the Court may take the precaution of seeking some corroboration , adequate and reasonable to meet the demands of the situation , but a court is not entitled to reject the evidence of a witness merely because they are government servants , who , in the course of their duties or even otherwise , might have come into contact with inves 739 tigating officers and who might have been requested to assist the investigating agencies.
If their association with the investigating agencies is unusual , frequent or designed , there may be occasion to view their evidence with suspicion.
But merely because they are called in to associate themselves with the investigation as they happened to be available or it is convenient to call them , it is no ground to view their evidence with suspicion.
Even in cases where officers who , in the course of their duties , generally assist the investigating agencies , there is no need to view their evidence with suspicion as an invariable rule.
For example , in rural areas , investigating officers would ordinarily think of calling in the village officers , such as , the Headman , the Patel or Patwari to act.
as punch witnesses , as they are expected to be respectable persons of the locality.
It does not mean that their evidence should be viewed with suspicion because they are government servants or because they are generally associated with investigating agencies whenever there is a crime in the village.
For that matter it would be wrong to reject the evidence of police officers either on the mere ground that they are interested in the success of the prosecution.
The court may be justified in looking with suspicion upon the evidence of officers who have been , demonstrated to have displayed excess of zeal in the conduct and success of the prosecution.
But to reject the evidence of all official witnesses as the High Court has done in the present case , is going far too far.
We think that it is extremely unfair to a witness to reject his evidence by merely giving him a label.
There were two panch witnesses Parikh and Panchal of whom Parikh has been examined as PW.3 while Panchal has not been examined.
We have been taken through the whole of the deposition of Parikh and we find nothing whatever to doubt his veracity.
Nothing was suggested to him as to why he should give false evidence to implicate the accused.
All that was elicited from him was that he had worked as departmental inquiry officer and also to defend delinquents in such inquiries in his department.
He had become acquainted with Inspector Sharma fifteen days before March 14 , 1972 as he was defending a delinquent at Bhavnagar in a case in which Shri Sharma was the prosecuting officer.
Shri Panchal , who was Assistant Superintendent of Post Offices , Bhavnagar was the Inquiry Officer in that case.
This is stated to be the "close association" of the two panch witnesses 740 with the investigating agency in this case.
It is impossible to subscribe to this view.
When Judeja , Deputy Superintendent of Police asked Inspector Sharma to get two independent panch witnesses , Parikh was readily available in the guest house and he had known Panchal as the Inquiry Officer in a departmental inquiry in the Postal Department.
Both of them being Government Servants belonging to a different department , if Inspector Sharma thought that they could be called as independent punch witnesses , we are unable to impute any motives to the investigating agency or to cast aspersions on the witnesses Parikh and Panchal.
We do not have any doubt in accepting the evidence of Parikh as that of an independent witness.
Having examined his evidence in detail , we find his evidence to be truthful.
His evidence substantiates the evidence of PWs 2 about the acceptance of the bribe by the accused and his keeping the money in a folded newspaper.
If we accept the evidence of PWs 2 and 4 , the prosecution case that the money was given as a bribe must be accepted and the defence version that the money was planted must be rejected.
The other circumstances upon which the High Court relied Court are very trivial and it is unnecessary to burden this judgment with a seriatim discussion of those circumstances.
For example , one of the circumstances was that if the accused had arranged that PW 2 should come to him on.
the evening of 14th with the bribe , he would have been waiting in his house to receive him with the doors of the house open so that the bribe giver may walk in straight and he was not likely to have kept the doors closed and wait for the bribe giver to knock at the door.
We consider it needless even to comment upon this circumstance.
Another circumstance upon which the High Court relied was that the accused was not likely to have talked with PWs 2 and 3 for as long as 40 minutes if he was accepting a bribe.
He would have merely received the money and sent them away.
The very fact that he was talking to them for nearly 40 minutes indicated that no bribe was given or taken.
On the other hand , we consider that this is a strong circumstance against the accused.
The accused knew that PW 2 was an assessee who had a pending case before him.
If the assessee paid him a visit after 8.00 PM at his residence , one would expect the accused to immediately suspect the reason for the visit and to turn him away at once or at least 741 within a few minutes after his coming to his house.
Instead of that , he takes them inside the house , talks to them for nearly 40 minutes.
This conduct of the accused is clearly against his innocence.
Some question was raised that the solution which according to the investigating officer and the panch witness turned pink when the accused was asked to dip his fingers in it , had become yellowish when the chemical examiner examined the solution.
Nothing really turns on this in view of the evidence of PWs 2 , 4 and that of the investigating officer PW 9.
A point was sought to be made in this court of the failure of the prosecution to examine Inspector Sharma as a witness.
All that Inspector Sharma did in the case was to assist Judeja , Deputy Superintendent of Police and to fetch the two panch witnesses when he was asked to do so.
He could not by any means be called a material witness.
As some comment was made during the course of the trial about the failure of the prosecution to examine Inspector Sharma , the prosecution offered him for cross examination and kept Inspector Sharma ready in court.
The counsel for the accused stated that since the witness had already been dropped by the prosecution , he did not want to examine him unless the court directed him to do so.
After the failure of the counsel of the accused to take advantage .
Of the offer made by the prosecution , we do not think that it is open to the accused to comment upon the so called failure of the prosecution to examine inspector Sharma as a witness.
Nor can we draw any adverse inference against the prosecution.
On this question , the High Court took the same view as we do.
From the evidence of PWs 2 , 3 and 9 , we do not have the slightest doubt that a sum of Rs. 12,500 was paid to and received by the accused as a bribe.
The learned Sessions Judge was clearly right in convicting the accused and the High Court was wronging acquitting the accused.
We do not think that this is a case where two views were reasonably possible.
The only possible view was J that the accused was guilty and we hold him guilty of both the offences under section 161 IPC and section 5 (2) read with section 5 (1) (d) of the Prevention of Corruption Act , 1947.
The learned counsel for the accused argued that in view of the long time that has elapsed since the commission of the offence and in view of the circumstance that the accused has also retired from service , 742 we may take a lenient view and not sentence the accused to any term of imprisonment.
13th under sec 5 (2) of the Prevention of Corruption Act , 1947 , the minimum sentence that can be imposed is imprisonment for one year and the maximum sentence is seven years.
However , the court , for any special reasons to be recorded in writing , may impose a sentence of imprisonment of less than one year.
We are unable to find any special circumstance in this case justifying our taking a lenient view.
Corruption has become so rampant in the country and the offence in this particular case cannot be considered trivial at all.
This is not a case of a petty clerk or a peon accepting a small amount as a bribe for doing some little favour.
We cannot possibly take a lenient view of the conduct of an income tax officer , who accepts a large amount as a bribe for causing loss to public revenue.
We think that the sentences imposed by the learned Session Judge were the right sentences to be imposed on the accused.
The judgment of the High Court is set aside and that of the learned Special Judge is restored.
The accused will surrender to his bail.
[/INST]Respondents are owners of sugar mill situated in erstwhile Jaora State which merged in the State of Madhya Bharat.
After the merger, the Madhya Bharat Essential Supplies (Temporary Powers) Act, 1948 came into force.
By a notification dated 5th September, 1949 the said Act included 'sugar ' in the list of articles as an essential commodity.
By another notification dated 5th September, 1949 the Government delegated its powers to the Director, Civil Supplies to issue orders under the Act.
The Director of Civil Supplies by a notification dated 14th January, 1950 fixed ex factory prices for different sugar factories, which were to supply and despatch sugar of Grade E 27 at Rs. 32.400 per maund F.O.R. destination.
The supply price was higher than ex factory price.
The difference between the supply price and the ex factory price was to be credited to Madhya Bharat Government Sugar Fund.
On demand by appellants, the respondents deposited a sum of Rs. 50,000 under protest in the said Sugar Fund.
The respondents instituted a suit for the refund of the amount deposited by them towards Sugar Fund and Rs. 10,000 towards interest.
Tho suit was dismissed.
On appeal, the High Court set aside the Judgment and Decree of the trial Court and decreed the suit.
Allowing the appeal of the State, ^ HELD: 1.
The respondents had not to pay the amount from their coffers.
The burden of paying the amount in question was transferred by the respondents to the purchasers and, therefore, they were not entitled to get a refund.
Only the persons on whom lay the ultimate burden to pay the amount would be entitled to get a refund of the same.[568C] 562 2.
The amount deposited towards the Fund was to be utilised for the development of sugarcane.
If it is not possible to identify the persons on whom had the burden been placed for payment towards the Fund, the amount of the Fund can be utilised by the Government for the purpose for which the Fund was created, namely, the development of sugarcane.
There is no question of refunding the amount to the Respondents who had not eventually paid the U amount towards the Fund.
Doing so would virtually amount to allow the respondents unjust enrichment.
[568D E] The Orient Paper Mills Ltd. vs The State of Orissa & Ors.
[1962] I SCR 549.
State of Bombay vs The United Motors (India) Ltd. , Shiv Shankar Dal Mills etc.
vs State of Haryana ; , Newabganei Sugar Mills vs Union of India & Ors. ; , Sales Tax Officer, Banaras & Ors.
vs Kanhaiya Lal Mukundlal Saraf, , M s Amar Nath Om Parkash & Ors.
vs The State of Punjab & Ors., ; , relied upon.
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<s>[INST] Summarize the judgementminal Appeal No. 264 of 1972.
Appeal by special leave from the judgment and order dated March 6, 1972 of the Bombay High Court at Bombay in Cr. A. No. 164 of 1972.
M. N. Sharma, for the appellant.
section B. Wad and Rine Sachthey, for the respondent.
The Judgment of the Court was delivered by DUA, J.
The appellant in this appeal by special leave was tried in the court of Session for Greater Bombay at Bombay for offences under section 467, under section 471 read with section 467 and under section 420, I.P.C.
According to the prosecution the appellant was running an octroi clearing agency under the name and style of "National Octroi Clearing Agency" at the Mulund check post.
He used to attend to certain transactions relating to the transport companies, one of those companies being the Montgomery Transport Company.
On December 16, 1962 a truck belonging to the said transport company bearing No. MPR 2147 arrived at the check post carrying a Depleix Machine to be delivered to Messrs Imperial Tobacco Company.
There were two drivers and one cleaner in the truck.
On being approached by them the appellant telephoned to manager Bakshi of the Transport Company to arrange for the payment of octroi which amounted to more than Rs. 8,000/ .
The Manager, Bakshi and Director, Inderjit Singh went to the Imperial Tobacco Company the following day and after getting Rs. 8,196/ /for the octroi reached the Mulund Check post.
The amount was handed over to the appellant in the presence of the driver.
Actually only Rs. 81 80/ were required for the octroi with the result that Rs. 16/ were paid back to Messrs Imperial Tobacco Company by means of a cheque.
During the investigation of another case arising out of an alleged forged receipt relating to octroi in respect of some imports by Messrs Pure Drinks Private.Ltd., it came to light that proper octroi had not been paid on December 17, 1968 in respect of the transaction in question in the present case.
The Assistant Assessor and Collector, Shri Karkhanis, after sending his superintendent Govind Charan to, the office of Messrs Imperial Tobacco Company he himself also visited the Company 's office and they both felt that the receipt for the payment of octroi held by the said Company was not genuine.
Having failed to trace the necessary relevant documents in the office files Shri Karkhanis lodged the complaint in February, 1969 and a case 3 L761Sup.
CI/73 550 was registered After preliminary enquiry under Ch.
XVIII Cr.
P.C. the appellant was committed for trial to the court of Session.
According to,the trial court the following points arose for determination : 1.
Whether it is proved that the receipt, Article A is a forged document ? 2.
Whether it is proved that it is the accused who forged that receipt with intent to commit fraud ? 3.
Whether it is proved that the accused used this receipt as genuine knowing it to be forged ? 4.
Whether it is proved that he cheated the Bombay Municipal Corporation, as alleged ? 5.
Whether it is proved that the accused cheated the Imperial Tobacco Co. of India Ltd., as alleged ?" The conclusions of the trial court on these points were "1.
In the affirmative.
Not proved.
In the affirmative, 4.
In the affirmative.
Not proved.
" The evidence in this case is mainly, if not wholly, circumstantial and about 20 witnesses were examined including a handwriting expert.
The trial court felt that the case required evaluation of the evidence of Bakshi (P.W. 4), Inderjit Singh (P.W. 18) and Handwriting Expert (P.W. 17).
Driver Balwant Singh was not examined in the case.
The trial court in a lengthy judgment exhaustively discussed the evidence of these witnesses.
It did not place implicit reliance either on Bakshi (P.W. 4) or on Inderjit Singh (P.W. 18) as, indeed in the testimony of 'both of them the trial court found partly reliable and partly unreliable statements.
The court did not feel inclined to hold that their evidence was wholly unreliable.
On evaluation of the evidence of the Handwriting Expert the trial court felt that the receipt in question could not necessarily be held to have been forged by the appellant.
After this ' observation follows the following passage in the judgment "I do not, however, feel that this earns an acquittal for him The direct charge regarding the forgery could be taken as not proved we will have however to weigh the other evidence for finding out whether he could have used the document which is necessarily a fogged docu ment, as a genuine document.
For this purpose we will have to appreciate the evidence of the two witnesses 551 about whom I have spoken quite a long time and we have also to appreciate the interval of time.
What exactly the accused did within that half an hour when he took the money and returned, will have to be surmised, particularly in the absence of categorical evidence showing that the disputed receipt is executed by him.
The evidence shows, it is a forged receipt.
It is not prepared at the counter.
We may not be sure in finding out as to who wrote it.
The accused may have had his associates it he himself has not written it.
Considering the way in which counters are stated to be working, considering the amount involved and the short time 'limit when the accused reappeared legitimate payment across the counter will have to be ruled out.
That is not even suggested on behalf of the accused.
He may have his own collaborators.
If we accept the version, which I do, then it was this receipt which was in the hands of the accused that was given over to the driver and from there onwards it reached the firm Messrs Imperial Tobacco Co. of India Ltd. I feel, the accused ought to be supposed to be aware that the real payment was made and what he carried could not be the real receipt.
It is for this reason that I am feeling that the charge of using a forged receipt knowing it to be forged could be brought home to him." The trial court thereafter dealt with the, charges of cheating and ultimately convicted the appellant for offence under sections 471 read with 467, I.P.C. and for an offence under section 420, I.P.C. Under the former he was sentenced to five, years ' rigorous imprisonment and a fine of Rs. 500/ with six months ' further rigorous imprisonment in case of default.
Under section 420 he was sentenced to rigorous imprisonment for two years.
The substantive sentences were directed to be concurrent.
The appeal to the High Court was dismissed in limine with one word "Dismissed".
Before us on appeal by special leave the short point but one of vital importance to the appellant requiring our decision is whether the High Court was justified on the facts and circumstances of this case in unceremoniously dismissing the appeal in limine with one word "Dismissed" without making a speaking order indicating the reasons for the dismissal.
The facts briefly stated by us and a close study of the lengthy judgment of the trial court quite clearly show that the appeal in the High Court did raise points which were not only arguable, but were also substantial requiring critical scrutiny and serious appraisal and evaluation of the prosecution evidence and the circumstances of the case.
The impor 552 tance of the opinion of the High Court on arguable points requiring consideration on appeal in that court when questions of fact or law are open to challenge by the appellant was emphasised more than 20 years ago by this Court in Mushtak Hussein vs The State of Bombay(1) when Mahajan J., (as he then was) observed at p. 820 : "With great respect we are however constrained to observe that it was not right for the High Court to have dismissed the appeal preferred by the appellant to that court summarily, as it certainly raised some arguable points which required consideration though we have not thought it fit to deal with all of them.
In cases which prima facie raise no arguable issue that course is, of course, justified, but this court would appreciate it if in arguable cases the summary rejection order gives some indication of the views of the High Court on the points raised.
Without the opinion of the High Court on such points in special leave petitions under article 136 of the Constitution this Court sometimes feels embarrassed if it has to deal with those matters, without the benefit of that opinion.
" Since then in a series of decisions (quite a number of them reported and several unreported) this Court has consistently drawn the attention of the High Courts to the eminent desirability of giving an indication of their views on the points raised in arguable cases in accordance with the legal position enunciated by this Court.
Such a course is normal in cases which raise fairly arguable questions of fact or law.
In one of the latest decisions of this Court in K. K. Jain vs State of Maharashtra(2) some of the earlier decisions were again noticed and it was considered necessary to repeat the emphasis laid on the necessity of recording reasons by the High Court for dismissing appeals raising questions which cannot be considered to be unsubstantial or not arguable.
In that decision it was reiterated, inter alia, that reasons prevailing with the High Court for dismissing the appeal, if recorded, would have been of valuable assistance to this Court in finally disposing of the appeal on merits.
Another advantage of recording such reasons.
is that the accused appellant who may not always be present in court would have the satisfaction of knowing from the judgment that the points appropriately arising for consideration in his case were actually argued and only considered by the High Court while dismissing his appeal.
This would, inter alia, tend to promote confidence of the parties concerned in our judicial process.
in the present case had the High Court recorded its reasons for dismissing the appeal it would have better enabled the appellant 's lawyer to consider the advisibility of appealing (1) ; (2) A.I.R. 1973 S.C. 243.
553 under article 136 of the Constitution and after filing the appeal would have afforded valuable assistance both to the counsel appearing in this Court and to us in the final disposal of the appeal without feeling the necessity of remanding the case to the High Court for re hearing.
The remand no doubt must result in further delay in the final disposal of the appellant 's appeal in the High Court, and this indeed is regrettable.
But in the absence of the opinion of the High Court which that Court was under the law expected to record we are left guessing about the line of reasoning the High Court would have adopted after appropriate scrutiny of the evidence on the record.
The appellant is entitled to have a proper decision on the points arising in his appeal by the High Court on due appraisal of the evidence in accordance with law.
The legal position on the point in question has been authoritatively settled and declared by this Court and the same has been frequently reiterated in its decisions.
The law reports are so full of them that it appears to us to be somewhat surprising that the counsel appearing in the appeal in the High Court Should have been unaware of it.
It, however, does seem that the attention of the High Court was not drawn to these decisions, for had that Court been apprised of the law as authoritatively declared by this Court, it is inconceivable ,that the present appeal would still have been dismissed without indicating the reasons in support of it.
Had the High Court recorded reasons the delay necessitated by this remand could have been avoided.
But in the circumstances we have no option but, to allow the appeal and remand ' the case to the High Court for rehearing and deciding the appeal after considering the points raised and recording its reasons in accordance with law.
We have taken care not to express any opinion on the merits of the case either way.
It is hoped that this appeal would now be disposed of by ,the High Court expeditiously and without avoidable delay.
section C. Appeal allowed.
[/INST]The assessee, a trading company, paid wealth tax and sought to, deduct it as a business expense under section 10(1) and section 10(2) (xv) of the Income Tax Act, 1922, in computing its assessable incomes from business for the purpose of the Income Tax Act.
The High Court held against the assessee following the decision of this Court in Travancore Titanium Product Ltd. vs C.I.T., ; The test adopted by this Court in the Travancore Titanium case was that "to be a permissible deduction, there must be a direct and intimate connection between the expenditure and the business, that is, between the expenditure and the character of the assessee as a trader, and not as an owner of the assets, even if they are the assets of the business".
Allowing the appeal to this Court, HELD : The Court is unanimous that the test laid down in the decision in the Travancore Titanium case should be modified.
[20A, 39B] (Per S.M. Sikri, C. J., A. N. Grover, A. N. Ray and D. G. Palekar, JJ.) : (1) Certain important aspects of the question were not brought to the attention of this Court when the earlier case was decided.
if that decision is modified as erroneous, it is not likely to cause any public inconvenience hardship or mischief; and numerous assessees would be affected by the decision.
[20A B] Keshav Mills, Co. Ltd. vs C.I.T. ; , 922, followed.
(2) There is no doubt that in one sense when rates and taxes on property are paid by a trader he pays them as owner or occupier, because taxes are either on possession of property or on its ownership.
But when a person has the dual capacity of a trader cum owner, and he pays tax in respect of property which is used for the purpose of trade, the payment must be taken to be in the capacity of a trader according to ordinary commercial principles.
[25A B, C D] Moffatt vs Webb, ; applied (Not cited in the Travancore Titanium case.
Smith vs Lion Brewery Company, , Usher 's Wiltshire Brewery Ltd. vs Bruce, , Harrods (Buenos Ayres) Ltd. vs TaylorGooby, and observations of Lord Davey in Strong and Co. Romsey Ltd, case ; , referred to.
(3) In the case of a trading company all the assets are owned and the liabilities are incurred for the purpose of trading, as outlined in its memorandum of association.
If all the assets are owned and used for the purpose of trade, the net wealth would also be owned and used for the ,purpose of trade.
The net wealth is as much an instrument of trade as the capital value of assets.
Therefore,.the test laid down in the earlier case should be qualified, by stating that, if the expenditure is I aid out by the 16 assessee as owner cum trader, and the expenditure is really incidental to the carrying on of his business, it must be treated as having bean laid out by him as a trader and as incidental to his business.
[29F H, 3OA C] (4) It may be difficult for the Revenue to allow the deduction of debts, and non business assets and debts.
But the wealth tax return form itself requires the assessee to show what are business assets and liabilities and what are the non business assets and liabilities.
At any rate, it should not be difficult to evolve a principle or frame statutory rules to find out the proportion of the tax which is 'really incidental to the carrying on of the trade.
[30C E] (Per M. H. Beg, J.) : (1) One of the tests laid down in Keshav Mills co 's case ([1965]/2 S.C.R.908), for deciding whether a previous erroneous view should be set right by this Court, is whether any Possible advantage to public resulting from doing so would be outweighed by the mischief or harm a revision may cause.
[38E F] The Wealth Tax Act was not intended to strike at or check expansion of commercial activities by either individuals or companies.
Its underlying purpose is the removal of disparities of individual or personal wealth and not injury to trade.
The interpretation placed in the Travancore Titanium case ([1966] 3 S.C.R. 321) seems to penalise mere expansion of business and trade without serving the underlying purpose of wealth tax.
Therefore, a revision of opinion does not involve any such mischief or Such injury to the public interest as would stand in the way of correcting an erroneous view.
[38G H, 39A B] (2) The error which crept into the Travancore Titanium decision could be traced to an application of the criterion stated by the Lord Chancellor in Strong and Co. of Romsey vs Woodfield ; , that if.
the expenses fall on the trader in some character other than that of a trader, they could not be deducted in computing profits.
But in the same case, another Law Lord laid down a somewhat different test that the payment to be deductible must have been made for the purpose of earning profits.
[30G H, 31A B] (3) Liabilities incurred by a trader to pay damages for injury to his customer due to his personal neglect in maintaining his premises, even though the premises were used for trade, could be looked upon as outside the course of trading altogether even if they arise out of commercial activity or result from something connected with or meant to serve a commercial purpose.
But in Strong and co. 's case the negligence which resulted in payment of damages, for which the deduction was claimed, was that of servants employed as an ordinary incident of trading, so that, the master was only vicariously liable; and the language used by the Lord Chancellor in that case covers more than what could be attributed to the trade man 's own personal wrongs.
[31B E] (4) In later English cases the test adopted is whether the expenses sought to deducted 'wholly or exclusively laid out for the purpose of earning profits.
[31F] Smith vs Lion Brewery Company Limited, ; Usher 's Wiltshire Brewery Ltd. vs Bruce ; Atherton vs British Insulted and Halsby Cables Ltd., ; Margan vs Tate and Lyle Ltd., , referred to.
Rushden Hell Co. Ltd, vs Commissioner of Inland Revenue, and Smith 's Potato Estates Ltd. vs Bolland, 30 T.C. 267 explained 17 Where profits, the net gains of business, determined after making all permissible deductions.
are taxed, the disbursements to meet such taxes cannot be deducted.
But, when the tax 'was levied on capital, or assets used for the purpose of earning those profits, it was a permissible de duction in calculating profits.
[32G H] Harrods (Buenos Ayres) Ltd. vs ' Taylor Gooby, , referred to.
(6) The principle, that tax paid by an assessee on property used by him to earn income is deductible in computing the income for paying income tax, was also laid down in Moffatt vs Webb ; , which was not cited before this Court when the Travancore Titanum case was argued.[34A B] (7) The test of trading character when incurring an expense for which deduction is claimed can be utilised usefully only in cases where the question is whether a payment was gratuitous or unnecessary or not made for a bona fide commercial purpose or connected more with some ulterior object really failing outside the normal sphere or regular course of commerce, such as the compounding of an offence even if committed while trading; but this could not be so in cases of payment of taxes[34D F] J.K. Cotton Spinning & Weaving Mills Co. Ltd. vs Commissioner of Income Tax, A.I.R. 1957 All. 513, referred to; (8) There is no accepted commercial practice or trading principle according to which wealth tax could not be deducted in the computation of profits under section 10(i) and (ii) of the Income Tax Act.
Except the observation in the Travancore Titanium case, all the other cases indicate that commercial practice and trading principles 'also warrant such deductions of tax on capital assets used wholly and exclusively for carrying on trade or for earning profits.
Deductions of taxes on net profits may not be permited, but those imposed on net assets or wealth, used exclusively for making profits, can be deducted in, computing income for purposes of income tax.
Moreover, whatever commercial practice or trading principles may imply or import, they could not alter the meaning of statutory provisions.
All that the Language of section 10(2)(xv) requires, for claiming its benefit, is proof of direct causal connection between an outgoing and the commercial purpose which necessitated it.
To lay down that it is the causal connection between the payment of tax and that part of the net wealth which is used wholly and exclusively for trade, and not the mere character or capacity for the possession of which the tax is demanded, which determines whether it is an allowable deduction or not, under section 10(2) (xv), nothing more than giving effect to the plain and literal meaning of a provision of a taxing statute.
[35A B, 35B C] (9) To exclude from the purview of section 10(2)(xv) wealth tax simply because it was a tax on assets or net wealth paid by its owner so as to reduce his wealth, is to bring in the misleading test of either of capacity of the owner for the possession of which, or the purpose for which, the wealth tax may be demanded.
instead of the inevitable need and the purpose of the trader in paying the tax, as relevant matters.
[35D F] (10) Wealth tax is imposed on net wealth of of assessees who are persons both natural and artificial.
In the case of an artificial or juristic person like a company, it is difficult to separate the purpose of the Juristic "persona" which is certainly commercial, from the character of the "persona" itself.
Even as regards other traders that part of the tax which falls on assets used exclusively for I trade could 'be really ascribed 18 only to a trading character.
To the extent it is a tax on property used for earning profits it must enter into a computation of profits from trading.
Therefore, nothing less than express, statutory provision would justify a denial of the right to a deduction which the language of section 10(2) (xv) confers upon assessees.
[36D F] (11) The Court is not concerned with any difficulty in separating that pail of the tax which is levied on any part of the net wealth, used wholly or exclusively for trade, from the rest of it.
The Court is concerned only with the interpretation of section 10(2)(xv) and not with any difficulty which may arise in actually computing the deductible amount.
Moreover, since net wealth is an amount by which an aggregation of all the assets exceeds all the debts there can be no intractable difficulty in calculating what part of the net Wealth is used for trade or business of an a sessee and what is not, an aggregation being collection of items n being collection of items which can be separated, and not a mixture whose ingredients became inseparable.
Further, the wealth tax return form divides wealth under two heads, one of business assets and another of other assets, showing that the Wealth Tax Act its itself makes that part of the net wealth separable which is used wholly and 'exclusively for trade from the reminder of it.
If this can be done, there is no difficulty in separating that part of the wealth tax which could be deducted under section 10(2)(xv) of the Income Tax Act.
[37D G] Assuming there is some difficulty the principle involved or.
the meaning of the relevant previsions will not be affected thereby.
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<s>[INST] Summarize the judgementAppeal No.193 of 1958.
Appeal by special leave from the judgment and decree dated October 3, 1955, of the High Court of Judicature, Madhya Bharat, Indore, in Civil First Appeal No. 58 of 1952.
C. B. Aggarwala and Bhagwan Das Jain, for the appellant.
Radhey Lal Aggarwal and A. G. Ratnaparkhi, for respondent No. 1. 1961.
March 29.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal by special leave from the judgment of the High Court of Madhya Bharat.
A suit was filed by firm Messrs. Harishchandra Dwarkadas (hereinafter called the respondent) against the appellant firm Messrs. Murlidhar Chiranjilal and one Babulal.
The case of the respondent was that a contract had been entered into between the appellant and the respondent through Babulal for sale of certain canvas at Re. I per yard.
The delivery was to be made through railway receipt for Calcutta f. o. r. Kanpur.
The cost of transport from Kanpur to Calcutta and the labour charges in that connection were to be borne by the respondent.
It was also agreed that the railway receipt would be delivered on August 5, 1947.
The appellant however failed to 655 deliver the railway receipt and informed the respondent on August 8, 1947, that as booking from Kanpur to Calcutta was closed the contract had become impossible of performance; consequently the appellant cancelled the contract and returned the advance that had been received.
The respondent did not accept that the contract had become impossible of performance and informed the appellant that it had committed a breach of the contract and was thus liable in damages.
After further exchange of notices between the parties, the present suit was filed in November, 1947.
Written statements were filed both by the appellant and Babulal.
The contention of Babulal was that the contract had become incapable of performance and was therefore rightly rescinded.
Further Babulal contended that he was not in any case liable to pay any damages.
The appellant on the other hand denied all knowledge of the contract and did not admit that it was liable to pay any damages.
Certain other pleas were raised by the appellant with which we are however not concerned in the present appeal.
Three main questions arose for determination on the pleadings of the parties.
The first was whether Babulal had acted as agent of the appellant in the matter of this contract; the second was whether the contract had become impossible of performance because the booking of goods from Kanpur to Calcutta was stopped; and the last was whether the respondent was entitled to damages at the rate claimed by it.
The trial court held that Babulal had acted as the agent of the appellant in the matter of the contract and the appellant was therefore bound by it.
It further hold that the contract had become impossible of performance.
Lastly it hold that it was the respondent 's duty when the appellant had failed to perform the contract to buy the goods in Kanpur and the respondent had failed to prove the rate prevalent in Kanpur on the date of the breach (namely, August 5, 1947) and therefore was not entitled to any damages.
On this view the suit was dismissed.
The respondent went in appeal to the High Court 656 and the two main questions that arose there were about the impossibility of the performance of the contract and the liability of the appellant for damages.
The High Court held that the contract had not become impossible of performance as it had not been proved that the booking between Kanpur and Calcutta was closed at the relevant time.
It further held that the respondent was entitled to damages on the basis of the rate prevalent in Calcutta on the date of breach and after making certain deductions decreed the suit for Rs. 16,946.
Thereupon there was an application by the appellant for a certificate to appeal to this Court, which was rejected.
This was followed by an application to this Court for special leave which was granted; and that is how the matter has come up before us.
The same two questions which were in dispute before the High Court have been raised before us on behalf of the appellant.
We think it unnecessary to decide whether the contract had become impossible of performance, as we have come to the conclusion that the appeal must succeed on the other point raised on behalf of the appellant.
The necessary facts in that connection are these: The contract was to be performed by delivery of railway receipt f. o. r. Kanpur by the appellant to the respondent on August 5, 1947.
This was not done and therefore there was undoubtedly a breach of the contract on that date.
The question therefore that arises is whether the respondent has proved the damages which it claims to be entitled to for the breach.
The respondent 's evidence on this point was that it proved the rate of coloured canvas in Calcutta on or about the date of the breach.
This rate was Rs. 1 8 3 per yard and the respondent claimed that it was therefore entitled to damages at the rate of Re. 0 8 3 per yard, as the contract rate settled between the parties was R.s. 1 per yard, The quantum of damages in a case of this kind has to be determined under section 73 of the Contract Act, No. IX of 1872.
The relevant part of it is as follows: 657 "When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it. " Explanation In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non performance of the contract must be taken into account.
" The contention on behalf of the appellant is that the contract was for delivery f. o. r. Kanpur and the respondent had therefore to prove the rate of plain (not coloured) canvas at Kanpur on or about the date of breach to be entitled to any damages at all.
The respondent admittedly has not proved the rate of such canvas prevalent in Kanpur on or about the date of breach and therefore it was not entitled to any damages at all, for there is no measure for arriving at the quantum of damages on the record in this case.
Where goods are available in the market, it is the difference between the market price on the date of the breach and the contract price which is the measure of damages.
The appellant therefore contends that as it is not the case of the respondent that similar canvas was not available in the market at Kanpur on or about the (late of breach, it was the duty of the respondent to buy the canvas in Kanpur and rail it for Calcutta and if it suffered any damage because of the rise in price over the contract price on that account it would be entitled to such damages.
But it has failed to prove the rate of similar canvas in Kanpur on the relevant date.
There is thus no way in which it can be found that the respondent suffered any damage by the breach of this contract.
The two principles on which damages in such cases are calculated are well settled.
The first is that, as far as possible, he who has proved a breach of a bargain .
83 658 to supply what he contracted to get is to be placed, as far as money can do it, in as good a situation as if the contract had been performed; but this principle is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable step" to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps: (British Westinghouse Electric and Manufacturing Company Limited vs Underground Electric Railways Company of London (1)).
These two principles also follow from the law as laid down in section 73 read with the Explanation thereof If therefore the contract was to be performed at Kanpur it was the respondent 's duty to buy the goods in Kanpur and rail them to Calcutta on the date of the breach and if it suffered any damage thereby because of the rise in price on the date of the breach as compared to the contract price, it would be entitled to be reimbursed for the loss.
Even if the respondent did not actually buy them in the market at Kanpur on the date of breach it would be entitled to damages on proof of the rate for similar canvas prevalent in Kanpur on the date of breach, if that rate was above the contracted rate resulting in loss to it.
Bat the respondent did not make any attempt to prove the rate for similar canvas prevalent in Kanpur on the date of breach.
Therefore it would obviously be not entitled to any damages at all, for on this state of the evidence it could not be said that any damage naturally arose in the usual course of things.
But the learned counsel for the respondent relies on that part of section 73 which says that dam ages may be measured by what the parties knew when they made the contract to be likely to result from the breach of it.
It is contended that the contract clearly showed that the goods were to be transported to and sold in Calcutta and therefore it was the price in Calcutta which would have to be taken into account in arriving at the measure of damages for the parties knew when they made the contract that the goods were to be sold in Calcutta.
Reliance in this connection is placed on (1) 689.
659 two cases, the first of which is Re. R. and H. Hall Ltd. and W. H. Pim (Junior) & Co. 's Arbitration (1).
In that case it was held that damages recoverable ' by the buyers should not be limited merely to the difference between the contract price and the market price on the date of breach but should include both the buyers ' own loss of profit on the resale and the damages for which they would be liable for their breach of the contract of resale, because such damages must reason ably be supposed to have been in the contemplation of the parties at the time the contract was made since the contract itself expressly provided for are sale before delivery, and because the parties knew that it was not unlikely that such resale would occur. 'That was a case where the seller sold unspecified cargo of Australian wheat at a fixed price.
The contract provided that notice of appropriation to the contract of a specific cargo in a specific ship should be given within a specified time and also contained express provisions as to what should be done in various circumstances if the cargo should be resold one or more times before delivery.
That was thus a case of a special type in which both buyers and seller knew at the time the contract was made that there was an even chance that the buyers could resell the cargo before delivery and not retain it themselves.
The second case on which reliance was placed is Victoria Laundry (Windsor) Ltd. vs Newman Industries Ltd, (2).
That was a case of a boiler being sold to a laundry and it was held that damages for loss of profit were recoverable if it was apparent to the defendant as reasonable persons that the delay in delivery was liable to lead to such loss to the plaintiffs.
These two cases exemplify that provision of section 73 of the Contract Act, which provides that the measure of damages in certain circumstances may be what the parties knew when they made the contract to be likely to result from the breach of it.
But they are cases of a special type; in one case the parties knew that goods purchased were likely to be resold before delivery and therefore any loss by the breach of contract eventually (1) (2) 660 may include loss that may have been suffered by the buyers because of the failure to honour the intermediate contract of resale made by them; in the other the goods were purchased by the party for his own business for a particular purpose which the sellers were expected to know and if any loss resulted from the delay in the supply the sellers would be liable for that loss also, if they had knowledge that such loss was likely to result.
The question is whether the present is a case like these two cases at all.
It is urged on behalf of the respondent that the seller knew that the goods were to be sent to Calcutta; therefore it should be presumed to know that the goods would be sold in Calcutta and any loss of profit to the buyer resulting from the difference between the rate in Calcutta on the date of the breach and the contract rate would be the measure of damages.
Now there is no dispute that the buyer had purchased canvas in this case for resale; but we cannot infer from the mere fact that the goods were to be booked for Calcutta that the seller knew that the goods were for resale in Calcutta only.
As a matter of fact it cannot be denied that it was open to the buyer in this case to sell the railway receipt as soon at it was received in Kanpnr and there can be no inference from the mere fact that the goods were to be sent to Calcutta that they were meant only for sale in Calcutta.
It was open to the buyer to sell them any where it liked.
Therefore this is not a case where it can be said that the parties knew when they made the contract that the goods were meant for sale in Calcutta alone and thus the difference between the price in Calcutta at the date of the breach and the contract price would be the measure of damages as the likely result from the breach.
The contract was for delivery for Kanpur and was an ordinary contract in which it was open to the buyer to sell the goods where it liked.
We may in this connection refer to the following observations in Chao and others vs British Traders and Shippers Ltd. (1), which are, apposite to the facts of the present case: (1) ,797.
661 "It is true that the defendants knew that the plaintiffs were merchants and, therefore, had bought for resale, but every one who sells to a merchant knows that he has bought for are sale, and it does not, as I understand it, make any difference to the ordinary measure of damages where there is a market.
What is contemplated is that the merchant buys for are sale, but, if the goods are not delivered to him, he will go out into the market and buy similar goods and honour his contract in that way.
If the market has fallen he has not suffered any damage, if the market has risen the measure of damages is the difference in the market price.
" In these circumstances this is not a case where it can be said that the parties when they made the contract knew that the likely result of breach would be that the buyer would not be able to make profit in Calcutta.
This is a simple case of purchase of goods for resale anywhere and therefore the measure of damages has to be calculated as they would naturally arise in the usual course of things from such breach.
That means that the respondent had to prove the market rate at Kanpur on the date of breach for similar goods and that would fix the amount of damages, in case that rate had gone above the contract rate on the (late of breach.
We are therefore of opinion that this is not a case of the special type to which the words "which the parties knew, when they made the contract, to be likely to result from the breach of it" appearing in section 73 of the Contract Act apply.
This is ,in ordinary case of contract between traders which is covered by the words "which naturally arose in the usual course of things from such breach" appearing in section 73.
As the respondent had failed to prove the rate for similar canvas in Kanpur on the date of breach it is not entitled to any damages in the circumstances.
The appeal is therefore allowed, the decree of the High Court set aside and of the trial court restored with costs to the appellant throughout.
[/INST]The questions for determination in the appeal were whether the award in question was invalid, (1) by reason of the court failing to comply with the mandatory requirement of section 23(l) Of the , that the time within which the award is to be made, must be specified in the order, and (2) whether the arbitrator was in error in allotting to the appellant less than half share in the properties.
Held, that under section 23(l) Of the , it is imperative that the time for making the award must be fixed; but that does not mean that where the court omits to specify the time in the order of reference and does so elsewhere in the proceedings, the reference is invalid.
Consequently, in a case where the order sheet of the court read with the order of reference made it clear that the arbitrator was to file his award by the date to which the suit was adjourned, it could not be said that the section had not been complied with.
Raja Har Narain Singh vs Chaudbrain Bhagwant Kuar (1891) L.R. 18 I.A. 55, referred to.
Held, further, that the award could not be said to be bad on the face of it and "otherwise invalid" merely because the appellant had received less than his due share.
The court cannot interfere with the findings of an arbitrator based on the best of his judgment unless it is shown that he has acted dishonestly.
</s>
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<s>[INST] Summarize the judgementAppeals Nos.
1968 1970 of 1966.
Appeals by special leave from the judgment and order dated July 16, 1962 of the Madras High Court in Tax Cases Nos. 117,118 and 119 of 1959.
section B. Banerjee and section N. Mukerjee, for the appellant (in all the appeals).
K. M. Mudaliyar, Advocate General for the State of Madras and A. V. Rangam, for the respondent (in all the appeals).
M.C. Setalvad, B. Sen, G. section Chatterjee and P. K. Bose, for the Intervener (in C. A. No. 1968 of 1966).
The Judgment of the Court was delivered by Hegde, J.
These appeals by special leave arise from the common order made by the Madras High Court in T. C. Nos.
117 to 119 (revisions Nos. 71 to 73) on its file.
The Indian Steel and Wire Products Ltd. a joint stock public limited company is the appellant in all these appeals.
At the instance of the steel controller the appellant supplied certain steel products to various persons in the Madras State during the financial years 1953 54, 1954 55) and part of 1955 56 (from April 1, 1955 to September 6, 1955).
The State of Madras assessed the turnovers of the appellant relating to those transactions to sales tax under the Madras Gen. Sales Tax Act, 1939 (Madras Act 9 of 1939) (to be hereinafter referred to as the Act), the law in force at that time.
The appellant has been assessed to tax on the basis of best judgment.
The authorities under the Act have determined appellant 's turnover during the year 1953 54 at Rs. 3129520/ and levied a tax of Rs. 16298/4 annas.
During the financial year 1954 55, its turnover was determined at Rs. 3759216/ .
and the assessment levied is Rs. 58737 12 0.
For the broken period in the financial year 1955 56, the appellant 's turnover was determined at Rs. 1453292/ and the same was assessed to tax at Rs. 22707 12 0.
Even according to the appellant, its turnovers during 1953 54 was Rs. 2912533 14 0, in 1954 55, Rs. 3971493/7/ and in 1955 56, Rs. 1725400/5/ .
Therefore, there is little room for controversy about its turnover in the relevant years.
The appellant is contesting the right of the State of Madras to levy tax on the turnovers in question.
According to the appellant, the turnovers in question could not have been considered as sales and consequently they could not have been brought to tax under the Act.
The appellant asserts that deliveries in question were made under compulsion of law and there was no agreement between the parties.
They were 481 made in pursuance of the orders of the Controller exercising powers under the Iron & Steel (Control of Production and Distribution) Order, 1941 (which will hereinafter be referred to as the order), which was issued under the Defence of India Act 1939.
It was argued on behalf of the appellant that it was the controller who determined the persons to whom the goods were to be supplied, the price at which they were to be supplied, the manner in which they were.
to be transported, and the mode in which the payment of the price was to be made.
In short, it was said that every facet of those transactions were prescribed by the controller and therefore those transactions cannot be considered as sales.
On the basis of those assertions support was sought from the decision of the House of Lords in Kirkness vs John Hudson & Co., Ltd.(1) the decision of this Court in M Is.
New India Sugar Mills Ltd. vs Commis sioner of Sales Tax.
Bihar(1), the decision of the Calcutta High Court in Calcutta Electric Supply Corporation Ltd. vs Commissioner of Income Tax, West Bengal(1) the decision of the Orissa High Court in Messrs. Cement Ltd. vs The State of Orissa(1), and a few other decisions.
It was further argued that even if those transactions are considered as sales the State before exercising its taxing power should have had in its possession material to show that the goods delivered by the appellant were delivered in that State for consumption which circumstance alone can make those transactions sales within that State; as no material was placed on record to show that the goods in question were delivered in that State for consumption it could not have brought the turnovers in respect of those transactions to tax under the Act.
These contentions of the appellant have been rejected by the authorities under the Act as well as by the High Court.
Other contentions advanced on behalf of the appellant deserve to be summarily rejected for the reasons to be mentioned hereinafter.
The principal question that falls for decision in these appeals.
is whether the transactions with which we are concerned herein are sales.
2(h) of the Act defines 'sale ' thus: " 'Sale ' with all its grammatical variations and cognate expressions means every transfer of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration, and includes also transfer of property in goods involved in the execution of works contract and in the, supply or distribution of goods by a co operative society. club, firm or any association to its members for cash or for deferred payment or other valuable consideration but does not include a mortgage.
hypothecation, charge or pledge" (the explanations to that definition are not relevant for our present purpo se).
(1) (2) [1963] Suppl.
2 S.C.R. 459.
(3) (4) 12 S.T.C. 205.
482 This wide definition undoubtedly covers those transactions.
But then the power of a State to tax sales is derived from Entry 54 of List II of the VII Schedule in the Constitution.
That entry as it stood at the relevant time empowered the State to tax on the sale or purchase of goods.
The scope of the expression 'sale or purchase of goods ' found in entry 48 in List II of Schedule VII of the Government of India Act 1935 which is in pari materia with the aforementioned entry 54 came up for interpretation before this Court in State of Madras vs Gannon Dunkerley(1).
In that case, the question that fell for decision was whether the words 'sale of goods ' should be given their popular meaning or whether they should have the meaning attached to them under the Sale of Goods Act.
This Court held that the expression 'sale of goods ' was, at the time when the Government of India Act, 1935 was enacted, a term of well recognised legal import in the general law relating to sale of goods and in the legislative practice relating to that topic and must be interpreted as having the same meaning as in the sale of Goods Act 1930: In the course of the judgment, Venkatarama Aiyar, J,who ,spoke for the Court after examining the various decisions cited at the Bar, observed, as follows: "Thus, according to the law both of England and of India, in order to constitute a sale it is necessary that there should be an agreement between the parties for the purpose of transferring title to goods which of course pre supposes capacity to contract, that it must be supported by money consideration and that as a result of the transaction property must actually pass in the goods.
Unless all these elements are present, there can be no sale.
Thus, if merely title to the goods passes but not as a result of any contract between the parties, express or implied, there is no sale.
So also if the consideration for the transfer was not money but other valuable consideration, it may then be exchange or barter but not sale.
And if under the contract of sale, title to the goods has not passed, then there is an agreement to sell and not a completed sale.
" As laid down by this decision, to constitute a valid sale, there must be concurrence of the following elements viz. (1) parties competent to contract (2) mutual assent (3) a thing the absolute or general property in which is transferred from the seller to the buyer and (4) a price in money paid or promised.
Therefore we have to see whether all these elements are found in the transactions before us.
Before doing so it is necessary to refer to the 'order ' and the manner in which those transactions were effected.
During the World War IT iron and steel goods became scarce.
Therefore it became necessary for the Government to control the production and distribution of those goods.
In order to do so, the (1) ; 483 government issued the 'order ' on July 26, 1941, and the same came into force on August 1, 1941.
The provisions in that order which are material for our present purpose are set out hereinbelow: "2. Definitions In this Order, unless there is anything repugnant in the subject context: (a) 'Controller ' means the person appointed as Iron and Steel Controller by the Central Government, and includes any person exercising, upon authorisation by the Central Government, all or any of the powers of the Iron and Steel Controller; (b) 'Producer ' means a person carrying on the business of manufacturing iron or steel.
(c) 'Registered Producer ' means a producer who is registered as such by the Controller.
(d) 'Stockholder ' means a person holding stocks of Iron or Steel for sale who is registered as stockholder by the Controller.
(e) 'Controlled Stockholder ' means a stockholder appointed by the Controller to hold stocks of iron or steel under such terms and conditions as he may prescribe from time to time.
(f) 'Pressure Pipes ' include all Pipes and Tubes 1/8" nominal bore and above which will withstand or may be used for a working pressure of 25 lbs.
per square inch and above.
Application of Order (I) The provisions of this Order shall apply to all iron or steel of the categories specified in the Second Schedule to this Order.
(2) A certificate signed by the Comptroller or by any officer authorised by him in this behalf, in respect of any category of iron or steel, shall be conclusive proof that it is an article to which this Order is applicable.
Acquisition No person shall acquire or agree to acquire any iron or steel from a Producer or a Stockholder except under the authority of and in accordance with the conditions contained or incorporate d in a general or special written order of the controller.
Disposal No Producer or Stockholder shall dispose of or agree to dispose of or export or agree to export from British India any iron or steel, except in accordance with the conditions contained or incorporated in a general or special written order of the Controller.
10B. Power to direct sale The Controller may ' by a written Order require any person holding stock or iron 484 and steel, acquired by him otherwise than in accordance with the provisions of Clause 4 to sell the whole or any part of the stock to such person or class of persons and on such terms and conditions as may.
be specified in the Order.
10C. Power to prohibit removal The Controller may order any producer (including a registered producer), any stockholder (including a controlled stockholder) or any other person not to remove or permit the removal of any iron or steel, whether sold or unsold, from his stockyard or from any other part of his premises to any place outside the precincts of such stockyard or premises, except with the written permission of the Controller.
11 AA (3).
No producer, stockholder, or other person holding stocks of iron and steel shall without sufficient cause, refused to sell any iron or steel which he is autho rised to sell under this Order.
Explanation The possibility or expectation of obtaining a higher price at a later date shall not be deemed to be a sufficient cause for the purpose of this clause.
11B. Power to fix prices (1) The Controller may from time to time by notification in the Gazette of India fix the maximum prices at which any iron or steel may be sold (a) by a Producer, (b) by Stockholder including a Controlled Stockholder and (c) by any other person or class of persons.
Such price or prices may differ for iron and steel obtainable from different sources and may include allowances for contribution to and payment from equalising freight, the concession rates payable to each pro ducer or class of producer under agreements entered into by the Controller with the producers from time to time.
and any other disadvantages.
(2) For the purpose of applying the prices notified under sub clause (1) the Controller may himself classify any iron and steel and may, if no appropriate price has been so notified, fix such price as he considers appropriate.
(3)No producer or stockholder or other person shall sell, or offer to sell.
(and no person shall acquire) any iron or steel at a price exceeding the maximum prices fixed under sub clause (1) or (2).
Any Court trying a contravention of this Order may, without prejudice to any other sentence which it may pass, direct that any Iron and Steel in respect of which the Court is satisfied that this order has been contravened shall be forfeited to His Majesty.
" The appellant has set out in para 4 of the statement of the case the procedure adopted for acquiring iron and/ 485 or steel products under the order.
This is what is stated therein: "That Order was at all material times administered principally by the Iron and Steel Controller having his office in the city of Calcutta in the State of West Bengal who controlled the entire production and distribution of the iron and/or steel products.
Any party desiring to acquire any product has to apply to the Controller.
Upon processing such application or requisition entirely at his option and discretion, the Controller would pass such a requisition an to the Appellant for manufacture and/or despatch.
The appellant has, upon receipt of the said requisition from the Controller to prepare a Works Order for the manufacture of the products concerned and to advise the Controller; and later on completion of the manufacture the appellant has to make the product conform to the requisition processed by the Controller and then deliver the requisite quantity in the requisite shape to the Indian State Railways siding maintained at the appellant 's own factory site, in Indranagar.
in the suburbs of Jamshedpur, in the State of Bihar, and to advise the requisitionist as well as the Controller accordingly. " The correspondence relating to the delivery of steel goods in pursuance of an order placed by one K. Thiruvengadam Chetty & Co. has been produced by the appellant evidently to show the manner in which the transactions were effected.
On December 20, 1952.
Thiruvengadam Chetty and Co., wrote follows to the Controller: 'From Name K. Thiruvengadam Chetty and Company.
Address Iron Merchants and Tata Scob Dealers 93, Rasappa Chetty Street.
Madras 3.
Date 20th December 1952.
To The Iron and Steel Controller, 33, Netaji Subas Road, Calcutta.
Through the Director of Controlled Commodities, Mount Road, Madras.
Dear Sir, Please place on our behalf and at our risk and account our order on Registered Producers for material as per specification given below for delivery in such period ,as you can arrange.
We confirm that this indent is placed 486 subject to the provisions of the Steel Price Schedule regarding prices, etc., and the terms and conditions of business (including payment) of the registered producers on whom the order is placed by you and that delivery or part/delivery from any such registered producer will be accepted by us.
Please direct the registered producers concerned to send us a copy of the works order in confirmation of having booked our Indent.
Ship to Madras Saltcotaurs.
Send R. R. to Messrs. K. Thiruvengadam Chetty and Company, Iron Merchants, 93, Rasappa Chetty Street, Madras 3, through your Madras Office.
Send original and duplicate invoice to Messrs. K. Thiruvengadam Chetty and Company, 93, Rasappa Chetty Street, Madras 3 through your Madras Office.
Date of shipment desired: Ex stock as early as possible.
Quantity Pieoes Section Lengths Complete description un tested of material indented (1) (2) (3) (4) CWT.
10. . 468 M.S. rounnd 1/4" 18 ' 13 B Category 5. . .493 " 3/16" 18 ' do 5. . .453 " 5/16" 18 ' do 20 (Twenty tons only) All P.T. free on rail Saltcotaurs and bundling charge account.
Yours faithfully, (signed). . . by Partner, For K. Thiruvengadam Chetty and Company.
" The Controller forwarded that letter to the appellant with the following remarks: "The above indent is forwarded to Indian Steel and Wire Products Limited, Tatanagar, for delivery in period 1/53 or subsequently in accordance with any general or special directions of the Iron and Steel Controller.
" It may be noted that the Controller merely asked the appellant to deliver to K. Thiruvengadam Chetty and company the goods ordered "in accordance with any general or special directions of the Iron and Steel Controller.
" Our attention was not invited to any general or special order issued by the controller excepting that 487 fixing the base price.
It is clear that it was left to the appellant to supply the goods ordered at his convenience.
On the basis of the, above communication a works order was issued by the appellant to the mill superintendent, a copy of which was sent to Thiruvengadam Chetty and Company.
That order reads: "Works Order: RS/MAD/RM/15/53 of 23rd February 1953.
Delivery: P.D.1/53.
Ship to: Saltcotaurs Book to self.
Freight: To pay.
To The Mill Superintendent.
Please supply the following to the Shipping Department, M.S. Rounds our usual commercial quality in bundles in stock lengths of 12/18 feet.
TONS 1/4" diameter 10 at Rs. 486 per ton free on rail 3/16" 5 at Rs.493 Saltootaurs, plus bundling.
5/16" 5 at Rs. 453 Charge of Rs. 5 per ton.
cc: South India Iron and Hardware Merchants Association, Armenian Street, Madras.
Notice to consignees.
Delivery must be taken within three days of the arrival of the train at destination, a certificate obtained for any wrongful delivery and a claim preferred against the Railway Company forthwith under advise to us.
In the case of non arrival of any consignment advise should be given us as soon as a reasonable time for the journey has elapsed. 'All orders booked are subject to our terms of business and general understanding in force at the time of booking the orders and despatch of goods. ' 'All prices mentioned in the Works Orders are subject to revision, i.e., prices ruling at the time of despatch will be charged. '".
The works order in question specifically says that 'all orders booked are subject to our terms of business and general understanding in force at the time of booking the orders and despatch of goods '.
In fact as seen from the letter of Thiruvengadam Chetty and Co., dated August 31, 1953, the buyers were willing to change by mutual agreement the specifications of the goods to be supplied.
This is what that letter says: 488 agreement the specifications of the goods to be supplied.
This is what that letter says: "If 1/4" size is not ready, please despatch 3/8" size 20 tons as requested in our previous letter.
Please treat this as very urgent.
" From the material on record it is not possible to accept the contention of Mr. S.R. Bannerjee, learned counsel for the appellant that the dealings in question were controlled at every stage, leaving no room of concensus.
From the records before us all that could be gathered is that the controller fixed the base price of the 'steel products and determined the buyers.
In other respects, the parties were free to decide their own terms by consent.
As seen from the correspondence referred to earlier, the controller allowed the appellant to supply the goods ordered either in the first quarter of the year 1953 or subsequently.
In other words, the appellant could supply the goods in question at its convenience.
It was open to the appellant to agree with its customers as to the date on which the goods were to be supplied.
From the works order dated February 23, 1953, a copy of which was sent to one of the appellant 's customers, it is clear that all orders booked were subject to appellant 's terms of business and general understanding in force at the time of 'booking the orders and despatch of goods.
It was also open to the appellant to fix the time and mode of payment of the price of the goods supplied.
Therefore it would not be correct to contend that the transactions were completely regulated and controlled by the controller leaving no room for mutual assent.
In his revision petition dealing with the question of transport of the goods supplied the appellant stated that "the transport of goods was if at all by virtue of an independent arrangement between the petitioner and the persons to whom the goods were supplied. .
This admission clearly shows that the supplies in question were made partly on the basis of mutual assent.
It was Mr. Bannerjee 's contention that for finding out the nature of the transaction we have only to look to the order and not to the documents produced in the case.
According to him, the documents produced in this case do not fully disclose the nature of the transactions; the transactions in question had to be effected under the terms of the order; the order left no room for negotiation between the supplier and its customers and therefore we should conclude that the transactions in question are not sales.
According to Mr. Bannerjee all supplies of iron and steel products could be made only in accordance with the directions given by the controller under cl.
10B of the order.
That being so, he asserted there was no room for mutual assent.
We do not think that this contention of Mr. Bannerjee is well founded.
We are unable to agree with him that the iron and steel products could not have been supplied to any person except in pursuance of an order made by the controller under cl.
10B. We think that supplies by producers can be made in pursuance of an order of the controller under cl.5.
We are not pursuaded 489 by Mr. Bannerjee 's contention that clauses 4 and 5 merely prohibit the prospective buyer and the intending seller from buying or selling without the sanction of the controller and that those provisions do not confer power on the controller to authorise a person to acquire and to permit a producer to sell.
Those provisions, in our judgment, by implication confer power on the controller to issue the necessary authority to the buyer and the seller.
This conclusion of ours is strengthened from the circumstance that cl.10B was not a part of the order till 1946.
That provision was inserted in the order by notification No. 1(1) 1(530) A dated May 26, 1946, It is nobody 's case that the provisions of the order were incapable of being implemented till that date.
The contention of Mr. Bannerjee that the controller derives his power to authorise the buyer to buy and the seller to sell exclusively under cl.
10B, suffers from another infirmity.
Under cl.
10B, the controller gets power to require any person holding stock of iron and steel acquired by him otherwise than in accordance with the provisions of cl. 4 to sell the whole or part of the stock to such person or class of persons and on such terms and conditions as may be specified in the order.
This clause does not empower the controller to issue the authority required under cl. 4.
Our attention has not been invited to any provision in the order if we exclude from consideration cl. 4, under which the controller could have the power to authorise the buyer to buy iron and steel products.
Therefore, it is obvious that he gets that power from cl. 4, itself.
The language employed in clauses 4 and 5 is simi lar.
If the controller gets power to authorise a buyer to buy iron and steel products under cl. 4, there is no reason why he should be held to have no power under cl. 5 to authorise a producer or stock holder to dispose of his stock of iron and steel products.
Further, under cl.
10B, the controller can only require any person holding stock 'of iron and steel to sell the whole or part of his stock to such person or class of persons and on such terms and conditions as may be specified in the order.
That clause does not empower him to direct any manufacturer to manufacture any steel or iron product and to dispose of the same to any person.
In other words, a direction under cl.
10B can only be given to a person holding stock of iron and steel But under cl.5 he can authorise a producer or a stockholder to dispose of any iron or steel whether the same is in stock or not in accordance with the conditions contained or incorporated in a special or general written order issued by him.
the instant case, as can be gathered from the correspondence already referred to, the order issued by the controller could be complied with only after manufacturing the required material.
Hence, the order issued by the controller could not have been issued under cl.
10B. In this view of the matter it is not necessary for us to find out the true scope of cl.
10B. So far as cl.5 is concerned.
admittedly, it does not require the controller to regulate or control every facet of a transaction between a producer and the person to whom he supplies iron and steel products.
490 It is true that in view of the order, the area within which there can be bargaining between a prospective buyer and an intending seller of steel products, is greatly reduced.
Both of them have to conform to the requirements of the order and to comply with the terms and conditions contained in the order of the controller.
Therefore they could negotiate only in respect of matters not controlled by the order or prescribed by the controller.
It is true, in these circumstances, the doctrine of laisser faire can have only a limited ap.
plication.
That is naturally so.
In certain quarters the validity of that doctrine is, seriously challenged.
Under the existing economic compulsions all essential goods being in short supply in a welfare State like ours, social control of many of our economic activities is inevitable.
That does not mean that there is no freedom to contract.
The concept of freedom of contract has undergone a great deal of change even in those countries where it was considered as one of the basic economic requirements of a democratic life.
Full freedom to contract was never there at any time.
Law invariably imposed some restrictions on freedom to contract.
But due to change in political outlook and as a result of economic compulsions, the freedom to contract is now being confined gradually to narrower and narrower limits.
This aspect is vividly brought out in the 'Law of Contract ' by Cheshire and Fifoot (6th ed.) at p. 22.
Dealing with the question of freedom to contract, the learned author observes.
"As the nineteenth century waned it became ever clearer that private enterprise predicated some degree of economic equality if it was to operate without injustice.
The very freedom to contract with its corollary, the freedom to compete, was merging into the freedom to combine; and in the last resort competition and combination were incompatible.
Individualism was yielding to monopoly, where strange things might well be done in the name of liberty.
The twentieth century has seen its progressive erosion on the one hand by opposed theory and on the other by conflicting practice.
The background of the law, social, political and economic, has changed.
Laisser faire as an ideal has been supplanted by 'social security '; and social security suggest status rather than contract.
The State may thus compel persons to make contracts, as where, by a series of Road Traffic Acts from 1930 to 1960, a motorist must insure against third party risks , it may, as by the Rent Restriction Acts, prevent one party to a con tract from enforcing his rights under it; or it may empower a Tribunal either to reduce or to increase the rent payable under a l ease.
In many instances a statute prescribes the contents of the contract.
The Moneylenders Act, 1927, dictates the terms of any loan caught by its provisions; the Carriage of Goods by Sea Act, 1924, contains six pages of rules to be incorporated in every contract for 'the carriage of goods by sea from any port in Great Britain or Northern 491 Ireland to any other port; the Hire Purchase Act 1938 inserts into hire purchase contracts a number of terms which the parties are forbidden to exclude; successive Landlord and Tenants Act from 1927 to 1954 contain provisions expressed to apply 'notwithstanding any agreement to the contrary.".
It would be incorrect to contend that because law imposes some restrictions on freedom to contract, there is no contract at all.
So long as mutual assent is not completely excluded in any dealing, in law it is a contract.
On the facts of this case for the reasons already mentioned, it is not possible to accept the contention of the ,learned counsel for the appellant that nothing was left to be decid ed by mutual assent.
On the other hand, we agree with the learned Advocate General of Madras and Mr. Setalvad who appeared for.
the State of West Bengal, the intervener, that the controller 's directions were confined to narrow limits and there were several matters, which the parties could decide by mutual assent.
We shall now proceed to examine the principal decisions relied ' upon by the learned counsel for the appellant.
In Kirkness vs John, Eudson & Co. Ltd.(1), the material facts were these: On January 1, 1948, railway wagons owned by John Hudson & Co., the tax payers '.
then under requisition by the Minister of Transport. were acquired, by the British Transport Commission under section 29 of the Transport Act, 1947.
Under section 30 of that Act, compensation became payable by the Commission to the tax payers.
The amount paid as compen sation was substantially higher than the written down value of the wagons for income tax purposes and as the tax payers had received allowances under r. 6 of the rules applicable to Cases I and 11 of Sch.
D to the Income Tax Act 1918, they were assessed under section 17 of the Income Tax Act 1945 to give effect to a balancing charge in respect of the excess of the original cost of the wagons over the written down value.
The Court of Appeal held that the transfer of ' wagons under section 29 of the Transport Act 1947 was not a sale at common law, since it did not involve a mutual assent and a price;, it was an acquisition authorised by a statute and not a compulsory purchase.
Therefore, the wagons were not machinery or plant which had been 'sold ' within the meaning of section 17(1) (a) of the Act of 1945 and no, balancing charge could be made under the sub section.
This, decision was affirmed by the House of Lords by a majority.
Speak in,, for the majority, Viscount Simonds observed: "My Lords, in my opinion the company 's wagons, were not sold, and it would be a grave misuse of language, to say that they were sold.
To say of a man who has had his property taken from him against his will and been awarded compensation in the settlement of which be has had no voice, to say of such a man that he has sold his ' property appears to me to be as far from the truth as to, (1) 492 say of a man who has been deprived of his property without compensation that he has given ' it away.
Alike in the ordinary use of language and in its legal concept a sale connotes the mutual assent of two parties.
So far as the ordinary use of language is concerned it is difficult to avoid being dogmatic, but for my part I can only echo what Singleton L.J. said in his admirably clear judgment: 'What would anyone accustomed to the use of the words ,sale ' or 'sold ' answer? It seems to me that everyone must say 'Hudsons did not sell '.
I am content to march in step with everyone and say 'Hudsons did not sell '.
Nor is a different result reached by an attempt to analyse the legal concept.
When Benjamin said in the passage quoted by Singleton and Birkett L. JJ.
from his well known book on Sale, 2nd ed., p. 1, that 'by the common law a sale of personal property was usually termed a 'bargain and sale of goods ', he was by the use of the word 'bargain ' perhaps unconsciously emphasizing that the consensual relation which the word 'bargain ' imports is a necessary element in the concept ', ".
From the facts set out above it is clear that the House of Lords was dealing with a compulsory acquisition and not sale.
Therefore that decision is of no assistance to the appellant.
In Messrs. New India Sugar Mills Ltd. vs Commissioner of Sales Tax, Bihar(1), this Court was called upon to consider whether ,certain transactions effected under the Sugar Control Order 1946 were sales.
By a majority this Court held that they were not sales.
The facts as found by the High Court and accepted by this Court ,are found at pp.
463 and 464 of the report.
They are as follows: "The admitted course of dealing between the parties was that the Government of various consuming States used to intimate to the Sugar Controller of India from time to time their requirement of sugar, and similarly the factory owners used to send to the Sugar Controller of India statements of stock of sugar held by them ' On a consideration of the requisitions received from the various State Governments and also the statements of stock received from the various factories, the Sugar Controller used to make allotments.
The allotment order was addressed by 'the Sugar Controller to the factory owner, direc ting him to supply sugar to the State Government in question in accordance with the despatch instructions received from the competent officer of the State Government.
A copy of the :allotment order was simultaneously sent to the State Government concerned, on receipt of which the competent authority of the State Government sent to the factory concerned detailed instructions about the destination to (1) (1963) Supp.
2 S.C.R. 459. 493 which the sugar was to be despatched as also the quantities of sugar to be despatched to each place.
In the case of the Madras Government it is admitted that it also laid down the procedure of payment, and the direction was that the draft should be sent to the State Bank and it should be drawn on Parry and Company or any other party which had been appointed as stockist importer on behalf of the Madras Government.
" On the basis of those facts, the Court came to the conclusion that there was no room for mutual assent in those transactions.
The facts of the present case are materially different from the facts of that case.
Hence the ratio of that decision does not apply to the facts of the present case.
Whether in a given case there was mutual assent or not is a matter to be decided on the facts of that case.
In Calcutta Electric Supply Corporation Ltd. vs Commissioner of Income Tax, West Bengal(1).
the facts were: The assessees were an electric supply company.
During the war the government requisitioned an electricity generating plant of the assessees under r. 83(1) of the Defence of India Rules.
The Government wanted to acquire that plant.
As the assessees were not willing to sell the plant, they required the government to re examine the position and to rescind the order depriving them of the plant, but the government refused to re consider that decision.
The amount which the assessees received as price or compensation for the plant exceeded the written down value of the plant by Rs. 3,27,840/ .
The taxing authorities treated the excess as assessees ' profits under section 10(2) (vii) of the Indian, Income Tax Act 1922 and assessed that amount to tax.
On a reference under section 66(1) of that Act, as to whether the amount in question can be considered as assessees ' profit, Harries, C. J. and Banerjee, J. held that the transaction by which the government acquired the plant could not be regarded as a sale within the meaning of section 10(2) (vii) and therefore the sum of Rs. 3,27,840/ was not taxable as profit under that provision.
The Court further observed that the ordinary meaning of the word 'sale ' is a transaction entered into voluntarily between two persons known as buyer and seller by which the buyer acquires the property of the seller for an agreed consideration known as 'price '.
The rule laid down in that decision is the same as that laid down by the House of Lords in Kirkness vs John Hudson & Co. Ltd.(2).
In this case also the Court was dealing with a compulsory acquisition and not sale.
In M/s. Cement Limited vs The State of Orissa(3), the Court was dealing with transactions effected under the Cement Control Order 1956.
Therein the assessee company.
a manufacturer of cement, was required to sell cement to the State Trading Corporation On payment of stipulated price.
3 of the Cement Control Order provided "Every producer shall sell (1)(a) the entire quantity of cement held in stock by him on the date of the commencement (1) , (2) (3) 12 S.T.C. 205.
494 of the order, and (b) the entire quantity of cement which may be produced by him during a period of two years from the date of commencement of this order to the Corporation and deliver the same to such person or persons as may be specified by the Corporation in this behalf from time to time, (2) notwithstanding any contract to the contrary, every producer shall dispose of cement lying in stock with him or produced by him, in accordance with the provisions of sub cl.
(1) and shall not dispose of any cement in contravention thereof".
6(1) was to the effect that the price at which a producer may sell cement shall be specified in the schedule.
The sales in this case were effected under the aforementioned clauses 3 and 6.
It is under those circumstances that the Court came to the conclusion that the transactions in question were not sales but were in the nature of compulsory transfer of title.
This case again is of no assistance to the appellant.
The appellant 's learned counsel also read to us the decisions in North Adjai Coal Company (P) Ltd. vs Commercial Tax Officer and others(1) and section K. Roy vs Additional Member, Board of Revenue, West Bengal(2).
On the facts of those cases, the Court came to the conclusion that the transactions in question were not sales.
For the reasons already stated, we are unable to accept the contention that the transactions with which we are concerned in these cases are not sales.
Out of the four elements mentioned earlier, three were admittedly established, namely, the parties were competent to contract, the property in the goods was transferred from the seller to the buyer, and price in money was paid.
The only controversy was whether there was mutual assent.
Our finding is that there was mutual assent in several respects.
Hence, we agree with the High Court that the transactions before us are sales.
That takes us to the next contention by the appellant i.e., that there was no material to conclude that the goods were delivered in the State of Madras for consumption.
There is no dispute that the goods in question were delivered in the State of Madras.
The dispute centres round the question whether it is proved that they were delivered for consumption in that State.
The learned counsel for the appellant conceded that actual consumption within the State need not be proved.
All that is required to be shown is that they were delivered for consumption in the State.
The only question is whether there was any material to support the conclusion of the Sales Tax Appellate Tribunal, the final fact finding authority, that the goods were delivered in the Madras State for consumption in that State.
The High Court rightly proceeded on the basis that "the burden is certainly upon the State to establish facts upon which a subject can be taxed under a financial enactment.
" But it accepted the finding of the Sales Tax Appellate Tribunal that from the facts and circumstances established it is a reasonable inference to draw (1) 17 S.T.C. 514.
(2) 18 S.T.C. 379.
495 that the goods were delivered for consumption in the Madras State.
This aspect was dealt with by the Tribunal in para 1 1 of its order dated April 17, 1959.
On that question this is what the Tribunal says: "It will be an onerous task to pursue the subsequent history of every inter State sale transactions to find out whether after successive change of hands the ' goods left the state; but it will be permissible in such cases to consider the broad pattern of the transaction, the surrounding circumstances and any other relevant date to draw a reasonable conclusion therefrom.
In the cases before us, it is admitted that the sales were in pursuance of a scheme of internal distribution under the control order applicable to the whole of India.
That there was necessity to draw up such a scheme, indicates that the goods were essential goods, that the supply was inadequate to meet the demand, and that unless there was control and restriction in distribution it was likely that the goods would pass into the black market, and would be sold at exorbitant rates.
It is permissible inference that controlled stockists, registered stockists and registered dealers, who are the principal buyers from the appellants and who could be expected to have been given quotas in the scheme of controlled distribution, would be people expected to meet the local demand for the consumption of the controlled goods.
It is also well known to people familiar with the operation of a controlled scheme and distribution of goods that quotas are given against proved demands, and that it is not part of the scheme of distribution to provide for goods sold in one State being exported to other states inside the Union territory because each State has got its own quota of goods and list of controlled stockists, registered stockists and so on.
Therefore we infer from the analysis given of the transactions by the appellants, that the sales to various groups of purchasers, registered stockists and controlled ' stockists and so on are all intended to meet the local demands for steel products and not for re export.
An analysis of the amount concerned in each of these transactions show that the quantity of steel involved would not be large in each individual case, a circumstance again point to the inference that the sales were intended to meet the requirements of the consumers in Madras State.
In the case of sales to local Government departments, it is obvious that sales were intended for internal consumption and not reexports".
Strangely enough, the High Court at the first instance thought that this finding was unsupported by evidence.
Consequently it remanded the case back to the Tribunal for a fresh finding on that aspect 496 after giving both the parties opportunity to adduce further evidence oral and documentary.
No fresh material was placed before the tribunal after the case was sent back to it.
But on the basis of the material already on record, the tribunal again came to the very conclusion that it had come earlier.
When the cases again came back to the High Court.
that finding was accepted as correct.
In our opinion, the High Court was not right in rejecting that finding at the first instance.
The finding of the tribunal is a reasonable finding .
The inferences drawn by it are reasonable inferences from the facts proved or admitted.
It is reasonable to assume that the supplies of iron and steel products were being made to stockists in a State for consumption in that State.
It may be, as found in this case, that a small portion of the supplies had gone out of the State.
But that is not a relevant circumstance.
What we have to see is whether the Supplies in question were made for consumption in the Madras State.
On that question the finding of the Tribunal is conclusive.
The contentions of the appellant that the findings of the tribunal about the quantum of the turnover were not based on any evidence, or that those findings were arrived at in violation of the principles of natural justice or that the decision of the High Court is perverse, are wholly untenable contentions.
At the time of the hearing no reasons were advanced in support of those contentions.
Hence those contentions do not merit any detailed examination.
In the result, these appeals fail and they are dismissed with costs hearing fee, one set.
Appeals dismissed.
[/INST]Held, that under section 7(3) (a) and (b) of the Industrial Disputes Act (XIV of 1947) as amended by section 34 of the Industrial Disputes (Appellate Tribunal) Act (XLVIII of 1950) the phrase "a Judge of a High Court and a District Judge" includes a Judge of the High ,Court and a District Judge in the former State of Jodhpur.
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